SILVER SPRING, MD— Choice Hotels International said it will take a one-time, $5 million charge against its fourth-quarter 2001 earnings to realign its business. The company claims the expenditures will save $2.5 million in corporate overhead a year, and changes in brand management and reservations will save $4 million a year in the operations of its marketing and reservations funds. The two major moves connected with this strategy include centralizing franchises services under one umbrella, and creating one brand management position that oversees the company’s eight brands. As a result of the franchise services centralization effort, the company’s three remaining market offices in Charlotte, NC; Denver; and Silver Spring, MD will close this month. All franchise services now move to Silver Spring, MD, where Choice’s headquarters are located, and will be headed up by Janna Morrisson, formerly vp/property systems, and a 14-year veteran of Choice. The move toward centralization has been on-going for Choice; last December it narrowed the number of regional franchise offices from five to three. With the elimination of all market offices, Choice will also centralize its help desk hotlines for franchisee assistance. Morrisson told HOTEL BUSINESS® that the concept of her new department is “to deliver exceptional value-added services. What we tried to do is look across the organization, and we tried to figure out how we could create a more consistent, integrated service package for our customers.” Much of what Choice has done in setting up the department was driven by licensee input, she said. The company will retain its franchise service directors, who have “close relationships” with Choice’s hotels. Brent Russell, who previously oversaw the market area office in Denver, will now oversee the whole field service organization as the national vp/franchise services. Senior regional directors will become regional vps, said Morrisson, and will simply be working from their homes rather than remote offices, reporting to Russell. Franchise services will now also include a field training group which previously had operated outside of the department. “New hotel services” is another new component of franchise services, and combines the pre-opening sales function, pre-construction, site review meetings and the Total Learning By Choice Center located at the company’s Silver Spring headquarters. Choice is also creating a “key account management” division to be headed by Tony Grant. The move significantly changes Choice’s former model of treating all customers alike, said Morrisson. That could mean noting that the needs of one Choice licensee who has 80 hotels in the system may be different from someone who has one, said Morrisson, noting that this new business segment is still in the embryonic phase. “Maybe there is a type of a club that makes sense and different types of rewards and recognition,” she said. “It could be that it’s for everyone in the system, but maybe we would have criterion of different levels.” The final prong of the franchise services department will be Morrisson’s former division, that of property systems, which will now be headed by Christopher Yellen. Including property systems in franchise services makes sense, she said, since part of her mission is figuring out how to leverage technology in order to increase revenue at the property level. The other key component to Choice’s corporate restructuring is creating the position of vp/brand management and strategy, which has been filled by Thom Hall. Hall, who joined Choice in July 2000 from La Quinta and was formerly vp/ emerging brands for Choice, now oversees all of Choice’s eight brands “and how they are going to inter-relate in our target markets,” he told HOTEL BUSINESS®. “That is really different from the way we operated in the past where each of the brands operated independently and wasn’t necessarily focused or complementary at the time,” Hall said. “And, it gi
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