Inside Hotel Development Trends with Choice Hotels’ CDO David Pepper

Glenn: Hey, everybody. It’s your hospitality. Friend Glenn here reporting from AlIS2025. I’ve got, you know, David Pepper, chief development officer with Choice Hotels. But first, I want to thank our friends over at Unfocus. Unfocus technology that delivers value. Check them out, please. David. Awesome news. The rebrand of Radisson. It feels like it’s finally your own since the acquisition and you’re signaling to the customers, hey, we’re different. We’re different now. We’re moving forward. How are you feeling about it? It’s great. You know, the integration is over. We’re done.

David: It’s going fantastic. They came out with a new logos. It really says it’s ours. Itreally refreshed the brand. And the owners are loving not just thereIt really fresh, but also what we’re delivering now. We’ve done the integration. They are up 42% in direct line reservations with the Radisson brand. So really we’re killing it top line for for these owners. And now also on the bottom line, you know, now that they’ve been part of us, we’ve been able to lower all their OTA costs, their cost of property management costs, so the owners are really feeling great. We feel great about what Reston has to offer in the future. So what does.

Glenn: Robertson have.

David: Tooffer.

Glenn: In the future?

David: Well, you walk around here and what’s going on. You know look still supply growth is still muted. You know half a percent growth last year. So people are looking for acquisitions. And it starts you know the interest rates dropped a little bit. Money is starting to flow a little bit. I think what you’re gonna see first is acquisitions and what you want to buy. Something you need to tell your investors you got a story right a value add. And when they’re going to buy an asset, it’s they’re looking for something where a new brand, something that can add more reservations and a new look. And so we think grass has got a huge opportunity going forward for people looking at urban resort locations, full service hotels. And again, we’re we’re proving it with our performance.

Glenn: Yeah for sure. So to put all the dots together for you what happens is when a hotel is either bought or sold, a lot of times it’s going to have an opportunity to reflag. So that’s what he’s talking about. As more transactions take place, there’s more opportunities for guys like David and his team to be able to say, hey, come on over to our Radisson family of hotels right.

David: There, viewers. They’re they’re way too smart.

Glenn: Yeah, I know. Well, you know, but also, we got a lot of younger people, so I’d love to bring them along and totally have them understand what’s going on. So that’s exciting for you. But the other big thing in the industry, and particularly for you, is the extended stay hotels. This fall, I happen to be part of a great opportunity with the 500 extended stay hotel opening. I’m sure you’ve got a bunch more already. How’s that side of the business?

David: Well, we’re the leaders in extended stay. We get it. We we’ve we’ve got the three things. Any developer wants a proven prototype, a proven operating model that generates 60% go in a proven exit. Right. And look, even in a very muted environment for new construction, we had a record year of openings for Woodspring and every home we opened up 25. What new construction would disprove last year and seven new construction ever homes. So we’re the leaders. We get it. And And look, investors are flocking. That’s that’s where you can still get financing. Thanks to love it. And we’ve got the proven. For the three proven up assets.

Glenn: And Extended stay hotels have proven to to the banks that you get the shovels in the ground and make some money really quick so they’re more likely to lend to that than some of the other types of hotels that we’ve seen, particularly brand new, full service hotels that aren’t directly connected to new types of business, such as convention center or sports stadium. So. And look.

David: Everyone loves talking about their pipelines. But we’re actually opening hotels which is great. We got a huge pipeline as well with, with with extended stay. You, you you talked about the 500th opening, but again, to have a record year of new construction openings in this environment really shows the power of what we’re doing with extended stay.

Glenn: That’s awesome. Before we wrap up, what are you feeling about the vibes over here in terms of how it’s going to set the tone for your team this year?

David: Look, I think you’re hearing a little bit I’d say it’s 10% better than last year, right? It’s so good. It is good. People are really they’re starting to talk. You’re starting to see a lot more hotels. They’re actually out for sale. They sold last year. So there’s some better assets for sale as well. So I think you’re getting a little bit of optimism. Again supply growth is going to be muted. So it’s going to be great for operators. We’re still I think you know it was a little bit flattish last year I think the groups and businesses coming back. So it should be a good year. In terms in terms of, of of of occupancy and RevPAR.

Glenn: That’s awesome. Well hey, maybe this year will be the day I actually invest in a hotel. Who who am I kidding? I have two kids in college. Meanwhile, David, watching football. I would love, honestly, I would totally do a Woodspring because it’s a it’s a lower barrier of entry for an investor. And, you know, because of the model, it really has great returns. You don’t need as many, you don’t need as many full time staffers, and you don’t have to worry about cleaning rooms as much. And your expenses are really low. And I think that’s part of the reason why we’re seeing it. But honestly, I’d really love to do that one.

David: Well, it’ll be great.

Glenn: One day I’ll sell you a franchise. Yeah. Thanks, man. But first I gotta get my kids out of college. Meanwhile, thanks for being here. That’s David. I’m Glenn. People surrounding us. I’m kind of scared. Share. And like this video. Talk to you later.