Choice Hotels makes strategic push for upscale brands
 
Choice Hotels makes strategic push for upscale brands
18 MAY 2017 8:27 AM

Choice Hotels International executives shared with brand conference attendees the latest news and strategies for Cambria Hotels & Suites and the Ascend Hotel Collection.

LAS VEGAS—Although Choice Hotels International is better known for its midscale and economy brands, executives told attendees of the 63rd annual company convention that Choice’s two upscale brands will provide benefits to the entire company.

Success in the upscale segment helps every brand and property when it comes to driving rate and attracting corporate, group and midweek business, said Janis Cannon, SVP of upscale brands, as well as developing and applying the technology that guests want.

The strong performance of Cambria Hotels & Suites and the Ascend Hotel Collection also means “raising the awareness of Choice in every segment, with business travelers, with leisure guests, with groups and especially with the development community,” she said.

Choice intends to own the upscale segment, President and COO Patrick Pacious said, and it’s where the company is putting its investments, noting that Choice has invested $450 million in Cambria.

“We’re already firmly in the upscale category, with more than 200 hotels between Ascend and Cambria,” he said.

Cambria matures as a brand
Choice is committed to do what it takes to make Cambria a brand developers don’t just consider but actively seek out, Pacious said. As a national brand, it now has its first national marketing campaign. The brand is driving competitive rates and achieving $100-plus revenue per available room across all properties, he said.

“We’re executing a development strategy that puts Cambria in high-visibility, urban areas,” he said. “Locations that attract the attention of business and high-end leisure guests. Locations that have demand generators and produce buzz. Locations that are getting the attention of even more developers who will join Cambria as their next big play.”

There are executed deals, open hotels and hotels under construction in 34 of the top 50 markets currently in the U.S., Pacious said. There are 29 open Cambria properties in the U.S. with another 50 under development in the U.S. and Canada. Sixteen are currently under construction and 14 are slated to open this year, including Los Angeles; Newport, Rhode Island; and Chicago set to open this month.

Last year was Cambria’s best ever, VP of upscale brand operations Michael Shemer said. RevPAR overall has increased by more than 15% in 2016, driven by a “whopping increase” of more than 10% average-daily-rate growth.

“And here’s what makes us really happy: We’re stealing market share from our competition,” he said. “And we’re doing it at a rapid pace”

In 2016, Cambria increased its market share by 730 basis points. New Cambrias have on average reached RevPAR targets within the first 12 months, he said.

An ascending collection
When Ascend launched nine years ago, no other major hotel company had a brand like it, Choice CEO Steve Joyce said. There was an unmet demand for upscale guests wanting to travel to destination locations, he said.

“The people in this room knew a quiet truth that still holds today: Authentic and immersive hotels are a definite draw for the upscale traveler,” he said.

The soft-brand collection currently has 230 properties open and under development around the world, including the U.S., France, the United Kingdom, Norway, Sweden, Turkey, Australia, Canada and the Caribbean. The company projects new Ascend properties opening each month in 2017. The collection saw six openings alone in April: The Look Red Hook in Brooklyn, New York; Envision Hotel Boston-Everett in Everett, Massachusetts; The Hotel at Sunland Park Casino in Sunland Park, New Mexico; The Solstice Hotel in Erie, Pennsylvania; the Gold Miners Inn in Grass Valley, California; and the Allentown Park Hotel in Allentown, Pennsylvania.

Properties that are part of the Ascend collection long enough to gain traction with Choice’s programs, systems and teams are seeing improvements to their top and bottom lines, Cannon said. RevPAR is up 5% year over year, driven by both occupancy and rate growth. Their RevPAR index has reached 95 over the past year, she said.

Eleonora Tarzibachi, the new head of brand development and management for Ascend, said the collection’s average guest satisfaction score is 8.5 year to date, which means guests will pay for the experience Ascend collection owners are providing them.

“You joined the Ascend Hotel Collection because it enabled you to scale up bookings, but still protects your ability to deliver customer service the way you want,” she said. “We’ll be looking at ways to ensure guests who appreciate the uniqueness of each of the Ascend hotels, can also expect a certain level of quality. That’s how we’ll drive your guest satisfaction scores and earn the right to keep pushing rate.”

Tarzibachi said she will work with Choice’s experts to improve the value Ascend owners receive and work to help grow their top and bottom lines. Because Ascend is a soft brand, she said she realizes owners aren’t looking for mandates over shampoo or fitness centers. However, Tarzibachi said Choice can provide them with different options, such as the ability to join a group purchasing program for economies of scale they can’t achieve on their own.

The brand’s main guests come from two demographics: baby boomers and millennials. Baby boomers have the money to travel and have grown tired of cookie-cutter hotels, she said, and millennials place a value on unique local experiences.

“In short, your hotels provide the stay and travel experiences these guests are looking for,” Tarzibachi said. “The specific local flavor of your hotels. The different cultures you create. The distinct ways you look and feel. This is the position of power we operate from. And it’s from this position of power that we will accelerate the performance and the scale of Ascend.”

Editor's note: Choice Hotels International paid for hotel accommodations and entertainment. Complete editorial control was at the discretion of the Hotel News Now editorial team; Choice Hotels had no influence on the coverage provided.

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