Choice Hotels, the company which franchises more than 6,000 hotels in the United States and in more than 35 other countries and territories has ambitious plans for its presence in Europe: to double its network of hotels in the next five years. TDN had the opportunity to talk with one of its key contributors in the realisation of these plans, Mr Olivier Dupont, Choice’s Vice President of European development.
TravelDailyNews: Mr Dupont, you joined Choice last January and this is a hotel chain which has its own ‘personality’ very different from Wyndham, Marriott and Holiday Inn. What are the similarities between these companies?
Olivier Dupont: As you know, although I have a long operational experience, my expertise in the field lies with international business development. I think that although all these companies may have a different philosophy or ‘personality’ as you call it, the common thread between them is international franchise development and this is the experience I bring in.
TDN: Europe shows clear signs of recovery now and unless significant economic changes take place (e.g., collapse of Euro, oil prices reaching $200) market conditions seem to improve. Will these conditions help Choice in its plans for Europe?
O.D.: I think it’s a matter of personal opinion. There are encouraging signs out there. One of the statistics often reported is that the European hospitality sector has recovered faster than the American one and it is normal that most of the hotel franchisors (certainly the American ones) are looking at Europe as a favourable destination for business over the next few years. I think that Europe has always had this ability to bounce back from disasters whether financial or others and most certainly the conditions that are emerging are conducive for Choice to develop its presence on this continent. This said, not everything is ‘rosy’ in Europe. The financial situation with sovereign debts is a concerning one and I think that from a lending perspective the funds are still very tight. Also conditions in certain Eastern European countries are still quite challenging from the hotel business development point of view. We, as Choice, will continue to concentrate on our three key markets, namely the UK, France and Germany where, despite the difficulties, the economic indicators are more positive than in other countries.
TDN: Choice is currently undergoing a change in an effort to align brand standards across the board. choiceADVANTAGE was announced and will be available in UK, from the spring of this year and in other countries later in the year. How much of a challenge is it for you that these things are not yet in place?
O.D.: The ideal situation would be to have everything there now. But we do not live in an ideal world and we should look forward to what we will be able to offer fairly soon. The alignment of standards across brands with WiFi, upgraded bedding and a more consistent breakfast offering is ongoing and will soon be in place offering our customers, owners and operators the consistency our brands need to have. The announcement by our CEO Stephen Joyce of a substantial investment of almost 8 million Euros on technology, including our proprietary PMS system choiceADVANTAGE, that will provide our franchisees with a more efficient and less expensive inventory, yield andgeneral property management system via the internet is certainly something that will give us a substantial competitive advantage in Europe.
TDN: Choice has a wide range of brands in the US. What will be your strategy in Europe?
O.D.: Like most large US-based international hotel franchising companies that have a wide range of brands, we have ten great brands plus the Ascend Collection. For Europe we had to make a choice with regards to what brands we would introduce. We traditionally offered three brands in Europe: Comfort, Quality and Clarion and some sub-brands attached to those such as Clarion Collection. We will maintain these brands until we see that the market is ripe for the introduction of other brands in our portfolio.
TDN: How are these brands differentiated from each other?
O.D.: The Clarion brand is a full-service upper midscale brand targeting mainly business travellers. Clarion Collection is a sub-brand for unique or boutique hotels in this segment which have an ‘iconic’ character in terms of building or history in the city. The Comfort brand is a midscale budget brand where food and beverage or business facilities are not an obligation whilst Quality is a midscale full service brand where food and beverage and meeting facilities are part of the service offering.
TDN: How do you plan to expand these brands in Europe and are you considering business models other than franchising?
O.D.: Our aim is to double our network of hotels in the next five years but we will not do this everywhere or in the same way. As I mentioned earlier, our key markets are the UK, France and Germany but we already have presence in many other European countries. Major European cities are our primary target destinations but as far as brands are concerned we will evaluate the needs and the conditions of each market separately. In France, for example, our flagship brands are Comfort and Quality. These will help in the development of the Clarion brand in this market. On the other hand, we have a very good presence of the Clarion brand in the Nordic countries and this should help in the development of the other two brands. Achieving the right balance will also help improve average rates across brands. We will not hesitate to invest in franchise agreements to show our commitment to certain investors but, at least in the near future, we are not considering changing our business model to engage in asset ownership or management contracts.
Olivier Dupont has industry experience of over 25 years not only in hotel business development but also in operations. After graduating from Witwatersrand Hotel School in Johannesburg, South Africa with a degree in advanced hotel management, he started in operations management with Southern Sun Hotels in South Africa and in 1997 he moved across to Europe to work in international business development for Holiday Inn (before its acquisition by IHG). Since then, he has worked in this line of business for Marriott International, for Cendant which later became Wyndham Worldwide and now for Choice Hotels International.