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Equis Plans Ambitious Growth

cnr-logoMicheal Mullenix sounds and loks like aman who is exactly where he wants to be. “My job is to control uncontrollable,” he said with a smile.

After leading his two brothers in a buy-out last year of their father’s hospitality business, Dominion Hospitality, and rechristening it Equis Hospitality, Mullenix has set a goal of over 300 percent growth in the next 5 years. Backed by a new construction subsidiary, Citadel Construction run by brother Greg, new financial partners, Rockbridge capital Corp. and Syndicated Equities Corp., and a “clever vision,” Mullenix is confident of the company’s growth, just maybe not the numbers.

“We have a very aggressive goal of having 5,000 hotel rooms in five years,” he said. The company had 1200 rooms when he set the goal. “if we hit 3,000 in five years u will be delighted.”

They already have a jump on the St. Louis part of the plan. In January, Equis announced the coming contrustion of two hotels in Richmond Heights, a 243-room Westin Hotel and a 144-room Homewood Suites by Hilton, the centerpieces of an $150 million development with Sansone Group called The Fountains. That announcement followed an August 2006 announcement of the start of construction on a 104-room, $11.5 million Homewood Suites art Riverport. In March 2006, before the buyout was complete, Dominion Hospitality had opened a 188-room, $25 million Residence Inn by Marriott at I-64 and Jefferson Avenue.

Mullenix expresses confidence that the newly announced projects will do as well as the Jefferson Avenue property is doing. “There is not a lot of new product in the [St. Louis] market.” He said, dismissing the competition.

With the addition of two more small hotels in downtown St. Louis, he added, “we’ll be pretty much where we would want to be in St. Louis.”

“We think there is room for more good, small hotels downtown,” he said. “There is a goof weekday and weekend business as long as your business model does not depend on large groups.”

Equis already is counting out locations for those two small hotels, checking out historic building that are still available for rehabbing.

What makes Mullenix sure he can succeed where William Stallings failed?

“Branding,” he said quickly. Any hotel developed by Equis would be part of a national chain, he said, and he pointed to Drury’s success with the Hilton Inn on Olive Street as a model of how to do it right.

But, don’t look for Mullenix to try to make a success of the WS under a different name. “There is just something wrong with the WS,” he said. “We haven’t figured it out, but every hotel chain we incite to take a look at it says “No.” We think it is just a goofy building.”

Besides, “there are still some neat old buildings downtown that tax credits will get you into cheaper than tackling that,” he said.

The brand that Equis wants to introduce into St. Louis is Hyatt Place, Global Hyatt Corp.s’ new entry into the select service segment of the hotel industry, launched in 2006 after the company’s purchase of Amerisuites.

“The lobby looks like an overgrown Starbuks,” Mullenix said. “The front desk is a wine bar, and you can check in at a kiosk.”

According to Jim Abrahamson, senior vice president of Hyatt Corporation, “We’ve held a number of focus groups in key U.S. markets to determine what core elements people expect out of a hotel stay. The extensive research we did was crucial to creating a different type of guest experience not yet seen in the industry. At Hyatt Place, out goal is for guests to enjoy unexpected familiarity coupled with flexibility and ease of use.”

Special features will include not just welcoming lobby with an upscale coffee and wine bar, but also larger guest rooms (25% larger), and state-of-the art media center in each room. Hyatt bills the result a “larger than home” experience.

Besides Hyatt Place, Equis also is interested in becoming a franchisee of Starwood Hotels’ Aloft brand, Mullenix said.

Equis acquired hotels in St. Louis and Indianapolis with the buy-out of Dominion Hospitality. “We’re selling out three Indianapolis properties, “Mullenix said, and looking to grow in Texas, Arizona, Colorado, and District of Columbia.

Mullenix has a vision of Equis as “a niche player…You’ll find us around universities or medical centers.” Within that niche, he said there may be opportunities for the company elsewhere in Missouri, such as near a major medical campus near I-70, about halfway between St. Louis and Kansas City.“We have clearer vision of our growth strategy than our father,” Mullenix said.

“We’re embracing the Marriotts and Hilton’s and asking them what cities they want to be in. We have a much better relationship with our franchisers.”