This week Choice Hotels announced a $40 million commitment to help qualified Comfort Inn and Comfort Suites franchisees improve their properties. Choice made the announcement at its annual convention in Los Angeles as a way to build on the brand improvement strategy that the company launched last year. “The reason we’re doing this is because Comfort Inn is our flagship,” says Steve Joyce, CEO of Choice. “With this change, we’re going to see a significant increase in the performance of the brand and the rate that it carries, and move it more upscale to where the competition moved a few years ago.”
Joyce hinted at this strategy in January, when he said, “For the power brands like Sleep Inn and Comfort Inn, we’re pushing our improvements through incentives because we want to get them done quickly. On the other brands, we’ll be taking an approach that’s more of a, ‘Hey, we love you, but if you don’t invest in your property we’re going to find someone else.’ It makes sense to put capital into Comfort, which is the engine of the company and it will be for quite some time. It’s about making sure our brands are consistent as can be and that customers like them. “
In his press briefing at this week’s Choice Convention, Joyce noted how Comfort Inn was the brand to beat in the 1990s. When he was at Marriott, he says, “we had developers coming to us saying that they wanted to do this product that Choice is doing. The result was Fairfield Suites, which is a copy of Comfort Suites.”
Now, according to Mike Varner, head of Comfort’s domestic brand management, “[Comfort] is in a battle to earn back customer respect; to take back occupancy and earn higher rates.” In his speech at the convention, he said, “Right now our guests are staying at Holiday Inn, Hampton, and La Quinta too often. We need to go rescue our guests and bring them back to Comfort.”
Choice is using the $40 million to assist Comfort hotel owners meet their property improvement plans. “We’ve got to get our PIPs done,” said Varner. “Comfort’s reputation is at stake.” He noted that franchisees who applied for the incentive program had to meet certain criteria—such as guest likely to recommend scores of 7.2 or higher. If they qualify, Choice will reimburse up to 50 percent of the owners’ PIP costs, which could add up to $150,000 per property.
There are a few strings attached, of course. In order to collect, property owners must do their renovations using Choice’s qualified vendors and they must stay within the company’s system for at least five years. But even with these restrictions, there were plenty of interested franchisees at the convention.
During the three-day event, Choice executives also emphasized the continuation of investments in improvement initiatives for its Sleep Inn and Clarion brands. Alexandra Jaritz, senior vice president of brand strategy and marketing, said that 100 Sleep Inn hotels have fully completed their refreshment plans. “For Sleep Inn, we’re offering our properties on average $40,000 to help them complete their PIPs,” she said. The public space deadline for all Sleep Inn hotels is the end of this year, and the end of 2014 for guestroom improvements.
As part of the company’s continuing commitment to Clarion, Choice will invest up to $2 million in development-incentive payments to encourage franchisees to incorporate the Bistro C food and beverage concept in their hotels. Bistro C was introduced to Choice’s midscale hotels last year and offers franchisees a scalable and flexible model that responds to guests’ demands for freshly prepared meals, while supporting banquet and business catering with minimal labor requirements.
“Bistro C is just one of the first steps in our strategy and it’s making giant strides,” said Dan Sweiger, head of domestic brand management for Clarion. “Owners at the first Bistro C location have told us they are extremely pleased that with this new concept, we have figured out a winning formula to make food and beverage profitable in the midscale segment.”