confidential1 fall promotion november 5, 2003. confidential2 fall objectives u promotion objectives...
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CONFIDENTIAL 1
Fall PromotionFall Promotion
November 5, 2003
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CONFIDENTIAL 2
Fall ObjectivesFall Objectives
Promotion Objectives Increase brand awareness for the Choice midscale brands Protect Choice’s market share, while giving hotels a
chance to significantly increase share Provide an incentive that attracts both leisure and
business travelers (medium and heavy users) Be a market leader by not only having a breakthrough
offer, but by offering the strongest program in the industry
Avoid the discounting trap by focusing on a value add that maintains rate integrity
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CONFIDENTIAL 3
Estimated System ImpactEstimated System Impact
INCREMENTAL REVENUE - EXISTING CP MEMBERS
$18,230,784
INCREMENTAL REVENUE - NEW CP MEMBERS $13,478,400
TOTAL INCREMENTAL REVENUE $31,709,184
EST. INCREASE IN SYSTEM REVENUE 3.3%
EST. INCREASE IN OCCUPANCY 1.8
SYSTEM ROI 399%
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CONFIDENTIAL 4
Hotel Performa Hotel Performa
Total - Four Months Average Month
INCREMENTAL HOTEL REVENUE
$12,196 $3,049
INCREMENTAL COST (+3.5% FROM 5% TO 8.5%)
$3,000 $750
AVERAGE INCREMENTAL ROOMNIGHTS PER HOTEL
192 48
COST PER INCREMENTAL ROOMNIGHT
$15.63 $15.63
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CONFIDENTIAL 5
Next StepsNext Steps
CP subcommittee to work with Choice staff to review bi-weekly promotion performance
At 60 days, CP subcommittee will recommend whether the fee structure is appropriate
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CONFIDENTIAL 6
Original Success Measures – 60 Day Review
Original Success Measures – 60 Day Review
Average Incremental Revenue Per Hotel – $2,000 Per Month
Average Incremental Hotel Sign-Ups – 20 Per Month
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CONFIDENTIAL 7
Additional Success MeasuresAdditional Success Measures
Data used to illustrate gains in Promotion Months over Year-to-Date Totals
Same Store Sales Research Results Smith Travel Data Reservation Volume
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CONFIDENTIAL 8
Current Fall Results(All Hotels)
Current Fall Results(All Hotels)
Average Choice Privileges Hotel Revenue September 2002- $10,213 September 2003- $13,755
October 2002- $8,425 October 2003- $15,923
$3,542 (versus Goal of $2,000)
$7,498 (versus Goal of $2,000)
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CONFIDENTIAL 9
Current Fall Results(All Hotels)
Current Fall Results(All Hotels)
Average Hotel New Member Sign-ups September 2002- 8.3 September 2003- 61.5
October 2002- 16.5 October 2003- 48.1
53.2 (versus Goal of 20)
31.6 (versus Goal of 20)
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CONFIDENTIAL 10
CP Applications 2002 vs. 2003CP Applications 2002 vs. 2003
0
50
100
150
200
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
# o
f A
pp
lica
tio
ns
2003
2002
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CONFIDENTIAL 11
CP Application SourceMonthly Average
CP Application SourceMonthly Average
-
20,000
40,000
60,000
80,000
100,000
120,000
Source
# o
f A
pp
licati
on
s
Jan-Aug YTD Avg
Sep-03
Oct-03
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CONFIDENTIAL 12
CP Application StatisticsCP Application Statistics
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CONFIDENTIAL 13
Weekly CP RevenueWeekly CP Revenue
$4,000
$6,500
$9,000
TAI Date
Rev
enu
e ($
'000
)
2003
2002
2001
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CONFIDENTIAL 14
CP Monthly Revenue 2002 vs. 2003
CP Monthly Revenue 2002 vs. 2003
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
Rev
enu
e ('0
00)
2003
2002
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CONFIDENTIAL 15
CP ADR 2002 vs. 2003CP ADR 2002 vs. 2003
$60.00
$62.00
$64.00
$66.00
$68.00
$70.00
jan feb mar apr may jun jul aug sep oct nov dec
Month
AD
R 2003
2002
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CONFIDENTIAL 16
CP Revenue data- same store hotels*
CP Revenue data- same store hotels*
*2,017 hotels compared
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CONFIDENTIAL 17
CP ADR data- same store hotels*
CP ADR data- same store hotels*
*2,017 hotels compared
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CONFIDENTIAL 18
CP Room Night Data- same store hotels*
CP Room Night Data- same store hotels*
*2,017 hotels compared
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CONFIDENTIAL 19
Airline Stays 2002 vs. 2003Airline Stays 2002 vs. 2003
250030003500
4000450050005500
60006500
8/29
/03
9/5/
03
9/12
/03
9/19
/03
9/26
/03
10/3/
03
10/10
/03
10/17
/03
10/24
/03
TAI Date
# o
f S
tays 2003
2002
United, Southwest, and America West excluded from this analysis
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CONFIDENTIAL 20
Airline Stays 2002 vs. 2003Airline Stays 2002 vs. 2003
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2003
2002
Includes all Airlines
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CONFIDENTIAL 21
Consumer Research Regarding Promotion
Consumer Research Regarding Promotion
Existing New
Members Members
Stayed due to promotion 17% 25%
Would have stayed anyway 83% 75%
Influence of Promotion
on Hotel Selection
Major Factor 34% 51%
Minor Factor 24 19
Not a Factor 42 30
Source: WRA Research
Sample contains 418 interviews
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CONFIDENTIAL 22
Consumer Research Regarding Promotion
Consumer Research Regarding Promotion
Source: WRA Research
Sample contains 418 interviews
Existing New
Members Members
This Promotion Compared to Other Hotel Promotions
Much Better 47% 29%
Somewhat Better 24 25
About the Same 14 18
Worse 2 2
Not Sure 13 25
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CONFIDENTIAL 23
2003 Reservation System Bookings Growth
2003 Reservation System Bookings Growth
October contains Preliminary data
-3%
11%9%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
Time Period
% c
han
ge
fro
m p
revi
ou
s ye
ar
Jan-Aug YTD
Sep
Oct
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CONFIDENTIAL 24
CP Revenue vs. OSS Revenue% increase
CP Revenue vs. OSS Revenue% increase
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
Jan-May
Jun-Aug
Sept
CP % increaseOSS % increase
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CONFIDENTIAL 25
Preliminary Performance Evaluation Same Store Analysis
Preliminary Performance Evaluation Same Store Analysis
Includes Best Western, Days Inn, Fairfield, Hampton, Holiday Inn, Holiday Inn Express and Ramada
Source: Smith Travel Research
Sept 2003 Change
from 9/02
Jan-Aug
2003 Difference
Choice Midscale Occupancy 57.9% +1.2% -2.3% +3.5%
Competitive Set* Occupancy 57.0 +0.5 -1.7% +2.1%
Choice Midscale ADR $64.11 -0.6% -0.1% -0.7%
Competitive Set ADR $69.82 +0.1 -0.2% +0.3%
Choice Midscale RevPar $37.12 +0.7 -2.2% +2.9%
Competitive Set RevPar $39.79 +0.6 -1.9% +2.5%
Choice midscale brands improved their occupancy performance versus competition in September 2003.
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CONFIDENTIAL 26
Preliminary September 2003 PerformancePreliminary September 2003 Performance
2003 2002 changeChoice Midscale RevPar 36.59$ 36.18$ 1.1%Midscale with food 39.65$ 39.48$ 0.4%Midscale without food 42.32$ 41.19$ 2.7%
Choice Midscale Occupancy 57.2% 56.3% 1.6%Midscale with food 54.9% 54.3% 1.1%Midscale without food 61.9% 60.3% 2.7%
Source: Smith Travel Research, OSS