Choice Hotels To Put $40 Million Into Its Biggest Brand

LOS ANGELES, May 14, 2013 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE: CHH) today announced a landmark $40 million property improvement incentive program to build on the success of the ongoing system-wide refresh strategy of its more than 1,900 domestic Comfort Inn and Comfort Suites hotels launched last year. The Comfort Re-Imagined brand strategy has been making great strides. Committed to gaining even more ground, Choice Hotels, one of the world's largest hotel companies, introduced this incentive to encourage hotels to perform their renovations quickly and completely. This is yet another dynamic component of the brand's sweeping multi-year, multi-faceted approach to provide greater consistency of quality across the company's biggest brand and ongoing increases in guest satisfaction.

From the opening session of the company's annual convention in Los Angeles, Choice Hotels International President and Chief Executive Officer Stephen P. Joyce unveiled the $40 million commitment to franchisees of the company's domestic Comfort Inn and Comfort Suites branded hotels. With nearly 2,500 Comfort Inn and Comfort Suites properties worldwide, this represents one of the largest single brands in the hospitality industry and one of the largest system-wide upgrades.   

"Comfort is the engine of Choice Hotels and an iconic brand.  More than 72 million people stayed at a Comfort branded hotel in the United States last year and the brand continues to be a favorite among travelers," said Joyce. "Today, we are putting our own balance sheet behind the brand in a monumental way. Hotel renovations improve guest satisfaction and through this investment we will accelerate improvement of the brand's product quality and consistency, guest satisfaction and brand performance."  

All qualifying domestic Comfort branded properties can apply for a piece of the $40 million, which will be awarded through a forgivable promissory note. Through the promissory note structure, after a fixed amount of time, hotels receiving incentive funds will not owe anything back to Choice Hotels so long as they have not defaulted under the Franchise Agreement. To ensure timely implementation, all incentive eligible work must be completed on or before Sept 30, 2014. The company will pay out incentive funds after Property Improvement Plans (PIPs) have been completed and verified through property inspections and submitted invoices.

While the incentive works through the existing PIP process, even hotels without a current PIP can request one and be eligible for the incentive. Once the improvements are made, franchisees will be able to submit for up to 50% of cost of eligible items for reimbursement. 

"This is another pivotal component to our multi-year, multi-pronged strategy that's making Comfort better than ever," said Alexandra Jaritz, senior vice president for brand strategy and marketing for Choice Hotels International. "We can say this with absolute confidence because we're seeing the results. Our guests are already enjoying the great new things they are seeing in refreshed Comfort hotels.

"We want to keep the momentum going and provide an even greater guest experience at more of Comfort hotels at an even faster pace," Jaritz added. "Choice is committed to this brand, and we're working with our franchisees and sharing some of the cost to create a stronger Comfort brand for the long run."   

The new incentive program builds on the Comfort brands' Truly Yours® brand positioning, which was formally launched through the Comfort Re-Imagined strategy in 2012. The Re-Imagined strategy has been driving a surge in guest satisfaction. The incentive program is concentrated on guest-facing, capital intensive items such as carpet, furniture, and mattresses. Where possible, the program requires the implementation of the Truly Yours design package.

Development of the Truly Yours Design Package was based on in-depth feedback from more than 1,500 guests and developers. Consumer research already indicates overall intent to stay at Comfort hotels nearly doubles in response to the new look. Research also indicates guests are willing to pay more on average per night compared with the current design. 

Changes to the free Your Morning Breakfast® program, which was a major feature of the first phase of the refresh, were made in response to the comments of more than 10,000 respondents. Guest response has been overwhelmingly favorable of breakfast enhancements that are now available at most hotels -- which include the addition of a flavored waffle -- and the new design concept's warm and inviting look. As part of the Comfort Re-Imagined strategy, hotels have also added 154,000 new flat panel TVs, served 25 million waffles last year and are in the process of rolling out one million new pillows and 230,000 refreshed beds.

"You can find Comfort branded hotels in every corner of the country – in the cities, in the suburbs. So we are getting even more targeted, even more tactical in making sure that no matter where a guest checks in, they are going to have a great stay, will recommend the brand and also return themselves," said Mike Varner, head of domestic brand management for Comfort Inn and Comfort Suites.

As part of its commitment to drive consistency and quality across the Comfort brand, last year, Choice Hotels announced tougher penalty fees for franchisees found not in compliance with their PIPs. Further, raising the bar on the guest experience, franchisees of Comfort branded properties now face an even higher required guest satisfaction score.

"The Comfort brand has three decades of success and incredible recognition – it's an iconic American brand and a household name," said Varner. "We want guests to know it's going to be even better moving into the future."

About Choice Hotels

Choice Hotels International, Inc. franchises over 6,200 hotels, representing more than 500,000 rooms, in the United States and more than 30 other countries and territories.  As of March 31, 2013, 395 hotels, representing more than 30,000 rooms, were under construction, awaiting conversion or approved for development in the United States.  Additionally, 81 hotels, representing approximately 7,000 rooms, were under construction, awaiting conversion or approved for development in more than 20 other countries and territories. The company's Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Cambria Suites, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge and Rodeway Inn brands, as well as its Ascend Hotel Collection membership program, serve guests worldwide.

Choice Hotels International offers the Choice Privileges® rewards program. With nearly 17 million members worldwide, is one of the fastest growing hotel loyalty programs in the travel industry.

Additional corporate information may be found on the Choice Hotels International, Inc. website, which may be accessed at www.choicehotels.com.

Forward-Looking Statements

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Generally, our use of words such as "expect," "estimate," "believe," "anticipate," "will," "forecast," "plan"," project," "assume" or similar words of futurity identify such forward-looking statements.  These forward-looking statements are based on management's current beliefs, assumptions and expectations regarding future events, which in turn are based on information currently available to management.  Such statements may relate to projections of the company's revenue, earnings and other financial and operational measures, company debt levels, ability to repay outstanding indebtedness, payment of dividends, and future operations, among other matters.   We caution you not to place undue reliance on any such forward-looking statements.  Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other factors.

Several factors could cause actual results, performance or achievements of the company to differ materially from those expressed in or contemplated by the forward-looking statements.  Such risks include, but are not limited to, changes to general, domestic and foreign economic conditions;  operating risks common in the lodging and franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees; our ability to keep pace with improvements in technology utilized for reservations systems and other operating systems; fluctuations in the supply and demand for hotels rooms; and our ability to manage effectively our indebtedness.  These and other risk factors are discussed in detail in the Risk Factors section of the company's Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission on February 28, 2013 and our quarterly reports filed on Form 10-Q.  We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Choice Hotels, Choice Hotels International, Choice Privileges®, Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Cambria Suites, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge, Rodeway Inn and Ascend Hotel Collection are proprietary trademarks and service marks of Choice Hotels International.

© 2013 Choice Hotels International, Inc.  All rights reserved.

SOURCE Choice Hotels International, Inc.