LAS VEGAS—During this year’s annual convention, Steve Joyce, president and CEO, Choice Hotels International, Inc., and other members of the executive team sat down with members of the media to discuss the company and industry trends. Here, Joyce gives his opinions on capitalizing on trends in the sharing economy, where we are in the cycle and opportunities in Cuba. Be sure to check out the June 7 issue of Hotel Business for more coverage.
On sharing economy trends: We recently announced Vacation Rentals by Choice, which is a really interesting space. The reason we were so excited about beta testing it and rolling it out is because there’s been a marked shift in the way consumers book their vacation. If you go back five years, about 10% of the American public was willing to consider alternative vacation options. Now that number stands between 35-40% and it seems to be expanding at a rapid rate where most of the traveling public looks at this. You can credit some of the online distributors who have been in this space, but I think the difference between what we’re doing and what they’re doing—we’re branding it and giving Choice Privilege points to it—and that is there are professionals handling check in and checkout, problems during a stay. There’s 24-hour availability as opposed to whether or not the owner cares or doesn’t. We are signing up with the best management companies in each market—we’re at eight and counting—and there’s a long line up of people interested. It’s a huge business, something like $25 billion, so it doesn’t take much market share on our part to say that could be a major deal. If you get 10% of that, that’s meaningful.
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On the lodging cycle: The cycle has peaked, but there is no reason to assume the cycle will go immediately into decline just because it peaked. Supply is getting added in upscale. If you look at where we are, in the moderate tier for the most part, there’s not much supply getting added, and the supply getting added is ours. We are pretty confident that we don’t have a supply problem unlike some of these other cycles, and it’s because there just hasn’t been financing available. Now, it’s just coming, so we’re starting to see a little bit, but it’s still way below historic levels, which is why we’re pretty bullish through ’18. If the economy holds up, if employment holds up, if consumer confidence holds up, we see no reason why we’re not doing this kind of business through at least ’18. After that, we’ll see.
On opportunities in Cuba: We were one of the first ones to visit Cuba. We were not the first to get a deal, but we’re talking to several members of the government as well as hotel owners about deals we want to do. We’re expecting to have something in the next couple of months. In addition to that, we’re helping with the Cuban development of the hospitality industry by helping them on the educational side. We’re working with them to give them access to our Choice U, and hopefully help them train the 50,000 to 75,000 hospitality workers they’re going to need for this 20-year expansion of the hospitality business in Cuba.
—Nicole Carlino