HM on Location: Choice conference celebrates resiliency, investments

LAS VEGAS — After a two-year delay, the 66th annual Choice Hotels International Convention kicked off at Mandalay Bay on Tuesday with a decidedly optimistic vibe. As the first general session got underway, Choice Hotels President and CEO Patrick Pacious told the approximately 4,000 attendees that this year’s conference was focused both on celebrating the resilience of the owners and on the investments the company has made in adapting to changes and new demands from owners and guests alike. 

Resiliency 

In mid-April 2020, some of the worst days of the pandemic, more than 90 percent of Choice owners were able to keep their doors open, Pacious told the crowd. The company conducted 49,000 individual consultations with hotel owners and operators to help keep the businesses going, and continued the practice into 2021. “We've always known how important it is to connect directly with all of you,” he said. “Some of those meetings were virtual, some of them were in person, some [were] one-on-one, some were in groups. We even did some fireside chats—whatever it took to keep you in business.” 

By the end of 2021, the company reported domestic systemwide revenue per available room growth of 13.9 percent in Q4 compared to the same period of 2019, driven by an increase in average daily rate of 9.5 percent and a 210-basis-point increase in occupancy levels versus fourth quarter 2019. RevPAR was up 2.2 percent for full-year 2021 compared to 2019, surpassing 2019 levels for the last seven months of 2021, a trend that continued in the first quarter of 2022.

The company’s economy and extended-stay brands were the first to bounce back, Pacious said, with their RevPAR surpassing 2019 levels by April of last year. Midscale and upper-midscale brands reached 2019 levels in June and the upscale brands hit the target in December. 

Investment and Initiatives

During those 49,000 meetings with owners, the company identified more than a dozen different ways for the average hotel to lower operating costs by nearly 15 percent. “We're aiming to get to a full 20 percent in average cost savings by 2023,” Pacious said. One of the new initiatives is to offer guests housekeeping upon request, which can save a hotel tens of thousands of dollars in labor alone—“with no effect on guest satisfaction when it's implemented correctly,” Pacious said. “And in this very tight labor market, managing your labor expenses and staffing ratios is critical.” A Comfort Suites in Ohio that offers housekeeping upon request now operates with 40 percent fewer housekeepers than it had in 2019, he said, and saved more than $40,000 in the first six months of the program.

Chief Commercial Officer Robert McDowell noted the return of business travel and the need for corporate customers to consolidate charges from multiple guests and hotels into a single invoice. “And you told us you wanted to stop manually invoicing properties, managing credit card authorization forms and chasing down payments,” he added. To meet these needs, the company has launched Choice Direct Pay, a new tool to help owners and managers simplify corporate invoicing. The platform sends corporate clients a single invoice for their stays across multiple Choice properties. “Prompt payment is guaranteed in 14 days, and there is no risk to you if the customer doesn't pay on time or fails to pay,” he told the attendees.

Choice also will be rolling out mobile check-in later this year on the Choice Hotels app. “It's a great benefit to guests and it streamlines your operations,” Pacious told attendees. “It lets you know when guests are expected to arrive. That way, you can make more rooms available for sale, prioritize your housekeeping and reduce the front-desk workload so your team can focus more on the guests that are right in front of them.”   

Environmental, Social, and Governance

In a bid to drive greater diversity, equity and inclusion, the company has also launched Hertels by Choice, a platform to provide training, education, mentorship and financial assistance to women entrepreneurs who are interested in hospitality. (Since March of last year, Choice has awarded 20 franchise agreements to female entrepreneurs, Pacious noted.)

Pacious ended the general session by introducing Megan Brumagim, the company’s first-ever VP of environmental, social and governance. In this new role, Brumagim is set to lead Choice's sustainability and corporate social responsibility initiatives, focusing on environmental sustainability, human rights, diversity and inclusion, philanthropic and community engagement and corporate governance. “ESG is all about making sure that when businesses succeed, they also have a positive impact on the world,” Pacious said.

The initiative, Brumagim said, is focused on balancing profitability with emerging social awareness. “Consumers, especially Gen-Z and millennials, want to know you're actively making a positive impact in the world. They're voting with their dollars for companies that care about more than just their profits.”  

While profitability is “the engine that sustains us,” Brumagim continued, younger consumers want to see clear evidence that businesses are invested in making their communities and the world at large a better place. “What we're building here in ESG is the roadmap for how Choice and all of our hotels will contribute to a more sustainable or equitable future," she said. "Everything we're doing will become visible to the people who book your hotels, the people who invest in your hotels and the people who work in your hotels.” 

The ESG program will also expand upon its Room to be Green program with the new Commitment to Green program, starting with a new cloud-based energy-tracking dashboard from Schneider Electric. The dashboard gives owners automated tracking of energy, water and waste at the hotel level, putting all utility data in one place and automatically syncing every month. “The goal is to help each of you identify ways to reduce energy use and costs at your hotels,” Brumagim said. This data also will let Choice show consumers and other stakeholders how the company is reducing energy usage and setting targets for improving environmental sustainability across the system.