Choice Hotels Offers Owners Data/Analytics Tech to Improve Revenue, Reduce Costs

Choice Hotels International, Inc. held its Q1 2019 Earnings Conference Call on May 9, 2019. During that call, CEO Patrick Pacious discussed how the company has been using technology to drive growth for its franchisees. Direct bookings is one area where he mentioned growth.

"We are reducing customer acquisition costs by driving direct bookings," he explained. "Our proprietary contribution has increased by approximately one-third over the last decade, a testament to our ability to execute on our long-term vision. A key driver in our direct booking growth is our digital channels, particularly mobile, which saw a 43% increase in revenue last year."

Choice is also working to meet the customer where  they shop while reducing customer acquisition costs. One way the company is doing this is with Book on Google which, according to Pacious, "provides the same benefits as direct booking, to our owners. I'm happy to say that gross room revenue generated through Book on Google is quickly yielding positive results."

Pacious also discussed how the company is offering franchisees a full suite of data analytics tools to help owners run their businesses smarter and more efficiently. He explained that running a hotel often requires owners to participate in labor-intensive processes, such as setting rates, answering RFPs, or even staying within the parameters of a government program such as FedRooms.

"There's a lot of effort that hotels have to do to make sure that their product and their inventory and their rates are showing up in the right places and are staying consistent with the program rules that a company may have or the government may have," he noted.

Choice is able to offer its owners data and analytics technology that can identify for owners where they might be missing an opportunity in revenue or channel management areas. This data and analytics technology can also help owners compare cost line items to other hotels in similar markets. For instance, owners can compare labor costs down to the shift level, the workman's comp bill, the insurance costs, etc. Armed with that data, owners can find cost savings.

But Choice doesn't just create the data and analytics tool, offer it to owners, and walk away. The company offers its owners educational sessions on how to use these tools.

"We're getting a lot of positive feedback that those [data/analytic tools] are ultimately boosting their bottom line," Pacious said. "So that, at the end of the game, is not just about driving RevPAR and gross room revenue. It's also about the return on investment and the unit economic improvement that we're able to achieve through the use of centrally delivered technology tools."