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Note to Reader: The information contained in this handbook is for general information purposes only. The information is provided by Choice Hotels Canada and while we endeavour to keep the information up-to-date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to this document or information, products and services contained in this document for any purpose. Any reliance you place on such information is therefore strictly at your own risk.



The Development Handbook has been prepared by Choice Hotels Canada for two purposes. First, to facilitate the development process for experienced hotel developers from site selection to grand opening; and second, to summarize the major steps and complexities of the hotel development process for first-time hotel developers. In reality, the hotel development process cannot be condensed into a written handbook because of the idiosyncrasies and site-specific problems of each and every project. However, this broad outline with specific recommendations and references will help to focus the process. As with any complicated process, much of a development and its critical path toward completion are interrelated. Many decisions are dependent upon information from a variety of sources. As a result, the development process is not one of individual steps but many steps taking place simultaneously. You must be aware of all of them at all times. We are confident that Choice Hotels Canadas family of brands, coupled with the right development team and an appropriate site and market, will result in a mutually beneficial investment project. Our development team looks forward to working with you throughout the successful completion of your project.


A preliminary market and feasibility analysis study is actually a market demand study with estimated operating results. This study is usually performed before a site has been selected in order to avoid purchasing a site in a market that may not be feasible. The study plays an important role in the development of a hotel in addition to site identification and selection. It is important because millions of dollars are being invested into the purchase of the land and the construction of the hotel. The study can be performed internally by a qualified professional with appraisal experience or externally by a fee appraiser or hotel consulting company. The preliminary market and feasibility analysis study does not take the place of a fee appraisal that a lender may require for financing. The components of the study typically include: The analysis of the market areas community profile, business climate, transportation, educational sources, attractions, cultural and annual events, and overall quality of life. The evaluation of the site areas accessibility, visibility, proximity to demand generators and competitors, and any potential external economic obsolescence that may impact the development of the project and future success of the lodging facility once opened. The analysis of the markets historical performance and trending resulting in projected supply, demand, ADR and occupancy rates. Preparation of projected cash flow analysis (typically five or ten years). A final written report that summarizes the gathered information, analyses, and recommendations. Market attributes for each of the above components should be gathered no matter what type of market is being evaluated (urban, suburban and airport). Below are specific market attributes that can be found in all types of markets. Each market attribute is evaluated below as to whether it is positive or negative to feasibility and why.

Market Attribute Site close to attractions and amenities (i.e., restaurants, convention centre, cultural events)

Positive X


Comments It is important to be near demand generators and amenities that support visitors to the area. Lack of attractions/amenities to a market can result in less demand and appeal to customers.

Source of Information Site visit Mapping software Chamber of Commerce Tourism & Convention Bureau

Market Attribute Growing roads and highways

Positive X


Comments Roads and highways that are being developed typically help generate development opportunities in an area. They may improve ingress/egress and visibility for a hotel. A difficult or illogical access route can negatively impact the hotel. Businesses provide a significant amount of demand generation to hotels. Therefore, a close and convenient proximity to business or corporate parks may provide more opportunity.

Source of Information Department of Transportation Department of Economic Development

Close proximity to businesses or corporate industrial parks

Site visit Chamber of Commerce

Lack of hotels in the market

The lack of hotels in a market can be positive or negative depending on the market, the brand, and the type of hotel segments positioned in the market. If the market is a growing market that lacks your brand or segment, then it is positive because it provides an opportunity. If there is a lack of hotels because there are no demand generators to support the hotels or market segment, then this particular market may need to be reconsidered.

Smith Travel Research Chamber of Commerce Site visits Travel web sites

Historical area

Historical areas can have a positive or negative impact on the hotel. Impact can depend on the type of hotel being developed or converted. Historical areas can provide challenges for new development because stringent requirements or restrictions may be in place that can increase costs, create delays, and dictate external appearances of the hotel.

Chamber of Commerce Local Planning Board Local Historical Society

Stagnant market (No new construction in pipeline)

A market that does not have any new construction in the pipeline is typically considered to be stagnant. A stagnant market can

Site visit Department of Economic Development

Market Attribute



Comments indicate that financial funding is not being reinvested back into the community. A stagnant market may indicate that businesses are not growing and unemployment rates may be higher than other neighbouring markets.

Source of Information

Growing market (new construction)

Indicators of a growing market typically include new construction projects, low unemployment, increased housing demands, road improvements, airport expansion, new retail and big box retailers. An area that is being revitalized or redeveloped is positive because it indicates that funds are being reinvested back into the community. Urban markets that may have been depressed or focused on industry or manufacturing in the past are usually candidates for revitalization and redevelopment. These types of markets are being reinvented and take several years to reach maturity. Empowerment zones are positive to hotel development. Incentives are usually available to businesses to develop or expand. Land may be less expensive thereby resulting in potentially higher returns to the owner. A secondary tier market can be as profitable as a top market. Land may be more abundant in a secondary market compared to a top market. X The positive aspects of a third tier market include abundant and less costly land, high growth potential and new construction. The negative aspects of a third tier market include less corporate business potential of Fortune 5001000 companies, possibly more transient business and lower ADR

Site visit Department of Economic Development

Revitalization/ Redevelopment occurring

Site visit Department of Economic Development Chamber of Commerce City planning

Site located in economic empowerment zone

Department of Economic Development City planning

Secondary tier market

Statistics Canada

Third tier market

Site visit Department of Economic Development Chamber of Commerce

Market Attribute



Comments and occupancy rates. In addition, third tier markets may have a longer stability period. That is, it might take longer to reach the going ADR and occupancy rates due to lack of demand and awareness of the brand in that market.

Source of Information

Industrial employers

Depending on the type of brand being converted or constructed, industrial employers may have a positive or negative impact on a hotel. A luxury or upper segment hotel may not perform as well and may not produce an acceptable rate of return compared to a midscale or economy brand. Midscale and economy brands typically perform well in industrial areas. Corporate employers are an excellent source for any hotel segment. Different companies and industries have different price points.

Site visit Department of Economic Development Chamber of Commerce

Corporate employers

Site visit Department of Economic Development Chamber of Commerce Site visit Local brokerage firms Site visit Chamber of Commerce

Industrial/ Corporate space with high vacancy

High office or industrial vacancy rates are indicators of a markets loss of jobs, companies relocating or changes in industries. A university in a market provides demand for hotels due to sporting events, parents visiting, etc. Universities also provide financial contribution to the community. A large regional hospital provides demand for hotels due to specialized services, consultants or salespeople calling on the hospital for business and family members visiting patients.

University located in area

Large regional hospital

Site visit

Market Attribute Near international or regional airport

Positive X


Comments International and regional airport locations are always good demand generators for hotels. However, locating a hotel near a municipal airport and relying heavily on business from that airport may be risky. Municipal airports may not produce enough passengers and secondary demand such as contractors.

Source of Information Mapping software

Population decreasing

If the population is decreasing in a market it is an indicator that the economy or job market is slowing. Low unemployment rates in a market are a good indicator that the market is growing and businesses are contributing financially to the community.

Statistics Canada

Low unemployment rates

Statistics Canada Chamber of Commerce

Lack of tourism

A lack of tourism is negative to hotels in the market. A diverse set of demand generators is important to any hotel market. Tourism may offset down times during the weekends and provide more leisure traveller interest in a market. The lack of new hotels or brands in an area is an indicator that the market may be stagnant. An annual decrease of RevPAR may be caused by a slowing market economy or new supply being added to a neighbouring market. The demolition of existing hotels in a market can be positive for the development of a hotel. Old hotels may be demolished to make way for new development. The demolition of existing hotels may also mean that new road construction is proposed which could lead traffic away from the area.

Tourism & Convention Bureau Chamber of Commerce

Lack of new hotels or brands in area Decreasing Market RevPAR

Site visit Department of Economic Development Smith Travel Research Trend Report

Demolition of existing hotels in a market

Site visit Department of Economic Development

In summary, the primary positive attributes that should be present in a hotel market include: Growing economy Increase in population Businesses expanding or relocating to the area Increased airport passengers and expanding airport facilities Amenities (restaurants, retail, convention center, tourism and leisure attractions, etc.) Low office and industrial vacancy rates New construction projects (commercial, industrial, retail, housing, hotels) Road improvements and expansion The negative attributes that a developer should avoid include: Stagnant market Markets with high vacancy rates in office, industrial and retail space Decreasing population High unemployment rates Lack of tourism Decreasing RevPAR

Once a market has been selected based upon a preliminary market assessment being performed, identifying and selecting a site is one of the most important components of successfully developing a hotel. The most common sources to aid a hotel developer in identifying vacant land sites are: (1) commercial real estate brokers; (2) Department of Economic Development authorities; and (3) mixed-use developers in the market. An alternative source is to work with a hotel broker or consultant to identify an older existing hotel or other building that can be purchased and demolished or converted. Older hotels or other buildings may provide an excellent opportunity to locate in a market where land is scarce or costly while providing a superior site location compared to vacant land. It is extremely important to discuss with each source the maximum price you are willing to pay for the land, preferred locations or areas, and timing requirements of acquisition. Below are additional guidelines for each source. Commercial Real Estate Brokers o Work with an established, well connected and experienced broker to achieve the maximum benefit o An exclusive representation agreement may be required by the broker o Broker compensation is typically paid by the seller not the buyer o Hotel developer should ask for a non-compete agreement with broker to avoid the broker shopping the land with competitive hotel developers o Require broker to provide land comparables Local Departments of Economic Development o No representation agreement required o No fee is paid to EDA for service o Incentives may be available and should be discussed o Pipeline developments and projects should be discussed for current and future projects Mixed-use Developers o Identify mixed-use developers in the market that have current projects under construction or approved projects in the pipeline o Discuss and understand timing of any mixed-use projects o Communicate to developer that all other components of the project should be developed before hotel in order to create amenities and demand o If the project is high profile and there is competition for the site the likelihood of negotiating a reduced sales price is limited; offer full price in order to secure the site o Discuss options for mixed-use developer to invest in project in order to reduce your investment cost contribution Hotel Brokers/Consultants o Work with an established, well connected and experienced broker to achieve the maximum benefit o An exclusive representation agreement may be required by the broker o Broker compensation is typically paid by the seller not the buyer o Require broker to provide hotel comparables and net operating income of hotel

Once a site or hotel has been identified, the next step is typically a letter of intent with a due diligence period (typically 60-90 days). The following due diligence should be performed for every site or hotel. General Site Description Location Size of the lot Owner Topography Present zoning Easements and setbacks Restrictions and encroachments History of the site Character of surrounding area Price Access and Visibility Major access routes, including possibilities of future changes Proximity to demand generators Key traffic issues Sign restrictions Height restrictions Visibility Utilities Sewer, including tap fees Water, including hook-up charges Electricity Public Approval Process Planning and Zoning Highways Environmental Site plans/building permits Fire codes Estimates of time to obtain approvals Recent history of other comparable developments Potential citizen opposition Civil, Geotechnical and Environmental Engineering Tests Sites physical characteristics identified Soil conditions analyzed Identification of subsurface problems Identification of wetlands or other environmental concerns Evidence of hazardous waste Once the due diligence has been performed and a decision to move forward with the purchase agreement is made, purchasing the site is the first major monetary commitment to the project. Prior to closing on a site, a thorough market and feasibility analysis should be completed. The lender should be involved at this time in order to receive a financial commitment prior to land or hotel closing.

Product Segmentation is the design and development of products to meet specific market needs. For example, light beer addresses a specific market which regular beer does not. Within the hotel industry, product segmentation primarily addresses the relationship between price and value and the related level of services. The choices range from budget hotels with limited service to luxury hotels offering a wide range of guest services. The market should drive your decision as to the product to build in a particular location. Segmentation allows you to select the optimal product for a specific opportunity. Choice Hotels offers a variety of different hotel brands designed to meet the unique needs of any market. This brand segmentation means we have brands that can be a good fit for a wide variation of locations. The table below should help serve as a guide for you to better understand the segments we serve.
Upscale Relaxing. Service. Upscale. Special and engaging, but unpretentious, Clarion offers services, amenities and an inviting atmosphere associated with finer hotels but at an affordable price. With over 350 locations worldwide, business and leisure travellers appreciate Clarions commitment to service in a relaxed atmosphere, while developers appreciate some of the lowest franchise fees in its segment. Historic. Boutique. Unique. For travellers looking for an out-of-the-ordinary experience, the Ascend Collection of properties is a special group of hotels that offer guests an authentic, local experience. These hotels share a passion for delivering attentive service to guests seeking a more experiential, individualized travel experience that gives them a sense of local flavour. Restful. Roomy. Productive. Whether business or leisure travellers need to unwind, relax or work productively at the end of the day, Comfort Suites provides the room and amenities they need. The all-suites brand features oversized rooms with separate areas for work, sleep and relaxing, plus guests enjoy the free Comfort Sunshine breakfast. With over 820 locations worldwide, Comfort Suites can be found in most major markets with the highest concentration in suburban locations, ideally in close proximity to business districts. Warm. Enjoyable. Helpful. The moment travellers walk into a Comfort, they notice the warm, inviting atmosphere and feel welcomed. They appreciate the good nights rest and energizing Comfort Sunshine breakfast. With over 2,200 convenient locations worldwide, Comfort is one of the best-known hotel brands in the growing midscale limited service segment. Its highway locations as well as select small metro and urban markets strengthen appeal to leisure and business travellers alike. Accommodating. Established. Satisfying. As one of the most recognized brands in the midscale lodging segment, Quality is known worldwide for its welcoming accommodations, friendly service, and delivering value for both travellers and franchisees. With over 1,400 Quality locations worldwide, Quality is designed to maximize both the owner and guest experience. Consistent. Confident. Value. When travellers stay with Sleep Inn , they really enjoy its friendly service and great value and knowing they picked the perfect place. They also enjoy its distinctive style, well maintained facilities and just-right amenitiesall at an exceptional price. As a developer, youll provide a midscale experience at an economy cost to construct. Sleep Inn hotels are located in over 530 locations worldwide. Reliable. Easy. Affordable. Econo Lodge is a convenient value for travellers offering clean, comfortable, and affordable accommodations. Travellers will find limited, but meaningful amenities, and as one of the best-known economy segment hotels with over 900 locations worldwide, Econo Lodge is a force in its segment.

Midscale Economy



PRELIMINARY SITE PLAN As part of the initial site and building assessment, a preliminary site plan must be prepared. This site plan will help determine the number of rooms that can fit on the site, the footprint of the building, the buildings orientation to the road, parking layouts and number of stories for the building. CONCEPTUAL PLANS Choice Hotels Canada can provide you with conceptual plans (for most brands), outline specifications and the programming (dimensions and space requirements) necessary to begin design work. These conceptual plans will need to be modified to meet specific market demands and adapted to meet the requirements of your site and local jurisdiction. WORKING DRAWINGS For all Choice products, an outside architects services will be required and preliminary drawings must be approved by Choice before construction begins. When selecting an architect, the following questions are among those which should be asked: Is he/she experienced with hotel design in general and specifically with the type of product you envision? Is there sufficient staff on hand to handle your project, in addition to those already contracted for? Is he/she experienced with local codes, ordinances and other requirements in the market that you are building in? Are documents in sufficient detail to minimize errors, omissions and change orders? Does his/her reputation include aesthetics and economics? Are you comfortable with him/her as an integral member of your development team? What services are included for the fees charged?

BIDS OR NEGOTIATED CONTRACTS Many developers bid out every project as they feel it is the only way to get the best price. Many other developers negotiate with their own trusted contractors on every project because they feel it is the best way to ensure high-quality work. There are pros and cons to both methods, and the particular situation should dictate whether you bid or negotiate. The following is a contractors opinion of the advantages of negotiating versus bidding: Preconstruction input Team atmosphere Shorter overall schedule No false starts Open book policy Savings returned to owner Selection of qualified subcontractors Performance vs. price Whichever method you feel more comfortable with, bidding or negotiating, plans should be 100 percent completed prior to making your decision on the contractors price. Avoiding change of orders will help keep your project within its budget.


Choice provides assistance for new construction and conversion projects by providing turn-key prototypical room design packages for guestrooms and public space for all Choice brands. These packages satisfy the requirements of function, aesthetics, cost, brand quality and consistency. PRE-APPROVED DESIGN PACKAGES Choice has enlisted the help of a design firm to create pre-approved design packages to fit the different brands style, direction and standards. These packages will save you time as all of the upfront work is done for you no time needs to be spent sourcing, buying or coordinating the logistics around getting hundreds of items delivered to your hotel. Additionally, when a preapproved design package is selected, no design submittal is required. Once the pre-approved design scheme is selected, we only require that written notification of these choices is submitted to Choice Hotels. CUSTOM DESIGNED PACKAGES Should a custom design be pursued, colour boards, along with complete specifications, must be submitted six months prior to hotel opening.

Choice has a dedicated team to help you with your hotel project. Whether you are converting an existing hotel or doing ground up new construction, our team will be responsible for working closely with you to bring your hotel online as quickly as possible, assisting you and working with you to help guide the completion of your project work. Choice Hotels Canada will conduct an initial conference call with you and key members of the Choice team that will be helping you bring your hotel online successfully. On this call we will establish what is required of you to come online successfully and how Choice can help. Following this initial conference call, your team will work with you to develop a specific project plan. This plan will outline the major milestones that need to be met to ensure an on-time opening, including: 1. The ordering and installation timing for furniture, soft goods and other interior design elements 2. Details regarding the installation and training of your new ChoiceAdvantage system 3. Coordination of your pre-opening paperwork (such as your opening guide, insurance certification, credit card setup) 4. The scheduling of our Hotel Sales Support team, which will help you ramp up revenues quickly. One of the most important results of this process will be to work together to establish your expected online date, which will keep everyone on track and on the same page to ensure your hotel opens on time. The next step in the process is determining what products and materials you will need to purchase to ensure that your project, when complete, meets all of Choices architectural and design requirements. The Choice team will help you identify the products youll need and put you in touch with qualified vendors from which to purchase these products. Now youre ready to begin construction or renovation. Once you hire your general contractor, your team will be in touch with you on a regular basis to ensure that the work is proceeding both on-time and within Choices standards. This will make the process more efficient when it comes time to document completion of your project.

The following pages provide a general checklist of some important areas that should be monitored throughout the construction and pre-opening phases of your property. These lists are not intended to be a complete guide to opening your hotel - rather, they are a good reminder of key items and their priority sequence beginning 12 months prior to opening. Obviously, for some limited service properties conceived and built in a much shorter time frame, the time lapse would be condensed and some of the items would not be necessary. Choice representatives will be available to consult with you as you need assistance. In addition, Choice is able to provide help with training and education, purchasing hotel products, grand openings and other vital ingredients for completing your hotel.

Hotel operations is a management intensive business. Certain skills not normally required with other types of real estate investment are necessary in the volatile, highly-competitive lodging industry. As a result, we highly recommend that competent, experienced management be an integral part of your development team if you yourself do not have such experience. For the hotel owner who does not manage his/her own property, there are two basic choices: 1. Obtain a Management Company Many management companies have had experience with Choice Hotels Canada and are well experienced in the industry. The right management company depends on many factors, including a comfortable personal relationship since a contract cannot possibly envision every possibility, particularly in the lodging industry. Carefully evaluate the management companies you interview for the right fit with you, your property and the specific market. Visit some of the hotels in their existing portfolio and talk to the employees. Interview owners of hotels currently managed by the management company. When evaluating each management company, consider such factors as: Extent of services and time frame available relative to your needs (development assistance, technical services, purchasing, construction overview, pre-opening, asset management or other areas). Size, experience and geographic presence. Marketing and sales experience and capabilities. Familiarity with the Choice Hotels Canada system and programs. Financial strength of the company and commitment of the principals. Plans for management reporting and communication with ownership. Fee structure. (Do not let fees alone dictate your decision. Consider the extent of services, their value to you and the risk attached to the fees). Your goal is to select the management company that will best protect your assets through day-today operations, understanding of cash management and return on investment. 2. Hire a General Manager The general manager (GM) will be responsible for overseeing all aspects of property management in accordance with a corporate mission statement including maximization of financial performance, guest satisfaction and staff development. You can locate a GM in a variety of ways: through executive search firms, local and trade ads and college campus programs. The downside to this approach is that if the general manager quits, you do not have the support of the management company. You are on your own to hire a new GM.

Ideally, with a new construction hotel, the GM should be hired 4 to 12 months prior to the hotel opening. The time variation depends on the size and complexity of the hotel. This time allows the GM to be involved in construction, interior design and hiring the staff.

For many hotels, staffing costs (which include both direct payroll and employee benefits) are second in amount only to the mortgage. Thus, controlling staffing costs is a critical job of management. At the same time, however, adequate staff to guest ratios are necessary to ensure proper guest service. A fine line must be walked because a miscalculation in either over- or under-staffing will result in exorbitant costs or poor service. The following general guidelines apply to a hotel in the 50- to 100-room category. They are meant to provide an overall picture of the necessary staffing. In particular, the figures outlined are estimates only and subject to variability based on a number of factors. If you are not experienced at hotel operations, please consider the hiring of a professional management company or an experienced general manager, as well as the completion of a thorough feasibility study by a reputable hotel consulting firm. FRONT DESK All hotels, regardless of size, will need a minimum of one desk clerk per shift until they reach approximately 100 rooms. However, depending upon your market mix of guests, it may be necessary to add a part-time clerk to assist with morning check-out and early evening check-in. In addition, allowances should be made if the clerks are involved with other duties that require them to leave the desk area and on the occasions when large groups check-in. Also, depending on the location of your hotel, a second staff member may be required for security. Typically, 30 minutes is allocated for cleaning a standard room. Thus, housekeepers should be able to clean between 12 and 14 rooms in an 8hour day, including breaks and lunch. By forecasting the number of rooms to be occupied, it is easy to project the number of housekeepers needed on any given day. Please remember, these figures are averages and based on a well-trained and properly supplied department. Laundry staffing guides are based on 6 minutes of laundry time per occupied room, or 10 rooms per hour. One well-trained laundry employee should be able to cover an 80 room property. After 80 occupied rooms, it will be necessary to provide assistance in the laundry. As with the housekeepers, these figures are averages and account only for cleaning linen. These figures would not include receiving/storing supplies, mending, and other tasks often done by laundry employees. Generally, one maintenance person and a helper can handle a 50 to 80 room limited-service hotel. For a full-service property, a second helper should be added. In both cases, additional staff will need to be added after about 80 rooms. When staffing your maintenance department, consideration should be given to the propertys age, how well the property is kept up, how much money is put back into the property and the quality of hard/soft goods purchased when the property was built. Full service hotels with more than 100 rooms will need to have an assistant manager (front office manager) and an executive housekeeper (schedules housekeepers, inspects rooms, performs administrative




functions and oversees the housekeeping for the other departments). Housekeeping staff will need to be added if they are to perform the cleaning of the restaurants, lounges, gift shop, and other public areas.

An operating budget summarizes projected revenues and expected expenses for the hotel for a period of time. It is based on revenue and expense estimates, or assumptions, developed from your understanding of the business and the market. An operations budget can be used as a financial target that specifies revenue goals and expense limits. It can also be used as a managerial tool to help you evaluate your ongoing performance relative to your goals. Budgeting is a time-consuming process; however, the benefits of budgeting generally exceed the costs. The major benefits of an operating budget are: It provides a clearly understood plan for management to follow. The budget process should require that managers be involved with its preparation and consider alternative courses of action. Budgeting requires management to examine just what measures are necessary to generate the desired results. Budgeting provides a standard for comparing with actual results. Budgeting allows management to look forward and prepare for the future. The budget process provides a channel of communication where the owners objectives in numbers are communicated to all management levels. The budget process consists of five major steps: 1. Establishing Financial Objectives A major financial objective for many businesses is long-term profit maximization. The emphasis is on long-term; therefore, short-term profitability may be sacrificed in order to maximize long-term profits. 2. Projecting Revenues For a new hotel, the complete market analysis will be the source of projected revenues, perhaps amended by management based upon new knowledge. For existing hotels, past operating results and trends will provide the basis for the projections. 3. Estimating Expenses Expenses are detailed by department for both profit centers and service centers. Also, expenses need to be categorized as either fixed or variable. 4. Determining Net Income Simply put, net income is revenue minus expenses. 5. Reviewing and Approving the Budget The entire budget is reviewed to determine if the predetermined financial goals have been met. If so, the budget is approved; if not, the budget is reworked until a satisfactory bottom line has been reached.

A condensed outline for an operating budget follows. This was adopted from the Uniform System of Accounts for Hotels, which is generally used for categorizing hotel revenues and expenses. When each revenue and expense is tabulated according to this system, owners can compare their operations with other similar hotels. Substantial variances can be investigated and action taken if required.


UNIFORM SYSTEMS OF ACCOUNTS FOR HOTELS REVENUES: Rooms Food including Other Income Beverage Telephone Other Operated Departments Rentals and Other Income Total Revenues DEPARTMENTAL COSTS AND EXPENSES: Rooms Food and Beverage Telephone Other Operated Departments Total Costs and Expenses Total Operated Departmental Income UNDISTRIBUTED OPERATING EXPENSES: Administrative and General Franchise Fees Marketing and Guest Entertainment Property Operation and Maintenance Energy Costs Other Unallocated Operated Departments Total Undistributed Expenses Income before Fixed Charges MANAGEMENT FEES, PROPERTY TAXES AND INSURANCE: Management Fees Property Taxes and Other Municipal Charges Insurance on Buildings and Contents Total Management Fees, Property Taxes and Insurance Income before Other Fixed Charges

According to the Institute of Public Relations, public relations practice is the planned and sustained effort to establish and maintain goodwill and mutual understanding between an organization and its publics. Who is your public? As a hotel owner, your public consists of your guests, your employees, the community, your suppliers and the media. The focus of this portion of the Development Handbook is on dealing with the media and getting publicity for your property. Effective public relations will lead to increased visibility for your property and increased sales. Publicity should be interesting, informative, innovative and important to your audience. And you can also launch publicity efforts in conjunction with your hotels local marketing efforts or Choices national campaigns.


Obviously, it is important to take advantage of available opportunities to obtain publicity in the media in your immediate market. Publicity should start well before your hotels doors are opened to your guests, and it should continue for as long as you are open. Some key milestones that you can publicize prior to opening include: The signing of the franchise agreement with Choice Hotels The groundbreaking ceremony The grand opening of the hotel Once your property is open, the following are good topics for publicity: Significant additions or renovations to your hotel Key personnel changes and additions Recognition or awards from Choice or the industry Involvement in community affairs Introduction of new services Above all, be imaginative. Find ways your hotel stands out from other hotels in your market and focus on those points. The following ten simple steps can help you garner publicity for your property.


1. MAKE IT TIMELY Reporters like to write about current and emerging trends. Whenever possible, link news about whats happening at your hotel to whats going on in the world or your community right now (a hot topic, an emerging trend, a current event or holiday, etc.) And make sure you know the medias

lead time. Broadcast media have shorter lead times, while monthly publications and magazines usually plan two to six months in advance. 2. MAKE IT VISUAL Pictures make the story and well composed, high quality digital photography can help place news about your hotel. Dont have a photo? Consider a chart that illustrates the results of a survey or a trend. 3. MAKE IT ABOUT THE READER Ask yourself if your news will be of value to the audience of the media outlet that you want to publish your story. Will they care? Why is it important that people know about the information in your press release? Thats what journalists will be asking when deciding whether or not to include your news in their next reports. Only prepare a press release or make the announcement to the media if you can position the news in terms that the audience will care about. 4. GET IT IN THE HANDS OF THE RIGHT PEOPLE Get to know the reporters in your community that cover travel, the lodging industry or local business. Even if you dont have a story, take the time to introduce yourself and let them know how you can help them (commentary on local business, trends in travel/lodging, etc.). And find out how each reporter prefers to receive news (by email, phone or mail). 5. BE RESPONSIVE It goes without saying, but its important to emphasize: When you promise information by a specific time or date, make sure you meet that deadline. Reporters are often working on tight timeframes, and you will become a trusted source of information based on the quality of the information you provide and how responsive you are to meeting deadlines. 6. THINK IN HEADLINES Consider the three most important messages you want the reporter to hear, understand, and repeat to others (be ready to make them over and over in different ways). Give your conclusions first and then support them with concise, factual details. 7. BE AN EXPERT Provide news that gives audiences valuable information, and include statistics and quotes from other expert sources to enhance the credibility of the information youre providing. Offering advice is a great way to get coverage by showing the reporter that youre an expert and providing the reader with information they can use. For example, tips for travelling with children, how to find out about local events when travelling, etc. 8. BE NEW, BE FIRST, BE DIFFERENT These are the most popular news angles and, if handled properly, can help increase your chances for media coverage. Is your hotel the first in the area to offer a particular lodging amenity? Is there something new about your hotel (new bedding, new bath amenities, new breakfast)? How does your property or your staff stand out from the crowd of other businesses or hotels in the area? Be prepared to back up your assertions with facts.

9. BE REACHABLE AND BE PREPARED When you pitch a story to the media, make sure to provide contact information that makes it easy for the reporter to reach you quickly. And then, be prepared for an interview. Most stories are not published word-for-word from a press release. The reporter will want to speak with youand, depending upon the story, perhaps some of your staff and your guests. Designate a few spokespeople from your hotel ahead of time. And if the reporter wants to talk to any of your guests, make sure you have agreement ahead of time and have provided background information to them before providing names/contact information to the reporter. 10. CONTACT US At Choice, the Communications team is here to help you! We provide you with the following areas of support and guidance: MEDIA RELATIONS AND PUBLICITY We can help you increase awareness of your hotel and attract more guests to your property through trade, business and consumer travel press. EVENT COMMUNICATION Working with you and other corporate departments like Franchise Growth and Development and Marketing, we can help you with special event marketing and publicity for events happening at your property. SHARING YOUR NEWS We can help share success stories about you and your property through stories published in our monthly franchisee newsletter. EMERGENCY AND CRISIS COMMUNICATIONS We are available to support you during emergency and crisis situations, enabling you to focus instead on critical operational issues. We provide 24/7 access to the Choice International Corporate Communications team through the Franchise Services help desk at 888.463.3716. If you have any questions or need assistance with your public relations efforts, the Choice Communications team is eager to help you. Contact the department directly at 905.624.7762 or via email at

A carefully planned, polished and memorable grand-opening celebration sets your hotel apart as a community-oriented, active organization - one that local citizens and businesses can be proud of, and one they would recommend to visitors and potential guests. The Choice Communications team can help you plan your grand opening event so that it is a successful sales and marketing effort. You should hold your grand opening celebration, whether it is invitation-only or open to the public, after your hotel has been open a month or so. This gives you some time to work out operational kinks and make sure your staff is familiar and comfortable with all aspects of the property. People are more likely to be available midweek for this type of event. If you plan an evening function, it is best to have it immediately following the work day before people can get home and become involved in other things. If you are hoping for local television coverage, you should plan a morning function when the stations are looking for news to cover that evening. Your grand opening celebration can cost anywhere from several hundred to several thousand dollars, depending on what type of celebration you wish to hold. A traditional private ribbon-cutting ceremony, for example, with light appetizers and a string quartet will cost far less than a pool party or barbecue celebration with a band that is open to the general public. Both types of celebrations are effective ways of gaining positive attention for your property. It is up to you to decide on a reasonable budget and choose the tone you want to set for your hotel. You may choose to hold a private grand opening, open only to invited guests, or you may opt to host a public grand opening, open to your community and invited guests alike. There are benefits to both types of celebrations; you must choose which type best suits your purposes. A private grand opening, announced by invitation to selected members of your community including potential business clients, local travel agents, tour operators, members of your local chamber of commerce and your convention and visitors bureau, allows you to focus attention on the guests most likely to generate future business for your hotel. A private grand opening also allows you to plan logistics including food and beverages with a specific number of guests in mind. Private grand openings are often formal ceremonies featuring a ribbon cutting and a local speaker. You should invite the press to cover this event, which will give you further exposure in the community. The guest list for your grand opening, whether public or private, should consist of those individuals who are key prospects for your future business. A great starting point is your Chamber of Commerce and local Convention & Visitors Bureau officials and members. In addition, you may want to invite representatives from the following organizations in your area: Choice Hotels representatives Travel agencies Corporate offices Local airline representatives Government agencies Industrial agencies Welcome centres Real estate offices Country clubs Reception halls Recreation facilities Local clubs Hospitals Colleges & Universities Banks CAA offices Rental car agencies Fire departments Police stations Restaurants Nursing homes Local newspaper representatives

The Internet is a great place to start for assembling a guest list. You can research online yellow pages to find the names and addresses of major companies in your area. Libraries also have community listings of local professionals, educational and local business groups. You might contact local car rental or airline representatives to obtain travel agent and corporate account lists. You should develop your guest list at least 12 weeks prior to your grand-opening celebration. After you've determined the date of your celebration, who you'd like to invite and the theme you'd like to use, you should take steps to secure speakers, photographers, videographers, caterers and other services you may need. Take time to meet with photographers, caterers and entertainers such as singers or musicians in your area to compare prices and explain what you need and expect. Be sure to get a written service agreement. Prepare detailed lists of your specific requirements. When choosing your menu, be sure to select appetizers and entres that appeal to a wide variety of tastes. In addition, when choosing your entertainment, select music that is light and provides a comfortable background to your celebration. You should confirm your photographer, caterer and entertainment at least eight weeks prior to your grand opening celebration. Finding a fitting guest speaker for your grand opening requires careful thought and planning. Your speaker needs to convey enthusiasm about the benefits your hotel will bring to the community. Examples of effective guest speakers include: The mayor A city council member A Choice executive City, provincial or federal officials City department heads Professionals in media, finance, law or business Chamber of Commerce members Service-oriented organization representatives You should contact potential speakers and confirm a speaker at least eight weeks prior to your grand opening celebration. Make your grand opening a team effort by delegating specific responsibilities to your staff. Assign different staff members to: Coordinate transportation for your speaker Set up and supervise a registration table with name tags for guests Set aside an appropriate number of hotel rooms for overnight celebration guests Collect business cards for surprise drawings Prepare rooms for tours and take guests on tours of rooms and key hotel areas Distribute information about the hotel Don't hesitate to get all members of your team involved.


If you are holding a public grand-opening celebration, you should send your press release one to two weeks in advance of the event. That gives the public the opportunity to plan to attend. It's a good idea to follow-up with the media the day before the event to ensure the editor has assigned a reporter and photographer to cover the celebration. If you are holding an invitation-only grand opening celebration, it often makes more sense to send a release after the event takes place. That way you can provide details about who attended, what occurred and the success of the event. If possible, send a photo from the event. It's a good idea to follow up with the editor a few days after you have sent the release. This will increase the possibility that the publication will carry news about your hotel. It also gives you an opportunity to introduce yourself and your hotel to the editor. You don't have to be a publicist or journalist to communicate news about your celebration, and your press release need not be formal. You can send local journalists information about your grand opening in the form of a letter, featuring bulleted information. Be sure to include your name, the proper name of your hotel, your telephone number and email in addition to the specifics about your event. To find the media outlets that serve your area, use the Internet or Yellow Pages of your telephone directory. Locate the newspapers, radio and television stations in your area. The individuals you might want to target include: Newspapers: editors, managing editors, city editors, travel editors, financial or business editors, real estate editors, amusement editors and columnists. TV and Radio Stations: general managers, program directors, news directors and public service directors.

Shortly after the reception, send letters to all guests and thank them for coming. Also send any photos from the event to the local media.


If you have questions or need additional assistance in preparing your press release, please contact the Choice Communications team at 905.624.7762 or via email at

Once your hotel is open and operating, interaction with Choice Hotels Canada continues. Choice is dedicated to generating measurable results for your hotel from its strong brands, worldwide state-of-the-art computerized reservation systems, national and international sales offices, national advertising campaigns and targeted marketing programs. Choice provides numerous services that help you get your hotel off to a great start and achieve maximum value throughout its operating life. Our support services represent a commitment to value-added performance. Here are just some of the services you receive as a Choice Hotels Canada franchisee: Training and Education Sales and Marketing Support Reservations Advertising Property Identification Quality Assurance Franchise Support Graphic Design Services Communications System Interaction Remember to contact Choice as you need any type of assistance.


A A/R AAA AARP Accounts Receivable (A/R) ACTA Adjoining Rooms Adjustment ADR AES AH&LA AI AIRRC Amenity see Accounts Receivable American Automobile Association American Association of Retired Persons Refers to the debit side of the accounts, like those involving direct bill or credit cards, where money is owed to the hotel Association of Canadian Travel Agencies Rooms with a common wall but no connecting door Adjusting folio charges that were posted on a previous day See Average Daily Rate After Entering System American Hotel & Lodging Association Agent Interface Airline Reservations Centre Service or item offered to guests or placed in guestrooms at not extra charge. Examples are guest services such as automatic check-out or free parking and personal bathroom items American Express A configured radius indicating the number of kilometers from a focal point (in geographical area) used to determine an unfulfilled demand. An example of a focal point is the latitude and longitude of a control tower in an airport American Society of Travel Agents Auxiliary Functions Reservation Centre This is one way to measure a hotels profitability. It is calculated by dividing gross room revenue by the number of occupied room nights sold during a specific time frame. The higher the average daily rate, the greater the hotels profit

AMEX Area Demand Radius

ASTA AUXRC Average Daily Rate

B B/S Back Office BES BTA C C/I C/O CA CAA CARP Cash Value Coupon (CVC) CBM CCFAB

Balance Sheet Distinguishes back office functions that deal mostly with accounting, including accounts payable Before Entering System British Tourist Authority

see Check In see Check Out ChoiceADVANTAGE Canadian Automobile Association Canadian Association of Retired Persons Used primarily as a guest relations tool by Customer Relations Choice Business Management System Choice Canada Franchise Advisory Board consists of a group of franchisee representatives and Choice Hotels Canada representatives who meet periodically to discuss and exchange ideas, and give feedback on matters affecting the system and franchisees

Central Reservations System (CRS) CHA CHAP CHC Check In

Check Out CHHE CHI CHISSP CHOC CHOC Regions Choice Privileges (CP) ChoiceROCS

CHSE CO Complimentary room Connecting rooms

CONV Conversion Properties CP CPSA CPU CRS CTA CVB CVC CXL D Direct Bill

The online central system where guest information, stay information, and hotel information is stored, and is accessible by multiple different sources Certified Hotel Administrator Choice Hotels Asia/Pacific Choice Hotels Canada The process of accepting a guest into a hotel. This usually includes checking inventory, confirming a rate, completing the guest information form, confirming payment and printing a registration card The process of settling a guests bill, completing the paperwork, receiving the key and thanking the guest for staying Certified Hotel Housekeeping Executive Choice Hotels International Silver Spring Headquarters Choice Hotels Owners Council Regional Grouping of Choice Hotels Owners Council The Choice Hotels International loyalty program that allows members to earn points that can be redeemed for free nights at participating hotels, gift certificates at participating merchants, or airline rewards. Customers also have special benefits and amenities available to them through their member participation The corporate Intranet site used by Choice associates and franchisees to access key corporate, departmental and property information The user interface that allows our customers to reserve rooms through the Central Reservation System via the web Choice Hotels RFP processing website used to distribute corporate RFPs, collect hotel responses and submit hotel rates and data to key clients Certified Hotel Sales Executive Certificate of Occupancy The guest is allowed to stay free Rooms with individual entrance doors from the outside and a connecting door between. Guests can move between these rooms without going through the hallway see Conversion Properties Properties converting from another brand to one of the Choice Hotels brands see Choice Privileges Canadian Professional Sales Association Central Processing Unit see Central Reservations System Closed to Arrival Convention & Visitors Bureau see Cash Value Coupon Cancel


Account set up where a company is directly billed for a guests expenses. (A direct bill account can be limited to cover only room and tax charges.) Directory Listing Information Directory Update Book

E EBITDA ECRM ELFA EOD Extra Charges Endorsed Vendors

Earnings before interest, tax, depreciation and amortization Enterprise Customer Relationship Management Econo Lodge Franchisee Association Estimated Opening Date Extra person, Crib, Rollaway rates Companies Choice recommends for purchasing products that meet brand standards (also known as Qualified Vendors)

F F&B FF&E FIT Flag Change FMS FOM Forecast Seasons Dates FPC Front Office Full-Service Hotel

Food & Beverage Furniture, Fixtures & Equipment Foreign Independent Traveller A hotel changes from one brand to another Frequency Marketing System Front Office Manager Forecast trends based on Revenue/Occupancy information, past and present bookings, and property reservation information Franchise Performance Consultant Distinguishes front office functions that deal directly with guests such as, checking guests in and out and posting A hotel that provides additional services that add revenue such as an onsite restaurant and lounge, conference facility, or business centre

G G/L GDS Global Distribution Systems GM GNT GOP Group Reservations

GRR GST GTR Guest Refund

General Ledger See Global Distribution System The system that travel professionals use to book a variety of travelrelated services, including hotels, airlines, and car rentals General Manager Program code for Group Non Travel Trade Gross Operating Profit A block of multiple guestrooms that are being held under an individual or business name for a specific date or range of dates. Generally sued for conventions, conferences, meetings, receptions, weddings, etc. Gross Room Revenue Goods & Services Tax Program code for Group Travel Trade Amount of money paid out of cash on hand to a guest who has a cash balance. Two examples are guest dissatisfaction or an unused deposit

H HOG Hotel Accounting


Hotel Opening Guide Accounting method specific to the hotel industry. Hotel accounting dictates that a credited amount (money coming into the hotel) is shows on a guests bill as a negative number, and that a debited amount (money owed to the hotel) is shown as a positive number. In hotel accounting, a negative number is a good thing Harmonized Service Tax Hotel Travel Index


International Air Transport Association International Travel Bureau (tradeshow) Integrated Voice Response Interexchange Carrier (AT&T, Sprint, MCI, etc.)

Joint Venture

Friends and Family Rate A lodging facility that does not offer extra facilities such as restaurants, pools, meeting rooms, etc. Length of Stay; refers to Stay Pattern/Rate Management LRA Worldwide consultants for Quality Assurance Program Local Special Rate Plan

Marketing Publication Update Book Maintenance and Capital Improvements Marketing Information Guide Marketing Information Summary Maximum Length of Stay Manager on Duty Minot Reservation Centre

New Build Properties New Hotel Sales Support Director National Tourism Association

OHG OOO ORM Overbooking

Occupancy Measures the number of hotel nights sold as a percentage of the number of room nights available. It is calculated by dividing the total number of rooms sold by the number of rooms available Official Hotel Guide Out of Order Optimal Rate Method (formerly known as Option D) Accepting reservations that exceed available rooms


Profit & Loss Statement/Income Statement Passengers Private Branch Exchange Property Enhancement Plan Phoenix Property Improvement Plan Profit Manager Property Management System Public Relations A number assigned to each Choice property which consists of 3 numbers tagged onto CN, such as CN088

Q QA QAR Qualified Vendors Quality Assurance Review R Rack Rate RAG Relicensed properties Repositioning REV/OCC RevPAR

Quality Assurance See Quality Assurance Review Companies Choice recommends for purchasing products that meet brand standards (also known as Endorsed Vendors) Property inspection, normally conducted by LRA


Maximum non-discounted room rate established by the hotel Reservation Activity Generated Report Any Choice property changing licensees Any Choice property changing names. For example, Econo Lodge to a Comfort or a Comfort to a Quality Revenue & Occupancy Report Revenue Per Available Room. This is one way to measure a hotels profitability. It is calculated by multiplying the average daily room rate (ADR) by the occupancy rate. The higher the amount of revenue per available room, the greater the hotels profit Request for Proposal see ChoiceROCS Return on Investment Rate associated with a room type RevPAR Maximizer Reservation Support System

Schedule Airline Traffic Org (Government/Military Travel Agencies) Securities and Exchange Commission Employee Discount Program Program Code for VIP Preferred Rate Program Special Rate Plan Program Code for Sixty Plus 20 Percent Discount Program Smith Travel Research

Travel & Vacation Directory Travel Agent Invoice Total Quality Management

Value-added Tax Visitors and Convention Bureau

W Wait List Walk In WAN Write Off

A list of guests desiring rooms that cannot be accommodated because the hotel is full A guest who arrives at the front desk without a reservation Wide Area Network An amount of money written off the books as bed debt. Two examples are room damage not paid by a guest, or a direct bill charge that the company is not able to pay because it went out of business

WTM WTO WTTC Y Yield Management

World Travel Market (tradeshow) World Tourism Organization World Travel Tourism Council

A process or strategy that hotel operators use to maximize hotel room revenue by achieving the appropriate balance between room rates and occupancy that generates the most revenue


Franchisees Franchisors