Seattle hotel chain closes deals on six sites in L.A.; Nendels Corp. vows to become dominant on West Coast.

Seattle hotel chain closes deals on six sites in L.A.

A Seattle-based hotel company that in October declared it would become the dominant hospitality chain along Interstate 5 from Canada to the Mexican border broke into the Los Angeles market by announcing last week that it has closed deals on six properties.

Nendels Corp. executives said they want to close on 10 Southern California properties before the end of the year. Of the six local properties just acquired, four are existing hotels that joined the Nendels franchise and two are new construction projects that will join the chain. Nendels is also negotiating with other Los Angeles area properties.

The newly acquired properties are:

* The Airport Century Inn, a 150-room hotel near Los Angeles International Airport that will be renamed the Nendels Airport Century Inn.

* The Santa Monica Hotel, a 101-room complex.

* The 79-room Siesta Inn in Buena Park near Knotts Berry Farm.

* The Plaza Inn, 83 rooms, also in Buena Park.

* A new 44-room Nendels hotel which will be built in east Compton by Regina Shaw, a Taiwanese motel broker.

* Another new hotel will be added to the chain in the city of Orange by Henry Chen, a Taiwanese hotelier who will tear down his existing 20-room complex and replace it with a 59-room development.

The Airport Century Inn, Santa Monica Hotel and Plaza Inn are all owned by Seymour Grush and other members of a partnership. Grush said one of the reasons he and his partners bought into Nendels is they believe more referrals will come their way from a franchise that is relatively undeveloped in Los Angeles than if they were to join a widespread chain.

"Basically, we'll be kind of exclusive in the area," Grush commented.

Each of the new franchisees will pay either a $10,000 flat fee or $100 per room (whichever is greater) to join the chain. They will also pay a royalty fee of 2.5 percent of gross revenues, a reservations fee of 10 cents per room per day, 25 cents per room night delivered through Nendels' reservations center, plus 15 cents per room per day for advertising and marketing.

Nendels, which claims it is the oldest and largest hotel franchise company in the Pacific Northwest, began exploding with growth about two years after merging with part of the Oregon-based Territorial Inn chain in 1986. The merger boosted Nendels to a 21-member chain.

Since late 1988, the company has mushroomed into a 61-member chain with 43 members presently on-line. Counting Nendels new Los Angeles properties, the company has about 16 members in California, including four in San Francisco and six in other parts of Northern California. San Diego will be the next market targeted by Nendels, company officials said.

Nendels President John Matlick said his company has identified four primary markets and six secondary markets within the Los Angeles area it wants to be represented in by 1991. The primary markets are the L.A. airport, downtown Los Angeles, Anaheim and Arcadia. Secondary markets include Long Beach, Ontario, Pasadena, Hollywood, Torrance, and a different section of Arcadia.

"We can bring our customers to these properties," said John Smith, vice president of franchise sales for Nendels.

"We've got the supply and we have a demand in Los Angeles. Not everyone is doing 90 percent occupancy. There are people who are hurting with really, really good properties (in Los Angeles) and they're looking for a solution, and we've got that solution."

Smith said he and Matlick developed the Los Angeles market when they worked for Quality Inn. "So we have a pretty good idea what we're doing," he remarked.

Matlick said the time is opportune for picking up Los Angeles members because the market is overbuilt and suffering from low occupancy. Nendels can use its reservation system to deliver Northwest travelers to Los Angeles members and vice versa, he said.

"Statistics indicate that 70 percent of the people in California, Washington and Oregon that stay in a hotel live in one of those three states," Matlick said. "So 70 percent of the business is coming from those three states along the Interstate 5 route."