Playing off the conference theme—“The Power of Performance”—Joyce said, “Working to step up performance and re-imagine our brands has been the driving force behind Choice Hotels’ corporate strategy for some years now.”
Toward keeping this momentum, the global lodging chain is earmarking $40 million to improve Comfort-brand properties in the United States and also is planning to invest up to $2 million in development-incentive payments to encourage and expedite more Clarion franchisees to develop the recently launched Bistro C food and beverage concept at their hotels.
The Comfort program targets the 30-year-old brand’s 1,900 domestic properties, including both Comfort Inn and Comfort Suites and is aimed specifically at those needing PIPs; however, owners can request to be part of the initiative.
The investment will be a shared expense between franchisees and the brand, leveraging off Choice’s balance sheet.
Monies will be distributed via a “forgivable” promissory note, whereby after a pre-determined amount of time, hotels that received the program funds will not have to pay them back to the franchisor provided they are not in default of their franchise agreement. According to Choice, it will pay out the funds after the PIPs are completed and verified as such via property inspections and invoices submitted for the work, which must be completed by Sept. 30, 2014.
The incentive funds are a continuation of the “Comfort Re-Imagined” transformation the brands have been undergoing, including the implementation of its signature “Truly Yours” design package introduced for Choice’s largest brand, which has close to 2,500 hotels globally, within its stable of 11 brands, including The Ascend Collection.
“There is no mistaking how committed Choice is—from the board to the entire Choice team—to a broader, more profitable Comfort Inn. This investment is just a part of the Comfort Re-imagine plan,” said Alexandra Jaritz, SVP/brand strategy and marketing. Thus far, Comfort hotels have added 154,000 flat-screen television sets, enhanced breakfast offerings and service-area design, and are currently under way with a bedding-refresh program.
The new incentive program targets capital-intensive, guest-facing items, including carpeting, furniture and mattresses, and to keep a level of consistency, the program is requiring owners to execute the Truly Yours design package where possible, as company data shows positive response from guests to the new look.
The program will be executed on a first-come, first-served basis and even Comfort hotels that do not have a PIP at the moment can request one and thereby be eligible for the incentive program. In this case, once improvements are made, hoteliers can submit invoices for up to 50% of cost of eligible items for reimbursement.
“Comfort Inn is an iconic brand,” said Michael Varner, recently named head of domestic brand management for the Comfort brand. He led the development and implementation of sister brand Sleep Inn’s “Design to Dream” program. “This is the chance to strengthen Comfort Inn, Choice’s largest and most valuable brand… We’re in a battle to earn back customer respect, take back occupancy from our competitors and earn higher rates.”
Choice has been cracking down on franchisees found not in compliance with their PIPs, assessing harsher penalty fees.
“We need everyone on board with our programs—the redesign’s Welcome Wall, breakfast and bedding. Every Comfort Inn needs to deliver a high-quality stay. That’s how guests learn to trust again that Comfort Inn delivers an experience that they can always count on.”
Thus far, the programs in place and those ongoing have apparently enhanced the brand’s performance. Varner noted average rate has increased from $80.17 to $82.39, while occupancy has increased from 53.9% to 55.6%, equating to an increase of more than $2 in RevPAR, from $43.21 in 2011 to $45.83 in 2012.
In terms of the Clarion investment of up to $2 million in development-incentive payments to encourage and expedite the Bistro C f&b concept, the move is seen as bolstering what Choice considers a “crucial component” of the brand’s larger effort to become a midscale “go-to” choice, particularly for group business, such as meetings and social events.
The concept behind Bistro C is for items to be prepared economically with minimal labor while also being scalable to include business and banquet catering, providing the hotel owner with the ability to still turn a profit.
Two hotels already have developed the Bistro C concept: the Clarion Inn Waterford Convention Center in Elmhurst, IL, and the Clarion Del Mar near San Diego. A third hotel in Knoxville, TN, was slated to add the f&b concept as part of converting to the brand.
On the brand-growth front, Choice also entered into a joint venture with private investment firm Fillmore Capital Partners, LLC, and its affiliates to develop multiple Cambria Suites, marking the brand’s first institutional investor.
The JV is targeting development of multiple Cambria Suites within urban markets, such as New York City, where in 2012 the brand broke ground on three hotels. The brand recently also broke ground as part of two mixed-use developments: one next to the convention center in downtown Washington, DC, and the other next to Choice’s new global headquarters in Rockville, MD.
The brand also recently inked franchise agreements for hotels in McAllen, TX, with McAllen Strategic Group, LLC, and in West Fargo, ND, with KAJ Hospitality.
“The Cambria Suites and Fillmore synergies are a game changer,” said Michael Murphy, SVP/upscale brands for Choice. “We know Cambria Suites is the right product at the right time. And now we have a major partner saying the same thing by helping us bring even more product to market, faster than ever.”
Choice’s Sleep Inn brand hit a milestone, its 100th “Designed to Dream” (DTD) concept hotel, located in Midland, TX. The DTD program features both a new-build prototype and renovation option. According to the company, last year executed deals and new-build applications for Sleep Inns increased 145% and 186%, respectively, compared to 2011.
Similarly, Choice’s Ascend Hotel Collection of independent properties marked the opening of its 100th hotel, the 62-unit Hotel Elan in Calgary, Canada.
Earlier this year, 21 Bluegreen Vacation Club resorts were added to the Collection via a marketing alliance.