Rolling Oaks Group handles hotel and apartment management

In 2001, Lonnie Funk was feeling the need for change.

He'd been with John Q. Hammons Hotels Inc. since 1974 and worked his way up from a management trainee in Billings, Mont., to executive vice president of hotel operations at corporate headquarters in Springfield.

But both of his daughters had graduated from college and he'd turned 50 years old. "I decided if I was going to do something different, now was the time to try," Funk says. "It was a good 26-year relationship with Mr. Hammons and provided many educational opportunities, (but) it was time to do something different."

After trying retirement for six months, Funk decided that wasn't for him. One day, he recalls, he received a call from auto dealer John Youngblood asking if Funk would be interested in buying or managing the Sleep Inn-Medical District, 233 El Camino Alto St.

Funk says he wasn't in a position to buy the hotel, but managing it was intriguing.

Rolling Oaks Hospitality Inc. was born from that spark in May 2002. It is now part of Rolling Oaks Group of Cos. LLC, which includes apartment manager Affiniti Management Services LLC.

The Sleep Inn was facing some challenges when Funk's company took over. It had a negative cash flow and was begging for repairs and maintenance.

Since then, the property has climbed to the top 25 of Sleep Inns in the nation.

And Rolling Oaks Hospitality is now responsible for the management of three hotel properties - the Sleep Inn, Comfort Suites-Medical District at 310 E. Monastery St. and La Quinta Inns and Suites in Bentonville, Ark.

Affiniti Management Services manages Old South Plantation in Ozark, and Tall Grass and The Villages at Nathanael Greene apartment complexes in Springfield.

"I think it's a function of survival," Funk says about expanding into apartment management. "As the hotel business has slumped a little bit, the apartment business has prospered."

According to the Springfield Convention & Visitors Bureau, room demand at city hotels is down 6.5 percent year-to-date through June, and at 50.8 percent, occupancy rates are down 5.8 percent through midyear compared to 2008. At $37.85 million, overall room sales are off by 5.3 percent this year, CVB data shows.

Despite the industry sag, Rolling Oaks is experiencing success managing the Comfort Suites-Medical District.

On Aug. 20, for the 17th month in a row, the site was named the No. 1 Comfort Suites in the nation. In May, the property received the distinction of being named the 2009 Choice Hotels Inn of the Year at the chain's annual convention.

This honor means that of the more than 5,000 properties in the Choice Hotels International constellation of brands - including Cambria Suites, Comfort Inn, Quality, Clarion, MainStay Suites, Suburban Extended Stay Hotels, and Econo Lodge - Comfort Suites-Medical District was judged to be the best.

"Lonnie had to punch me and say, 'Do you realize that's not just Comfort Suites? That's the entire nation,'" recalls Pam Long-Prentice, general manager of the hotel.

Funk and Long-Prentice both credit the hotel's employees for its success, which they say is unprecedented in Choice Hotels.

"I don't have to do anything," Funk says. "(Employees) are so focused on keeping this property No. 1 that it's self-perpetuating at this point."

Erika Ehlers, director of performance solutions for Choice Hotels in Bethesda, Md., says the rankings are based on a combination of guest satisfaction surveys, third-party inspector reviews and the number of complaints each site receives.

"I think the fact that they're scoring so well from both a (quality assurance and guest satisfaction) standpoint shows that across the board, they're just a very well-rounded property," Ehlers says.

Long-Prentice thinks it's possible for the hotel to retain its No. 1 designation for at least two years.

While declining to disclose company revenues, Funk says he and the Sleep Inn and Comfort Suites investor-owners feel the two sites are in a location that's only realized about 65 percent of its potential. Because of the recent opening of the south-side Sam's Club, the South Campbell Avenue corridor is poised for more growth, he says.

But he can't ignore the economic challenges the hotel industry faces as a whole. Travel seasons are no longer typical, booking cycles are very tight and corporate America has put the brakes on business travel.

"It's cyclical," Funk says. "And we're ready for that cycle to come to an end."

Until then, Funk says his company will focus on ensuring the best returns possible for investors rather than thinking about growth.

"If I'm off focused on something in Indiana or St. Louis or Kansas City, then I'm not doing my job for them during a critical period," he says. "So right now, we're just focused on doing it right until we come out of this cycle."

[[In-content Ad]]Sleep Inn-Medical District

Owners: John Youngblood, John Calhoun and Howard Bailey

Rooms: 104

Occupancy rate: 62 percent

Average daily rate: $63

Comfort Suites-Medical District

Owners: Jerry and Katie Drury

Rooms: 87

Occupancy rate: 62 percent

Average daily rate: $94

LaQuinta Inn and Suites (Bentonville, Ark.)

Owners: John Youngblood, John Calhoun, Howard Bailey, Lonnie Funk, Tracy Clay, John DeBus and Andreas DeSantiago

Rooms: 107

Occupancy rate: 61 percent

Average daily rate: $90

Source: Rolling Oaks Hospitality Inc.