Choice Hotels Is Winning Hearts & Trust With Digital Innovation
Whether it’s a family trip to a national park or a weekend getaway to a nearby city, most people have likely seen or stayed at a Choice-branded hotel. Choice Hotels International is one of the largest hotel companies in the world that franchises more than 7,100 hotels—including its flagship Comfort brand and stylish upscale Cambria Hotels—representing nearly 600,000 rooms in more than 40 countries.
The 80-year-old company has had a rich history of industry firsts, from being the first hospitality brand to offer online booking, to pioneering the first website in the lodging industry, to rolling out an iPhone application and launching voice-enabled booking. Most recently, the company introduced the industry’s first cloud-based global reservation system (GRS) and distribution platform called choiceEDGE. Choice Hotels is at the center of innovation and prides itself on being built at the intersection of hospitality, franchising, and technology.
But this innovative spirit hasn’t made Choice Hotels immune to industry pressure from major hotel chains or from third-party online marketplaces—such as Expedia and Airbnb—that have reimagined the ways modern consumers book travel by providing more options than ever before. To compete, the hospitality franchisor knew it needed to boost its technology leadership position in the hotel industry and leverage cutting-edge technology.
Over the past three years, Choice Hotels didn’t just meet the technology innovations of digital-first players—the company is rivaling their capabilities and scaling up to the next stage of transformation for the business using the cloud. Today, the company is on its way to creating a bigger ecosystem with its online travel agent partners and delivering an elevated travel experience to customers and franchisees around the world.
Built at the Intersection of Hospitality, Franchising, and Technology
In 2019, Choice Hotels made an aggressive move to the cloud by announcing that it would migrate more than 1,000 applications from legacy systems to Amazon Web Services (AWS) to improve performance, scalability, and reliability. While moving to the cloud was a step toward more nimble operations, Choice Hotels is now making big strides to deliver the latest and greatest capabilities to its guests and franchisees using data. Supported by more than 130 applications, its core business services are the GRS and property management systems.
“There’s a lot of angst and slowness that occurs when you’re trying to source data from all these different places, and everything is from different generations of technology,” says Jason Simpson, vice president of engineering, Choice Hotels.
The Choice team knew in order to innovate faster, capture new business, and provide the experience customers and franchisees expect, they would have to modernize IT the right way, including the data infrastructure.
“It’s easy to put a veneer on your legacy, mainframe system and offer a mobile app,” Simpson adds. “But you have to put in the investment and modernize, as opposed to having a boat anchor that constantly holds you back.”
To make the cloud promise a reality, the IT organization brought on an API-first programmable data infrastructure platform that automates data compliance and data delivery. By doing so, the organization broke down data silos, allowing software teams to significantly improve the quality and speed of application testing and development.
One of the new ways of managing their data operations meant only moving masked data from one place to another. After suffering a data breach of non-production data last summer, Choice Hotels has automated the profiling of all its data sources to mask sensitive information, keeping customer data safe and complying with regulations such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).
Developers and QA teams have easy access to consistent, production-quality data for quality testing, minimizing the risk of huge outages and delivering a frictionless experience for customers and franchisees across platforms.
“The cost of downtime is very high for the industry. Every time we’re down, it’s potentially thousands of dollars in lost revenue for our franchisees, the vast majority of whom are small business owners,” says Debbie Moshier, senior manager of infrastructure engineering at Choice Hotels.
The Makings of a Modern Hospitality Business With Cloud
By building their reservation distribution engine in the cloud, Choice Hotels has opened up its ability to reach more customers by working with partners around the world as a travel agency, not just as a local hotel chain.
“The cloud has enabled us to open up to new markets,” Simpson explains. “We have partners in Europe and Latin America that leverage Choice to book rooms in their hotels. As of 2019, we were able to service 1,100 different shopping requests per second.”
This agility and thoroughness have already proven incredibly valuable for Choice customers and franchisees, especially during the COVID-19 pandemic. For example, the chain created a new feature in its mobile app to allow guests to “opt in” (rather than “opt out”) for additional room cleanings. The opt-in feature gives customers, including nurses and doctors who stay at any of their hotels, the flexibility to request cleanings only as needed and help keep hotel staff safe.
These improvements were offered on top of other important modifications, such as reduced or complimentary rates for essential workers and first responders and enhanced existing best practice guidance for deep cleaning, disinfecting, and hygiene. Choice also launched its new Openings Portal last year to improve the process of opening a hotel for its franchisees, helping owners welcome guests faster and capitalize on their investment sooner.
Although only 20% of hotel rooms around the United States were occupied during the worst weeks of the pandemic, Choice-brand hotels fared significantly better. The company’s occupancy rates have been steadily climbing since that time, reaching 50% at the end of June and outperforming the competition every week since. This is especially true for the company’s extended stay brands, which achieved average occupancy rates of 66%—nearly double the industry average—between the onset of the pandemic in mid-March through the end of June.
"The resilience of our asset-light, franchise-focused business model, combined with our winning strategy to grow the right brands in the right markets, has allowed us to capture an outsized share of demand as Americans continue to return to travel," says Patrick Pacious, president and chief executive officer, Choice Hotels. "We are optimistic that our long-term view, strong balance sheet, disciplined capital allocation strategy, proven brands, and compelling franchisee value proposition will help us emerge from the crisis in a position of strength."
The billion-dollar Choice Hotels is in the process of modernizing its loyalty and customer information programs and bringing them into the cloud to better target customers and get them to the right rooms at the right price.
“There are a lot of technology decisions that need to be made to support industry dynamics and win. We can only do this because of the transformation we’ve invested in our company to adapt at speed and scale,” Simpson adds.
Read more stories about data-driven innovation in the 2020 issue of Data Company Magazine.