Industry NewsCalculated Growth: Choice Hotels Annual Convention Showcases Momentum and Expansion Plans

Calculated Growth: Choice Hotels Annual Convention Showcases Momentum and Expansion Plans

This week, Choice Hotels International is hosting its 67th Annual Convention at Mandalay Bay Resort & Casino, Las Vegas, bringing together more than 6,000 hotel owners, general managers, vendors, and Choice associates. LODGING was on hand to gather insights from Choice leadership on the company’s strong growth and performance across its many brands, which inspired the convention’s “unstoppable” theme.

During his keynote at the Tuesday afternoon Corporate Business Session, President and CEO Pat Pacious highlighted the company’s three years of RevPAR growth exceeding the industry average. “We achieved that momentum despite some tremendous challenges, [including] a pandemic, an industry-wide labor shortage, and inflation. Even in the face of all of that, together, we’ve performed brilliantly. That’s what gives us so much confidence in the future,” he said. “There are a lot of very successful owners in this room. And they know that when others are fearful, that’s when you build.” The franchisees are well-positioned, Pacious maintained, to capitalize on what he calls the “5 Rs” driving travel demand: “rising wages, retirements, remote work, road trips, and rebuilding America.”

Pacious went on to detail Choice’s robust development: “Last year, we ended the year with almost 800 new construction hotels in our pipeline. And right now, almost 100 hotels are actually under construction and expected to open this year. Fifty-three more are expected to begin construction this year. That’s unstoppable momentum.” The growth, however, is calculated to ensure that new franchisees will be strong performers. “For two straight years, the new hotels we’ve brought in are, on average, performing at twice the revenue of the hotels that we’ve exited,” he added. “Our model is different. We’re not chasing growth at all costs. Our entire system is getting better together.”

In terms of the company’s chain scale market positions, Pacious explained, “We are a challenger in upscale, we own extended stay, and we keep stealing share in midscale and upper midscale.” For example, the company is on target to open 700 extended-stay hotels in the next five years, while the upscale Cambria brand has increased its number of open domestic hotels by nearly 200 percent since December 2017.

Radisson Acquisition

Acquired by Choice in August 2022, Radisson Hotels Americas and the competitive value it brings to the Choice family was a major focus of this year’s convention. “We’re joining Choice and Radisson to create one powerful business and keep our industry-beating momentum going,” Pacious said. The ability to capture more upscale and full-service market share was cited as a major advantage of acquiring Radisson, which has over 1,700 hotels worldwide.

Speaking at the Radisson Upscale Brand Session on Wednesday, Mark Shalala, senior vice president development, explained, “Driving the growth of our upscale platform is a primary objective for Choice Hotels, and Radisson fills a very important whitespace in the Choice Hotels portfolio, which now consists of 22 well-segmented brands.” Radisson’s history and reputation were also key considerations. Janis Cannon, senior vice president of upscale brands, described Radisson as “a strong brand with a proud legacy. … For over 114 years, Radisson has stood the test of time, and it is a brand known for quality across the globe.”

In terms of plans for the newly acquired brand, Cannon commented, “The equity we have in the brand names allows us to thoughtfully craft the next chapter of the Radisson story that will resonate with our three core customer groups: corporate travel buyers, meeting and event planners, and of course, our hotel guests.” Shalala added, “What might surprise you is that our upscale portfolio now consists of eight brands, over 400 hotels, and 80,000 rooms globally. And we’re just scratching the surface of where we can take this. I can tell you right now we did not make the single largest investment in Choice Hotels’ history to acquire Radisson to simply babysit it or let it languish. Our goal is to grow it, and grow it aggressively.”

Choice’s upmarket move is being complemented by new loyalty and promotional initiatives, including the recent introduction of a Choice Privileges Select Mastercard and the launch of a national multichannel marketing campaign starring actress and musician Zooey Deschanel.

Brand Announcements

Among the many brand developments highlighted at the annual convention was the 15-year anniversary of the Ascend Hotel Collection. Choice launched the industry’s soft-brand segment with the introduction of Ascend, which is comprised of unique and historic boutique and resort hotels, today numbering more than 330 globally.

A milestone for Clarion Pointe—60 open properties—was also announced. The select-service midscale brand extension of Clarion debuted in September 2018. Another growing midscale brand, Sleep Inn, was also in the spotlight during the convention. By the end of 2023, Sleep Inn’s next-generation prototype is expected to be completed and rolled out.

Developers in attendance enjoyed a sneak peek of the prototype, which “builds on the strong value proposition developers expect from Sleep Inn to maintain the segment’s lowest build and operating costs while homing in on the brand’s inviting, wellness-focused elements that help modern travelers get a great night’s rest,” explained David Pepper, chief development officer.

Sleep Inn’s refreshed prototype features amenities such as the following:

  • Modernized guestrooms with increased functional spaces, light dimming, smart thermostat capabilities, regional artwork, and a new color scheme that promotes relaxation.
  • Stylishly designed open and airy lobbies with tall windows and murals that support the brand’s nature theme.
  • New-and-improved breakfast areas that can be partitioned to suit guests’ needs, including a game room, TV room, and flexible workspace.
  • Expanded wellness offerings, including water refill stations and newly equipped fitness centers.
  • Designated outdoor spaces to allow guests to connect with nature.
George Seli
George Seli
George Seli is the editor of LODGING.

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