Choice: We'll need suits, not just boots, for true recovery

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Like most industry executives and analysts, Choice president and CEO Patrick Pacious thinks drive-to leisure travel will lead the Covid-19 recovery, but that a full recovery would be underway when business travel returns. For Pacious, that means drawing back both categories of Choice's business travelers: suits and boots.

"The suits are the professional services type firms who tend to stay in Comfort, Cambria and Ascend [properties]," Pacious said on a Thursday webinar for franchisees, held in lieu of the company's annual convention, which was to have taken place in May in New Orleans. "The boots travelers are those who can't work behind a laptop from a home environment. They may be in trucking, logistics, construction. That segment has continued to stay in our brands over the last three months, and that will continue. But the professional services traveler and getting them back on the road, that will depend on when large events and conventions come back into the equation. As most of our competitors have talked about, that will likely be next year or the following year."

The company has been reaching out to its corporate travel managers, and "their first question is about the virus and infections," Pacious said. "They want to know the staff and hotel are safe to be engaging with." 

Choice sent a video showcasing its Commitment to Clean initiative not only across its social media and digital channels but also to all Choice Privileges members and corporate accounts, said Choice COO Robert McDowell. 

"The other piece that is critical with us is the entire buying process through the corporate travel buyers is going to be focused on what we are doing around the Commitment to Clean," he added. "We'll be reinforcing that through the [request-for-proposals] process, and communication will be critical."

The company also has been working with corporate meeting planners and travel buyers to conduct virtual tours of hotels, said Choice senior vice president of upscale brands Janis Cannon. "We're setting up virtual tours on how we are setting up meeting rooms, how we are approaching F&B, and that's driving early demand for us," she said. "We're helping hotels by not just coming up with the Commitment to Clean, but what do we need to do from a meetings and event perspective as well."

Occupancy improving

Since the start of the pandemic, Choice Hotels' worst week in terms of occupancy was that of April 5, when the systemwide level was just 28%, Pacious said. As of May 31, the company's occupancy was just shy of 45%. 

"Memorial Day weekend was relatively strong, and the weekend after was even stronger, which shows a pent-up demand for travel," he said.

The company's extended-stay brands have posted even higher occupancy levels. For March, Choice's extended-stay brands reported an average occupancy level of more than 68%, and in April it was 60%. The WoodSpring Suites brand achieved an average occupancy rate of more than 70% in May.

The extended-stay brands also outperformed in terms of revenue per available room, according to Choice. "Despite an industry-wide RevPAR decline of nearly 52% in March and 80% in April, RevPAR for the company's extended-stay brands declined less than 14% and 29%, respectively," the company said. 

As of the first quarter, Choice has 410 domestic extended-stay hotels open, representing nearly a 10% year-over-year increase, and currently has another 300 hotels in the pipeline. The company has opened 17 extended-stay hotels so far this year. 

But things have not been all positive for the company during the pandemic. In April, the company furloughed about 15% of its domestic workforce for 60 days, and it is in the process of determining what will happen with those staff members as the furloughs expire on July 1, Pacious said.

Source: Business Travel News

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