Comfort Inn 2013 Annual Report Download - page 21

Table of Contents
Our CRS provides a data link to our franchised properties as well as to airline reservation systems such as Amadeus, Galileo, SABRE and Worldspan
that facilitate the reservation process for travel agents and corporate travelers. We also offer our rooms for sale on our own proprietary internet site
(www.choicehotels.com) and mobile and tablet devices as well as those of OTAs and other third-party internet referral or booking services.
Our toll-free telephone reservation system primarily utilizes third party call center service providers. Reservation agents trained on the reservation system
can match each caller with a Choice-branded hotel meeting the caller’s needs. We also operate a call forwarding program through which our franchisees can
leverage our central reservation system capabilities by forwarding reservation calls received directly by the property to one of our reservation centers. Typically,
this reduces the hotel’s front desk staffing needs, improves customer service and results in a higher average daily rate than reservations booked directly
through the property.
We continue to implement our integrated reservation and distribution strategy to improve reservations delivery, reduce franchisee costs and improve
franchisee satisfaction by enhancing our website, choicehotels.com. We also design our marketing campaigns to drive reservation traffic directly to our
proprietary channels to minimize the impact that third party reservation sites may have on the pricing of our inventory. In addition, we have introduced
programs such as our Best Internet Rate Guarantee program which has greatly reduced the ability of the travel intermediaries to undercut the published rates at
our hotels. We do selectively distribute our inventory to key third party travel intermediaries that we have established agreements with to drive additional
business to the Company and its brands. These agreements typically offer our brands preferred placement on these third party sites at reduced transaction
fees. We also continue to educate our individual franchisees about the unfavorable impact to their business of contracting with sites with which we do not have
preferred agreements. We currently have agreements with many but not all major online third party sites.
Property Management Systems. Our proprietary property and yield management system, choiceADVANTAGE, is designed to help franchisees
maximize profitability and compete more effectively by managing their room inventory, rates and reservations. choiceADVANTAGE synchronizes each hotel’s
inventory with our central reservation system, giving our reservation sales agents last room sell capabilities at every hotel. Our property management system
also includes a revenue management feature that calculates and suggests optimum rates based on each hotel’s past performance and projected occupancy.
These tools are critical to business delivery and yield improvement as they facilitate a franchisees’ ability to effectively manage hotel operations, determine
appropriate rates, drive occupancy and participate in our marketing programs. As a pure web-based solution, the choiceADVANTAGE system reduces each
hotel’s investment in on-site computer equipment resulting in a lower total cost of ownership for property management systems than traditional on-site
solutions.
Quality Assurance Programs. Consistent quality standards are critical to the success of a hotel franchise. We have established quality standards for
all of our franchised brands that cover housekeeping, maintenance, brand identification and minimum service offerings. We inspect properties for compliance
with our quality standards when application is made for admission to the franchise system. The compliance of existing franchisees with quality standards is
monitored through scheduled and unannounced quality assurance reviews conducted periodically at the property and through the use of guest surveys.
Properties that fail to maintain a minimum score are reinspected on a more frequent basis until deficiencies are cured, or until such properties are terminated.
To encourage compliance with quality standards, various brand-specific incentives and awards are used to reward franchisees that maintain consistent quality
standards. We identify franchisees whose properties operate below minimum quality standards and assist them to comply with brand specifications.
Franchisees who fail to improve on identified quality matters may be subject to consequences ranging from written warnings, the payment of quality re-
inspection and guest satisfaction fines, attendance at mandatory training programs and ultimately to the termination of the franchise agreement. Actual
consequences, if any, are determined in the Company’s discretion on a case-by-case basis and may take into account a variety of factors apart from a
franchisee’s level of compliance with our quality standards and brand specifications.
Training. We maintain a training department that conducts mandatory training programs for all franchisees and their employees. Regularly scheduled
regional and national training meetings are also conducted for both property-level staff and managers. Training programs teach franchisees how to best use the
Choice reservation system and marketing programs and fundamental hotel operations.
Training is conducted by a variety of methods, including group instruction seminars and on-line programs. We have also developed an interactive
computer-based training system that will train hotel employees at their own pace.
Opening Services. We maintain an opening services department that ensures incoming hotels meet or exceed brand standards and are properly displayed
in our various reservation distribution systems to ensure that each incoming hotel opens successfully. We also maintain a design and construction department
to assist franchisees in refurbishing, renovating, or
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