HB ON THE SCENE: Choice Hotels Readies for the Future

LAS VEGAS—The theme of the 63rd annual Choice Hotels Convention is “Future Ready.” And with more than 5,000 hotel franchisees in attendance, the company outlined the steps it’s taking to prepare for the future in its general session.

CEO Steve Joyce stressed how important the government’s role is when it comes to hospitality’s future. “The new administration will implement policies that affect all of us here in our businesses, as employers and as taxpayers. As leaders in the business community, we have a special responsibility to advocate for policies that will help the economy grow and provide security and prosperity for everyone,” he said. “Choice Hotels is hopeful that the president will move forward with a pro-business agenda. This includes promoting a fair business environment to encourage the growth of franchise businesses and supporting an improved travel infrastructure that includes airports, roads and bridges.

“We’re looking for the new administration to be a champion for travel, not a limiter,” he continued. “And to promote a secure, efficient, but welcoming customs process that attracts more international visitors—not less.”

In addition to travel and immigration policies, there are a number of public policy issues that should be on hoteliers’ radar, said Joyce. Top of the list? Federal income tax reform. “What’s exciting is how this reform may improve your business and provide great opportunities for developers to build new Choice properties,” he said. “Did you know that one of the potential changes to the plan is the ability to expense the total cost of your hotel as you build it? If expansion is part of your future-ready plan, right now might be an ideal time to begin developing.”

Joyce noted that healthcare is another issue Choice is watching closely. “[We’ve] always supported a healthcare system that makes quality affordable care available and accessible to all who need it,” he said. “We need the Senate to do some good work and hopefully get a good result. We will, however, continue to work with Congress and the administration to obtain the best result on a healthcare system for our franchisees, for all of our employees and for the country.”

Turning to the industry, Joyce said, “We’ve been riding the wave of one of the longest and most positive lodging cycles on record. Opportunities to improve your business and optimize rates have never been better.”

Pat Pacious, president and COO, added that Choice brands have continued to outpace the industry. “In 2016, Choice’s domestic systemwide RevPAR increased 3.9%, outpacing the industry. In the first quarter of this year, RevPAR is up another 3.8%, outpacing the entire industry. Together, we are going to continue to beat the competition.”

To beat the competition and become future ready, the company highlighted several initiatives: Choice University, the online learning system for hotel managers and staff, will later this month launch a newly enhanced website designed to create a more tailored hotel learning portal and new training delivery approaches, as well as provide a better user experience with more intuitive search and navigation; a next-generation, cloud-based reservation system, which will roll out this year; its proprietary revenue management tools—ChoiceRM and SmartRates; and Badda Book. Badda Boom, which is a new integrated advertising campaign that encourages consumers to book directly through ChoiceHotels.com or the Choice mobile app for the lowest prices guaranteed and instant rewards.

“The OTAs continue to affect our business,” Joyce said. “In the battle for hotel bookings, OTAs are becoming much more aggressive… In the past, these OTAs have benefitted by fueling the misperception that the best rates are found with them on their websites. This is where your partnership with Choice becomes critical. Alongside the industry, we are also working to stop online travel scams that hurt our customers. We’re finally telling customers the truth with a campaign that clearly communicates that the lowest prices are available on ChoiceHotels.com and on our mobile apps.”

“Just because you visit multiple sites doesn’t mean you’re shopping around,” Pacious added, noting that many customers don’t realize how many sites are owned by Expedia Inc. and The Priceline Group. “Our message to consumers is plain and simple: We provide value and the best rates to those guests who book directly on our platforms. Our national advertising confirms that it really is that easy. OTA growth rates have slowed significantly in recent months and ChoiceHotels.com continues to grow. This is driven almost exclusively by direct reservations on our digital platforms and Choice Privileges member revenue growth, which is up 17% from last year. Expanding our book-direct strategy will be key to moving forward.”