Steve Joyce: “Once in a lifetime opportunity to make inroads”

Fred Schneider of The B52s at the Choice Hotels International Conference last month.

NATIONAL HARBOUR, MD—“There has never been a downturn like this—everyone is uncertain and nervous,” Choice Hotels International president Steve Joyce told the thousands of franchisees who attended the chain’s annual convention at the Gaylord National Resort & Convention Centre south of Washington, May 11-13. “You have a once in a lifetime opportunity to make inroads with customers who have moved or who are not acquainted with our brands.”

Joyce said that through March 31, Choice brands have increased 110 basis points in RevPAR against their competitive set, “the largest overall increase in seven years.”
He pointed to the 400 Gold or Platinum levels among the chain’s 5,800 properties, rapidly growing membership in the Choice Privileges loyalty program, and a powerful global distribution system as other reasons for optimism.

While other companies have cancelled their annual conventions due to the economy, Joyce stressed that “holding this convention is critical” as an opportunity to share information, hear and address concerns, and conduct effective and timely training sessions.  While this year’s conference was toned down from last year’s event in Las Vegas, where Cirque du Soleil and Deepak Chopra provided entertainment, there was still lots of pazzaz with travel expert and journalist Peter Greenberg headlining the Corporate Business sessions on Tuesday morning, and the B52s performing at an 80s Bash on Tuesday night.

(For more information on Peter Greenberg, see Editorial on page 4.)

Choice Hotels Canada (CHC)  held a reception for Canadian delegates in the Lower Atrium of the Gaylord Convention Centre, complete with dancing fountains.

Exploiting the upside in any downturn

Tim Oldfield, CHC managing director — franchise performance, echoed Joyce’s sentiments, kicking off the Canadian AGM by saying he has a high level of optimism and that “the time is now.”

He quoted Jim Treliving of Boston Pizza, who says we should “exploit the upside in any downturn.”  The recession will change the behaviour of companies, which gives Choice franchisees an opportunity to attract more companies that never thought of using Choice brands before.

“Guests are looking for reliable value, and Choice Hotels are looking to exploit the upside of this downturn.

Oldfield noted that Canadian hotel occupancy declined to 45 per cent during the first quarter of 2009, but that it should end up the year at 55 per cent, down about five per cent from last year. Average Daily Rate (ADR) has not been impacted significantly—it remains a shade over $95, a one point drop from 2008.

Brian Leon. CHC managing director—franchise growth and administration told Canadian delegates that Choice Hotels Canada had 275 hotels last year. It brought 11 online and terminated agreements for 10 non-performing properties in 2008. But the hotel pipeline is “the strongest pipeline we ever had with 21 under development, a little over half in Western Canada.” By the end of the year, CHC should have 297 hotels open or under development.

The 11 hotels which CHC brought online are Quality Hotel Fireside in Niagara Falls, Econo Lodge City Centre Kingston, ON, Econo Lodge St. Apollinaire, QC, Comfort Inn & Suites, Edson, AB, Econo Lodge Canmore, AB, Quality Inn & Suites Levis, QC, Comfort Inn & Suites Saint-Nicolas, QC, Comfort Inn & Suites Airdrie, AB,  Comfort Suites Kelowna, BC,  Comfort Inn Mississauga, ON, and Quality Hotel Burlington, ON.
 
The Quality Inn Sarnia, ON, Comfort Hotel & Conference Centre Victoria, BC, and Quality Inn & Suites Petawawa, ON will open this summer.

During 2009 and 2010, CHC’s plans include enhancing the brands through the addition of great new properties, introduction of the Ascend Collection affiliation program and● growth with existing CHC franchisees, Leon said.

“The Ascend Collection gives us a opportunity to bring poperties into the system that wouldn’t fit with existing brands,” he added.

The Ascend Collection is described on the Choice Hotels website as a network of historic, boutique and unique hotels that gives the traveller an authentic, local experience. It was designed specifically as an upscale hotel with a strong local flair.

Choice is looking at performance marketing, which focuses on human behaviour. Performance marketing looks at where guests shop, i.e., online for 49 per cent of all transactions, and when they shop by day part.  The goal is to add more guests using the same amount of money.

And in late March, the company made a shift to a Best Available Rate strategy rather than the rack or standard rate.  Principles behind the BAR strategy are that dropping rate doesn’t increase demand, and that discount options should be reduced. They should sell effectively in all CRS channels, honour negotiated rates and look after these high value customers.

The changes have had an immediate impact on ADR, with a 7.3 per cent (or $6) improvement in ADR since late March.

The Econo Lodge brand will have a standardized breakfast in place by September, and this should give Econo Lodge a competitive edge in the economy segment.  It’s designed to be low-cost and easy to maintain, with signage a key element  of the program.

Quality Inn Harbourview wins Choice Hotel of the Year

The Quality Inn Harbourview St. John’s, NL won the Choice Hotels Canada Hotel of the Year Award. Kurt Schoenberg is the hotel general manager and the property is owned by InnVest REIT.