Like its US competitors, the American group is strongly hit by the sanitary crisis.
Patrick Pacious, president and chief executive officer, Choice Hotels starts the official statement by sharing this : "Today, as it has been for more than 80 years, our primary focus remains on the health and well-being of our guests, franchisees and associates. The resolve of our associates and franchise owners, who are helping health care workers, first responders and critical infrastructure travelers with lodging during this trying period, is remarkable.Given the broad-based uncertainty of the current environment, we have taken decisive actions over the past several weeks to position the company for changing market dynamics and enhanced our financial flexibility to sustain the long-term health of the business. We are confident in our ability to weather this storm, while supporting our franchisees as they navigate uncharted waters. Choice Hotels has been through challenging times before and, each time, the company has always emerged stronger given its long-term focus, proven brands, high-caliber associates and broad franchisee base."
Several measures have been taken to save costs such as : Board of Directors and excutives will reduce their compensations, hirings are frozen except for critical positions, suspension of the company' share purchase plan, supension of future dividends and cuts in any non essential costs. Moreover, the company announces $489 million available in cash and borrowing capacity through its revolving credit facility.
The company's US market revealed to be under 50% OR in March, falling between 26% and 33% daily occupancy at the end of the month. Most of the hotels of the group on the US soil remained open taking part of the national solidarity effort.
Choice Hotel put up a program to support franchisees :
- "Implemented fee-deferral programs for domestic and international franchisees.
- Suspended one-time finance charges, reputation management fees and guest relations handling fees.
- Paused quality assurance reviews, extended capital-intensive brand deadlines and created more flexible brand standard options in line with the current operating environment.
- Successfully advocated to expand the amount of and eligibility requirements for government relief SBA programs and other CARES Act benefits to help franchisees retain employees and service their debt.
- Established a proactive, ongoing multi-channel franchisee outreach and education program that is actively helping thousands of hotel owners access this newly available capital."
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