Franchisee Focus
Choice Hotels Execs Tout Strong Owner Relationships As Key To Pandemic Success
While the pandemic represented a challenging time for many hoteliers, it also proved to be a key point of differentiation for some hotel companies, such as Choice Hotels International, Inc., which outpaced the industry throughout the last two years in terms of performance and is poised for continued growth.
Speaking during a media roundtable at its 66th annual convention at Mandalay Bay Resort & Casino in Las Vegas earlier this month, a few leading Choice executives emphasized the company’s commitment to its franchise partners while touting the success of the event.
The annual conference drew some 5,200 attendees, which exceeded attendance from the company’s last in-person event, which took place in 2019.
“To see more owners here than we saw in 2019 really says a lot,” said David Pepper, chief development officer, Choice Hotels.
“We’ve been connected virtually for the last two years and it’s fantastic to be back in front of them [franchisees],” said Pat Pacious, President/CEO, Choice Hotels.
Pacious maintained that Choice Hotels was the best performing hotel company during the pandemic, last year exceeding overall industry RevPAR by some 19 percent. He added that Choice was also the first hotel company to outpace 2019 performance levels.
Pacious further detailed how the company achieved those results.
“Nobody advertised in the summer of 2020, except for Choice Hotels. We were on TV with our “On The Road Again” campaign and that drove a lot of business to our hotels. We built on that with some pretty interesting technology that allowed us to see what was happening logistically across the country and take that information and drive the right promos; for length of stay where that made sense, for discounting where that made sense. The sophistication we’ve got around our merchandising capabilities really accelerated during the pandemic so that drove a lot of business travel in the industry verticals that we serve,” he said.
Pacious also attributed some of its success to its strong relationship with its franchisees.
“When this pandemic hit, it hit a lot of us that our friends are in trouble. Not just our business associates in the franchise world, but our friends. This company didn’t decide in March of 2020 that the franchisees were at the center of what we do. That’s been our legacy, so this was very much in our DNA,” he said.
Pacious added, “We have some really fun stories of how we took business from our competition. It’s interesting talking to these owners who own other product and they say ‘the Choice global sales people and the Choice franchise services people were there when we needed them and I didn’t get that from my other brand.’ Those are just some key examples of why we took lead and have held onto it as we moved through 2021,” he said.
Robert McDowell, chief commercial officer, Choice Hotels, reinforced the point.
“We were one of the few chains that didn’t let go of the majority of our sales teams. A lot of our competitors let go of their sales teams, while we kept them employed,” he said.
Meanwhile, the company remains keenly focused on driving down the cost of ownership and increasing profitability. There is an ongoing initiative to reduce costs for franchisees by 20 percent by 2023.
“One franchisee said to me ‘I’ve never been to a convention where the focus was lowering costs for the owner,’” he said.
Finally, Pacious detailed the company’s recent focus on the upscale and extended-stay segments and commented on the potential for brand expansion down the line.
“We’ve done a lot of investment in brand launches in upscale and extended-stay so we have a lot on our plate to be even more successful in those two key segments. There’s one intersection there between extended-stay and upscale where we aren’t yet. With the launch of Everhome Suites [midscale extended-stay brand] and the success we’re seeing there we will want to get that to scale before we probably enter that space. But that will likely be the next opportunity for us to grow our business,” he said.
