Choice Hotels Formally Enters the Direct Booking Wars

Five days after Choice Hotels International CEO Stephen P. Joyce and CFO David White said the company would embrace direct bookings, the company kept to their executives’ promise on May 10.

Later this summer, Choice Hotels will begin to offer a new exclusive hotel rate, supported by the company’s best-price guarantee, for Choice Privileges members who book direct on ChoiceHotels.com and the company’s mobile app.

Chief Commercial Officer Robert McDowell made the announcement to Choice Hotels franchisees at the start of the company’s annual convention taking place in Las Vegas.

Mc Dowell said, “The launch will introduce these rates exclusively on ChoiceHotels.com and mobile first. Given our continued focus on growing share of midweek business, we will evaluate expansion to travel agents and plan to include input from travel managers in our decision making process.”

The new rates also apply to all of Choice Hotels’ domestic properties across all of its brands, which include Cambria hotels & suites, Comfort Inn, EconoLodge, Sleep Inn & Suites, and Rodeway Inn.

Joyce and White’s comments from last week were a clear signal that the company would soon jump into the direct booking wars against online travel agencies (OTAs) like Expedia and Booking.com.

White said last week, “You’re going to continue to see us try to drive business to our channels simply because they’re dramatically more profitable than an OTA trying to suck 15% to 20% out of the deal. And so we’re not anti-OTA, but we are not at all happy with some of their practices and we’ve never been happy with their pricing. We think it’s overrated for what they provide.”

Joyce has said ChoiceHotels.com generates the largest share of the company’s revenue on its distribution channels and that, thanks to direct mobile app bookings, Choice saw a 17% increase in revenue for the first quarter of 2016 compared to the same period last year.

Following a revamp of its loyalty program earlier this year, the company also saw a 63% bump in enrollments in Choice Privileges compared to the first quarter of 2015, and the program now has more than 26 million members. Activity among existing members, Joyce noted last week, is also up 17% compared to last year.

McDowell said that the company relied on consumer research to develop and execute the new rates. “The rates further enhance and complement the recently revamped rewards program by providing additional value to members when they book on ChoiceHotels.com on top of the program enhancements announced in February.”

Will Choice promote its new rates in the same fashion as its competitors like Marriott and Hilton have? That’s still not entirely clear, but Joyce hinted at taking “a different turn on things.”