Thomas and Melissa Magnuson, founders of Magnuson Hotels, are becoming experts at what Thomas Magnuson describes as “coping with growth.”

Magnuson Hotels’ growth rate currently is somewhere between hyper growth associated with initial industry acceptance of a new technology and more organic growth of a strong and stable enterprise, Magnuson says.

In the 13 years since launching Magnuson Hotels, the company has averaged 127 percent annual revenue growth.

“There’s a steep (revenue) curve with adaptation,” Magnuson says of companies that go through hyper growth. “Then it plateaus with new entrants and competition. Usually, if revenue goes up again, it’s not as steep.”

Under the Magnuson Hotels business model, the company provides marketing, reservation, and branding services to affiliates without charging a typical franchise fee of 15 percent of total room revenue regardless of whether the franchise originates the reservation.

Magnuson Hotels’ main source of income is through commissions only on bookings it makes through its central reservation system.

The company has headquarters in Spokane and London.

The Spokane headquarters, which is the larger of the two, has 50 full-time employees and occupies the former Carnegie Library building at 525 E. Mission.

The Magnusons live in London eight months of the year, during which they visit Spokane four to six times.

They own a home on Lake Pend Oreille and spend summers in the Inland Northwest.

Technology enables the couple to lead the company from either headquarters.

“We have an excellent management team here,” Melissa Magnuson says. “And we can use videoconferencing capabilities.”

While Magnuson says the company is coming out of hyper growth mode, he’s not worried about growth flattening any time soon.

Thomas Magnuson says he anticipates 20 percent revenue growth this year, which he claims is still the envy of the industry. Much of that growth is coming from established affiliates.

“A lot of that growth is from hotel owners doing better,” he says. “There’s been a considerable increase in same-store revenue. So we’re not just throwing more logs on the fire.”

Magnuson says Magnuson Hotels also is continuing to grow through diversification.

“We’ve managed hyper growth and developed into four service platforms with a more moderate growth rate,” he says.

Those platforms include serving independent hotels at a low cost, promoting the Magnuson brands, and taking services into the international realm.

The fourth platform will be a new booking technology, which will be announced soon, Magnuson says, declining to disclose much in detail about it, except to say, “It’s a new form of management technology we’ve been working on for about a year now.”

The technology won’t be a new online travel agency, though, Magnuson says.

A few years ago, Magnuson Hotels had planned to launch a separate online travel agency, Global Hotel Exchange, with the idea of simplifying options for consumers while charging them smaller pass-through fees than the big online booking companies charge, and eliminating booking commission fees for hotels.

“That’s something for another day,” Magnuson says, of the Global Hotel Exchange model.

Magnuson says the online booking industry has undergone massive consolidation, making it too difficult for new entrants to gain a foothold.

“Most are now controlled by Expedia, Booking.com, and Google,” he says. “They spend $4.5 billion a year on search engine optimization.”

Magnuson Hotels has an established track record, currently providing marketing and reservation-management services to 1,000 hotels in the U.S. and Canada, nearly 100 in the United Kingdom, and a few across Europe, he says.

Now, the company is focusing on developing its brands: the upscale Magnuson Grand, the midscale Magnuson Hotels, and the economy M-Star.

About 100 hotels are operating under the Magnuson brands. Recently branded hotels include the Magnuson Hotel Convention Center New York City; the Magnuson Hotel Framingham, in Massachusetts; and the Magnuson Hotel Marshall, in Texas.

Combined, the brands make Magnuson Hotels the fastest-growing hotel brand in the U.S., Magnuson claims.

“We offer a brand platform at a third of the cost of traditional platforms,” he says.

That’s a big savings in an industry with ever tightening margins, he says.

He asserts Magnuson Hotels is set up to provide branding services more efficiently than the big franchise hotels.

“We’re 13 years old, and our technology is newest. We’re agile enough to do it faster, cheaper, and more effectively,” he says. “Our competitors are 65 years old and have layers of overhead that have crept up over all those years.”

Melissa Magnuson adds, “We have a secret weapon: Spokane.”

She says employees here have a strong work ethic and no entitlement issues.

“They appreciate living and working in Spokane and pass that (attitude) on to hotel owners and guests,” she claims. “You can’t duplicate that in New York, Denver, or Southern California.”

Magnuson, son of Wallace, Idaho, mining and business magnate Harry F. Magnuson, got his start in the hospitality business as a youth working for his father and grandfather at the family’s Stardust Motel in Wallace.

Later, while managing family properties, including the Wallace Inn, which opened as a Best Western affiliate in 1989, he was seated on the board of directors for Best Western.

As a board member, he says he talked to many frustrated hotel owners who thought that cookie-cutter franchise requirements didn’t fit individual properties.

“They wanted freedom to run their businesses the way they wanted,” he says.

Today, with a business model that recognizes and encourages independent hotel operations, the Wallace Inn and more than 400 formerly Best Western-branded hotels are among those that have switched to the Magnuson Hotel brand.

In the international realm, Magnuson Hotels earlier this year joined in a distribution partnership with Chinese operator Jin Jiang Hotels and European operator Louvre Hotels, in which the partners agree to market each other’s brands and affiliates.

With an inventory of 600,000 rooms between the partners worldwide, that’s equivalent in number to a top five global hotel chain, Magnuson claims.

Magnuson Hotels isn’t the first venture in which Thomas and Melissa Magnuson have created a new brand.

The couple started Silver Country marketing campaign in the 1990s to promote North Idaho’s Silver Valley as the center of a four-season, 1,000-mile trail network.

Melissa Magnuson, a veteran marketing executive, says, “Silver Country was born out of the need to transition the Silver Valley out of a mining economy that wasn’t doing well and repackaging it as something marketable to tourists.”

Silver Country had the support of business and recreation organizations from Spokane to western Montana.

“We didn’t do it by ourselves,” she says. “It became a coalition.”

Looking back, Thomas Magnuson says, “It’s pretty satisfying from our perspective, in Wallace. Today, it’s a blueprint for economic transition.”