Veeren GowreaSWOT analysis of Choice Hotels – Choice Hotels SWOT
This is a detailed SWOT analysis of Choice Hotels. It aims to examine the strengths and the weaknesses of Choice Hotels. It also aims to explore some of the opportunities and the threats facing the company. Choice Hotels International, Inc. is an American company and is considered to be the first hotel chain as we know it nowadays and, has this status since 1941.
Strengths of Choice Hotels
Global Presence
Choice Hotels is present in more than 40 countries with a total of 6,800 hotels with new ones opening frequently throughout the year. It is present in 50 states of the USA. Its portfolio consists of hotel and motel brands such as Comfort Inn, Comfort Suites, Quality Inn, Sleep Inn, Clarion, Cambria Hotel & Suites, Mainstay Suites, Suburban Extended Stay, Econo Lodge, and Rodeway Inn. Ascend Hotel Collection is their upscale – a boutique brand recently developed.
Leadership
Patrick Pacious has been at the company since 2005. Others in the leadership team are also highly experienced and reputable. The leadership adopted by Patrick is viewed as charismatic and inspirational by both employees and shareholders.
Latest technologies
Latest Satellite TV, and data centre infrastructure management software, high speed wifi throughout the hotels have been very useful for the company. Extensive use of social media and consumer interaction through a strategy which the hotel calls ‘social play’ has also been very effective too.
Brand Image
Choice Hotels International has a very diverse portfolio already. The group has established a strong brand image in overseas marketing. This is a highly appropriate strategy when developing a niche approach (Camilleri, 2018).
Profitability
Profitability is an important strength to consider. According to Lock (2021) Choice Hotels’ revenue was $1.11 billion U.S dollars in 2019. However, it is worth mentioning there was a decrease in revenue in 2020.
Growth
2017 has been the best year for Choice Hotels in terms of growth since 2007, opening nearly one hotel per day in the U.S., increasing its pipeline, and hosting more than 200 million guests in more than 500,000 rooms. The company signed 704 franchise agreements in 2017. It continues to benefit greatly from its mainly franchise-only business model.
Resilience
When many hotels around the world were facing extreme difficulty in 2019/20 due to lockdowns, Choice Hotels were doing very well. Many of its both domestic and international hotels remained open. It continued to provide support to its franchisees, guests, and communities and preserved its financial flexibility (Choice Hotels International, 2021).
Weaknesses of Choice Hotels
Bad customer reviews
Bad customer reviews have been an issue where Choice Hotels need to bring about significant improvement. Numerous customers have shared their bad experience on a number of sites e.g. Trustpilot.
Other weaknesses
Choice Hotels has not been highly successful at integrating firms with different work culture. Moreover, the sales team of the hotel has been accused of being too aggressive leading to a loss in credibility (Trustpilot, 2018).
Opportunities for choice hotels
New geographical markets
Strategic alliance was announced on April 11, 2018 with Sercotel Hotels, a leading hotel operator and franchisor based in Spain. The alliance establishes the framework for the extension of Choice Hotels’ global footprint into Spain and other markets, as well as the creation of new opportunities for additional hotel development across Europe and Latin America.
New products development
Cambria and Ascend (New upscale brands) have started to grow and produce dividends. The strong performance of Cambria Hotels & Suites and the Ascend Hotel Collection is due mainly to the adoption by two demographics: baby boomers and millennials (Wroten, 2018).
Threats to Choice Hotels
Competitors
The competition for Choice Hotels comes from an array of big players such as Marriott International, Carlson Hotels, and Wyndham Worldwide.
Other threats
While it is not specific to Choice Hotels only, a growing trend towards isolationism in the American economy can lead to similar reaction from other governments worldwide which may negatively impact on the international sales of the hotel. Likewise, natural disasters or global crisis may impact on its operations significantly.
Concluding statement
The above SWOT analysis of Choice Hotels shows a number of very good strengths as well as weaknesses. The company has not suffered from the financial crises and from natural calamities in the US like flooding because they were not present in those delicate regions at the time.
We hope the article ‘SWOT analysis of Choice Hotels’ has been useful for you. You may also like reading SWOT analysis of Hilton Worldwide. Other relevant articles for you are:
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Last update: 03 June 2021
References:
Camilleri, M.A. (2018) The Tourism Industry: An Overview. In Travel Marketing, Tourism Economics and the Airline Product, Tourism, Hospitality & Event Management, Springer, Cham
Choice Hotels International (2021) Choice Hotels International Reports Fourth Quarter And Full Year Results And 2018 Outlook, available at: http://media.choicehotels.com/2020-08-06-Choice-Hotels-International-Reports-2020-Second-Quarter-Results (Accessed 02 June 2021)
Lock, S. (2021) Revenue of Choice Hotels International 2008-2020, available at: https://www.statista.com/statistics/257395/choice-hotels-revenue/ (accessed 01 June 2021)
Wroten, B (2018) “Choice Hotels makes strategic push for upscale brands” http://www.hotelnewsnow.com/Articles/140398/Choice-Hotels-makes-strategic-push-for-upscale-brands (Accessed 12 August 2018)
Photo credit: Choice Hotels/Facebook
Author: Veeren Gowrea
Veeren Gowrea is a lecturer in Tourism & Hospitality management. He holds an MBA in Strategic Management and MSc in Human Resource Management from the University of Wales, UK. He also holds a Postgraduate Certificate in Higher Education (PgceHE) from Birkbeck, the University of London. He works as a visiting lecturer at a number of institutes in London.
M Rahman