HB ON THE SCENE: Choice Unveils Brand Strategies

LAS VEGAS—During the second day of sessions at Choice Hotels’ 63rd annual convention, the company stressed the importance of its book-direct and revenue management initiatives, and unveiled strategies for several brands.

At a marketing and distribution session, Robert McDowell, chief commercial officer, noted that when hoteliers partnered with Choice Hotels they did so for two reasons—that the company would deliver guests and provide tools, marketing and support to help increase revenue. “In 2016, the Choice central reservations system delivered nearly half of all revenue for your hotels. That’s up from 43% the year before. Our reservations contribution is leaving competitors in the dust,” he said, noting that the landscape is becoming more complex and hoteliers must engage with revenue management tools like SmartRates, the company’s pricing optimization tool, and ChoiceRM, the pay-to-play revenue management program. In 2016, hotels that engaged in the ChoiceRM program drove up their RevPAR by 6%.

Turning to the Choice Privileges rewards program, McDowell said that last year, the program signed up 4.6 million new members. “In fact, by August, we’d already broken the record of our best year ever in our program’s 20-year history. And, in January, we enrolled our 30 millionth member. And we’re growing even faster than last year.

“Re-launching the Choice Privileges program was the first step of our book-direct strategy,” he continued. “It gives guests a reason to keep coming back after we’ve worked hard to acquire them… To date, revenue from ChoiceHotels.com is up by 17%. And the OTAs are feeling the pinch.” This June, the company will begin offering a member price on the advanced purchase rate and hotel-initiated promotions only when members book on ChoiceHotels.com.

The company also stressed the importance of mobile and its new app, with more than 60% of traffic to the website coming through mobile devices. The enhanced app changes depending on where the user is in the travel journey; the company reported that 30% more guests are using the Choice app this year alone and revenue is up over 50%.

Later in the day, during a session on Cambria Hotels & Suites, Janis Cannon, SVP of upscale brands, filled attendees in on plans for the brand. “The success of Cambria as a brand is no longer in doubt,” she said.

President/COO Pat Pacious added, “Choice Hotels is building Cambria to be a lasting success… Choice intends to own the upscale category. It’s where we’re putting our investments. We’re already firmly in the upscale category with more than 200 hotels between Ascend and Cambria. Choice has invested significantly in Cambria—$450 million and counting.

“We’re executing a development strategy that puts Cambria in high-visibility, urban areas,” Pacious continued. “We’ve got executed deals, open hotels and hotels under construction in 34 of the top 50 markets.”

For her part, Cannon added, “I’ve watched a lot of brands come and go in my career. I’ve seen the really good ones evolve in distinct ways. Every brand has a lifecycle… We’re keeping a sightline on Cambria’s lifecycle. We know where we are, and we know how to navigate to the next point in our lifecycle.

“Choice is investing more money in Cambria than in any other brand in our portfolio,” Cannon continued. “This level of investment—and where we’re investing—is another level of proof that Cambria is becoming a mature brand, a brand taking off to capitalize on its next opportunity.”

According to the company, 2016 was the best year in Cambria’s history. Overall Cambria RevPAR jumped by more than 15%, driven primarily by an increase of over 10% in rate. Last year, the brand increased its market share by 730 basis points. 

“For the next phase of our growth, we’re going after key locations,” Cannon said. “We’re sighting our locations with ruthless specificity. In our sightlines, based on successful identification of demand generators, we’ve opened hotels near airports, near conventions centers… In our sights are the cities that match the wants of our guests with emerging food, music and arts scenes that connect with the Cambria guest—New Orleans; Savannah, GA; Asheville, NC; Charleston, SC; Pittsburgh. Capital cities with universities—we’re there too. And it’s smart to be, because universities bring the students that create trends in culture and capitals bring the stability of government business.”

There are now 30 open Cambria hotels, with 10 more openings slated for 2017 along with 16 projects under construction right now. The brand executed 28 new franchise agreements in 2016 and has 45 signed projects in the pipeline.

Finally, Sleep Inn unveiled new guest offerings, including the Zenses line of bath and body products, and Dream Cup, a hot beverage station that will offer unique premium blends of tea.

Inspired by nature, the bath line was created exclusively for Sleep Inn and includes shampoo, conditioner, body soap and lotion. The products are infused with essential oils. “Altogether, the Zenses line of products now reflects our brand promise at a touchpoint that guests see, smell and touch,” said Patrick Clyde, Sleep’s brand strategy director.

With regard to the hot beverage station, he said, “We don’t intend to chase and match the quality of chains like Starbucks where they charge over $5 for a cup. That’s not the race we want to be in, since we give ours away for free. Dream Cup will serve the same coffee as today, but with a refreshed presentation and some innovation around the other hot beverage items.” Dream Cup offers coffee, hot chocolate and premium sachet tea. New tea blends have been developed exclusively for Sleep Inn, including a signature Be Rested Chamomile herbal blend.

“Tea is much more prominent now,” he said. “We think of America as a coffee culture, but younger guests are drinking tea more and more often.” 

To stay true to the prototype design, the brand is also rolling out new bedding, highlighted by a white, nature-inspired coverlet.

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