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Choice Focuses on Loyalty, Distribution, Brand Updates

Now is the time to capitalize on opportunity, according to executives at the 2016 Choice Hotels International annual convention in Las Vegas. 
Hotel News Now
May 12, 2016 | 7:12 P.M.

LAS VEGAS—It’s all about momentum for Choice Hotels International.

That’s the theme for this year’s annual convention, and with new plans in place for distribution, brand initiatives and loyalty, the company is set to deliver on forward motion into 2016.

“Last year was a breakthrough year, but momentum alone is not enough,” said President and CEO Steve Joyce at the opening general session. “What you do with it and how you make the most of the opportunities available is what makes all the difference. Today, Choice Hotels is poised to make the most of every opportunity.”

Big-picture initiatives
One big focus of the conference is about making the most of the time left before the next industry downturn, as Choice executives stressed distribution and revenue management strategies, property updates, mobile readiness and more.

Earlier this week Choice announced it would join Marriott International, Hilton Worldwide Holdings, InterContinental Hotels Group and Hyatt Hotels Corporation in offering exclusive low rates to loyalty program members who book directly on ChoiceHotels.com.*

That announcement dovetails with enhancements the company is making to its Choice Privileges loyalty program. Earlier this year, Choice relaunched the program significantly, adding instant rewards redemption options and a faster track to rewards.

The program captured 1 million new members in its first 100 days, according to EVP and Chief Operating Officer Patrick Pacious. The company continues to add perks and extras, like instantly redeemable digital gift cards and extra rewards when guests book midweek travel. Uber will be a new partner in the U.S. in the coming months, and Choice Privileges members will be able to earn Uber credits through loyalty redemptions.

The mix of points and instant rewards like gas, coffee and restaurant gift cards is designed not only to appeal to today’s guest, but also to keep Choice top of mind, said Jamie Russo, VP of loyalty programs and customer engagement.

“Loyalty is a two-way street, and we’ve taken a major step in solidifying that relationship,” he said. “The customer is now thinking of (Choice Hotels) while enjoying coffee, eating dinner or filling their car with gas. We’re getting customers to think of Choice at times they never would have before.”

Distribution is a big focus for the entire company. In 2015, Choice’s central reservations system generated $3 billion in revenue, so pushing direct visits to Choice.com is key, said Chief Commercial Officer Robert McDowell.

Growing profitable midweek business travel is another distribution priority. The company has a goal to improve midweek business by 25%.

With new revenue management program enhancements also in the works, Choice executives all stressed the importance of acting quickly to take advantage of growth opportunities now.

Brand updates
Cambria Hotels & Suites: Growing the upscale brand “is the No. 1 priority for Choice Hotels,” said the brand’s director of brand strategy and marketing, Rebecca Mervis.

High-visibility, high-barrier-to-entry urban gateway markets have been in Cambria’s crosshairs. In addition to key openings in New York City, the company signed franchise contracts in cities including downtown Atlanta; downtown Memphis, Tennessee; Seattle; San Antonio; and Philadelphia in 2015.

While from its start the brand was a new-build offering, now the company is making room for some adaptive-reuse conversions, said Mark Shalala, VP of development for Cambria. Two of those projects are underway in Chicago.

With a strong pipeline and a new brand leader in SVP for Upscale Brands Janis Cannon, the brand’s next focus is to capture the small-group business meeting segment.

Comfort Inn: Several years ago, the Comfort Inn brand launched a major refresh designed to increase guest satisfaction and likelihood to recommend, while removing bottom-performers from the system. In 2013, the company committed $40 million in corporate dollars to help the refresh along.

Today, the company has terminated or repositioned more than 600 hotels in the Comfort system. Still, the brand hasn’t made the improvements across its portfolio that company executives want to see.

“Too much of our system is still old and dated, three years after the refresh,” said Anne Smith, VP of brand strategy.

Megan Brumagim, head of domestic brand management for Comfort brands, announced the brand’s new deadlines for public space and guestroom refreshes. Public spaces must fall into brand standard designs by the end of 2017, and guestrooms by the end of 2019.

“Having a modern, up-to-date hotel is table stakes for playing in upper midscale,” Brumagim said. “If we do nothing, we fall behind. We must do this before the cycle softens. We cannot let this stretch on indefinitely.”

Additionally, every Comfort Inn must go smoke-free by 1 July. The company also is invigorating its training, bringing new online learning resources, activating a systemwide daily huddle at every property and doing in-person meetings.

Sleep Inn: The new-construction midscale brand launched a new design prototype this week that builds on consistency goals the brand has enacted for the last few years.

The brand’s new public space design features an open public area with versatile seating spaces, local artwork and more spaces to plug in. Guestrooms have slimmed-down furnishings, a partially open closet and beds with white triple-sheeting.

Since the brand first launched its “Designed to Dream” prototype in 2010, the brand’s revenue per available room has grown more than 40%. Today the company has 75 Sleep Inn projects in the pipeline.

Ascend Hotel Collection: Choice’s soft brand has 43 openings planned for 2016, including 32 new locations for the brand like Dallas; Sonoma, California; La Jolla, California; and more.

Neil Cantor, head of Ascend, said boosting direct bookings is a priority for the brand.

Hand in hand with that goes promoting new Choice Privileges elements that appeal to the independent-minded traveler. Cantor cited the company’s partnership with Great American Days to offer excursion rewards, like skydiving trips, to Privileges members.

*Correction, 12 May 2016: An earlier version of this story used the incorrect website name.