COVID-19 impact roundup: How Choice Hotels is responding to the crisis

by | 25 Apr 2020 | Chains

Choice Hotels is welcoming healthcare workers around the US. (Photo: Choice Hotels)

With 90% of its US hotels open, Choice Hotels is stepping up by offering rooms for hospital overflows or frontline healthcare workers. 

Hotels around the world are struggling with the effects of COVID-19 on the hospitality and tourism industry.

While Choice Hotels is facing the same issues as other hotel chains, the group has found many of its North American properties are doing comparatively well.

We find out more about how Choice Hotels is dealing with the crisis and how the brand has been impacted.

COVID-19 impact on Choice Hotels

Due to widespread hotel closures around Europe, Choice Hotels has been forced to shut down most of its properties in this region and furlough employees at these hotels.

90% of US hotels remain open, however. Of course, there has been a significant drop in occupancy, with levels reaching between 26% and 33% in the last ten days of March. The numbers remain the same for April.

Since Choice Hotels operates the majority of its domestic hotels in smaller towns and suburban locations, occupancy declines have been less severe here than for downtown or resort properties. This has led to Choice brands having a higher RevPAR (revenue per available room) and performing ahead of many competitors in the past five weeks.

Mitigation measures are taken by Choice Hotels

Despite the group’s comparatively good performance, mitigation measures have been necessary. These included reducing compensation for the CEO, the Board of Directors and other executive officers for the rest of 2020, implementing a hiring freeze and reducing non-essential capital expenditures. Repurchase plans for shares and undeclared dividends have also been suspended for 2020.

Choice is also supporting its franchisees by offering fee-deferral programs, suspending certain management-related fees and providing updated information about accessing government aid and relief programs.

Patrick Pacious, president and chief executive officer, Choice Hotels, recently said in a media release, “The safety and well-being of guests, franchisees and associates is our top priority during these challenging and unprecedented times. We are working closely with our hotel owners and operators in managing difficulties posed by COVID-19 and helping mitigate the impact on their business by providing best-in-class franchisee resources and implementing timely changes to policies and procedures aimed at extending relief and minimizing disruptions. Concurrently, we remain committed to serving guests and the communities across the world where our hotels operate.”

Supporting healthcare workers

Many Choice Hotels franchisees have made their hotels available to COVID-19 relief efforts at reduced rates or on a complimentary basis. Some properties serve as hospital overflows while others temporarily house first responders, healthcare workers or the National Guard.

The company is also working with Operation Homefront to offer free housing for service members and their families who have been displaced from their homes during this crisis.

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