Choice Hotels Asia-Pac is celebrating a momentous first half, after Q2 results showed direct online bookings were up 155% and RevPAR up almost 50% on the same period in 2019.

“The first six months of this year have been better than our first six months in 2019 – no matter how you measure it,” Choice Hotels Asia-Pac CEO, Trent Fraser, told HM.

“From a RevPAR point of view, year to date 2022, we’re up 17% compared to the same six months for 2019,” Fraser said.

“It just shows the appetite for revenge travel. What we’ve seen right across the board, right across the country, both in Australia and New Zealand, has outpaced our expectations for the first six months of this year. It’s been an amazing and speedy recovery.”

Choice set a new record for direct online bookings in the first half as many Australians opted to travel within the country.

“Our business through our websites and our mobile app, for the first six months of this year has already eclipsed the full year of 2019,” Fraser said.

This digital bookings boom is the result of continued investment by Choice in these direct channels.

“Digital is the most efficient channel for us to generate business in our hotels,” Fraser said.

“We want to help [our hotels] get the most yield efficient business that they can – through the mobile app and websites there’s no cost for the delivery of that booking compared to other agencies that they might use – that’s an absolute area of focus.

“We are investing most of our marketing dollars in below-the-line activities to drive behaviour back into the mobile app and our proprietary website as well.”

Bookings throughout the month of July and into August indicate no signs of a slowdown.

“Australian occupancy rates in Q2 are 15 percentage points above 2019 levels,” Fraser said.  

“That’s a significant gain on pre-pandemic trading conditions and goes against early winter slowdowns experienced in the past.”

Choice properties in New Zealand have been slower to bounce back, however, with occupancy levels returning to just above pre-pandemic levels during Q2 – up 20% in the three months to June – but still outperforming market competitors.

“New Zealand is finally starting to enjoy the return of international travel and holding its first ski season in two years,” Fraser said.

“The domestic travel market is still cautious, seeking good value for money in the midscale segment.”

Annual conference returns

Choice also held its annual conference this week for the first time since February 2020, using the opportunity to bring together for shared learning and to reflect on recent challenges and successes.

During that time, Choice has grown its portfolio by 42 properties in this region – 26 across Australia and New Zealand (12,081 rooms) and 16 across Japan, India, Thailand, and China (743 rooms).

Fraser pointed to ESG as a major focus of the conference and for the business going forward with new environmental and sustainability initiatives to be put in place to drive profitability.

“I think previously, these issues were seen as being just a cost – it’s really now about being able to use some of these environmental initiatives to actually save money and drive profitability as well,” he said.

“We’ve got two hotels that have a zero-carbon footprint, so using those as model [properties], sharing examples and ideas to bring the properties back to being carbon neutral.”

Another important element of this strategy is the introduction of large format amenities in place of single-use plastic products.

“We will save 7.8 kilos of plastic per room by not having individual amenity bottles – reducing the use of single-use plastic by 83% per room per year,” Fraser said.

“I think that’s becoming more widely accepted now – that’s the expectation from the customer – they understand the reasons why the industry and ourselves are moving towards that.”

Choice is also time-saving techniques at its properties to support teams during the industry’s critical staff shortage. One way it is doing so is by putting its revenue management experts in charge of inventory management and rate setting at hotels to give teams more time for other essential tasks.

“We’ve got half of our hotels on the revenue management programme, there’s still plenty that are not and should be,” Fraser said.

“It drives greater results from a revenue point of view, but importantly, it gives teams back something that they don’t have today, which is time.”

Choice is also encouraging teams to offer housekeeping on demand – an initiative first introduced during COVID that gives the guests the option to decide if and when they want housekeeping services.

“This can also provide significant cost savings to owners by putting that flexibility back into the guests’ hands, rather than just having it instituted every day for every single room.”

After such a successful half, Fraser says it would be “easy to feel very positive” about the future, but he admits the rapid recovery seen this year can’t be sustained over the longer term.

“[The recovery has] been so dramatic, so sharp and so aggressive,” he said.

“We think the rest of this year will still be very, very positive, but probably not at the rapid rate of recovery that we’ve seen in the first half of the year. And then next year, I think there’s some economic headwinds that we can see in the distance, which may make things a little bit more moderate.”