“There is more room for extended stay hotels in the US lodging industry,” said Villager President and CEO Ken Rodgers at the chain`s annual conference in Nashville. “Our segment remains strong, and as high returns continue to draw investment interest, Villager is perfectly positioned for growth and distribution.”

The conference clearly highlighted the Villager success story in the extended-stay market, its continued growth and key strategies for expansion. Rodgers said that extended stay is ripe for consolidation and Villager is ready to capitalize on the opportunities that exist in the industry.

“Villager has seen significant increases in its number of properties and number of rooms signed versus the same time last year,” reported Rodgers. “With more than 125 locations and an additional 56 properties with over 5,000 rooms sold to date, we are on pace to sell another 30 franchises and 3,400 rooms by end of this year. More importantly, I am happy to report that the properties coming into the system are larger, high quality products.”

Rodgers said the need for consolidation in the extended stay segment was evident, particularly with small, regional chains that will find it difficult to compete without joining a larger brand.

“In order for many purpose-built extended stay lodging companies to survive, they`ll need to look for opportunities to place multiple product types under one brand or merge with a national hotel company,” predicted Rodgers. “The brand awareness, marketing clout and resources of a larger hotel company—like Villager—can help smaller extended stay lodging companies prosper in the future.”

Rodgers went on to announce that the chain is in negotiations with two regional, purpose-built extended stay chains, representing over 20 properties and 2,000 rooms. The agreements are expected to finalize by year-end. “Any additions to our chain will be key to our national distribution and brand recognition, added Rodgers. “We will continue to look at other exciting growth strategies to increase brand presence throughout North America.”

Rodgers excited franchisees and general managers with the announcement of the brand’s new national marketing and advertising programs, including the chain`s first TV commercials and new radio spots featuring Villager’s mascot and spokesperson, “The Mayor.”

Villager also announced the significant growth of its mid market Premier tier, introduced last October. “This time last year we predicted that we would have 20 Villager Premier properties by year end 2000,” said Rodgers. “I`m proud to say we have met and exceeded our expectations. We already had 25 Premier locations open and under development by mid-year and expect to have another nine signed by year end.”

Rodgers reported that the extended-stay segment continues to be one of the fastest-growing segments in today`s lodging market. In fact, according to research from the Atlanta-based Highland Group`s Mid-Year 2000 Report on extended stay, average occupancy was 77.2% as of June, up 2% over the same period last year, versus 63.5% average occupancy for all US hotels. Supply is expected to grow at an average of 11% annually through 2004 while demand in the first half of 2000 also grew 17.8% compared to first half demand in 1999. And by mid-year 2000, more than 29 million extended stay roomnights were sold, with 4.4 million more roomnights rented during this time over the same time last year.

Villager will continue its aggressive growth strategy that includes a heavier push towards new construction, consolidation, reflagging and stronger support and emphasis on franchise sales efforts. The brand`s growth plans reflect a surge in national presence, with the expansion of property locations in states including Florida, Mississippi, Illinois, Missouri, Louisiana, California, Colorado, Texas and Nevada. “Villager has also just signed agreements for additional franchises in the states of Washington, Nebraska, Louisiana and Wyoming,” said Rodgers.

Rodgers also discussed the trend for increased expansion opportunities outside of the U.S. The Villager chain is already realizing this trend with the opening of its first international property in Rosarito Beach, Mexico. The brand also had its first opening in Canada, in Port Alberni, British Colombia, with discussions underway for an additional seven locations. Villager’s international master franchisor, AFM Hospitality Corporation of Toronto, expects to add more than 20 Villager hotels in Canada over the next five years.

Villager has also extended its “Villager Advantage” loan renovation program so that qualified franchisees will be able to borrow funds at the low interest rate of four percent. Franchisees were encouraged to use the funds to upgrade signage, install mini-kitchenettes where needed and provide exterior renovations to improve the overall quality and image of the brand.

Villager Franchise Systems, Inc. is an extended-stay chain of more than 125 locations and over 10,000 guestrooms in the U.S., Canada and Mexico. Villager is a subsidiary of Cendant Corporation (NYSE:CD). For reservations or further information, the Villager toll-free reservation number is (800) 328-7829 or access the chain’s website at www.villager.com.

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