Rocky Mountain Hospitality LLC, a Post Falls-based hotel operator with eight properties in Idaho and Montana, has grown steadily since buying a modest hotel in Coeur d'Alene and moving its base to North Idaho in 2004.

At that time, it had two properties.

Today, Rocky Mountain Hospitality operates six GuestHouse hotel franchises: three in North Idaho, one in Lewiston, one in Idaho Falls, and one in Missoula, Mont. It also operates a Super 8 hotel in Moscow, Idaho, and an independent hotel in northwestern Montana.

Almost all are turnaround properties, says Steve Rice, who owns the company with his wife, Cinthia. "The goal is to renovate, reposition, and reflag," Rice says.

Rocky Mountain Hospitality employs 100 people and likely will hire another 20 or so this summer, he says.

Rice says the Hendersonville, Tenn.-based GuestHouse International hotel chain is franchisee friendly, serves Rocky Mountain Hospitality's target market, and has lower fees than other franchise operations.

"Our mission is to offer the greatest value in our market," Rice say, adding, "That doesn't mean we have the lowest rate, but no others give more for the same rate."

One key to Rocky Mountain Hospitality's growth, he asserts, is in keeping its debt-to-revenue ratio lower than its competition. Rice says the company usually funds down payments for new acquisitions through retained earnings, so it's not strapped with debt.

"That helped us in the downturn," he says.

By focusing on modest properties with around 60 beds, Rocky Mountain doesn't have to compete with many big investors, he adds.

In the years leading to the recession, hotel property prices escalated, and Rocky Mountain didn't acquire new properties.

"That turned out to our benefit," Rice says.

When the recession hit, prices and revenues crashed, he says. Some competing properties that had changed hands at the top of the market couldn't stay afloat.

During that time, Rocky Mountain bought The Lodge at Lolo Hot Springs, near Lolo, Mont., the company's only independent property. Rocky Mountain then bought a hotel in Kellogg, Idaho, out of bankruptcy.

In its most recent acquisition last July, Rocky Mountain bought a hotel in Missoula, where it qualified for a Small Business Administration loan program. "We probably couldn't have acquired it without the SBA loan," Rice says.

During the downturn, Rocky Mountain properties captured some new customers who stepped down to value hotels like GuestHouse from more expensive hotels, Rice says. That was offset, however, by the loss of the construction market and a general decline in both leisure and business travel.

Value properties weren't hit as hard as others, though, he says. "We were down less than the general market, still profitable, and still acquiring properties."

While average daily occupancy rates were down, net income grew companywide because of the acquisitions, Rice says.

"Our average daily rate has improved over the last 18 months, but it's not where it was in 2008, and our expenses have increased," he says. "We made adjustments based on the downturn being the new status quo."

Rocky Mountain is looking for additional potential acquisitions, and Montana might be the next growth area for the company.

"I would like to look at the next market," he says. "Now that we're in Missoula, maybe we'll look at Butte and Helena."

GuestHouse International might be a small player in the hospitality industry, considering that only some 60 hotels are under its brand, and Rocky Mountain is its largest franchisee, but the Internet has been the "great equalizer" in the markets they serve, Rice says.

"There are no TV ads for GuestHouse. It's all about destination, and 80 to 90 percent of travelers use the Internet to make their plans," he says. "If you pull up Sandpoint on the Internet, GuestHouse is going to be right up there with Best Western."

The Rices run the company out of a 1,200-square-foot office attached to their home near the Spokane River in Post Falls.

"It's not hard to go to work," Rice says. "It's harder to get away from work. The challenge is to shut the door."

For that reason, the office has its own separate entrance that isn't visible from the living area of the house.

"We don't walk through the house to get to the office," he says.

The company started with an investment in a single hotel property in Pocatello, Idaho, 14 years ago. At the beginning, the couple kept their day jobs.

Steve was general manager at an upscale hotel property, and Cinthia was in marketing.

"We ran the first hotel almost a year with separate jobs," Cinthia Rice says. They then decided to transition the hotel ownership from an investment to a career.

"It was a huge leap of faith," she says.

As they had children, they decided their long-term plan would be to buy more hotels and hire general managers to run them. That way, they could grow Rocky Mountain Hospitality while devoting more time to their two boys rather than spend 60 to 70 hours each running a single hotel.

With two boys under 4 years old, they faced the decision of where to raise a family. Coeur d'Alene, one of their favorite vacation spots, was high on their list. So, when the hotel at 330 W. Appleway hit the market, they sold the Pocatello property and moved to North Idaho.

"We decided to come up and expand up here," she says.