Comfort Inn 2002 Annual Report Download - page 4

79% were for conversions. At the same time, our retention rate for domestic franchisees remains
high, with only 1% of franchisees choosing to leave the system in 2002 while terminations were down
14%. The result is a more stable, growing franchise system that contributes positively to the overall
predictability of our business.
For the near term, our development opportunities remain in the conversion arena, where existing
hotels seek new brand affiliations that can build their business. Our enhanced leadership in franchise
development, along with a stronger sales staff and a per formance pay system, is definitely paying off.
We have increased the size of our franchise sales staff and improved it by bringing a singular
focus to sell all of our brands more effectively. In addition, we have created more cost-effective proto-
types for our new construction brands that will position us very well once the hotel market improves.
A larger Choice franchise system benefits our franchisees by providing even more size, scale and
distribution to drive cost efficiencies and deliver more value-added services.
Proven Strategy for All Scenarios
In my report last year, I stated our commitment to pursuing our overarching strategic goals of
reaching more consumers, delivering exceptional services and building strong brands. Underpinning
these three cornerstones is our drive to leverage our size, scale and distribution.
Our strategy remains unchanged. It has proven the right course in a challenging economic time and
has the opportunity to be even more successful when the economy and the lodging industry rebound.
In terms of reaching more consumers, we have adopted a multi-brand marketing approach
that increases the visibility of all Choice brands efficiently while driving local market penetration through
effective co-op marketing with our franchisee associations.
Our seasonal promotions aimed at both leisure and business travelers have relied on value-added
promotions with key partners through co-branding. For example, we have teamed up with the major
domestic airlines to offer triple miles promotions to drive more business travelers to our hotels. In the
summer, our brands have linked up with McDonald’s, major gasoline companies and Lowe’s Home
Improvement Warehouse in special promotions aimed at the leisure traveler.
On the reservations side of the business, we continue to see a continued shift away from the
toll-free telephone to the Internet as the primary tool for booking reservations. As a result, we
have revamped our proprietary Web site, choicehotels.com, to improve functionality and enhance
content for consumers.
We also are working to improve our positioning through negotiated contracts and co-op marketing
with third-party Web sites. In this manner, we can help our franchisees deal with the complexity of a
multitude of Internet travel sites and better manage their inventory.
This year we have already created a Best e-Rate Guarantee for our Choice Internet site and also
will leverage technology for one-on-one marketing with our frequent traveler program members.
Our drive to deliver exceptional services to our franchisees calls for providing a complete life-cycle
service that meets their needs, from site selection and prototypes through construction and training,
and finally on to sales and marketing, purchasing and operations.
In a time when our franchisees are under pressure to preserve rates and occupancy, our field
services are focused on providing the tools and technology needed to maximize profitability for our
franchisees. Historical data collected through our central reservations system and our property
management systems can help them forecast individual hotel performance. We also work with the
hotels to analyze competitive rates across all distribution channels to better manage inventory and
maximize rate potential.
Through our Partner Services capabilities, we offer on-line purchasing with endorsed vendors
for lodging goods and services that saves money and simplifies operations for hotel owners while
generating revenue for Choice.