Choice Has Dumped Hundreds of Budget Hotels in Upscale Strategy Shift
Skift Take
Choice Hotels International has been orchestrating one of the U.S. lodging industry's most dramatic makeovers. The company that built its empire on roadside chains like Econo Lodge and Rodeway Inn is now aggressively pivoting toward sleek urban hotels and extended-stay suites.
Skift analyzed Choice Hotels' financial filings on Thursday for 2024 and compared them with 2019. The numbers on property counts and room counts tell a compelling story. Budget properties have been falling out of favor, while extended-stay and upscale offerings have been flourishing.
MainStay Suites, Choice's extended-stay brand, has nearly doubled its footprint since 2019, adding 68 properties and over 5,500 rooms.
This wasn't by chance. According to The Highland Group, extended-stay properties industry-wide have shown fatter margins than most other hotel segments. A key explanation is that weekly housekeeping and limited service offerings keep costs in check.
Meanwhile, Choice's upscale expansion strategy began with Cambria Hotels and sped up with the Radisson acquisition.
For context, Skift spoke with David Pepper, chief development officer, ahead of Thursday's earnings.
"We're definitely moving much more into the upscale space," Pepper said.
