By Fred Delkin

 Seeking the American dream?  One Oregonian claims to have found it.  And he’s franchising it.

Mark Hemstreet, owner of 46 Shilo Inns in nine states, has revealed to Oregon Magazine that he is launching a franchising department as his next step in expanding a successful lodging formula to additional sites.  To date, all Shilo facilities have been owned by the founding corporation.

“We’ve had many, many requests for a franchise during our 27 years of operation,” the earnest Hemstreet says, “but we’ve resisted this growth method until now.  It may seem overly bold in today’s oversaturated lodging market, but we’ve developed a team and systems that will make very selective franchise choices successful.”

It has been six years since a new Shilo was built.  Hemstreet says he has been “very frustrated by the overbuilding we see in our industry.  You can see up to six properties at a single intersection in some areas, and there will certainly be some consolidation.”  He declares that “no one will ever accuse Shilo of saturating a market…we’ll continue to go only where there is a need, a demand.”

An early start

 Hemstreet’s lodging career was launched as a teen.  His family owned and managed lodging properties in Oregon and Nevada.  At the tender age of 16 (he’s now 50), Hemstreet managed a family lodging site at Rockaway on the Oregon coast.  He credits “a very loving, caring family atmosphere” for a thorough, proper grounding in his industry.

“I learned the business from the ground up,” he states, “and was never too proud or too busy to take on the most menial duty…my business upbringing taught me that I am no better than my lowest paid employee.”

After graduation from Beaverton high, Hemstreet attended Portland State University for two years, “totally paying my own way before I was overcome with impatience to start my own business.”  This latter day Horatio Alger had been saving his shekels earned on summer and part time jobs since he became a teen, with lodging ownership a goal.  In 1974, in the midst of a depressed national economy, Hemstreet negotiated a bank loan “with my good credit”, and purchased his first property, a motel at Wood Village near Gresham (since removed by state highway expansion).  This was soon followed by Shilo sites at 82nd and Sandy in Portland and in Grants Pass, and a chain was born.

Hemstreet says he chose the name “Shilo” after that title was first implanted in his thoughts by a Neil Diamond song and TV westerns and then he found that the Bible defines it as a “peaceful place of rest.”  The motel mogul says he dropped the ‘h’ from the usual spelling to make his use distinctive.

Living up to advertising

 Shilo Inns’ advertising has spread the credo “affordable excellence” throughout the west, and done it via Hemstreet’s own voice in radio and television spots.  He believes “nobody else can tell our story with more conviction than I can.”  The validity of the slogan is brought out by a study of Shilo operations.  Each inn offers a wide array of desirable amenities, yet current nightly rates range as low as $51.95 and top out in resort locations at $149.  Hemstreet says his corporation’s average annual sales volume is “far above the industry average, even in this oversaturated market.”

“Our sales success stems from the fact that our product and our staff are superior to most of our competition, particularly at our price levels,” Hemstreet declares.  His marketing covers a broad swath of the travel market, targeting both business and tourist needs.  Shilo sites  (shown: Seaside, Oregon) are quite diverse, from beach and mountain resort destinations to downtown locations.

Best part of the job?

 Hemstreet has a swift answer when queried as to what is most satisfying in his endeavors…”reading the guest comment cards at the end of each day!”  He says 95% of these cards are “very positive, and tell us we’re doing the job we aim for.”

Staff loyalty gets major credit in Hemstreet’s book for maintaining his high service standards.  “Many of my people have been with me for 20 years or more, and the comment cards confirm how well they serve the public.”

Shilo is anything but stingy in providing guest ‘extras.’  A typical inn offers movies, cable TV, hair dryer, coffeemaker, clock radio, ironing gear, refrigerator, microwave, pool, steam room, fitness center and a daily newspaper…all included in the price of lodging.  Business persons are lured with dual phone lines, data ports and fax service.  Guest bait gets very creative in Beaverton, Portland and Klamath Falls locations that
offer a Cigar Bar equipped with big screen video for sports nuts.  Attempting to leave no marketing stone unturned, Shilo has just begun offering airline miles for frequent guests.  Shilo is sensitive to what’s happening now, touting energy efficiency.  “We ask our guests to help in conserving energy and we have no extra surcharges to offset higher energy costs,” Hemstreet says.
 

Hemstreet credits awareness of an ever growing market segment for Shilo’s focus on security measures for business women.  Most Shilo outlets provide extensive conference and meeting facilities.  In-house lodging and dining facilities are found in a majority of  Shilo properties and complimentary breakfasts are the norm.

Where to next?

 So where will all this ‘affordable excellence’ extend to next?  Hemstreet says he would like to march more Shilos down the Pacific coast.  Currently, Washington and Oregon have the only coastal sites.  Hemstreet’s franchise targets will initially be in the western states Shilo now serves, but he foresees moving gradually eastward…”even to the east coast.”

Shilo sites to date take advantage of western recreation draws in addition to urban business locations.  Northwest beachfront facilities are complemented by resort complexes sited near skiing and national park attractions.

Facility designs are not “cookie cutter.”  They vary widely, according to community demographics and regional climate.  Interior design and décor are supervised by Hemstreet’s wife Shannon and daughter Stacy.  Son Brian rounds out the family presence as a regional manager.

The man behind the mattress

 Talking with Hemstreet, you begin to realize the man truly believes, and acts upon, a set of values that you may have thought (along with myriad listeners and viewers over the years) was merely advertising hyperbole.  He hews to the characteristics of the ‘self-made man’.  He exudes a dedication to principles which he seems to successfully instill in his employees.

And he is a flag waver.  “I’m an Oregonian, an American and truly a political independent,” he avers, when asked about his political philosophy.  “We live in the greatest country on earth…where else could you go where I’ve gone with my career?!”  Shilo sponsored broadcast tributes to World War II’s “greatest generation” during the recent Memorial Day weekend.

While claiming political independence (he says he vehemently opposes Oregon’s primary voting law that forces specific party registration), Hemstreet offers admiration for President George W. Bush, whom he has met with personally.  He agrees with Bush’s campaign promise of “more civility in politics.”  Hemstreet is a financial donor to both candidates and measures and has the image of a conservative in Oregon political causes.
“My major political goals are less antagonism and more cooperation to achieve the greatest benefits for our society,” he states.

Hemstreet is critical of government’s failure to recognize the economic potential of tourism.  “Our state of Oregon ranks a lowly 46th, I believe, among state tourism budgets,” he points out.  He feels there should be more “partnering” between government and industry associations to foster tourist travel.  “I don’t believe government at any level shows enough appreciation of the contribution tourism makes to our economy…when you convince people to visit a region, they provide income for a wide diversity of people at their destination.”

Hemstreet fervently states “government should get out of the mode of ‘take, take, take’ in the form of taxes and find more ways to contribute to the economy that supports us all!” He says Shilo contributes significantly in the public affairs of communitys where inns are located.  The corporation was a founding force in Oregon’s long established SOLV (Stop Oregon Litter & Vandalism) campaign.  Undoubtedly the most visible evidence of Shilo
community effort is the massive, memorable Chistmas lighting display annually surrounding corporate headquarters along U.S. highway 26 just west of Portland.  Hemstreet worries the energy crisis “will curtail this,” but assures that Shilo will “do what contributes to the greatest good.”

Mark Hemstreet is a truly American example of ‘capitalism’ and seems quite dedicated to proving this economic philosophy is the path to that “greatest good” for all.  An All-American franchise, anyone?
 

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