Choice Hotels Pitches AI as a Reason Owners Stay

Choice Hotels is selling its own hotels and telling owners the software is the product. Its third-quarter numbers are the first test of that pitch.

The lodging franchisor reported Nov. 2 that U.S. room exits fell 23% from a year earlier, leaving its U.S. room count roughly flat. U.S. franchise agreements awarded rose 24%, the conversion pipeline grew 29% to 25,500 rooms and U.S. revenue per available room rose 3.8%. It also sold two owned hotels for about $34 million while keeping their franchise agreements.

On his first call as permanent CEO, Dominic Dragisich tied part of that to tools Choice built for owners, Hospitality Technology reported. EasyBid, which prices and returns group requests for proposals, lifted RFP win rates by 210 basis points in the quarter as group revenue grew 27%. About 75% of businesses signing up for Choice Business Direct, a self-service booking portal for small and mid-sized companies, are new to the brand. A review tool called Smart Response cut owners' reputation-management vendor fees by roughly 30%. Next up is RAIZ, which combines pricing, inventory and channel management.

Dragisich said RAIZ would roll out this quarter, with the benefits ramping into 2027.

One caution: the numbers line up with the rollout, but they do not prove the software did the work, as Street Fight pointed out. Hospitality Technology also noted that roughly 30% of Choice's domestic hotels sit within 10 miles of a major data center, and those properties beat the rest of the system on RevPAR growth by more than 400 basis points. Construction crews fill rooms whether or not a bid tool answers fast.

Still, the mechanism is easy to follow. Group business goes to the hotel that answers first with a usable quote, and a lean front desk often cannot. Wyndham made a similar point last month when it said franchisees drop more than a quarter of inbound calls, the problem its AI concierge is meant to fix, as we noted in our look at Wyndham's quarter.

That speed problem is not unique to hotels, and it is the one Revscale, which publishes this site, builds for. Its Inbound Agent replies to inquiries within minutes at any hour, asks qualifying questions and routes qualified leads to the right person, while its Voice Agent answers calls the staff cannot reach and transfers to a person when needed. The difference is who builds it: Choice and Wyndham have engineering teams to write their own, while most franchisors and multi-location operators would configure an agent for the workflow rather than build one.

For Choice owners, the open question is retention. Fewer exits is the number to watch, because a franchisor that no longer competes on real estate has to keep earning the renewal with what its tools put on the books.

Revscale Media is published by Revscale.