Online distribution dominates Day 1 of Choice show

Las Vegas—Choice Hotels International put its upscale brands on center stage Tuesday, but Cambria Suites and Ascend Collection brand sessions, as well as a Capitol Hill update, were peppered with discussions about working with Online Travel Agents.

Franchisees and Choice executives were clearly frustrated with the deep discounting, and therefore chopped profits, delivered by online websites selling Choice property roomnights.

“Do we as franchisees, and you as franchisors, can we all agree and say, ‘you know what, we’re not going to give you any roomnights,’ and put them out of business?” said one frustrated franchisee during the question-and-answer portion of the general session.

Choice CEO Steve Joyce, who had difficulty as recently as last October negotiating contracts with certain OTAs, remained neutral on the distribution topic.

“We need to use them in ways that benefit us and not use them in ways that do not,” Joyce said. “I’ll leave it at that.”

He did openly oppose the Internet Travel Tax Fairness Act, which would give OTAs a tax advantage over hotels when guests book through third-party intermediaries instead of through a hotel directly.

“We strongly oppose with our presence and our money unfair taxes for hotels not associated with OTAs,” Joyce said.

Marlene Colucci, EVP of public policy for the American Hotel and Lodging Association, pointed to AH&LA’s lobbying efforts against the ITTFA as an example of how getting involved can make a difference. Popular opinion has swayed from supporting the act to opposing it because lobbyists have brought its negative impacts to the forefront, she said.

“You’re going to see a lot more aggressive action by the Online Travel Companies trying to tell you what’s in your best interest,” Colucci said. “They’re definitely getting nervous. It just shows you that they’re not going to come to the bargaining table unless you really push back and make your voice heard.”

In the Ascend Collection brand session, Mary Beth Knight, SVP of e-commerce for Choice, discussed actions to persuade more customers to book direct rather than through online aggregators.

Knight said the average daily rate for an Ascend Collection hotel room booked through Choicehotels.com is $100, but through an OTA that average dips to $41.

“It’s about helping you sell more strategically and profitably … it’s not always about discounting,” she said.

Knight pushed rate parity, saying hotels that undercut rate are “wasting time and money.”

She explained efforts Choice is taking as a franchisor to broaden distribution strategies, such as working with Travelocity and Hotwire to establish guidelines where Choice will submit non-negotiable rates to them. Choice is also working with the opaque sites to drive length-of-stay promotions with value adds, she said.

“Choice is also broadening its wireless strategy over the next few years,” Knight said. “The OTAs aren’t doing this for you.”

Discussion shifted positive during the Cambria Suites brand session, when brand president Kevin Lewis noted growth across the board in occupancy, ADR and revenue per available room indexes.
Lewis unveiled new food and beverage plans for the brand as well as plans for a LEED-Silver-certified prototype that will debut in the fall.