Best known in the Southwest and the Pacific Northwest, Texas-based La Quinta Corp. is trying to bring its hotel chain into the New England market, specifically in Boston.

La Quinta Corp., owner of a moderately priced hotel chain popular in the Southwest and Pacific Northwest, is looking for its big break in New England. Executives from La Quinta traveled to Boston last week, looking for franchisers interested in establishing the brand in the Boston metro market.

“Fort Knox would be easier to break into,” said Alan L. Tallis, executive vice president and chief development officer for La Quinta, which is based in Irving, Texas. “The cost to develop is extremely high, plus there is an elongated permitting process. A lot of developers don’t want to invest the time.”

La Quinta isn’t interested in building a brand-new hotel in Boston. Instead, it’s searching for existing hotel properties or conversions. Franchises would allow La Quinta to sidestep the city’s costly real estate and development process and, at the same time, take advantage of the market recovery expected in the second or third quarter of this year.

Tallis says that any challenges faced along the way will be worth it.

“The area, not only because of the business climate but also the high tourism demand, makes for tremendous opportunities,” he said.

Getting Better

La Quinta, with more than 370 properties across the United States, was founded in San Antonio in 1968. Its La Quinta Inn & Suites brand, which caters to business travelers, competes with brands such as Marriott Courtyard, Holiday Inn Express and Hampton Inns. La Quinta Inns, geared toward the leisure traveler, competes with Days Inn, Comfort Inn, Fairfield and Super 8.

Industry watchers say that, despite the current market slump, La Quinta remains a strong, moderately priced brand. They say it’s the type of company that could do well in Boston, particularly with the uptick in hotel business expected by the end of 2004.

“Historically, Boston has always had a dearth of moderate hotel chains but because it costs so much to build a hotel in Boston, normally developers will create a four-diamond property to get back their investment,” said Art Canter, executive director of the Boston-based Massachusetts Lodging Association. “That’s been the rule in Boston for the last eight to 10 years but because the last few years have been awful, with the drop in rates and shift in market focus, most properties have been charging moderate rates just to maintain. By the time La Quinta opens, based on the projected turnaround, then they’d be a moderately priced chain in a good market.”

Plagued by a drop in business and tourism travel dating back to the terrorist attacks of Sept. 11, 2001 – a problem exacerbated by the more recent SARS scare, the war with Iraq and a still-slumping economy – hotels are struggling to recover revenue. In Boston, hotel success was built upon high-tech business conferences, the financial services industry and tourism, but as those markets decreased – some by as much as 50 percent – hotels suffered. Boston remains one of the last markets that continues to decline month to month on the average daily rate, according to Jim O’Connell, principal of Boston-based O’Connell Hospitality Group.

But as an industry event in Atlanta recently proclaimed, “Happy times are near again.” O’Connell predicts that a turnaround will occur in the third and fourth quarters of this year. Lending already has shown signs of improvement.

“It’s definitely gotten better,” he said. “There’s some pressure from financial institutions to place funds, and we’re seeing new construction all over the country, especially in the market La Quinta operates in.”

La Quinta, poised to break into the Boston market just as it begins recovering, will have other challenges, including the establishment of a new customer base. Canter said every chain’s central reservation system provides an immediate list of clientele. The company’s partnerships with several airlines, including Southwest, American and Delta, also will assist in increases the customer pool.

“La Quinta historically has provided a solid base for central reservations,” Canter said.

La Quinta also has redesigned its frequent-stayer program to increase its membership and bookings. Its returns program offers point-based incentives that include free stays, airline miles and gift certificates, along with VIP treatment of Elite members, lower thresholds for higher membership tiers and more rewards with additional partners including Chili’s Grill & Bar, Home Depot, Target and Lands’ End.

“La Quinta is a solid chain, a nice product; however, [it’s] a product that’s not in New England,” Canter said, adding that he hasn’t heard of any other moderately priced chains seeking a foothold in New England.

O’Connell said the La Quinta brand would provide a needed alternative.

“I’m very happy that they’ve finally decided to come into the New England market,” he said. “Given the strength of borrowing and the market, I don’t think they’ll have any problems here in New England.”