With new CEO, Choice Hotels prepares for what's next

(Photo Credit: Jena Tesse Fox)

LAS VEGAS — More than 5,000 hotel owners, GMs and hotel staff gathered at Mandalay Bay as Choice Hotels International kicked off its 64th annual convention—the company's first under new President and CEO Pat Pacious, after nearly 10 years of outspoken Steve Joyce guiding the proceedings.

There were no muttered “Don’t get me started” quips about travel bans from Pacious. Instead, he began the opening general session by telling the attendees what he felt his role at the conference—and as head of the company—would be. “It’s imperative for me to develop the big picture, and it’s important for me to share my perspective on our business and how we all continue to profit and grow,” he said.

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That perspective can be summarized in three core corporate principles he expects owners and managers to follow. “We are bold, we are quick, and we listen,” he said. “We live those principles every day. We are a bold company, unafraid to invest in new ways of doing business and entering new segments. We’re a quick company, often the first to bring new products and new technology to market. And we listen to industry trends, to our guests and we listen to you. But by itself, listening isn’t enough. It’s what we do with the knowledge we gain that matters. So we operate with a growth mindset.”  

A “growth mindset,” he said, means being unafraid to take risks, setting high goals and then achieving them. With that in mind, Pacious shared statistics for the previous year's growth: In 2017, Choice Hotels had its best development year since 2007, opening nearly one hotel per day in the U.S., increasing its pipeline, and hosting more than 200 million guests in more than 500,000 rooms. The company signed 704 franchise agreements in 2017, Pacious said, two-thirds of which were from the owners attending the conference.

Segment by Segment, Brand by Brand

“The demand for extended stay is booming,” Janis Cannon, SVP of Upscale Brands, said. “So much so that the segment led the hospitality for RevPAR growth in 2017.” By acquiring the Woodspring brand, Choice has tripled its presence in the extended stay segment. Woodspring hotels, Pacious said, tend to be younger properties, built—on average—within seven years. The company has also helped raise brand awareness among major businesses seeking long-term housing. Earlier this year, a Woodspring hotel opened in Redmond, Wash., close to the Microsoft campus. The property has already signed a deal to host the campus’ summer interns. “Extended Stay continues to report some of the biggest gains in demand, and we’re going to maximize every opportunity,” Pacious told the attendees. “Hear me when I say this: We are committed to success in the extended-stay segment.”

Choice’s midscale Mainstay Suites brand had its best development year ever, Anne Smith,VP of brand management and design, said, doubling the number of contracts awarded over 2016. The success of the Sleep Inn/Mainstay Suites dual brand is paving the way for m

Choice’s flagship Comfort brand is experiencing what Smith called a “complete renaissance.” Last year, Choice opened 58 Comfort hotels, and the company has 300 more in the pipeline, 80 percent of which are new-construction.  

The upscale Cambria brand, meanwhile, set a record by opening 10 new properties last year, and increasing its pipeline to the largest in the brand’s history. Cambria now has hotels open or in the pipeline of 42 of the top 50 RevPAR markets.

The midscale Sleep Inn brand, Smith said, has reported solid RevPAR in the last year and is the lowest cost-to-build in the segment. The brand has more than 400 properties open worldwide, with a pipeline of more than 140 hotels.

Choice’s Ascend Collection soft brand opened 56 hotels last year, 48 of which were in the U.S.  “Today, Ascend has more than 200 hotels open across the globe, and more than 50 that are currently in development,” Cannon said. The collection now has 200 properties open worldwide.

Choice’s economy Rodeway brand, meanwhile, opened 98 hotels last year, closing out 2017 with 600 properties in the system.