For Choice
Hotels International, 2017 marked its best development year since 2007, the
company reported Tuesday. It awarded 704 franchise agreements across its system
and in the U.S. opened 346 hotels, almost one per day.
In
addition to positive organic growth, the acquisition of WoodSpring Suites
tripled the size of Choice's extended-stay footprint to more than 350 hotels.
That transaction closed this month. "WoodSpring is a brand of tomorrow,
still in the early growth stage of its brand life cycle," said Choice
president and CEO Patrick Pacious. The brand joins other new-build brands in
Choice's portfolio: Cambria, Sleep Inn, Mainstay Suites, Comfort Inn and
Comfort Suites.
Loyalty & Channel Growth
Choice
Privileges added more than 5 million new members in 2017, which pegs the
program's growth to nearly 10 million during the past two years. Pacious said
the loyalty program has 35 million members. Since the industry rolled out
loyalty member discounted rates in 2016, hoteliers have been able to realize revenue
growth through proprietary booking channels as loyalty membership has grown.
For Choice, almost $6 of every $10 of revenue came from the company's
proprietary channels, which include desktop and mobile. Pacious said Choice's brand.com
website is the focus of the hotel company's distribution strategy and the
channel grew faster than all other distribution channels last year.
Choice's New Reservations System
In
January, Choice rolled out its new global reservations system, ChoiceEdge, replacing
its decades-old system. The company built the cloud-based system in-house. In
an interview with The Beat, Pacious said it will allow greater flexibility and
speed for shopping and booking and will enable the company to be more receptive
to new technologies coming into the lodging space. The platform is fully
deployed and manages all distribution for Choice Hotels, "optimizing rate,
inventory, availability, shopping, booking and reservations for its website,
mobile apps, call centers and third-party distribution partners," Pacious
said.
Earnings Results
Systemwide occupancy fell 10 basis points year over
year during the fourth quarter to 57.2 percent, and average daily rate
increased 2.2 percent to $80.87. For the full year, occupancy increased 50
basis points to 62.2 percent and ADR grew 1.7 percent to $84.02. Full-year net income decreased
18 percent year-over-year to $139.4 million. The company's earnings statement
attributed the decline to the U.S. tax reform that passed in December.
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