Comfort Inn 2013 Annual Report Download - page 10

Table of Contents
develop our services based on customer needs and focus on activities that generate high return on investment for our franchisees.
Reaching More Consumers. We believe hotel owners value and benefit from the large volume of guests we deliver through a mix of activities including
brand marketing, reservation systems, key account sales, and the Company’s loyalty program, Choice Privileges ®. Our strategy is to maximize the
effectiveness of these activities in delivering both leisure and business travelers to Choice-branded hotels.
The Company intends to continue to increase awareness of its brands through its national marketing campaigns and its Choice Privileges loyalty
program promotions. These campaigns are intended to generate a compelling message to consumers to create even greater awareness for our brands with the
ultimate goal of driving business through our central reservation system. Local and regional co-op marketing campaigns will continue to be utilized to leverage
the national marketing programs to drive business to our franchised properties at a local level. We expect our efforts at marketing directly to individual guests
will continue to be enhanced through the use of our customer relationship management technology and programs. Our continued focus on overall brand quality
coupled with our marketing initiatives is designed to stimulate room demand for our franchised hotels through improved guest awareness and satisfaction.
Our central reservations system is a critical technology used to deliver guests to our franchisees through multiple channels, including our call centers,
proprietary web and mobile sites, global distribution systems (e.g., SABRE and Amadeus), on-line travel agents ("OTAs") (e.g. Expedia and Bookings.com)
and internet referral or booking services (i.e. Kayak and Trip Advisor). We believe our well-known brands, combined with our relationships with many
internet distribution web sites benefits our franchisees, by facilitating increased rate and reservations delivery, and reducing costs and operational complexity.
Leveraging Size, Scale and Distribution . We continually focus on identifying methods for utilizing the significant number of hotels in our system to
reduce costs and increase returns for our franchisees. For example, we create relationships with qualified vendors to: (i) make low-cost products available to
our franchisees; (ii) streamline the purchasing process; and (iii) maintain brand standards and consistency. We plan to expand these relationships and identify
new methods for decreasing hotel-operating costs by increasing penetration within our existing franchise system and enhancing our existing vendor
relationships and/or creating new vendor relationships. We believe our efforts to leverage the Company’s size, scale and distribution benefit the Company by
enhancing brand quality and consistency, improving our franchisees returns and satisfaction, and creating procurement services revenues.
Franchise System
Revenues from our domestic operations comprised 92% of our total revenues in both 2013 and 2012. As a result, our description of the franchise system
is primarily focused on the domestic operations.
Our standard domestic franchise agreements grant franchisees the non-exclusive right to use certain of our trademarks and receive other benefits of our
franchise system to facilitate the operation of their franchised hotel at a specified location. The majority of our standard domestic franchise agreements are 10
to 20 years in duration with certain rights for each of the franchisor and franchisee to terminate their franchise agreement, such as upon designated
anniversaries of the agreement, before the 20 th (or 10th, as applicable) year. Our franchisees operate domestically under one of eleven Choice brand names:
Comfort Inn, Comfort Suites, Cambria Suites, Quality, Clarion, Ascend Hotel Collection, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites and
Suburban Extended Stay Hotel.
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