Company Profiles Iconic Brand July/August 2022 May/June 2022

Iconic Brand: The Right Choice

Choice Hotels builds its franchising empire on a bedrock of passion and care

By Jordan Whitehouse

It was Christmas Eve 2020 when Dharmesh Patel received the diagnosis: he had pancreatic cancer. It was a shock, of course—to Patel and his family, but also to his friends at Choice Hotels Canada. Patel and his brother Ravi had owned the Quality Inn in Leamington, Ontario since 2014, and both had developed deep personal connections with the team at the parent company over the years, including CEO Brian Leon.

So, when Leon heard the news and learned that Patel would be having surgery that March, he made a commitment: if Patel successfully pulled through the surgery, he’d do one hundred sets of one hundred push-ups. Patel did make it through, and not long after waking up, Leon was Facetiming him, doing his first set with his dog trying to distract him in the background.

“He probably shouldn’t have made me laugh, but he did,” remembers a smiling Patel. “But that’s the level of personal commitment that Brian and his team have to their franchisees. And that’s a big part of why we’re with Choice. I would recommend this brand to anybody.”          

A history of innovation

Choice Hotels Canada is now one of the largest lodging franchisors in the country, with more than 330 independently owned and operated properties from coast to coast to coast. Each of those properties caters to a different market segment—upscale, mid-scale, extended stay, or economy—and each falls under one of eight brands: Ascend Hotel Collection, Comfort Inn, Sleep Inn, Quality Inn, Clarion, MainStay Suites, Econo Lodge, or Rodeway Inn.

The company is a master franchisee of Choice Hotels International, which got its start in Florida in 1941. The first Canadian property opened in 1955 in Summerside, PEI and is still in operation today. Fast forward 30 years to 1989 and Canada’s first Comfort Inn locations opened in Cornwall and Niagara Falls, Ontario. Three years later, Choice really began its meteoric rise, growing to 54 hotels in Canada and then 173 properties in 1993 after entering into a joint venture with Journey’s End. After adding a remarkable 18 new hotels in 2021, Choice Canada now has more than 330 hotels open across the country.

Innovation has been a cornerstone of the company since the very beginning, says Leon. As an example, he points to the fact that Choice became the first hotel chain to offer guests 24-hour, toll-free reservations in 1970. In 1984, it was the first to offer non-smoking rooms in every hotel, and in 2011 it was the first hotel franchise to develop an app for iOS. “When you look at the evolution that’s happened over time here, a huge part of it is our value proposition to our franchisees,” says Leon. “What is it that our franchisees need from us today that’s different than what it used to be?”

Those needs are rapidly changing, says Leon, but a big one over the past five years has been a focus on revenue management. In many industries, prices are set and may gradually change, but it’s a lot more complicated in the hotel business. Room rates go up and down based on a number of factors, including ever-fluctuating demand levels triggered by the informed traveller who knows how to get the best value for their money. Through hundreds of booking sites, even on-the-go booking powered by rapidly changing mobile technology, travellers have a lot of options. It can be incredibly difficult for franchisees to figure out what they should charge at what time, to give the consumer the best value while getting the best rate for a room in a highly competitive market.

To address this, over the last year, Choice has rolled out ChoiceMAX, a revenue management system (RMS) built on advanced pricing and inventory management algorithms. Based on that information, it recommends to franchisees what their rates should be to stay competitive. On the franchisee’s end, the simple mobile and desktop interface has allowed Choice’s franchisees to quickly adopt the system and make the most of its functionalities.

It’s all about passion

ChoiceMAX is just one example of the types of innovations Choice is committed to exploring for its franchisees, says Leon, many of whom come from a variety of backgrounds. Some have a lifetime of experience in the hospitality business and want to be very hands on with their Choice property. Others come with less experience and choose to delegate hotel management to a third party. There is one common denominator for success, however, says Leon: passion. “More than anything, you need people who have a passion for hospitality and for the guest experience. If we have that, everything else we can make sense of.”

It’s clear that Dharmesh Patel has that passion in spades. He’s a second-generation hotelier, and he still remembers cleaning rooms at his parents’ first motel in Leamington, Ontario at the age of six. “By the time my brother and I we were in high school, we had two motels in town. It was my mom and my brother managing one, and then my dad and myself with the other one. We were kind of competing against each other,” he adds with a laugh.

He still likes the competitive aspects of the business, but it’s the people he loves most, he says. “The hotel business is all about people, and you meet so many different, fascinating people. And with Choice, the reason we’ve stuck with them is the people. It’s like a family. Brian and his team are absolutely amazing. They’re great people to work with, very open, receptive, and approachable. They all know me personally, they all reach out, and they all genuinely care.” This same sense of family also extends to his staff, he adds. “Our staff love being a part of Choice, and we wouldn’t be successful without them.”

Leon says that many franchisees tell him they love that this is a Canadian company. “We’re part of Choice International, but we’re a separate entity in Canada. We have a full team here in Canada providing support across all functional areas—from marketing to sales to hotel development.”

Beyond the pandemic

That local support was huge during the pandemic, says Patel. “They definitely stepped up.” During the first few months, for example, Choice helped franchisees navigate the different government supports available to them. Leon says the corporate team also tried to be as creative as possible to help franchisees. That meant weekly and sometimes daily meetings with its franchise advisory board to work together on issues such as finding different customer streams. “If there was a bright spot for us [in the pandemic], I’d say it was that there’s never been a time in the history of our company where we had collaborated more with our franchise community,” says Leon.       

This isn’t to say the challenges of the pandemic are over. Supply chain issues and labour shortages are still top of mind for many in the industry. But Leon is hopeful that as we move through the post-COVID adjustment period, these challenges will prove to be short-term ones.

In the meantime, he says the hotel industry is still a great one to be a part of and that franchising in general is a great opportunity for many people to get into business. But he has some words of advice for prospective franchisees: be careful. “I think sometimes people have a tendency to think, ‘Well, if something is a franchise, then it’s kind of guaranteed success.’ And that just simply isn’t the case. So, try to find a business area that you’re interested in, and don’t just jump in. Understand the economics, and absolutely talk to other franchisees within the system or the industry.”

Patel agrees, but adds that if it turns out the hotel industry is for you, Choice is a great option. “I won an award last year and when I went in to the office to get it, there was Brian doing his last set of push-ups for me. I can’t even do one push-up and this guy did one hundred sets of one hundred push-ups. You won’t find another hotel franchise CEO that’s going to do that for his franchisees.”

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