Tom Magnuson is Co-Founder and CEO of Magnuson Hotels Worldwide – a top 10 global chain, and the world’s largest independent hotel group. Magnuson markets over 1000 hotels across six countries and three continents, and they’re the number one conversion brand in the market, with over 400 Best Westerns, 250 Wyndhams and 200 Choice franchises that have made the switch.
Tom began to learn the hotel business at the age of 8 after his father inherited a 44-room Stardust Motel in small mining town Wallace, ID. Tom helped with the family business doing everything from making beds and cleaning toilets to cutting keys. However, this second generation hotelier did not intend to follow in his father’s footsteps, rather his dream was to become a world famous drummer. After nearly 20 years of success pursuing his dream in Boston and Los Angeles, his father asked him if he’d be willing to return to Idaho to help sort out the family businesses so he could retire. By that point, the family’s portfolio had grown from the 44-Room Stardust Motel they began with, to include a 9-room Bed & Breakfast, a 63-room Best Western, and a 160-room University Inn Best Western in Moscow, ID. Over the next several years, Tom continued to hone his skills in operations and served on the Board of Directors for Best Western. This experience allowed him to learn how the back of the house worked from the corporate perspective, including GDS, reservation services, brand support, and brand management.
In November of 2000, Tom attended the Best Western International Convention and listened to countless hoteliers share their grievances during an Open Forum session with the leadership and Board. After hearing the commonalities in their complaints, and the dismissive, canned responses from the leadership, Tom remembers a poignant thought he had … “Someday some company’s going to come along and give these people a serious alternative, and if they do, it’s going to be a major shift. I didn’t know at that time that it might be us. It was only 3 years later that we came up with this company.”
In 2003, Tom co-founded Magnuson Hotels with his wife, Melissa. Back then, Magnuson was run on two iMac computers out of their 5-year old son’s bedroom in Spokane, WA. Tom struck a deal with UNiREZ, a GDS company in Texas, to provide smaller properties like his family-owned Stardust Motel access to the same GDS (Global Distribution System), travel agents, and online distribution channels that the big franchise companies offered their licensees. The modest company started with only 12 hotel clients in the Northwest. “It was like hitting a live wire,” said Tom, and by December of 2003, Magnuson’s customer base had grown to 100 properties using their service. Their philosophy was simple – do what you say you’re going to do.
Tom’s approach to prospective hoteliers wasn’t about the technology (e.g., the features of his service), rather he simply focused on the benefit his service would provide – helping the hotels raise their occupancy percentage by selling unsold rooms. He kept it simple, which allowed less technically savvy hoteliers to understand how his services could help them be more profitable.
In 2006, Magnuson Hotels introduced three hotel brands to serve three tiers in the market, including:
Tom says the Magnuson model has changed significantly today, but at that time (in 2006), the introduction of the brands was really about listening to our customers.
Hotel owners and operators who believed they could go it alone before the coronavirus pandemic devastated the hotel industry are having another think and turning to third-party managers to work their way back to profitability in the post-pandemic recovery. Another trend contributing to the growth in third-party managers’ business is more commercial real estate investors armed with cash entering the hotel sector and in need of an experienced operations team. Episode 321 of Lodging Leaders podcast explores the growth of third-party management companies over the past 12 months. This report is part of Lodging Leaders’ coverage of the coronavirus crisis and its impact on the hospitality industry.
The Ever Given container ship running aground on March 23 in the Suez Canal got worldwide attention, but it is just one of many reasons for the breaks in the global supply chain that are impacting the U.S. hotel industry’s post-pandemic revival plans. Shipping companies in Asia and Europe are contending with a boatload of challenges, including a lack of containers, traffic jams at West Coast ports and increased costs. Long Live Lodging explores what the problems mean to hotel owners and developers eager to refresh their properties and welcome guests back.