Choice Hotels International will upgrade the company's
Comfort Inn and Comfort Suites brands, and may deflag many as 10 percent of the
brand's lesser-performing hotels.
Choice Hotels, which franchises more than 6,100 hotels
worldwide, will work with owners and franchisees at implementing the design
upgrades and expects about 70 percent of the company's approximately 2,000
Comfort Inn and Comfort Suites hotels to complete the improvements by 2015.
The company is working with New York-based Gensler, which
has done work for chains such as Ritz-Carlton, on a cleaner design for the
chain's bedrooms, bathrooms and public spaces.
"It's one of the better-known brands in the industry,
and it's been quite a while since we refreshed and rejuvenated the look and
feel of it," said Choice Hotels CEO Stephen Joyce in an interview at the
Americas Lodging Investment Summit in Los Angeles this week, adding that the
company may offer franchisees financing in order to speed up the improvements.
"We're going to combine that with a very active
incentive program and other positive movements for the franchisees who invest
With the upgrades, Choice appears to be trying to move the
Comfort brands closer to the select-service sector that has recently gained
favor by both investors and hotel companies specializing in upscale operations
such as Marriott, Hyatt and Hilton.
With as many as 200 hotels expected to not go along with the
upgrades, Joyce said the company would work with many of those owners at moving
the hotels into Choice's economy brands, which include Econo Lodge and Rodeway
As of last September, Choice franchised 1,413 Comfort Inns
and 616 Comfort Suites hotels totaling more than 158,000 rooms, compared with
about 1,000 Quality hotels and about 1,100 Econo Lodges and Rodeways combined.
Choice is looking to hotel owners to invest in a midscale
sector that has lagged the higher-end hotels when it comes to recovery in U.S.
Midscale was the only sector of the six tracked by Smith
Travel Research (STR) to experience a drop in average room rates last year,
while midscale room demand fell 5.5 percent from a year earlier, compared with
a 5 percent increase in room demand across all sectors.
Still, Joyce pointed to an uptick in employment and a drop
in midscale hotel supply as reasons why the brand upgrade makes financial
Joyce estimated that a typical 75-room Comfort Inn would
require "about a couple hundred thousand dollars" to meet the new
standards, and will generate room-rate increases of between $5 and $10 a night,
giving investing franchisees a "strong" return on investment.
For the first nine months of 2011, Comfort Inn and Comfort
Suites had average daily room rates of about $77 and $83, respectively, while
revenue per available room was up 5.8 percent and 7.3 percent from a year
"Folks that are employed feel secure in their jobs
because the companies are very profitable," said Joyce. Companies are "sitting
on a ton of cash, and their bosses are telling them to get back on the road and
Source: Travel Weekly