Choice Hotels has launched a vacation rental business and is doing it by working strictly with vacation rental management companies and not individual property owners or the latter could be a future option.
Hospitality-tech company Maxxton is providing Choice with vacation rental reservations and distribution technology as a foundation for the new Choice offering.
Choice CEO Stephen Joyce said the chain signed on three vacation rental management companies in the last month and that a lot of others want to work with Choice because the platform enables them to efficiently run their entire businesses for the first time.
Speaking during the Choice Hotels fourth quarter of 2015 earnings call February 18, Joyce said the program would compete, to some extent, with Airbnb, which is also signing up vacation rental management companies, and he expects the vacation rental offering to turn profitable within a year.
Choice Hotels CFO David White added that the vacation rental platform leverage’s choice existing technology and distribution platform and he likewise expects it be to accretive to earnings starting in 2017.
For consumers, the vacation rental stays enable them to earn Choice Privileges points so they can add to their totals whether staying in a hotel or vacation rental.
Choice currently offers vacation rentals in a limited set of destinations, including Aspen, Colorado; Bear Lake, California; Phoenix, Arizona, and Shenandoah and Williamsburg, Virginia. In a property search, Bluegreen Vacations was the only management company listed among these destinations, although Choice states that more properties are coming soon.
The Choice websites lists management companies’ phone numbers so consumers can contact them with any questions about their reservations.
Millennials Want Instant Gratification
Joyce detailed some of the changes the chain recently made to Choice Privileges, noting that 43 percent of millennials in a Choice survey indicated they wanted benefits as soon as they sign up.
“Millennials want instant gratification,” Joyce said.
With the changes to Choice Privileges, members can redeem at the time of check-in their choice of 500 Choice Privileges points, 100 airline miles, $0.20 per gallon in Shell fuel rewards savings, a $2.50 Amazon.com credit or a $5 coffee card.
These little perks are available for stays Sundays through Thursdays.
Choice Wants to Get to Cuba Soon
Joyce said Choice Hotels can’t wait to enter Cuba and is in discussions with government officials. He didn’t specify which government, the U.S. or Cuba.
He said he hopes the chain will “be there in the relatively short term,” although Choice “isn’t putting any money into it.”
Instead, Choice intends to use an Ascend Hotel Collection-type business model in Cuba, referring to one of Choice’s brands.
Ascend doesn’t use a traditional franchise plan but instead uses a membership model that enables properties to retain their independent brands while getting access to Choice marketing and distribution channels.