LOS ANGELES, May 14, 2013 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE: CHH) today announced a landmark $40 million property improvement incentive program to build on the success of the ongoing system-wide refresh strategy of its more than 1,900 domestic Comfort Inn and Comfort Suites hotels launched last year. The Comfort Re-Imagined brand strategy has been making great strides. Committed to gaining even more ground, Choice Hotels, one of the world's largest hotel companies, introduced this incentive to encourage hotels to perform their renovations quickly and completely. This is yet another dynamic component of the brand's sweeping multi-year, multi-faceted approach to provide greater consistency of quality across the company's biggest brand and ongoing increases in guest satisfaction.
From the opening session of the company's annual convention in Los Angeles, Choice Hotels International President and Chief Executive Officer Stephen P. Joyce unveiled the $40 million commitment to franchisees of the company's domestic Comfort Inn and Comfort Suites branded hotels. With nearly 2,500 Comfort Inn and Comfort Suites properties worldwide, this represents one of the largest single brands in the hospitality industry and one of the largest system-wide upgrades.
"Comfort is the engine of Choice Hotels and an iconic brand. More than 72 million people stayed at a Comfort branded hotel in the United States last year and the brand continues to be a favorite among travelers," said Joyce. "Today, we are putting our own balance sheet behind the brand in a monumental way. Hotel renovations improve guest satisfaction and through this investment we will accelerate improvement of the brand's product quality and consistency, guest satisfaction and brand performance."
All qualifying domestic Comfort branded properties can apply for a piece of the $40 million, which will be awarded through a forgivable promissory note. Through the promissory note structure, after a fixed amount of time, hotels receiving incentive funds will not owe anything back to Choice Hotels so long as they have not defaulted under the Franchise Agreement. To ensure timely implementation, all incentive eligible work must be completed on or before Sept 30, 2014. The company will pay out incentive funds after Property Improvement Plans (PIPs) have been completed and verified through property inspections and submitted invoices.While the incentive works through the existing PIP process, even hotels without a current PIP can request one and be eligible for the incentive. Once the improvements are made, franchisees will be able to submit for up to 50% of cost of eligible items for reimbursement.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts