For Choice Hotels Canada, 2014 can be summed up with one term: record-breaking.
This year, the Mississauga, Ont.-based company delivered more reservations to its franchisees than ever before, up more than 13 per cent from 2013, thanks to investments in sales and reservations technology. Direct distribution bookings via choicehotels.ca are up 14 per cent this year, and mobile bookings jumped more than 225 per cent in the first half of 2014.
On the development front, Choice Hotels Canada had seven (and counting) new-build hotel developments in 2014, the highest number of new-build hotel deals in a single year in the company’s history. And an ongoing $65-million renovation program at 85 Comfort properties, which is adding new breakfast rooms, decor updates and new public spaces, has resulted in higher guest satisfaction and increased revenue.
Choice Hotels Canada, which has 314 properties under eight banners, including Comfort, Quality, Sleep Inn, Econo Lodge, Rodeway Inn and Clarion, posted $509 million in gross room sales in 2013, a 4.5-per-cent increase over 2012. The company experienced 2.5-per-cent RevPAR growth from July 2013 to July 2014; occupancy was up 1.3 per cent in the same period; and the average daily rate (ADR), at $99.10, increased 1.1 per cent.
While a healthy economy and return to business travel is contributing to the great results, an amplified focus on franchisees is underlying the company’s success. “At the heart of our plans is [putting the] franchisee first,” says Tim Oldfield, managing director, Franchise Performance at Choice Hotels Canada. “We think about our business in terms of the franchisees and their ability to easily be better at what they do.”
And that’s not just hollow talk from head office. “They listen to what the franchisees want and then act upon it,” says Shona Karas, who, along with her husband, Nick, owns Comfort Inn & Suites in Airdrie, Alta., Choice Hotel Canada’s top-performing Comfort Inn property in the country. “They’re extremely professional, very supportive and very receptive.”
As an example, Karas points to the company’s franchise performance consultants who act as personal advisors in areas such as revenue enhancement, inventory and rate management, and sales and marketing initiatives. “They come to our properties and do regional conference calls with all the franchisees,” says Karas. “[They address] how we can work together to become better, how we can overcome challenges and best practices. I always find that I come away with something I can really use, so it’s not just talk.”
With an eye on continual improvement, in 2013 Choice Hotels Canada expanded the size of its field consultants team and reduced the number of hotels each consultant serves. “The premise was that they could spend more time with the franchisees who wanted access to those services,”
says Oldfield.
The consultants work with the franchisees on annual property consultations, mapping out business goals for the upcoming year. They then create an action plan and help the franchisees execute it. “There are regular check-ins, so this is not a ‘set it and forget it’ type approach,” says Oldfield. “Franchisees [can] run their business as independently as they want … but we find our top-performing franchisees use the system to its full advantage.”
This year also saw the launch of a weekly webinar program after franchisee surveys found more training was desired. The 20- to 30-minute webinars feature rotating topics in areas such as HR, operations and housekeeping and can be repeated so staff on different shifts can take part. “What our franchisees love about it is that we’ve responded to their needs,” says Oldfield. “They need relevant education, they need it delivered in a format that’s easy to consume, and they need it on a repetitive basis because of the rotation in staff…. It’s been a runaway success.”
On the development front, the record-breaking year — seven new-build deals and another two expected by year’s end — is part of a strategic plan rolled out in 2008, which focuses on new-build growth. Since the strategy launched, Choice Hotels Canada has had 36 new-build hotels either open or under development.
“Historically, Choice was never really known for new-build development; it was the company that did a lot of conversion growth,” says Brian Leon, managing director, Franchise Growth and Administration at Choice Hotels Canada. “While we continue to do a lot of conversion growth, part of our strategy in 2008 was that we wanted to ramp up new-build growth and be taken more seriously as new-build players, and we’ve had some great success.”
Another part of the plan was the “improve-or-remove” strategy to increase the strength and quality of its portfolio with the addition of top properties and the removal of the hotels at the bottom of the pack. “We identified properties that weren’t representing the brand or adequately delivering on the promises we make to our guests,” says Leon. “We make every effort to try to work with those hotels so that we can move forward with them, but, in some cases, you just can’t.” The company has terminated 25 hotels since the plan was set
in motion.
On the flip side, Choice Hotels Canada has brought aboard more than 90 new hotels since the strategic plan rolled out in 2008. “But the big thing for us is not the number of hotels, it’s the quality of the properties that we’re bringing aboard, and that’s really making a huge difference in driving to the overall strength of our brand,” says Leon. “Anybody can grow fast, but, for us, it’s about how do we grow strategically and in a way that adds positively to the system.”
The results speak volumes: of Choice Hotels Canada’s top 25 hotels in the country, from a guest satisfaction standpoint, 15 are hotels that came on board during the last six years. “We’re driving brand strength by bringing on new hotels that are raising the bar on our system,” says Leon.
Choice opened six Canadian hotels this year as of September: Clarion in Medicine Hat, Alta.; Comfort Inn & Suites in Gananoque, Ont.; Quality properties in Hawkesbury, Niagara Falls and Hamilton, Ont.; and an upscale hotel that joined Choice’s membership program, Ascend Hotel Collection, in Gatineau, Que. Six more are expected to open by year’s end. As was the case in the past few years, more than a third of new hotel growth this year has been achieved with existing Choice franchisees.
There’s no question Choice Hotels continues to build on its long history of innovation and iconic brands. The company got its start in 1939 as Quality Courts — a cooperative of seven southeastern U.S. motels — and was later incorporated as Quality Inns International. In 1981, the company invented market segmentation, dividing its lodging system into three distinctive chains: Quality Royale, a luxury brand; Quality Inn for the moderately priced market; and Comfort Inn, a budget franchise. The company was renamed Choice Hotels International in 1990. While the first Quality Inn came to Canada in 1955, the Canadian division wasn’t established until 1993 when a joint venture was formed between Choice Hotels International and Belleville, Ont.-based Journey’s End, a franchising and management services company that later became Unihost and was subsequently bought by the global Westmont Hospitality Group.
“We built some brilliant hotel brands, and we’re able to promise our guests a consistent experience that speaks to choice and value,” says Oldfield. “That has been a large contributor to our success, the fact that Canadians can rely on Choice for that value experience, and that’s why we have guests repeatedly coming back.”
The company, through the Choice Hotels Canada Foundation, also endears itself to guests and staff with charitable initiatives that support programs focused on global issues of shelter, education and children. These include The Girls Education Support Program (Afghanistan), The Alalay Shelter for Children (Bolivia), Early Childhood Development Support Program (Bangladesh), House of Hope Orphanage (Haiti) and the Sleeping Children Around the World bedkit program, consisting of items such as a mat or mattress, pillow, blanket, mosquito net (if required) and towel. Choice Hotels Canada is on track to raise $100,000 by the end of 2014.
Even on the charitable front, Choice Hotels Canada asked for franchisees’ input when it began developing its platform more than three years ago. “If we were going to do something, we didn’t want it to be a top-down initiative, we wanted it to be from our franchise community,” says Leon. Franchisees provided feedback on the issues that were most important to them, and a flexible platform was set up to allow them to choose between different causes under one umbrella of the three key areas.
This year, the company launched a fundraising contest among all franchisees. The two hotels that raised the most money sent a representative on a week-long bed-kit distribution trip to Honduras in October, paid for by Choice Hotels Canada.
“[Our philanthropic initiative] dates back to our strategy — when we were talking about what it means to be a leader,” says Leon. “One of the things that came out of our discussion was that when you look at leading franchise systems such as Tim Hortons and McDonald’s, one of the common denominators is a strong philanthropic platform that is ingrained into their franchise systems. It’s something customers, franchisees and staff all get involved in.” Choice Hotels Canada felt that was missing at the company and was necessary to make it a true leader in the hospitality industry. On all fronts, it’s clear Choice has reached the top.
