Choice Hotels won the Hotel Visionary Award in the Enterprise Innovator category from “Hospitality Technology” magazine for the revenue management system (RMS) Choice introduced in early 2021. Known as ChoiceMAX and developed by IDeaS, it positions the company and its franchisees to capitalize on shifts in domestic U.S. travel and help drive revenue-per-available-room (RevPAR) growth.
When system-wide revenue management works well, two critical drivers typically also are working well: a combination of sophisticated RMS software with advanced analytics and technology to recommend optimal pricing along with strong system adoption by hotel operators and revenue managers. In launching ChoiceMAX, Choice Hotels chose ZS to lead a change management initiative focused on helping franchisees understand and implement the new RMS. And, as franchisee confidence in the system’s pricing recommendations grew, they were better able to leverage it to drive revenue opportunities.
As a lodging franchisor, Choice Hotels has 6,000-plus licensed properties and 15 brands in the United States. The previous RMS had run its course and the company recognized the importance of replacing its system with one that had state-of-the-art capabilities, especially in light of growing competition for leisure travelers. Choice believed wide-scale franchisee adoption of ChoiceMAX would prove critical for meeting revenue growth objectives.
“In any type of change management exercise, trust is critical to bringing about change,” said Doug Lisi, vice president of revenue management at Choice Hotels. “ZS was able to establish trust very quickly with the franchisees because it understands their business. It understands the marketplace.”
While guiding the ChoiceMAX implementation, ZS worked in partnership with both Choice Hotels and IDeaS. The companies collaborated to mitigate implementation risks and to train ZS colleagues on the data and analytics supporting the RMS. ZS and IDeaS also teamed up to help Choice Hotels’ franchisee-focused area directors, a key internal stakeholder, understand the RMS and support franchisee adoption.
“ZS was a trusted source to lead the hotels through the rollout process,” said Mike Chuma, vice president of global marketing, engagement and enablement at IDeaS. “It significantly increased adoption and was essential because the ZS team knew how Choice Hotels operates and knew the hotels.”
Lisi said ZS’s hospitality industry experience gave it a unique understanding of Choice’s franchisees, particularly how to meaningfully connect and communicate with them. ZS also was flexible in scaling its work to onboard approximately 10,000 users in an industry that is subject to seasonal fluctuations and continues to adapt to the COVID-19 pandemic.
“More importantly, ZS has a breadth of capabilities to tackle a whole host of different issues, whether they’re technology-, RMS- or pricing-based,” Lisi added. “ZS has the depth we really needed to bring into something like this.”
In developing a change management program for Choice Hotels, ZS leveraged its proven change management framework:
- Awareness: Communicate the need for and value of the new RMS to franchisees (i.e., “what it means for me”) and build excitement
- Engagement: Guide franchisees through new RMS functionality, help them understand Choice Hotels’ expectations and encourage them to feel both invested in the program and critical to its success
- Enablement: Teach franchisees how to confidently navigate the new system—not just how to use it—so they can optimize revenue growth
- Commitment: Leverage early adopters/change champions and other advocates to promote the new RMS to their peers and help ensure continued franchisee adoption and usage
“Our franchisees are entrepreneurs. They’re goal-oriented, and that’s the way they like to think. By breaking down complex steps into easy and digestible pieces, ZS aligned with the mentality of a franchisee: How do I start achieving goals? What does this mean for me, each and every week?” Lisi said. “If you build the right system and help people through the change, they’re more appreciative and accepting—and they can see the results, each and every day.”
In the company’s most recent year-end earnings call, CEO Patrick Pacious described 2021 as “a remarkable year” for Choice Hotels. “Our pricing optimization and merchandising capabilities are further enabling our owners to effectively capture additional market share, drive top-line revenue and reach their target customers,” he said.
“Our leadership in this area is reflected in the prestigious award we recently received for our leading-edge revenue management tool, recognized as the industry's most innovative enterprise technology. The tools we have introduced are contributing to the outperformance our brands are experiencing. In fact, during the past two years, our revenue-per-available-room gains as compared to 2019 have been significantly higher than the competition,” Pacious said. “What's most impressive is that we continue to drive strong performance through both rate and occupancy share gains. We expect to maintain share gains moving forward.”
Choice Hotels also reports increased franchisee adoption of the RMS. While 30% of franchisee owners signed on to use the prior system, Lisi said nine out of 10 raised their hands to use ChoiceMAX. More than seven out of 10 said they’re satisfied with the onboarding process.
“No one has achieved the level of adoption that we've achieved in the short amount of time that we did,” Lisi said. “And that really is a testament to the change management efforts we made with ZS. I think it’s that one-on-one connection.”