Choice Hotels has just announced the opening of 50 Quality Suites hotels in France, continuing its partnership with the Zenitude group. So this partnership could not be more fruitful.
David Beers - In fact, we are extremely satisfied. For Choice Hotels, it is fundamental to create mutually beneficial, win-win partnerships. After an initial agreement covering 34 establishments, Choice will almost double in size in France and, at the same time, Zenitude will double its commitment to Choice. This is the best proof of the success of this collaboration. Zenitude has seen all the benefits of joining an international brand like ours. And at the same time, thanks to the results we're delivering, we're fuelling their growth.
Are you relying solely on this partnership with Zenitude or are you also looking to attract new franchisees to expand your network in France?
Ricardo Losada Revol - This partnership with Zenitude will give us a presence in around forty more French towns and cities. But France is an incredible country, the most visited in the world, and one of the biggest markets in Europe. So it's crucial that we continue to develop there, both with Zenitude and with other franchisees.
D. B. - France is a key market for us. By the end of the year, we will have 107 hotels in France, 84 with Zenitude and the rest with various franchisees. But that's still not enough. We want to diversify our network and add more establishments. Every corner of France could benefit from a Choice product.
What do you think would be the ideal size of your offering in France?
D. B. - I'm going to be bold: in the long term, France has the capacity to welcome 500 Choice Hotels brand establishments. And I sincerely believe that we can do it. The largest operator in France has over 1,700 hotels in France, so the opportunity is there. We just need to find the right projects and the right partners. And convince them of one of the key advantages of our group, that of being pure franchisors. We focus solely on the hotel owner. We don't own any hotels, we don't operate any hotels, we're not in competition with them. We're all moving in the same direction, with the sole aim of their profitability and the success of their business.
What are the main arguments for convincing a franchisee to join your network?
R. L. R. - Our value proposition is based on four pillars. Firstly, we help our franchisees maximise their revenues through our leisure and corporate sales, loyalty programme and marketing campaigns. Secondly, we help them to reduce their operating costs by providing preferential rates on purchases and greater negotiating power with OTAs. Thirdly, we provide them with a complete technological platform. By connecting to the Choice ecosystem, hotels benefit, for example, from a fully integrated environment with our centralised reservation system or our ChoiceMAX automated revenue management system. This improves operational efficiency by eliminating a lot of manual work. And fourthly, we can also provide capital to those who need it, much more cost-effectively than a traditional financial institution. It's a very complete value proposition that we offer franchisees.
Is your distribution force focused on leisure customers or does it also target business travellers?
D. B. - On the contrary, this is where we are strong. We have significant relationships with all the major consortia and travel agencies. We seek to maximise the corporate partnerships we have on a global scale. This exposes our hotels to new customers that they would not have had access to without this connection to Choice Hotels.
Choice Hotels is a well-known group on the other side of the Atlantic, but do French business travellers really know you? How can you make your group and your brands better known in this market?
D. B. - Our approach is twofold. Firstly, we put a lot of effort and money into digital. So that when a consumer is looking for accommodation, a Choice-branded hotel is part of their decision-making process. The other element is the competitive advantage represented by our loyalty programme. We now have over 72 million members, and each hotel is encouraged to bring its own customers into the programme. There's a real benefit there too.
Apart from France, are you following this expansion strategy elsewhere in Europe through key partnerships?
R. L. R. - Indeed, one of our key strategies is based on multi-unit agreements, which allow for much faster expansion than individual agreements. Our doors are wide open to explore this type of opportunity across Europe and the rest of the EMEA region.
D. B. - We recently entered the Polish market with this approach. And we've also just signed a similar agreement for 18 hotels in Africa, starting with three establishments in Kenya that will open shortly. Our first steps on the African continent.
In addition to France, what are the main countries where you want to build networks?
D. B. - As people travel more and more and the world gets smaller, we want to make sure they have a Choice hotel available to them wherever they go. The EMEA region I oversee stretches from the Scandinavian markets, where we have over 250 hotels, through Eastern Europe to Saudi Arabia and now Africa. Of course, France, Spain and the UK are pillars of our growth.
R. L. R. - But we are also seeing growing demand in the countries of Central and Eastern Europe, which is reflected in our expansion in Poland, Hungary, Slovakia and the Czech Republic. Globally, the Choice Group's international division has around 1,400 hotels outside the US, in 46 countries, out of a total of around 7,500 in the US. This year, we will be posting double-digit growth in the number of rooms in our international operations. In every region of the world, the time is right to add more units to our system.
You mentioned the possibility of reaching 500 hotels in France. What would be the right number of hotels for Choice in Europe in the future?
D. B. - My ambitious target is to have 800 hotels by 2028, up from 456 today. I firmly believe that this is achievable. That's just my personal view, but it's also my mantra, the message I give to our teams. As in sport, you always have to have ambitious goals, but they have to be based on concrete facts. In 2024, we saw double-digit growth in our portfolio in Europe, and in 2025 we're going to see similar growth again. The Choice Group has a historic presence on this continent and our pipeline is very exciting, with robust growth expected in many countries.
This growth is also based on the launch in Europe, in the wake of the pandemic, of new concepts for each of your brands. How far have you got with this programme to refresh your offer?
D. B. - Most of it has been completed. Some have already finished what we have launched and others are on the way. What we have learned along the way is that customer expectations are not static. As customer expectations evolve, as our business evolves, our brand standards must continue to evolve. It's essential to ensure that, for the contribution we ask hoteliers to make, there is a return on that investment.
R. L. R. - What's positive is to see these new brand standards integrated into all the new deals we sign, like the one with Zenitude.
As far as your brands are concerned, the 50 Quality Suites announced with Zenitude are positioned in the long-stay segment. Is this a growth segment for your group?
R. L. R. - We are one of the main players in the extended stay market in the United States. With brands in every segment, from budget to mid-range and top-of-the-range. So there's an opportunity to launch one of these leading brands in Europe in the future. Zenitude's establishments will be marketed under the Quality Suites brand. These are flats with all the amenities needed for extended stays, such as a kitchenette and laundry facilities. They will meet the expectations of both leisure and business travellers.
The aparthotel sector is fairly well developed in France's major cities, but less so in secondary towns. So there was an opportunity to be seized in the regions?
D. B. - Exactly. But now, with this agreement, they are less, since we have just deployed it in 41 towns! This offer was not yet available to customers visiting these markets. We currently have four main brands - Comfort, Quality, Clarion and Ascend Collection - that we are actively developing in Europe, and we believe there is always scope to extend their reach. But we are still evaluating opportunities for the potential entry of other brands from our portfolio into this market.
