Fiesta Inn lays blueprint for expansion in 2007 and beyond

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This year promises to be a record-breaking one for Fiesta Inn. The Mexican hotel chain, which is a division of Grupo Posadas, plans to open more hotels this year than in the past two years combined.

In 2005, Fiesta Inn opened five hotels; last year, the chain brought three new properties online. This year, nine properties will open their doors, adding about 1,162 hotel rooms to Fiesta Inn's inventory.

"The strategy for the growth of Fiesta Inn is very clear and determined," said Javier Barrera, chief marketing and technology officer for Grupo Posadas. "Besides [the hotels planned for 2007], there are plans to open from 10 to 20 more hotels in Mexico."

Barrera said studies are currently under way to determine new markets where the brand could be successfully introduced, especially in business-oriented destinations.

Business travelers account for 81% of the brand's clientele, said Barrera.

"This growth could be achieved within the next five to nine years, depending on the results of these marketing studies," he said.

Fiesta Inn hotels usually have 120 to 160 rooms.

The average occupancy rate is 65%, according to company figures.

In 2007, Fiesta Inn plans to open hotels in Cuernavaca, Morelos; Ciudad Obregon, Sonora; Uruapan, Michoacan; Monterrey Cintermex, Nuevo Leon; and Tuxtla Gutierrez, Chiapas, among other cities.

He said the brand is working on developing synergies with Mexicana Airlines, which Grupo Posadas bought in 2005.

Barrera also noted that there is some cross-pollination between Fiesta Inn and its sister brands, especially Fiesta Americana.

"Sometimes, especially with loyal guests, when they arrive in a destination where their usual brand, Fiesta Americana, has no presence, they stay at a Fiesta Inn because it has the attention and service they are familiar with," he said. "And most of the time, Fiesta Inn is among the best hotels in that destination."

However, the two brands are distinct and do not target the same type of traveler.

"Generally, Fiesta Americana guests stay with the brand or a [similar] competitor when [the Fiesta Americana hotel] doesn't have available rooms," Barrera said. "This is because the hotels and guest experience is different within the [two Grupo Posadas] brands. They are built and addressed to different targets."

Fiesta Inn used to be the third-largest hotel brand [in Mexico]," Barrera said. "It was seven percentage points away from being the second brand four years ago. During the last two years, it has been growing, and now, it shares second place."

The Fiesta Inn expansion isn't the only growth area for Grupo Posadas. The company, which operates about 20% of Mexico's tourist-class hotel rooms, is introducing additional brands to target different segments.  

In 2006, the company announced plans for Lat 19, a five-star brand aimed at design-conscious business travelers. News about specific openings has yet to be released.

Already under way is the One Hotel brand, which opened its first property in Monterrey in February. This economy brand aims to attract price-conscious travelers who still want amenities and consistent service.

Rates at the Monterrey property start at about $50 per night and include continental breakfast. All One Hotels have guest laundry facilities and free wireless Internet, coffee and parking.

Plans call for opening a total of 50 One Hotels by 2010 in business, industrial and tourist destinations.

The next openings are scheduled for Acapulco, Coatzacoalcos, Playa del Carmen, Tepic, Durango and Morelia.

For more on Fiesta Inn, visit www.fiestainn.com.

To contact reporter Mark Chesnut, send e-mail [email protected].

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