Choice Hotels Opened 17 MainStay Suites and Suburban Studios Since January 2024 Breaking into Las Vegas, Moreno Valley, Orlando, and Tampa Markets, Demonstrating Best-In-Class Conversion Capabilities and Leadership in the Extended Stay Segment

Rhea-AI Summary

Choice Hotels International (NYSE: CHH) has opened 17 MainStay Suites and Suburban Studios between January 1 and September 17, 2024, demonstrating leadership in the extended stay segment. Key highlights include:

- Breaking into markets like Las Vegas, Moreno Valley, Orlando, and Tampa
- 16 out of 17 hotels are conversions, with an average of 120 days from contract to opening
- Half of the nearly 70 properties in the pipeline are conversions, expected to open by March 2025
- Utilizes the innovative 'Kitchen-in-a-Box' concept for quick conversions
- Offers fully equipped kitchens, spacious rooms, and amenities like free Wi-Fi
- Participates in the Choice Privileges rewards program

Choice Hotels emphasizes its franchise-first focus and industry-leading retention rate, providing cutting-edge solutions to support hotel owners.

Positive

• Opened 17 new MainStay Suites and Suburban Studios in key markets
• Rapid conversion process averaging 120 days from contract to opening
• Pipeline of nearly 70 properties, with half being conversions
• Innovative 'Kitchen-in-a-Box' concept for quick and easy hotel conversions
• Participation in Choice Privileges rewards program to attract and retain customers

Negative

• None.

Insights

Financial Analyst

Choice Hotels' aggressive expansion of MainStay Suites and Suburban Studios demonstrates a strategic focus on the high-demand extended stay segment. The opening of 17 new properties since January, with 16 being conversions, showcases the company's efficient conversion capabilities. The average 120-day turnaround from contract to opening is impressive and could lead to faster revenue generation.

The company's "Kitchen-in-a-Box" concept is a key differentiator, enabling quick and cost-effective conversions. With half of the 70 properties in the pipeline being conversions, CHH is poised for significant near-term growth in this segment. This expansion strategy could potentially increase market share and boost revenue streams, particularly given the current supply-demand imbalance in extended stay hotels.

Investors should note the diverse guest profiles targeted by these brands, which could provide resilience against economic fluctuations. The focus on conversions rather than new builds also suggests a more capital-efficient growth strategy, which could positively impact the company's financial performance and return on investment.

Market Research Analyst

Choice Hotels' expansion in the extended stay segment is well-timed, given the current market dynamics. The company's statement that "demand for extended stay hotels exceeds supply" indicates a favorable market position. By rapidly converting existing properties, CHH is capitalizing on this demand-supply gap faster than competitors who might be focused on new constructions.

The entry into key markets like Las Vegas, Moreno Valley, Orlando and Tampa is strategically important. These locations are known for their strong tourism and business travel sectors, which could drive occupancy rates and revenue per available room (RevPAR).

The diverse guest profile for both MainStay Suites and Suburban Studios, ranging from blue-collar workers to medical professionals and relocating families, suggests a broad market appeal. This diversification could help mitigate risks associated with downturns in specific sectors.

The integration with the Choice Privileges rewards program and the Choice Privileges Mastercard could enhance customer loyalty and drive repeat business, potentially leading to stable, recurring revenue streams.

Tech Expert

Choice Hotels' technology infrastructure plays a important role in its expansion strategy. The company's cloud-based solutions, including the choiceEDGE guest reservation platform and choiceADVANTAGE property management system, provide franchisees with advanced tools for managing room rates, distribution channels and inventory. These tech solutions can potentially improve operational efficiency and revenue management for franchisees.

The emphasis on free Wi-Fi in all properties aligns with modern traveler expectations and could be a competitive advantage, especially for extended stay guests who may need reliable internet for work or communication. The inclusion of premium movie channels also enhances the in-room entertainment offering, which is particularly important for longer-staying guests.

The integration of the Choice Privileges rewards program with a co-branded credit card demonstrates a tech-savvy approach to customer retention and data collection. This could provide valuable insights for targeted marketing and personalized guest experiences, potentially driving higher customer lifetime value.

Overall, CHH's tech-forward approach could contribute to improved guest satisfaction, operational efficiency and data-driven decision-making, all of which are important for long-term success in the competitive hospitality industry.

Demand for extended stay hotels exceeds supply, and owning these hotels is a way to invest in the hottest segment in hospitality

NORTH BETHESDA, Md., Sept. 23, 2024 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE: CHH) continues to lead in the extended stay segment, opening 17 MainStay Suites and Suburban Studios between January 1 and September 17, 2024. Breaking into the key markets of Las Vegas, Nevada (with a second hotel opening later this month); Moreno Valley, California; Orlando and Tampa, Florida, 16 of the 17 hotels opened across the two brands are conversions, with the average length of time between contract signing and doors opening around 120 days. Half of the nearly 70 properties in the pipeline for MainStay Suites and Suburban Studios are conversions, expected to open between September 2024 and March 2025.

A first mover in the space, Choice Hotels extended stays conversion success builds on the company's "Kitchen-in-a-Box" concept, a modular kitchen design that allows franchisees to quickly and easily convert almost any transient hotel into an extended stay hotel with kitchens in each room in as little as 3-4 months, enabling owners and developers to start offering extended stay rooms more quickly.

"Choice Hotels experience in conversions, along with innovative, turnkey solutions like kitchen-in-a-box, and our history of strong collaboration with developers, enables us to accelerate the time it takes to convert a typical transient hotel into an extended stay property," said Ron Burgett, senior vice president, extended stay development at Choice Hotels. "With a team of experts dedicated to extended stay, we are able to support developers throughout the entire conversion process with extreme efficiency."

"With Choice's deep expertise in extended stay, our two conversion brands offer a great opportunity to enter the hottest category in hospitality, backed by the same support system that's made WoodSpring Suites the most successful brand in the segment. From sales and marketing to training, developers can rely on dedicated resources to help maximize their return on investment," said Matt McElhare, vice president and lead for extended stay brands for Choice Hotels.

The Suburban Studios guest profile includes blue collar infrastructure and construction workers, as well as seasonal workers and families. The MainStay Suites guest profile includes sports teams, medical professionals, business travelers, members of the military, mid-level blue collar workers, students, professors, medical patients, and people relocating or renovating their homes.

MainStay Suites and Suburban Studios offer the comforts of home with a fully equipped kitchen in every room with a full-sized refrigerator, stovetop, microwave, and plenty of counter space, as well as providing flatware and cookware. The guestrooms are clean and spacious allowing guests to unwind and relax or to catch up on work with free Wi-Fi.

MainStay Suites and Suburban Studios participate in Choice Privileges, the award-winning rewards program where members earn points on eligible charges during their stay, which can be redeemed for reward nights at over 7,000 hotels across a diverse portfolio of brands in 45 countries and territories. With the Choice Privileges Mastercard, members can earn more points faster, including on everyday purchases.   

Choice Hotels, with a franchise-first focus and an industry-leading retention rate, has been committed to providing its hotel owners with the support they need to succeed since it launched the country's first hotel chain in 1941. Today, Choice offers franchisees a suite of cutting-edge cloud-based solutions, including the choiceEDGE guest reservation platform and the choiceADVANTAGE property management system, to help franchisees effectively manage room rates, distribution channels, and inventory.

MainStay Suites®: Live Like Home 
MainStay Suites is a midscale extended stay brand that allows guests to Live Like Home no matter how long they're away. MainStay Suites hotels offer spacious residential-style suites with fully equipped kitchens, separate areas for working and relaxing, a marketplace and 24/7 laundry facilities. With more than 125 locations open across the United States, MainStay Suites provides the conveniences of home plus the perks of staying in a hotel — like weekly housekeeping, a fitness center, free Wi-Fi and more. To learn more, visit www.choicehotels.com/mainstay.

Suburban Studios®: Hotels for Real Life 
Suburban Studios offers longer-staying guests a comfortable, affordable extended stay experience with hassle-free registration and just the right hotel amenities. With more than 100 locations across the United States, our hotels feature studio suites with in-room kitchens, 24/7 laundry facilities, free Wi-Fi and premium movie channels, and bi-weekly housekeeping. For more information, visit www.choicehotels.com/suburban.

About Choice Hotels®  
Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world. The challenger in upscale and a leader in midscale and extended stay, Choice® has nearly 7,500 hotels, representing more than 630,000 rooms, in 45 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® rewards 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. 

Addendum   
This is not an offering. No offer or sale of a franchise will be made except by a Franchise Disclosure Document first filed and registered with applicable state authorities. A copy of the Franchise Disclosure Document can be obtained through contacting Choice Hotels International at 1 Choice Hotels Circle, Suite 400, Rockville, MD 20850, email: development@choicehotels.com.   

© 2024 Choice Hotels International, Inc. All Rights Reserved  

 

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SOURCE Choice Hotels International, Inc.

FAQ

How many MainStay Suites and Suburban Studios did Choice Hotels (CHH) open in 2024?

Choice Hotels opened 17 MainStay Suites and Suburban Studios between January 1 and September 17, 2024.

What is the average time for Choice Hotels (CHH) to convert a property to MainStay Suites or Suburban Studios?

The average length of time between contract signing and doors opening for conversions is around 120 days.

What is the 'Kitchen-in-a-Box' concept used by Choice Hotels (CHH)?

The 'Kitchen-in-a-Box' is a modular kitchen design that allows franchisees to quickly convert almost any transient hotel into an extended stay hotel with kitchens in each room in as little as 3-4 months.

How many properties are in the pipeline for MainStay Suites and Suburban Studios?

There are nearly 70 properties in the pipeline for MainStay Suites and Suburban Studios, with half being conversions expected to open between September 2024 and March 2025.