How Choice plans to own the upscale hotel segment

Cambria Chicago

LAS VEGAS—Choice Hotels International is driving full speed ahead into the upscale category, bringing its 10-year-old Cambria brand to new markets.

“Choice intends to own the upscale category,” Choice President and COO Pat Pacious said at last week’s annual company convention, held at Mandalay Bay. “It’s where we’re putting our investments.” Since Cambria’s conception 12 years ago, Choice has already invested $450 million in the brand. “We’re committed to do what it takes to make Cambria a brand that developers don’t just consider, but actively seek out,” Pacious said. 

Choice now has 30 Cambrias open, six of which opened since the previous year’s convention, said Mark Shalala, VP of development for upscale brands. Another 10 are scheduled to open this year, and 16 projects are currently under construction. Choice signed 28 new franchise agreements in 2016 and has an additional 45 signed projects in the pipeline in various stages of the development process.  

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The company has Cambrias in 34 of the top 50 markets nationwide, and will open new properties in Los Angeles; Newport, R.I.; and Chicago this month. “We’re executing a development strategy that puts Cambria in high-visibility, urban areas,” Pacious said, emphasizing that the company would be focusing on adding Cambria hotels in locations that “have demand generators and produce buzz” and that “attract the attention of business and high-end leisure guests.” 

The brand hit a milestone when it made its Manhattan debut in Chelsea in 2015, followed quickly by a property in Times Square. It launched in California at the beginning of May.

 

A post shared by Cambria Chelsea (@cambriachelsea) on

Over the past 14 months, the Chelsea Cambria has averaged a 100-plus RevPAR Index, thanks primarily to groups and meetings. “We recently made a significant investment in partnering with American Express Meetings and Events,” said Michael Shemer, VP of brand operations. The partnership will give Cambria hoteliers access to AmEx’s network of programs and services. “Take advantage of this partnership,” Shemer advised the crowd.

Approachable Indulgence

The brand’s target demographic, said Janis Cannon, Choice’s VP of upscale brands, is the modern traveler who does not have unlimited funds but is willing to splurge on some carefully selected luxuries. “They must balance wants and needs, and they're looking to land on the upside of wants,” Cannon said. 

As such, the “design philosophy” of the brand, covering everything from the aesthetic to the service to each hotel’s food-and-beverage programming, is “casually tailored,” Cannon said. “As a brand, a design philosophy gives us the flexibility to do an adaptive reuse project in the Chicago Loop, and a modified prototype at LAX Airport.” 

Cambria’s Future

2016 was the best year ever in the history of Cambria, Shemer said. Overall brand revenue per available room jumped more than 15 percent, driven primarily by a rate increase of more than 10 percent. In the first quarter of the year, the company advanced approximately $43 million in support of the brand's development and recycled approximately $1 million of previous investments in Cambria development projects, resulting in net advances of $42 million for the current year. 

“For the next phase of our growth, we’re going after key locations,” Cannon said. The company already has opened hotels near major airports, including LAX, Denver, Miami and Indianapolis, but is now aiming for culture hubs line New Orleans; Savannah, Ga.; Charleston, S.C.; and Pittsburgh—a burgeoning city that Cannon called “the new Brooklyn.” Some cities like New York, LA and the Raleigh-Durham, N.C., area have multiple Cambrias, catering to demands in different neighborhoods. Los Angeles, which will have six Cambria hotels in the coming years, has a strong demand for upscale rooms, Cannon said, “but the availability of upscale brands to invest in is low, because the competition is over-saturated.”

“We want to attract guests who will talk about us and tell their friends and colleagues,” Cannon said, “so our sightlines are on locations near conventions centers—Nashville, McAllen [Texas], Washington D.C.” Cambria is also aiming for university towns like Austin, Texas; Tallahassee, Fla.; and Gainesville, Fla. “Universities bring the students that create trends in culture, and capitals bring the stability of government business,” she said. 

“We’re analyzing and understanding markets down to the street corner, not just casting a wide net over a macro market,” Cannon told the crowd. “When we see a location that holds the demand generators that have the greatest impact for Cambria, we go in and we lock it up.” 

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