For Steve Joyce, it’s clear this is personal.
The CEO of Choice Hotels International had a bit more of a bounce in his step at this year’s brand convention, and it’s not only because he has shed a few pounds. The brand Joyce is most proud of—the brand he left Marriott International to help launch—appears to have emerged from a tough four years, and it finally looks poised for future success.
“I’ve been a part of the launch of many hotel brands, but nothing compares to the launch of Cambria Suites,” Joyce said last week at a news conference during the convention. “We’ve revolutionized upscale with Cambria Suites.”
A tough go for Cambria might be an understatement. In the four years since its launch, Cambria Suites has been through an ugly breakup with its largest franchisee, resulting in four lost flags. Choice has fought lawsuits over Cambria’s financial returns, completely altered its target market strategy and even reached deep into its pockets to pony up $250 million to spur growth.
Although plenty of work remains to be done, it feels as if Joyce and the Cambria team have finally turned the corner.
“Hold on to your hats, folks, because we’re in for one hell of a ride,” Joyce told a group of Cambria owners and managers during the conference.
Last week, Cambria opened its 19th property in Rapid City, South Dakota. A Cambria is under construction in Miami; contracts have been signed for hotels in seven more major markets; a developer will break ground in New York’s hottest neighborhood within 90 days; and talks are underway in at least 10 more primary cities.
The first three months of 2012 proved to be the best quarter in the brand’s history. Cambria’s revenue-per-available-room index was up 9 points in 2011 to 84.4; the goal is to reach 101 by the end of this year, Joyce said. Occupancy across the brand is well over 60% and average daily rate has seen a $3 lift.
“Cambria is a tale of two stories: improving the existing portfolio and growing in primary, urban markets,” said Michael Murphy, who was brought on as senior VP of Cambria Suites to help steer the brand early last year. “The existing owners should be testimonials for new developers.”
Murphy—a man Joyce called “the most passionate brand leader he’s ever seen”—has transitioned Cambria’s executive leadership from what was a traditional brand team to what he calls a market-brand team hybrid. The corporate team meets regularly with owners, uses their feedback to shape the brand’s future direction and spends a good portion of the year on the road in the hotels.
A new food-and-beverage program that launched last week was born because existing owners told Murphy they needed a way to increase profitability. The goal is to cut food cost from a whopping 49% to 35% in less than six months.
“One giant opportunity (for increased profitability) was staring us in the face,” Murphy said. “Revamping the F&B program will offer three times more profitability than any other effort we could have provided.”
The brand hired Victor Burga from United Airlines to oversee revenue management. Burga will drive a strengthened focus on group business as the brand has outlined goals to add 111,000 more group roomnights and a $4.84 rate lift in 2012, which will make the 101 RevPAR index goal achievable.
“Is it going to be easy? No it is not,” said George Kalka, director of field sales for Cambria. “But is it achievable? Yes. We’ve got the product, we’ve got the loyalty and the customers will accept rate increases.”
Brand leaders know they’ve got a lot of work ahead of them yet. But the question of whether Cambria Suites as a brand will survive has been put comfortably to rest.
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