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Upscale Upturn

Choice Hotels Touts Development Potential Of Cambria Brand

Tuesday, May 08, 2018
Dennis Nessler
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Much of the discussion at last week’s Choice Hotels International annual conference centered on changes to the company’s flagship Comfort brand, but company executives also expressed plenty of enthusiasm about the growth prospects for Cambria Hotels going forward.

The upscale brand now has 37 properties open, in addition to a robust pipeline of product. President and CEO Pat Pacious commented, “Cambria continues to be on a significant tear. We had our biggest development year last year,” he said.

Pacious underscored the brand’s growth while addressing the company’s overall progress within the upscale segment in recent years with Cambria, which was launched in 2005, as well as The Ascend Collection.

“As for the upscale segment, we have arrived. We didn’t listen to those who said it’s impossible to move up in segments. We knew we could and we did, not once but twice. The Ascend Collection is the industry’s first upscale, soft brand and has more hotels open than the top two competitors combined. With Cambria we have multiple properties in top markets like New York City, Los Angeles and Chicago,” he said.

Pacious went on to relay some commentary regarding the recent opening of the Downtown Dallas Cambria. “I heard somebody marvel ‘I can’t believe this is a Choice Hotel.’ It is; it’s the most exciting upscale brand out there and today Choice has nearly 45,000 upscale hotel rooms around the globe.”

The Cambria brand—which last year opened properties in key markets such as Nashville and New Orleans, in addition to Dallas—now has properties open and in development in 42 of the top 50 U.S. markets. Key urban markets have remained a focus of Cambria, according to chief development officer David Pepper, who pointed out the brand is entering the next phase of growth.

“The brand is really poised to take it to the next level. We’ve kind of gone with a W strategy the last couple of years. It’s all been urban, tent-pole locations. Developers see it and consumers see it; it’s been a great marketing opportunity for us. Now what you’re going to start seeing Cambria do is filling in that beltway around it,” said Pepper.

Mark Shalala, vp, development, upscale brands, noted that on the heels of opening 10 hotels last year, Cambria is on track to open 12 more properties this year. In addition, the brand signed contracts for 36 hotels last year and there are currently 13 properties under construction.

Shalala laid out some lofty development objectives. “We anticipate breaking ground on an additional 15 projects in 2018 and with another 70 plus projects in the pipeline we have a clear path to reach 100 hotels by 2020,” he said.

Shalala detailed the general appeal of the brand and its ethos, particularly when it comes to modern business travelers.

“They put a huge premium on the experiences that we’re creating in our hotels…Today’s guests want to experience and take home a little bit of the history, culture, tradition, art, food, music and the overall vibe that these cities have to offer and they want to do this in our hotels,” he said.

Shalala added, “Another big piece of the puzzle that developers love about Cambria is its individuality. It’s a huge reason for our rapid growth and why we’re attracting so many developers to the brand.”

The company also emphasized the fact that the brand doesn’t have some of the impact issues that its competitors face as a result of having multiple upscale brands in the same markets. Cambria is also in the process of rolling out a new service culture known as “Make It Happen.” The new culture is centered around three core fundamental brand values; an engaged mind; an empathetic heart and an energetic soul, according to the company.

Meanwhile, Shalala detailed a bit of a shift in development strategy not that the company is going to take “a more programmatic invest approach with multi-unit developers,” he said, adding that it will still invest in individual projects as well.

He explained the new approach. “It’s a winning strategy. It should drive faster unit growth and deliver a better Cambria product across the chain and it should help increase brand equity for all owners,” he said.

Shalala further noted that brand has gained considerable traction within the financial community. “Cambria’s attracting more and more top sponsors, such as institutional investors and private equity groups, and we’re rapidly gaining acceptance within the lending community. This is making raising equity and securing debt for new construction a little bit easier for our owners, as well as refinancing for our current owners when that makes sense. We will continue to capitalize on the prolonged growth cycle the industry is experiencing and for the reasons I’ve just explained we feel pretty bullish about the future growth of Cambria,” he concluded.

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Dennis Nessler    Dennis Nessler
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