Magnuson Hotels adds lending partner–Joins with Georgia bank to lend to independent hotels.
June 11, 2007
Spokane-based Magnuson Hotels has entered into a partnership that will make borrowing money easier for independent hotel operators.
(The company, which provides global reservation services for more than 600 independent hotels nationwide and in Canada, recently joined with Atlanta, Ga.-based Haven Trust Bank to offer financing for hotels that aren’t affiliated with big chains.
“There’s a lot of interest. The reaction everyone is getting is far larger than we anticipated,” said Tom Magnuson, who shares principal-CEO status with his wife Melissa.
In the past, he said, independent hotel operators have had a rough go of it when it came to getting loans to upgrade or purchase hotel properties. One hotel owner complained that he paid 12.5 percent interest on a loan, Magnuson said, while some others were refused loans because they weren’t connected to a big name.
“They suffered from it because they didn’t have the capital to renovate or acquire new properties.”
Haven Trust Bank is approved by the U.S. Small Business Administration as a preferred lender and can provide loans that are competitive to the rates offered to franchises, he said. According to the bank’s Web site, it has more than $350 million in assets.
Magnuson started the company, which serves 35 to 50 independent hotels in the Northwest, four years ago to offer independent hotels the opportunity to connect into the same global reservation systems used by franchises and big chains. Because his parents owned the Stardust Motel and Wallace Inn in Wallace, Idaho, while he was growing up, Magnuson said he was in a good position to access the needs of independent hotel owners.
“I really got to know about what small business operations deal with,” he said. Franchise operators can pay as much as 14 percent to 18 percent of their gross sales to the parent company, he said. Instead of charging a fee that is taken off the top and applies to all sales, Magnuson Hotels charges 15 percent of net sales for rooms booked through the company’s reservation system.
Magnuson Hotels also offers purchasing discounts and access to group health insurance programs.
The business was started with two home computers, but has grown into a company that represents clients with combined assets of $2.5 billion, he said. Some of the hotels are former franchises that went out on their own, while others were never affiliated with a chain.
Magnuson expects his customer base to reach 1,000 hotels within the next year.
About Magnuson Hotels, the fastest growing hotel chain in history.
In only seven years, Magnuson Hotels headquartered in Spokane, WA has become the world’s largest independent hotel group, representing nearly 1500 hotels and a combined affiliate base with assets in excess of $5.5 Billion. One of the top 10 global hotel chains, Magnuson Hotels was the #1 Hotel Company of Inc. Magazine’s 2009 annual ranking of the 5,000 fastest growing privately owned U.S. companies. With a four year reservation sales growth of 595%, Magnuson Hotels is listed in the top 100 U.S. business services companies.
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