By: Dennis Nessler
At the recent ALIS Conference in Los Angeles, Hotel Interactive® Editor Dennis Nessler caught up with Steve Joyce, President and CEO of Choice Hotels International. Joyce discussed a variety of issues ranging from Cuba to Hilton’s newly launched midscale brand, not to mention the progress of a couple of Choice’s own brands.
Q: You just returned from visiting Cuba for the first time as part of the Engage Cuba Coalition, what were your impressions?
A: It’s fascinating to see, the cities are frozen from the year 1959. We went and we had terrific meetings with the primary ministries; the ministry of tourism, the ministry of commerce, and the ministry of state government owned companies. We think there’s real opportunity for us near term; everybody is going to do stuff long term. They’re going to do things like bring in investors, but none of that can happen until the law changes. There are things that we think we can do and we can get approved that will allow us to start playing almost right away. It [the product] would be sort of like an Ascend, but it would be a little different. We have a huge advantage over everybody else because the Cuban government doesn’t want technology coming in there. They don’t want to see computers and servers coming in. We don’t need it because we’re all cloud-based… I think we’ll be down there reasonably quickly, we had a couple of ideas that were broached. We may have something in a couple of months.
Q: The company’s Cambria brand just opened its first property in New York City with the Cambria hotel & suites NY – Times Square, can you talk about the significance of the “billboard effect” for that brand?
A: Cambria is a perfect example of a brand that did not pursue the billboard effect initially. They opened in tertiary markets with folks that weren’t very experienced in the hotel business, and as a result sold some deals and got some open but no one knew where they were. There was no buzz about them, and they didn’t perform all that well. When I came in I said you have to launch a brand in major markets. That’s what’s going to draw developer attention, and that’s what consumers are going to see. There’s posterboard and there’s posterboard; Times Square you just can’t replicate that. If you can get one done there that would be everybody’s first choice of doing one for a couple of reasons. One is so many people see it and, secondly, if you make it there and do well you’ve pretty much said this brand can prosper in even some of the toughest hotel markets where the competition is fierce...We thought we had something with this brand, but we knew we weren’t getting where we needed to go. That took two things, the determination to go into major markets and using the balance sheet in a big way. We’ll see how successful Cambria becomes but it’s off to the races. We’ll have 18 or 20 under construction within the next 6 to 9 months.
Q: Choice’s Ascend Collection recently opened a couple of properties in the U.K., can you elaborate on the brand’s broad appeal?
A: It’s a runaway success. It was not borne of any strategy, it was borne of necessity. We had this huge level of demand and no place to put them and the independent hotel needed support of a big system. We were initially interested in how well it would play in Europe. We went into Ireland and now we’re going into the U.K. and they’re doing great. We’re feeding them lots of business. The owners are happy because it’s business they wouldn’t have gotten otherwise and it allows them to yield manage their bucket better. They’re big supporters of what we’re doing.
Q: Hilton has launched yet another brand with Tru by Hilton, this one in the midscale tier, what is your take on it?
A: It makes perfect sense for them. It is going to be competitive with Comfort based on what I’ve seen; it looks like a well designed product. They’ve got the Hilton system behind it, and they’ve already signed more than 100 deals, so they’re going to be successful. We think we’ll continue to thrive as well because we think our brand is going to generate equally attractive numbers. That’s what we do. That business for them isn’t all that material to them, it’s material to us. We view that as a little more important to us. But it looks to me like they’ve done a reasonable job of it. We’re looking at exactly what our offering is and whether or not we need to adjust anything on the consumer side. They’ve got more than 100 deals signed, and we’ve got 2,000. This is space where we traditionally have been a big player. We think we’ve got Comfort going exactly where we want it. Will we be competing with them on some deals? Yes, but we’re in a good position to be very competitive.