Hospitality ON met with Ricardo Losada Revol, Senior Vice President International Choice Hotels, for about eight months already. While in Paris, the SVP explores this new adventure on the hospitality sector and the ambitions of the group, still perceived essentially as an American franchisor despite its presence in over 40 countries.
Could you introduce yourself please?
I'm Ricardo Losada Revol with Choice Hotels International. I recently joined the company, and I am the Senior Vice President and General Manager of the International Division. We have about 1200 hotels around the world in 46 countries and territories outside of the US.
What made your CEO Pat Pacious hire you, as you have no background in the hospitality industry?
I worked in the past in growing companies, so my vision of the international segment is to build an attractive value proposition for our franchisees and guest while expanding globally through strategic development to become the growth engine for the company and then change our position in the international arena. I think I could bring a lot of what I've done in the past into this role. The industry has a tech component and a strong development aspect where I have a very solid track record in corporate strategy corporate development and corporate finance.
More than six months after your arrival in hospitality, what is your view of this industry?
It's a new industry for me but I found fascinating how important is the tech and connectivity aspect in this business. Choice Hotels is focus on what we call the three Ls, which stands for allowing the franchises to Leverage our Tech infrastructure to get operating efficiencies and increase sales ; to Lessening the reliance on the OTAs and third-party distributions ; and therefore reducing the overall cost of ownership. You can't do that if you don't have a solid Tech platform and connectivity with the hotels.
Choice Hotels is in the world Top 10 of our industry, but perceived as an American company, how do you develop internationally to change that perception?
We have more than 7,000 hotels in the company, only 1,200 of those are outside the US, so that tells you something. We see the international division as a future growth engine for the company and there's a lot more that we must do in terms of a brand awareness. But there's recognition already in the market. A specific deal, such as the partnership with Zenitude Hotels, that we just did will really help us to continue building that brand awareness, particularly in France because it's going to allow us to double our portfolio in the next 18 months.
What can you offer to future franchisees?
We are the only one who is doing purely franchise businesses in this market so that give us an advantage because all that we want to do is to deliver a value proposition to our franchises. That's our focus and because of that we have enough flexibility to adapt our value proposition to whatever hotel is looking for. We can adapt that offering versus some other companies could be stricter in that offering.
Are you working on new tech developments?
We are always thinking and exploring ways to improve our Tech platform, right now there's nothing new coming out but we always improving and enhancing our solutions to adapt to what our franchises are looking for. The recent partnership allows us to enter the long stay business, we have certain solutions that will also facilitate that transition.
Which areas are on your radar to increase your presence in EMEA?
Our development efforts are primarily concentrated in three key markets France UK and Germany, but we are open to do business with any other opportunity outside of these three markets in Europe or Middle East or Africa which is the region that is managed by our team. In addition to that we have our franchise agreement with Strawberry, formally known as Nordic Hotels, where they manage a large portfolio of hotels in Finland Norway Denmark and Sweden. In addition to that we signed a few months ago a distribution agreement with a company called Sercotel in Spain that also give us exposure in that to that market as well.
Apart from Europe and the Middle East, on which areas would you focus on?
I currently manage the three main regions which are EMEA Caribbean and Latin America and Asia Pacific. In Asia Pacific we have a strong presence in Australia and New Zealand and then we have a master franchise agreement in India with another partner there. It's a market that continues to grow. I was reading some stats the other day saying that in the next 10 years there will be about 300 million people entering into the middle class, so that will drive huge opportunities.
Choice Hotels attempted to merge with Wyndham though on hostile takeover bid, what do you learn from this failed attempt?
We continue to believe that there are many compelling long-term financial and strategic benefits that will evolve from a combination of the two companies but right now it's not the right time to do it. We will continue focusing our stand-alone strategy. Last year, we delivered about 13% EBITDA growth. This year the guidance for us is to grow another 10% in adjusted EBITDA. The bigger you are, you're leveraging that infrastructure that you already built. We want to continue and double down in growth. We are not giving up at all. I see a lot more activities or opportunities developing in this market. You mentioned before the consolidation aspect, I think there will be more consolidation occurring in this market.
What kind of guests do you expect to host at the Zenitude properties?
Probably they have a 60% leisure and 40% corporate ratio. In the peak vacation season, you have a lot of leisure travelers but then in the valleys, you try to fill that out also with corporate travelers. Corporate travelers could give you a base and then you adjust during the peak and off-peak seasons. A family could go and stay in these hotels and they their comfortable in the unit that has a kitchen and the laundry.
