There is no denying that the COVID-19 pandemic changed our lives and the way we travel forever. From workations and bleisure trips to longer and more sustainable holidays, the hospitality sector must adjust to the new needs and desires of guests.

TD sat down with Trent Fraser, CEO of Choice Hotels about the emerging travel trends and navigating the post-pandemic era in the hospitality sector.

Travel Daily (TD): How is Choice Hotels navigating the post-pandemic era? What are the challenges you faced?

Trent Fraser (TF): The post pandemic period has some interesting and surprising trends in the way people travel and challenges in delivery across the hospitality industry.

Supporting franchisees through the rolling state and border lockdowns was our number one priority. During lockdowns and throughout the pandemic we waived certain fees to franchisees and reduced the charging methodology to assist hotels with their cashflow.

There was also a focus on retaining our head office team to ensure we were able to support our properties and maintain service levels as customers became ready, and able, to travel again.

To date, recovery has been strongest in our regional properties. Until recently, the myriad challenging requirements for international travel have given domestic travel into our regions a real boost, and it’s been heartening to see the growth in demand in the regions. As these travel restrictions ease and international travel returns, we are seeing a strong bounce back to normal in our metro hotels now, with forward bookings showing a very optimistic outlook in the months ahead.

Right now, our focus now is on assisting our franchisees to ramp up as quickly as they can as they return to, and in many cases exceed, 2019 numbers. We have invested in additional corporate sales team members, building out our Revenue Management program and made multi-million-dollar investments in our loyalty, digital and traditional marketing channels over the last two years.

Across the group we have evaluated the needs and expectations of consumers as they return to travel post pandemic.

“The turbulence of the last two years has changed the way people think about travel. Working from home gave many of us a new appreciation of work life balance.”

The turbulence of the last two years has changed the way people think about travel. Working from home gave many of us a new appreciation of work life balance. We’re seeing subtle changes in the needs of our business and corporate guests, with in-room office setups, and larger room requests to allow work trips to extend into long weekends.

Holiday time and connecting with family around the country carries so much more value and are occasions that we really look forward to. This time is more precious and memorable because of the time spent apart.

So, when we do get to travel, we want to know and trust the properties that we are staying in and that has been a real advantage for hotels in the Choice Hotels group, evidenced by our boom in direct online bookings as consumers return to the brands they trust.

TD: With direct online booking exceeding records in 2022, what is driving this trend?

TF: Direct online bookings have set new records in the first half of this year, eclipsing pre-pandemic booking levels. Our second quarter direct online bookings to the end of June 2022 were up 38 percent compared to the same period of 2021, and 155 percent compared to the same period of 2019.

The traditional seasonal slowdown over the winter months hadn’t come this year. Occupancy rates for Q2 were 15 percentage points above 2019 levels, and bookings through the month of July and August were solid and continue to be into this month.  We’ve seen significant gains in pre-pandemic trading conditions which goes against winter slowdowns experienced in the past.

With the risk of last-minute covid isolation ruining plans – customers have made the most of our regional destinations, and they’re booking direct and looking for clear cancellation policies and a local phone number to call if they need support.

Many consumers are feeling bruised from poor experiences in obtaining refunds during the pandemic and we increasingly see people seeking direct contact with the properties they stay with.

The boom in direct online is also the result of ongoing and concentrated efforts in developing our online booking channels and the increasing popularity of our Choice Privileges loyalty program, which now has over 500,000 members in the Asia Pacific region.

2021’s Year of the Long Weekend is eking into 2022 and we expect it will continue into 2023. It’s still hard to travel internationally, domestic tourism is booming because of this.

Plus, we see new hybrid working travellers – taking advantage of hybrid working conditions to move their home office and enjoy extended weekends.

TD: Can you give us an overview of your partnership with IDeaS in developing ChoiceMAX revenue management technology?

TF: We started to roll out the ChoiceMAX automated revenue management tool to the Asia-Pac franchisee network in late May, and it’s been met with enthusiasm.

The ChoiceMAX Revenue Management System has been developed exclusively for Choice Hotels by IDeaS, the world’s leading provider of revenue management software and services and was awarded a Hospitality Technology Hotel Visionary Award for enterprise innovation in January 2022.

ChoiceMAX is designed to help franchisees effectively manage hotel room rates, channels, and inventory. The system is currently live across more than 5,000 Choice-branded hotels globally with over 10,0000 users trained and using the tool to make pricing decisions.

It’s exciting to be able to offer franchisees a user-friendly and intuitive revenue management system, and the bottom line benefits it brings. Choice Hotels head office has a dedicated team of revenue managers, which have been offering RM services for some time, but ChoiceMAX gives the basic pricing tools to all franchisees using our ChoiceMAX revenue management system.

Quality Hotel Regent Rockhampton was one of the first properties to use the ChoiceMAX, and despite some segmentation changes, the property has seen an ADR growth of $16 year on year.

Feedback from the Rockhampton franchisee Wipula Fernando is that one of the key benefits of ChoiceMAX has been his ability to review pricing against the competitor set over the course of a day, which makes his property more competitive against fluctuating rates.

ChoiceMAX is a mobile enabled solution that leverages pricing and inventory management algorithms to help hotels optimise their pricing structure, which may ultimately increase revenues.

It offers:

• 365-day optimization window, including intra-day optimization with rates updated multiple times per day.
• Real-time alerts that can be customized to stay up to date on price changes or when competitors adjust.
• Automated delivery and implementation of pricing decisions.
• New tools which bring automation to Forecasting and Group Quoting
• Setting price floors and ceilings and use of continuous pricing to gain additional revenue from each room night

The dedicated Revenue Management services which Choice Hotels offers franchisees are proving to be a real game changer across the group. Revenue Management is a key profit driver for Choice Hotels franchisees, with hotels within the group achieving premiums on market RevPAR.

We first introduced RM in 2017 and participation has grown considerable as franchisees become more familiar with the revenue benefits it delivers. In Q2 Australian hotels participating in the program achieved RevPAR 7 percent above market, hitting an almost 11 percent premium for the year to date.

In New Zealand, revenue management has made a significant difference for participating properties with 54 percent gain on comparable market properties in Q2 and 72 percent premium for the year to date.

The insights our revenue managers provide into rate trends and market conditions are driving significant profit gains for our franchisees.

TD: What are the hospitality trends you see this year and how do you plan to capitalise on them?

TF: The big trends this year are really centred on the domestic tourism boom and the slow return to the office, which has hybrid and remote working becoming increasingly normal. We’ve seen properties reconfigure rooms to allow for guests working across the week and staying into the weekend.

Consumers are increasingly curious about the opportunities available here in Australia and hesitant to commit to international travel, especially over the winter season.

Corporate travel is returning, but we’re seeing slightly longer and less frequent trips. Many businesses are still managing costs closely as volume recover.

Our Choice Privileges loyalty program is becoming a significant point of difference for the group. The Asia-Pac loyalty membership hit 500,000 members in June with continual month on month growth in membership.

“The corporate travel market is chasing value-for-money stays as the “bleisure” trend emerges and work trips merge into holidays or weekends away.”

The corporate travel market is chasing value-for-money stays as the “bleisure” trend emerges and work trips merge into holidays or weekends away.  The ability to earn points when travelling for work and redeem them for leisure stays is an important benefit.

Our Choice Privileges loyalty program offers exclusive member rates, which is a strong driver of return business. Points transfer opportunities with Qantas and Virgin this year have given members more ways to redeem their points and see value from their stays.