Choice Hotels' 69th Annual Convention: Driving Franchise Success Through Innovation and Efficiency

Choice Hotels International’s 69th Annual Convention, held in Las Vegas in April/May 2025, underscored the lodging giant’s commitment to empowering franchisees through strategic innovation, operational efficiency, and brand diversification. With over 7,500 hotels in 46 countries, Choice is leveraging cutting-edge technology, cost-saving initiatives, and targeted brand expansions to solidify its position as a global leader in hospitality. Below, we dissect the key takeaways and their implications for investors.

Strategic Initiatives: Food, Tech, and Brand Evolution

At the heart of the convention were initiatives designed to enhance guest experiences while reducing costs for franchisees. Two notable programs emerged from the Comfort and Country Inn & Suites brands:

1. Food Innovation Pilots:
2. Comfort introduced a Build Your Own Breakfast Bowl, featuring customizable ingredients like Nashville Hot-seasoned proteins and bagels.
3. Country Inn & Suites tested Pillsbury biscuit sandwiches, a nostalgic, high-margin item. Both programs are backed by partnerships with suppliers like Florida’s Natural and General Mills to ensure affordability.

A new food group purchasing program, launched in July 2024, has already delivered 9% average savings on food costs by March 2025, a critical win in an industry where food inflation remains a challenge.

1. AI-Driven Efficiency:
   Choice is investing heavily in artificial intelligence to streamline operations and boost revenue. New tools include:
2. Flexible rate management systems to optimize pricing dynamically.
3. A self-service corporate booking platform targeting mid-sized clients, reducing reliance on travel agencies.
4. AI-enhanced marketing for personalized guest outreach.

The ChoiceROCS consultancy program, which provides pricing and strategy recommendations, generated $81 million in incremental revenue for participating franchisees in 2024, with a 100-basis-point RevPAR Index premium over non-users.

Brand Growth and Global Expansion

Choice’s portfolio continues to expand through both established and emerging brands:
- Ascend Collection, its upscale soft-brand, now boasts 423 global openings (up from 400 in 2024) and a refreshed logo. It has expanded into markets like Chile, Washington, D.C., and Australia.
- Everhome Suites, a midscale extended-stay brand, is on track to reach 25 open hotels by end-2025, while WoodSpring Suites maintains strong performance with Gross Operating Profits (GOP) above 55%.

New cost-effective prototypes for Comfort and Country Inn & Suites aim to refine brand identities and attract franchisees, particularly in underserved markets.

Awards and Loyalty Program Momentum

The convention celebrated franchisees and partners pivotal to Choice’s success. Notable winners included:
- Gary and David Burton (Premier Legacy Award) for their 17-year commitment, including six properties like the Platinum Award-winning Sleep Inn & Suites in Texas.
- Toshio Muraki, founder of Choice Hotels Japan, honored posthumously for growing the brand to nearly 100 hotels in Japan, including 22 Comfort properties.

The Choice Privileges loyalty program now has 70 million members, with 13% longer stays and 30% more redemptions in 2024 due to expanded benefits like premium room access. Partnerships with AAA, AARP, and Preferred Hotels & Resorts have driven demand, with AARP members alone booking 1.1 million room nights in 2024.

Financial and Operational Highlights

• Cost Savings: Area Directors identified $25 million in operational savings for franchisees in 2024 (an average of $33,000 per hotel).
• Direct Bookings: The updated ChoiceHotels.com platform drove a 6% increase in direct bookings, with upscale bookings rising 14% in Q1 2025.
• Leadership Vision: CEO Patrick Pacious emphasized “Powering the Future” through cost reduction, revenue growth, and operational simplification. With 40% of occupancy driven by business travel, Choice is well-positioned to capitalize on corporate demand.

Conclusion: A Compelling Investment Case

Choice Hotels’ 69th convention showcased a company in strong growth mode, leveraging technology, cost efficiencies, and brand diversification to drive franchisee success. Key metrics—such as $81 million in incremental revenue via ChoiceROCS, 9% food cost savings, and 25 projected Everhome Suites openings by year-end—highlight its operational and strategic strengths.

With 70 million loyalty members and a 14% surge in upscale bookings, the company is not only maintaining its market share but also expanding into higher-margin segments. CEO Pacious’s focus on “reducing costs, boosting revenue, and simplifying operations” aligns with investor priorities, particularly in an era of economic uncertainty.

While the lodging sector faces challenges like labor shortages and inflation, Choice’s data-backed initiatives—such as its AI tools and strategic brand expansions—position it to outperform peers. For investors seeking exposure to a resilient, innovation-driven hospitality leader, Choice Hotels International (CHH) remains a compelling play, backed by its robust financials and franchisee-centric model.

This analysis underscores Choice Hotels’ strategic acumen and execution, making it a standout opportunity in an evolving industry landscape.