CONFIDENTIAL 1
Fall PromotionFall Promotion
November 5, 2003
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
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%
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
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
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
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
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)
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)
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
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
CONFIDENTIAL 12
CP Application StatisticsCP Application Statistics
CONFIDENTIAL 13
Weekly CP RevenueWeekly CP Revenue
$4,000
$6,500
$9,000
TAI Date
Rev
enu
e ($
'000
)
2003
2002
2001
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
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
CONFIDENTIAL 16
CP Revenue data- same store hotels*
CP Revenue data- same store hotels*
*2,017 hotels compared
CONFIDENTIAL 17
CP ADR data- same store hotels*
CP ADR data- same store hotels*
*2,017 hotels compared
CONFIDENTIAL 18
CP Room Night Data- same store hotels*
CP Room Night Data- same store hotels*
*2,017 hotels compared
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
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
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
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
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
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
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 $39.79 +0.6 -1.9% +2.5%
Choice midscale brands improved their occupancy performance versus competition in September 2003.
CONFIDENTIAL 26
Preliminary September 2003 PerformancePreliminary September 2003 Performance
2003 2002 changeChoice Midscale RevPar 36.59$ 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