Choice Hotels International

Choice Hotels International, Inc. is a hospitality franchisor based in Rockville, Maryland, United States. The company, which is one of the largest hotel chains in the world,[5][6] owns several hotel brands ranging from upscale to economy. As of June 30, 2020, Choice Hotels franchised 7,118 properties in 41 countries and territories worldwide, with approximately 597,018 rooms, in addition to 1,035 hotels under construction with 85,129 rooms.[1][6]

Choice Hotels International, Inc.
TypePublic
NYSE: CHH
S&P 400 Component
Russell 1000 Component
Industry
Founded1939 (1939)
Headquarters
Rockville, Maryland
,
United States
Number of locations
 7,118 (June 30, 2020)[1][2]
Area served
Worldwide
Key people
Brands
  • Ascend Hotel Collection
  • Cambria Hotels
  • Comfort
  • Sleep Inn
  • Quality Inn
  • Clarion
  • MainStay Suites
  • WoodSpring Suites
  • Suburban Extended Stay Hotel
  • Econo Lodge
  • Rodeway Inn
  • Vacation Rentals by Choice Hotels
RevenueUS$1.04 billion (2018)[3]
US$114.9 million (2017)[4]:37
Number of employees
1,987 (global operations)[4]:37
Websitewww.choicehotels.com

History

Founding and early years

Quality Courts United, Inc., which began as a nonprofit referral chain of seven motels in Florida,[7] was founded in 1939.[8] It would undergo several name changes before becoming what is known today as Choice Hotels International.[7] The chain initially remained east of the Mississippi River.[9]

By the early 1960s, Quality Courts United had approximately 600 members.[9] All of its hotels needed to meet certain quality standards and offer amenities like air conditioning, telephones, swimming pools, paved driveways, and wall-to-wall carpeting.[9] In 1963, the organization became a for-profit corporation and changed its name to Quality Courts Motels, Inc.[7][9]

In 1957, Stewart W. Bainum Sr., who ran a Washington, D.C., plumbing business, opened his first hotel in Silver Spring, Maryland.[10] He later franchised his first Quality Courts motel in 1963.[11] In 1968, Bainum merged his business, Park Consolidated Motels, Inc., with Quality Courts Motels, assumed the role of president and CEO,[8][11] and moved the company's headquarters from Daytona Beach to Silver Spring, Maryland.[9]

Lodging Magazine wrote that, by 1969, Quality Courts Motels was the world's "largest association of independent motel operators".[7]

Growth and expansion
The Clarion Hotel in Hamden, Connecticut in 2007
A Comfort Suites in Laredo, Texas in 2008

The company changed its name to Quality Inns International in 1972 and, in 1990, the parent company became known as Choice Hotels International.[9][12]

In the 1980s, the company started the industry's first market segmentation strategy, using a range of hotel brands across price points.[13] Geographically, it expanded across the country by opening hotels in the west.[9]

The Comfort brand, which would later become Choice Hotels' flagship brand, was established in 1981. The brand was marketed to family vacationers, business travelers, and senior citizens[9] to compete with Days Inn, Best Western, and Friendship Inn.[13] The company's Quality Inn hotels remained in the midscale segment, competing with Holiday Inn, Ramada, Howard Johnson, and Travelodge.[13] The now-discontinued Quality Royale brand was positioned as Choice Hotels' upscale brand,[7] designed to compete with Marriott, Hyatt, Hilton, and Sheraton.[13] In the 1980s, Choice bought Friendship Inn, Rodeway Inn, and Econo Lodge.[9]

In 1989, the company introduced McSleep, an economy brand utilizing a consistent, interior-corridor design prototype designed by Rob Spurr that was all new construction. The name was soon changed to Sleep Inn following litigation from McDonald's.[9][14]

Bainum's other business, Manor Care, Inc., which owned and managed nursing homes, bought Choice Hotels in 1990.[9] The company later spun off its hotels business in 1996.[15] Bainum Sr. led Choice Hotels International until 1987, when his son, Stewart W. Bainum Jr., took over the role of chairman and chief executive.[10] As of 2018, Bainum Jr. remains chairman of Choice Hotels.[16]

Choice Hotels International became publicly traded in 1996.[8] That same year, it announced the establishment of the MainStay Suites brand, a midscale extended-stay hotel.[17]

In the mid-2000s, Choice Hotels expanded into the upscale hotel market.[18][5] The company announced in 2005 the creation of its Cambria Hotels & Suites brand, later renamed Cambria Hotels, the company's first new brand since MainStay Suites's creation in 1996.[18] The Cambria brand was created as an upscale hotel chain marketed to business travelers.[18] As of 2018, the Cambria brand had expanded to about 100 hotels open or in the pipeline, including hotels in Philadelphia,[19] Dallas, New Orleans,[20] South Windsor, Connecticut and Savannah, Georgia.[5]

In 2008, Choice Hotels was the first industry chain to establish a "soft brand", Ascend Hotel Collection.[21][22][23] The Ascend Hotel Collection includes upscale boutique and historic hotels whose owners are subject to fewer fixed brand standards compared with Choice's other brands.[21]

Recent history
Cambria Chicago Magnificent Mile exterior

Choice Hotels began a transformation of its Comfort properties in 2012,[24] with the company removing its franchising from 600 properties that did not meet Choice Hotels' new standards.[25] Choice Hotels rebranded Comfort in 2018, which brought its Comfort Inn, Comfort Inn & Suites, and Comfort Suites brands under one umbrella.[25]

In October 2010, officials in Maryland and Montgomery County announced that Choice Hotels International would move its headquarters from Silver Spring,[26][27] to a new 197,866 square feet (18,382.4 m2) facility in Rockville Town Center in Rockville. Groundbreaking occurred in August 2011,[28] and Choice Hotels completed the move into the new headquarters in June 2013.[29]

Rendering of Sleep Inn prototype exterior, November 2017

Throughout its history, Choice Hotels introduced new features into the hotel industry,[7] including having all hotels include non-smoking rooms, 24-hour-a-day toll-free reservations, Internet-based property management systems, and the industry's first iPhone application.[7][30] The company's technological developments also led it to create a division called SkyTouch Technology in 2013, which markets Choice Hotels' property management system to other hotel companies.[31][32]

In 2014, Choice Hotels invested millions of dollars to begin a multi-year process to develop the industry's first new global reservations system and distribution platform in 27 years.[32][31] A cloud-based system, choiceEDGE, launched in 2018.[32] The system can integrate with voice search and artificial intelligence.[32]

In 2018, Choice Hotels expanded the number of hotel brands it franchised by acquiring WoodSpring Suites, an extended-stay economy hotel brand.[33][34] Adding WoodSpring's 240 hotels across the U.S. tripled the number of extended-stay hotels in the company's portfolio to around 350 properties.[33]

As of 2018, Choice Hotels-branded properties are located in more than 40 countries and territories,[6] including hotels in Europe,[35] Asia-Pacific,[36] the Middle East,[37] and Scandinavia.[38] Choice Hotels entered into an agreement with Spanish hotel operator Sercotel in 2018 to increase Choice's footprint in Spain and Latin America.[39]

Corporate affairs

Choice Hotels International is publicly traded on the New York Stock Exchange under the stock symbol CHH.[40] It maintains a corporate headquarters in Rockville, Maryland,[20] and a technology campus in Phoenix, Arizona.[41] At year-end 2017, Choice Hotels employed 1,987 people in its global corporate operations.[4]:37

Stewart W. Bainum Jr. is chairman of Choice Hotels' board of directors, a position he has held since 1987.[42] Pat Pacious became president and CEO in September 2017.[43][44] Previously, he served as Choice Hotels' president and chief operating officer.[45]

In 2017, Choice Hotels teamed up with the Red Cross and Boys and Girls Clubs of America in the aftermath of Hurricane Harvey and Hurricane Irma.[46]

Choice Hotels scored 100 on the Human Rights Campaign Foundation's Corporate Equality Index in 2018.[47]

The company's sustainability efforts include Room to be Green, which requires franchised properties to reduce their impact on the environment and lower operating costs with energy-efficient lighting and recycling, and giving guests the option of foregoing daily change of linens.[48] Choice Hotels also participates in Clean the World to recycle hotel soap.[49]

Partnerships

Choice Hotels formed an alliance with Bluegreen Vacations, an international timeshare company, in 2013. Pursuant to this arrangement, many Bluegreen resorts are members of Choice Hotels' Ascend Hotel Collection brand.[50][51]

Brands
Logo used until 2015
Cambria Hotel New Orleans Warehouse District guestroom, November 2017
Quality Inn & Suites exterior, November 2017

Choice Hotels International is the parent company of a number of hotel brands split among various market segments, in addition to a vacation rentals brand. As of June 30, 2020, Choice Hotels franchised 7,118 properties worldwide, with a total of 597,018 rooms, in addition to 1,035 hotels under construction with 85,129 rooms.[1][4]:11[2]

Upscale

  • Ascend Hotel Collection
  • Cambria Hotels

Midscale

  • Comfort (Economy in Norway, Sweden and Lithuania)
  • Sleep Inn
  • Clarion Hotels (upscale in Australia, Norway, Denmark, Sweden and Finland)
  • Quality Inn

Extended stay

  • MainStay Suites
  • Suburban Extended Stay Hotel
  • WoodSpring Suites

Economy

  • Econo Lodge
  • Rodeway Inn

Vacation rentals

  • Vacation Rentals by Choice Hotels

Rewards

Choice Hotels' rewards program is called Choice Privileges. In order to earn points through the program, one must book a reservation by either calling a toll-free number, going online, or using their mobile app. Points are updated the day after the user's stay.[52] To redeem points earned using the program, one must log in on Choice Hotels' website. Points can be redeemed for gift cards or airline mileage.[52]

See also

Notes
  1. "Inline XBRL Viewer". www.sec.gov. Retrieved August 20, 2020.
  2. "Choice Hotels boss says hotels in a tech battle with Booking.com and Expedia". Australian Financial Review. March 13, 2018. Retrieved July 2, 2018.
  3. "Choice Hotels revenue". www.craft.co.
  4. "2017 Form 10-K". Choice Hotels. Retrieved May 28, 2018.
  5. Grant, Peter (February 20, 2018). "Choice Hotels Signs Deal in Savannah". The Wall Street Journal. Retrieved May 28, 2018.
  6. Trejos, Nancy (July 5, 2018). "The brands and rooms of Choice Hotels, by the numbers". USA Today. Retrieved September 19, 2018.
  7. Ellen Meyer (April 10, 2018). "The origins and growth of franchising in the hotel industry". Lodging Magazine. Retrieved May 28, 2018.
  8. King, Danny (February 13, 2014). "Obituary: Choice Hotels founder Stewart Bainum Sr". Travel Weekly. Retrieved May 28, 2018.
  9. Jakle, John A; Sculle, Keith A; Rogers, Jefferson S (2002). The Motel in America. JHU Press. pp. 162–165. ISBN 9780801869181. Retrieved May 28, 2018.
  10. Langer, Emily (February 19, 2014). "Stewart W. Bainum Sr., D.C. businessman, dies". The Washington Post. Retrieved May 28, 2018.
  11. Ricca, Stephanie (October 4, 2010). "AH&LA: celebrates an era of achievement". Hotel & Motel Management. Retrieved May 28, 2018. Stewart Bainum, from plumbing contractor to international franchisor: Stewart Bainum franchised his first motel with Quality Courts Motels in 1963, and by 1968 he operated eight nursing homes, incorporating them as Manor Care, Inc., while grouping five motels, franchised with Quality Courts Motels, under the name Park Consolidated Motels, Inc. In that year, Bainum merged Park Consolidated with Quality Courts, becoming president and chief financial officer of a company, which by then represented 410 franchised and 12 company-owned motels. Within two years, Quality Courts operated franchised motels in 33 states, and began its first international operations. In 1980 Bainum merged Manor Care and Quality, with Manor Care purchasing Quality for $37 million.
  12. Faiola, Anthony (July 3, 1995). "Choice Hotels makes a wide turn". The Washington Post. Retrieved July 2, 2018.
  13. Knight, Jerry (May 9, 1981). "Quality Inns planning 3 classes of motels". The Washington Post. Retrieved May 28, 2018.
  14. "'McSleep' Loses to Big Mc". The New York Times. September 19, 1988. Retrieved August 10, 2013.
  15. Salganik, M. William (March 4, 2000). "Manor Care gets 2 buyout offers". The Baltimore Sun. Retrieved March 10, 2017.
  16. "Choice Hotels International". Reuters. Retrieved June 1, 2018.
  17. Richards, Rhonda (January 26, 1996). "Midprice hotels becoming mainstay of travel". USA Today. Retrieved May 28, 2018.
  18. "Choice Hotels to launch 'lower-upscale' brand". The Washington Post. January 24, 2005. Retrieved May 28, 2018.
  19. Hilario, Kenneth (February 22, 2018). "Philadelphia Cambria Hotel is now open on South Broad". Philadelphia Business Journal. Retrieved September 20, 2018.
  20. Trejos, Nancy (February 16, 2018). "New hotels: Gleaming properties from Washington, D.C. to California". USA Today. Retrieved September 20, 2018.
  21. Haberkorn, Jen (May 26, 2008). "Hotel franchiser rebrands collection". The Washington Times. Retrieved May 28, 2018.
  22. Hughes, Kate (September 15, 2017). "Independently Minded: The Power of Soft Brands". Lodging Magazine. Retrieved September 20, 2018.
  23. Sickel, Julie (July 7, 2017). "The Rise of Hotel 'Collection' Brands". Business Travel News. Retrieved September 20, 2018.
  24. Judy Maxwell (February 27, 2018). "Seeking Comfort In a Sea of Hotel Brands". Asian Hospitality. Retrieved September 20, 2018.
  25. Jena Tesse Fox (May 3, 2018). "Choice Hotels' Comfort brand gets new logo, Cambria gets new plan". Hotel Management. Retrieved September 20, 2018.
  26. "Choice Hotels International Headquarters Move Marks A New Era". Choice Hotels International - Media Center. Retrieved April 24, 2018.
  27. "Choice Hotels moving to Rockville". The Washington Post. October 26, 2010. Retrieved October 9, 2011.
  28. "Construction starts on Choice Hotels headquarters in Rockville". Gazette.Net. August 31, 2011. Archived from the original on May 10, 2012. Retrieved October 9, 2011.
  29. Inc., Choice Hotels International. "Choice Hotels International Completes Move Into New Rockville Headquarters". www.prnewswire.com. Retrieved April 24, 2018.
  30. Deanna Ting (July 13, 2017). "Choice Hotels appoints Pat Pacious as new CEO beginning in 2018". Skift. Retrieved May 28, 2018.
  31. Dorothy Creamer (March 29, 2018). "The intersection of technology & hospitality". Hospitality Technology. Retrieved May 29, 2018.
  32. Cooper, Rebecca (January 23, 2018). "Choice Hotels launches new reservations system at long last". Washington Business Journal. Retrieved May 29, 2018.
  33. Trejos, Nancy (December 20, 2017). "Choice Hotels buys extended stay brand". USA Today. Retrieved May 29, 2018.
  34. Mest, Elliott (May 10, 2018). "Choice revels in extended-stay success". Hotel Management. Retrieved July 2, 2018.
  35. "Choice centers Europe growth on four known brands". Hotel News Now. October 16, 2017. Retrieved September 19, 2018.
  36. Gabriella Warden (August 28, 2015). "Choice Hotels unveils new brand identity in Asia-Pacific". Travel Weekly. Retrieved September 19, 2018.
  37. Clarke, Patrick (May 2, 2016). "Choice Hotels Signs Master Agreement to Enter Middle East". TravelPulse.
  38. Björn Wallenberg (May 29, 2018). "A Norwegian hotel billionaire wants to use blockchain to cut out booking sites like Expedia". Business Insider Nordic. Archived from the original on November 29, 2018. Retrieved September 19, 2018.
  39. "Choice Hotels chain announces partnership with Spanish Sercotel". Forbes Mexico. April 11, 2018. Retrieved May 29, 2018.
  40. "Choice Hotels International". The Wall Street Journal. Retrieved June 1, 2018.
  41. O'Connell, Jonathan (March 31, 2013). "Capital Business". The Washington Post. Retrieved May 29, 2018.
  42. Abramowitz, Michael (March 6, 1987). "Bainum takes father's post at Manor Care". The Washington Post. Retrieved March 10, 2017.
  43. Jena Tesse Fox (August 10, 2017). "Pat Pacious to step up as Choice Hotels International CEO in September". Hotel Management. Retrieved May 29, 2018.
  44. Nycz-Conner, Jennifer (March 22, 2018). "Choice Hotels CEO Pat Pacious: WoodSpring, Cambria efforts paying off". Washington Business Journal. Retrieved May 29, 2018.
  45. Cooper, Rebecca (August 10, 2017). "Choice's new CEO will take helm early as Joyce exits". Washington Business Journal. Retrieved July 3, 2018.
  46. Trejos, Nancy (September 22, 2017). "Hotels respond to series of hurricanes". USA Today. Retrieved September 19, 2018.
  47. David Eisen (November 13, 2017). "12 hotels, hotel companies score perfect ratings in commitment to LGBTQ community". Hotel Management. Retrieved May 29, 2018.
  48. Kerry Medina (March 8, 2017). "U.S. hotels continue to make strides in energy efficiency". Hotel Management. Retrieved May 29, 2018.
  49. Silver, Kate (November 30, 2017). "Check in, help out: Socially conscious hotels give back to the community". The Washington Post. Retrieved May 29, 2018.
  50. "Choice Hotels-Bluegreen Join Forces". Zacks.com. Retrieved May 24, 2017.
  51. Dennis Schaal (January 23, 2013). "Choice Hotels is no longer just a hotel company as it gets into timeshares". Skift. Retrieved September 19, 2018.
  52. "Choice Privileges FAQ". Choice Hotels.
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