Cambria expands push into top-tier cities
 
Cambria expands push into top-tier cities
18 FEBRUARY 2019 8:28 AM

Choice Hotels International’s Cambria flag has been popping up in more U.S. gateway cities as the company looks to maximize exposure for the upscale brand.

LOS ANGELES—Choice Hotels International has been executing on a strategy to expand its Cambria Hotels brand into major U.S. cities, with the latest Cambria flag being planted in Los Angeles.

The brand’s groundbreaking in downtown Los Angeles represents the latest step on the company’s multi-year path to develop the upscale brand aggressively, in part through money the company has pledged toward that effort.

Mark Shalala, VP of upscale development for Choice, said 2018 was a big year for Cambria, as the brand matures to different markets and ownership models. The company opened its 40th Cambria in 2018, and has added several already in 2019.

“We’ve allocated $725 million to date to grow this brand,” Shalala said at a Cambria breakfast event held during the Americas Lodging Investment Summit.

Developers have taken a keen interest in the brand, he said. Driving that interest is that the brand has three funding models in place: Choice can take an equity position through a joint-venture partnership with other owners, by contributing key money or through debt, Shalala said.

“We’re shifting more to multi-unit developers,” he said. “We have owners that want to do multiples, which will accelerate growth.”

He cited the company’s 2018 partnership with an affiliate of Oz Real Estate to create a co-investment platform to develop as many as 50 Cambria properties in the U.S. Choice is contributing $250 million in investment to the platform.

In 2018, the brand achieved systemwide revenue per available room of $104.84, according to financial documents.

Locations matter
Janis Cannon, Choice’s SVP of upscale brands, said the company is very deliberate about where it’s growing the brand—to maximize its exposure, to attract developers and, most importantly, to be where Choice guests want to see the brand.

“We’ve made tremendous progress,” Cannon said of the brand’s growth goals. “We wanted to plant flagpoles in the top ten (U.S.) cities, then move to the top 50.”

She cited openings within 2017 and 2018 in Philadelphia, at Los Angeles International Airport, in Chicago and in Nashville as examples of the company’s strategy to open in “iconic locations” and places “where our customers are looking for us.”

Cambria’s downtown Los Angeles hotel “will be the culmination of our top 10 cities project,” Cannon said.

What’s next
Shalala said the brand has a pipeline of approximately 85 projects in late stages, including 23 in active construction.

Cambria sees particular opportunity for growth in California, where the under-construction Cambria Hotel Anaheim – Resort Area* will be the brand’s largest hotel. It will have 352 rooms and suites, plus a 30,000-square-foot waterpark. Plans call for a spring 2019 opening.

“What’s exciting is that developers are approaching us,” Shalala said. “We still have a lot of markets available, and we’re growing.”

Cannon echoed Shalala’s enthusiasm for the brand’s future, pointing out the elements that differentiate the brand, such as its approach to hyper-local design and programming (the brand’s Nashville location has a live music stage that opens to the street) and thoughtful amenities.

“We’re designing these for a modern business traveler who’s starved for time but still wants experience,” she said. “It’s about (giving) a little bite of the local culture.”

* Correction, 19 February 2019: An earlier version of this article included the incorrect property name for the Cambria Hotel Anaheim - Resort Area. 

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