Canadian business strong at hotel level

Brian Leon

LAS VEGAS-Choice Hotels business in Canada is strong at the hotel level, said Brian Leon, managing director for franchise growth and administration at Choice Hotels Canada. They weren't hit as badly as higher end hotels, he added.

CHC leads the Canadian industry in conversion development, and its Canadian development pipeline is second only to that of IHG, said Leon. The company has signed 19 new deals since 2009. New hotels include the Quality Hotel & Suites in Langley, BC, while properties under development include Quality Inn, Prince Albert, SK; Comfort Inn & Suites, Surrey, BC; and Econo Lodge, Hinton, AB, along with the Ascend Collection properties (see "Choice Hotels Ascend-ing in Maritimes and Quebec").

"One of the things we were all hit by is that travel in the aggregate has come down. We hope by getting people exposed to our brands, we can control overall revenues," said Leon.

"We are making good progress in driving guest satisfaction-and it's the highest it's ever been-guests are exposed to a good experience and it's up to us to make sure they continue to have good experiences."

Choice is making positive progress in its Likelihood To Recommend (LTR) scores at a time when some hotels are thinking now is the time to cut corners.

"We didn't shed a lot of overhead, and we increased our resources to enhance our product. We targeted strategic development only at hotel properties that could add to our system positively," said Leon.

He noted that the LTR scores that came in from hotels added since 2009 are 8.7/10, way above the brand average, and that 18 of those 20 hotels were above the brand average in LTR.

On the other hand, Leon said that last year, Choice terminated agreements with nine hotels, more than in the past four years combined.

"As a franchisor, we don't want to lose franchisees, but we have a duty to the brand and the other franchisees.  If a hotel is struggling, we work with them to get to the point where they meet our standards, but occasionally they just can't do that."

Six of the hotels were forced to leave, while three chose to leave on their own. "Of the six  hotels with forced exits, the average LTR was 6.5, while the ones we added averaged 8.7." The overall average for Choice's 280 Canadian properties is 8.1.

At press time, Choice Hotels Canada had 22 properties under development: two Ascend Collection; five Quality, nine Comforts and six Econo Lodges, in all provinces except for PEI and Newfoundland. Fifteen of these are conversions and seven are new builds.

In Las Vegas,Tim Oldfield, managing director for franchise performance at Choice Hotels Canada, encouraged franchisees to leverage Choice's resources, including HOST (Hospitality Operations Success Training) a one-week Choice-specific certification program for general managers.

Choice aims to have all of its GMs HOST certified by the end of 2010, according to Leon. "It's a real positive thing. Given the importance of operational standards and service, it's important to have a properly-trained GM."  And while Leon has had tons of pushback, those who experience the program have been pleasantly surprised.

Choice University, CHC's fall conference, and ROI (Regional Operating Improvement) meetings are some of the other opportunities for Choice franchisees.

Oldfield also encourage franchisees to make just one extra prospecting call per day. By his calculations, one call per day equals 260 calls per year. At an eight per cent conversion rate that equals 20 new accounts at 50 room nights each, or $94,000 worth of new business per year.

He also spoke about the power of the Choice Privileges reward program, saying the program had grown from $42 million to $85 million in redemptions since 2006.  There are now 384,000 Canadian Choice Privileges members.