Spokane Journal of Business

Magnuson Worldwide sees surge in new hotel contracts

Company also reports big rise in room reservations, launches sales incentive

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Magnuson Worldwide, a hotel group that offers reservation management and branding services with headquarters in Spokane and London, says it has signed new contracts with 26 hotels in a 30-day period that ended Dec. 12, a majority of which are branding as Magnuson hotels.

Some of the hotels previously were aligned with such companies as Wyndham Hotel Group, Choice Hotels International, and Best Western International, company CEO Tom Magnuson says.

Nearly 100 independently owned hotels, with one in Canada and the rest in the U.S., currently operate under one of Magnuson's three brands—Magnuson Grand Hotels, Magnuson Hotels, and M Star Hotels.

In addition, the company has announced a 35 percent increase in reservations this year through Nov. 29, compared with year-earlier figures.

Separately, Magnuson says it's starting a commission-based sales platform to pay people for referring hotels that become branded through the company.

It says its new commission-based incentive program, called Magnuson Partners, is available to people who enroll on the company's website to become an independent sales agent to make hotel referrals. If a referral results in a hotel owner contracting with Magnuson, the agent can earn 50 percent of a licensing fee that is paid by the hotel to Magnuson for branding with the company.

"Depending on the length of the contract, it can be a $2,500 to a $5,000 signup (licensing) fee," says Magnuson, who owns the company with his wife Melissa. The referring agent also will receive a $1-per-booking royalty for a year, Magnuson says.

He adds, "What we're trying to do is rapidly grow the company by using an affiliate sales model where people could keep their current job or even be self-employed and then make these referrals. It's also good for people who work in the industry, such as vendors who are suppliers to hotels."

Magnuson says the new commission-based pay model will be honored also for referred hotels that choose to contract only for services from Magnuson, without taking on the brand, but the compensation will be less because the initiation fee for those hotels is less, he adds.

The Magnusons founded the company in Spokane in 2003, and in addition to hotels that carry its brand name, the company provides services, such as reservation management and marketing assistance, to nearly 2,000 hotels across North America and in Europe. All of the hotels in the group, whether under its brand or only receiving services, are independently owned.

The company employs about 50 company employees in Spokane and 32 people in London, where Magnuson and his wife moved in March 2010.

Overall, the company provides what it calls a low-cost hotel branding alternative to hotel franchises. Those franchise companies typically receive a percentage of a franchisee's gross room revenue, Magnuson says.

Treva Lind
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