After Banner 2023, Choice Hotels Enters Next Chapter of Growth for its Upscale and Upper Upscale Portfolio of Brands, Starting with Radisson Blu
- 8% year-over-year increase in revenue per available room for the Radisson brand
- Plans to redefine five of the eight brands across its upscale and upper upscale portfolio
- Awarded top upscale brand in the J.D. Power 2023 North America Hotel Guest Satisfaction Index Study
- Earning an industry-leading voluntary retention rate of 98%
- Investment in a world-class team with strong and proven pedigrees
- Longtime investors in cutting-edge technology to drive hotel performance
- None.
Insights
The announcement by Choice Hotels International, Inc. regarding the upgrades and redefinition of their upscale and upper upscale portfolio signifies a strategic move to distinguish their brands in a competitive market. This initiative is likely to influence the company's market position by enhancing the value proposition offered to developers, owners and guests. The reported 8% year-over-year increase in RevPAR for the Radisson brand is a significant metric, as RevPAR is a crucial indicator of a hotel's financial performance, combining both room rates and occupancy rates. The focus on creating distinctive experiences through design, comfort and service is a response to the evolving consumer preferences towards personalized and memorable hospitality experiences.
The investment in property renovations, such as the $15 million allocated for the Radisson Blu Mall of America, indicates a commitment to capital expenditure aimed at long-term brand strengthening. The mention of a 98% voluntary retention rate among franchisees underscores the attractiveness of Choice Hotels' franchise model, which could lead to an increase in franchisee interest and expansion of the hotel portfolio. However, it is essential to monitor the return on investment from these upgrades, particularly in the context of economic conditions that might affect travel and hospitality spending.
The investments Choice Hotels is making in its upscale and upper upscale brands, including the Ascend Hotel Collection and Cambria Hotels, are poised to contribute to the company's financial health. The expansion to 400 upscale hotels and the opening of new properties are indicative of growth and an aggressive development strategy. The use of AI-enabled technology for efficiency and profitability, alongside proprietary cloud-based solutions, could lead to operational cost savings and improved revenue management. These technology investments are particularly relevant as they can provide a competitive edge in optimizing pricing strategies and occupancy rates.
Investors should note the potential for increased capital expenditures due to the renovations and upgrades, which could impact short-term profitability. However, the long-term benefits, such as increased guest loyalty and higher average daily rates driven by enhanced guest experiences, could offset these costs. The company's focus on franchisee satisfaction and retention is also a positive sign, as it suggests a stable and supportive environment for growth. The financial implications of these strategic moves will become more apparent in future financial reporting and performance metrics.
The strategy outlined by Choice Hotels to revamp its upscale and upper upscale brands is reflective of broader trends in the hospitality industry, where differentiation and guest experience are becoming increasingly important. The concept of 'Nordic Vanguard' for Radisson Blu, focusing on Scandinavian-inspired design and curatorial warmth, is an example of creating a unique brand identity that can resonate with guests seeking novel experiences. The hospitality industry often sees a positive correlation between unique branding and guest retention, as travelers are more likely to return to hotels that offer distinctive and memorable experiences.
The recognition by J.D. Power for Cambria Hotels as the top upscale brand in guest satisfaction highlights the importance of guest experience in driving brand loyalty and competitive advantage. The commitment to franchisee-friendly practices, such as reducing reliance on OTAs, aligns with a broader industry trend towards direct booking channels and personalized guest interactions. The long-term success of these initiatives will depend on their execution and the ability of these brands to maintain consistency in guest experiences while scaling up.
"Radisson Blu has proven its potential and appeal among guests and owners alike as it transcends the ordinary, redefining upper upscale by blending contemporary design with warmth and an enriching environment," said Indy Adenaw, senior vice president and general manager, upscale brands, Choice Hotels. "The upper and upscale landscape is littered with generic hotels and Choice now has the opportunity with 400 hotels and counting, and the proven success we've had, to make a statement and drive even stronger returns for hotel owners and repeat stays for guests."
Radisson Blu
Designed to remove the compromise guests and owners face between design-forward but sterile, or big box but boring, Radisson Blu promises to be the 'Nordic Vanguard'. The brand disrupts upper upscale by blending contemporary design with warmth and an enriching environment. The full-service brand focuses on distinctive architecture, as well as amenities, brought to life through three distinct brand pillars:
- Experience/Exciting Comforts: Through subtle innovation and digital ingenuity, the brand crafts a seamless experience that envelops guests in a calming environment, fostering a sense of belonging and discovery. This approach intertwines the comfort of the familiar with the excitement of the new, making every stay memorable.
- Design/Nordic Nouveau: The Scandinavian-inspired design prioritizes comfort, distinctiveness, and warmth. Emphasizing style and purpose, the spaces are dynamic and stimulating. Creating iconic, inviting environments for unique and reliable experiences.
- Service/Curatorial Warmth: Attention to detail and professional warmth define the guest service, reflecting a passionate and welcoming approach akin to an art gallery curator. The hotel teams, confident and knowledgeable, inspires a sense of discovery, fostering an environment that is enlightening and accessible.
These three pillars will shine through work underway at the Radisson Blu Mall of America, which is undergoing a
Enhancing the Guest Experience
Last year, Cambria Hotels was awarded the top upscale brand in the J.D. Power 2023 North America Hotel Guest Satisfaction Index Study. The ethos that led to that designation will be harnessed to create unique, brand-specific amenities, revamped food & beverage programs and unique Choice Privileges rewards for all five of the upscale and upper upscale brands Choice is set to redefine this year.
Committed to Being Franchisee Friendly
Earning an industry leading voluntary retention rate of
Continuing to Invest in Success
Choice has assembled a world-class team, with strong and proven pedigrees to lead the upscale and upper upscale brands to greater heights. In addition to Indy Adenaw, who led Sheraton's global turnaround and launched Moxy at Marriott, segment leadership includes Alexandra Coleman, vice president, upscale brand management, who has 15+ years brand experience including at Marriott, and Patrick Curran, director of food & beverage, upscale brands, who was the executive chef at Momofuku and Riggs Washington DC. As this portfolio of brands continues its transformation, Choice has enlisted the assistance of top creative and brand agency support with Design Agency and RO New York. These two agencies have successfully launched and revitalized emerging and established brands across many industries.
Longtime investors in cutting edge technology to drive hotel performance, Choice operates at the intersection of hospitality, franchising, and technology. As a result, Choice owners and operators have access to a suite of proprietary built and customized cutting-edge cloud-based solutions, including the choiceADVANTAGE and Opera property management systems, the choiceEDGE guest reservation platform; and ChoiceMAX and iDeaS G3 mobile-friendly revenue management tools that continuously help them adapt to changing marketplace conditions using artificial intelligence and real-time data.
Across the entire upscale and upper upscale portfolio, Choice will take the momentum built through the exceptional new hotels opened in 2023, including the Cambria Hotel Burbank Airport and Mayfair Hotel in NYC, Ascend Hotel Collection, to push on performance and further its reputation as a friendly and adaptive partner to the owner and operator community.
About Choice Hotels
Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world. The challenger in the upscale segment and a leader in midscale and extended stay, Choice® has over 7,500 hotels, representing more than 630,000 rooms, in 46 countries and territories. A diverse portfolio of 22 brands that range from full-service upper upscale properties to midscale, extended stay and economy enables Choice® to meet travelers' needs in more places and for more occasions while driving more value for franchise owners and shareholders. The award-winning Choice Privileges® loyalty program and co-brand credit card options provide members with a fast and easy way to earn reward nights and personalized perks. For more information, visit www.choicehotels.com.
Forward-looking Statements
This communication includes "forward-looking statements" about future events, including anticipated development and hotel openings. Such statements are subject to numerous risks and uncertainties, including construction delays, availability and cost of financing, and the other "Risk Factors" described in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, any of which could cause actual results to be materially different from our expectations.
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SOURCE Choice Hotels International, Inc.
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