Choice’s Roadmap to RevPAR Growth

Choice Hotels has a simple plan to help its franchisees weather the current downturn: Send them more business. At last week’s Choice Hotels convention near Washington, DC, President & CEO Steve Joyce and other chain executives discussed a lot of topics, but none was as important as revenue generation.

“Across the board we’re seeing gains in market share as the result of our aggressive marketing and the positioning of our brands,” said Joyce during a press briefing at the convention. “This could represent a marked and possibly permanent consumer shift to a value orientation.”

Throughout his remarks to the 5,700 owners and managers in attendance, Joyce stressed revenue growth as the first among equals in initiatives Choice has launched to assist its owners. Among other marketing programs, the chain is boosting membership in its Choice Privileges frequency program, launching a $50 cash giveaway summer promotion and fully exploiting a range of online marketing initiatives, including aggressive use of social media.

The company has already seen results: The combined RevPAR index for all brands is up by more than one point, the largest overall increase in seven years. For the Comfort brand, the gain is nearly three points. In addition, reservations call volume is up eight percent, while the number of calls converted to reservations is up 17 percent. ChoiceHotels.com has seen a nine-percent increase in visits to the site.

As Chief Marketing Officer Chris Malone explained, it takes a multi-pronged approach for Choice to succeed in its “Roadmap to RevPAR” strategy.

“First, we must listen to and collaborate with our franchisees in everything we do, and working together we must position our brands for RevPAR growth,” he said. “As we implement, we must balance our single-brand and multi-brand marketing efforts and focus on doing fewer things, better to drive results. Along the way, we build guest loyalty and stay frequency, while also capturing and delivering reservations more profitably.”

Choice Privileges is a particular focus for Malone and his marketers. Calling it “an audacious goal,” Malone says Choice wants to enroll an additional 1.75 million members this year. Through April, nearly 600,000 new members joined, pushing enrollment above eight million. Malone says Choice properties could realize $250 million in incremental revenue this year if the program meets its membership goals.

Joyce reminded owners success is a shared burden: It’s Choice's role to drive guests to the properties; franchisees must make sure their hotels are clean, in good condition and staffed by well-trained and friendly employees.

“In this down economy, Choice’s value-oriented brands are in a great place to capture guests from other hotel companies,” said Joyce. “That’s why it’s so important that our hotels all deliver a top-notch, consistent experience to every guest, every time. Those hotels that can’t meet their brand’s guest-care standards must be improved or removed.”

Education was another focus of the conference and of the company’s service delivery to franchisees. The event featured more than 65 educational sessions. The company’s Choice University initiative is an online operational training curriculum that has 75,000 active participants (or the equivalent of more than a dozen associates at each of its nearly 6,000 hotels worldwide).

And last fall, as the economy tanked and hotel operations sunk, the company put together in two weeks a Streetwise Tactics for Tough Times workshop. So far, more than 1,800 franchisees have attended the free events.


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