The Perseverance of Independence – An Interview with Tom Magnuson
With the Marriott-Starwood deal still casting its hemispheric shadow and a host of soft brands or associations looking for worldwide expansion, it would seem as though we are in an era of rapid consolidation within the hospitality industry.
This is only part of the story, and indeed there is still plenty of room for independent properties to flourish. One brand that has operated in this space since 2003 and has grown to represent over a thousand hotels spanning three continents is Magnuson Worldwide. With tremendous year-over-year growth to its portfolio and a preferred network that puts it north of 800,000 rooms worldwide, I have always been curious to meet one of the two cofounders.
As luck would have it, I was able to connect with Tom Magnuson while in London for a speaking assignment. Here is someone who is nurturing independence, and one might even say that he is allowing this segment of the business to persevere in the face of what would seem to be insurmountable odds against the branded franchises. How does he stay in business? Let's find out.
Give us a breakdown of the various hotels associated with Magnuson Worldwide.
Magnuson properties are primarily in USA, Canada and Europe - 85% of which are independents stemming from the company's inception. However, the introduction of branded properties in 2010 has seen steady growth and now accounts for 15% of the company's portfolio. Through a global marketing alliance with Louvre Hotels and Jin Jiang Hotels, Magnuson clients also enjoy access to the European and Asian markets through preferred networks. The alliance comprises over 8,000 hotels - a consortium the size of a #2 global chain.
What would you attribute to be the key reasons for your success?
The key driver for success for Magnuson Worldwide lies in our personal approach to the success of the hotel owner. Our owners know their markets and where they want to go. We are here to support them with chain-level technology and services. We do not impose costly standardization via performance improvement plans (PIPs). Rather, we leverage our platform to drive success for each hotel owners' unique situation and goals. Tied to this personal approach to success is our personal revenue management service, where each hotelier receives an experienced online revenue manager. Working with Magnuson Worldwide, hoteliers enjoy 24-hour access to pricing, promotion and review strategy.
What market are you focusing on right now for expansion?
Magnuson is currently expanding into the United Kingdom with an exciting promotion called 'We Come Bearing Gifts'. Magnuson Worldwide is so confident that they can deliver UK hotels growth amidst Brexit and other industry challenges that we are giving five hotels free brand memberships for the first 12 months! Magnuson aims to extend its footprint and have 15 UK properties by the first half of 2018.
What benefits do independents get from joining Magnuson?
The advantage of working with Magnuson Worldwide brands lies in our compact and simple-to-use structure. For a flat 5% fee, our hotels are supported by a complete platform including brand, corporate, national and local marketing support, as well as global distribution, personal revenue management and access to our e-learning platforms. The entire offering comes without the expense and standardization of franchise-level PIPs or the heavy price tag and additional bolt-ons traditional hotel franchises require.
What about your loyalty programme?
Magnuson Rewards is a loyalty program offered at no additional cost to the hotel owners, where our members get paid and don't receive points. Guests who book online receive a $25 Amazon.com gift card with no restrictions. Because of its straightforwardness, Magnuson Rewards is already seeing a 17% conversion rate, the same rate as online giants Amazon and Apple iTunes.
