WASHINGTON — All eyes are on Choice Hotels International President and CEO Pat Pacious as the company detailed today its offer to buy Wyndham Hotels & Resorts.
Pacious joined Choice in 2005 and before becoming CEO in 2017, he was the company’s president and chief operating officer.
Most recently, he spearheaded the company’s $675 million acquisition of Radisson Hotel Group Americas in 2022.
During a conversation held prior to the latest acquisition announcement, Pacious shared candid thoughts on how the company is investing in machine learning and artificial intelligence, growing diversity at all levels and how the Radisson acquisition transformed the company at the recent International Society of Hospitality Consultants Annual Conference.
Here are a few takeaways from Pacious on his priorities.
“As a company, we’ve always identified as a hospitality and franchise company, and also a tech company,” he said, referring to Choice’s history of building proprietary software such as property-management systems and central reservations systems. Pacious led the company’s technology division in the early 2000s.
“Ten years ago, we were investing in cloud, big data and mobile. We’re now investing in machine-learning, AI and the new technologies to drive the business forward,” he said.
Today, Pacious said Choice is using AI in some cybersecurity applications, to write software and to feed content from its online learning platform, Choice University, into large-language model programs to better serve up training to its franchisees and employees.
And critically, Pacious said Choice is using the technology to help owners get better performance out of their hotels in applicable ways that are useful now, even if those elements change down the line.
“When you understand what tech can do, and more importantly what it can’t do and how expensive it is, and how long it takes, you have to think about who the end user is,” he said. “If you overbuild something and put it into the hands of a small business owner who’s trying to run a Comfort Inn; if you spend on the wrong terms and overwhelm your customer, it won’t be helpful.”
Pacious shared Choice’s efforts to grow diversity at all levels of the company, a movement that started more than 20 years ago with the company’s board of directors. He said Asian-Americans make up two-thirds of Choice hotel owners today, and the company has launched initiatives in recent years to boost ownership among women and African-Americans.
“The biggest challenge for anybody new to the business is access to capital, and we’ve seen that in particular for African-American and for women owners,” he said.
To address the gap, Pacious said Choice puts in financial incentives and mentoring to assist minority owners in raising capital to buy hotels. The company has a dedicated franchise development team that focuses on minority owners and veterans, which has assisted in 300 franchise agreements over the years.
Growing diversity in the company’s succession plan is another focus. Pacious detailed the company’s strategies around recruiting diverse talent, setting goals for driving representation and staying accountable.
“What gives me heart and hope is that when I see at the vice president level who will be sitting in the senior vice president level, and ultimately in my chair someday, that the diversity at those levels is much higher,” he said. “We are tracking those numbers particularly for women and African-Americans and it’s moving in the right direction.”
Choice’s $675 million acquisition of Radisson Hotel Group Americas in June 2022 signaled a relatively rapid move for the traditionally economy-to-midscale Choice into upper-midscale, upscale and upper-upscale segments.
Pacious called the deal “a final step in a significant transformation of our business.”
The move strengthened Choice’s upscale footprint in the U.S., but Pacious was quick to add that the segment is nothing new for Choice. It has grown its Cambria brand to more than 70 locations including those open, under construction and in the pipeline.
He also cited the upper-upscale Radisson Blu brand as a near-term opportunity.
“As you’re well-aware of what’s going on in the commercial real estate market, we do expect there will be a lot of owners of upper-upscale hotels who are in distress now or soon will be with regard to refinancing,” he said. “That is going to give us an opportunity from a branding perspective to really help those owners bring those hotels back to life.”
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