Growth and expansion
In 1981, Quality Inns announced a major nationwide expansion program, and started the industry's first market segmentation strategy, using a range of hotel brands across price points.[11] Geographically, it expanded across the country by opening hotels in the Western United States for the first time.[7] In addition to its Quality Inn hotels, the company created Comfort Inn, a lower-price, limited-service chain, and Quality Royale, representing the most upscale locations in the system. The first Comfort Inn opened in July 1981 in Atlanta, Georgia, converted from a decades-old independent motel next to the Georgia Tech campus.[12][13] The first hotel to become a Quality Royale franchise was the Georgetown Marbury House in Washington, D.C., in January 1982.[14][15] Comfort Inn, which would later become Choice Hotels' flagship brand, was marketed to family vacationers, business travelers, and senior citizens,[7] and was intended to compete with Days Inn, Best Western, and Friendship Inn.[11] The company's Quality Inn hotels remained in the midscale segment, competing with Holiday Inn, Ramada, Howard Johnson, and Travelodge.[11] The Quality Royale brand was positioned to compete with Marriott, Hyatt, Hilton, and Sheraton.[5][7]
In January 1987, Quality Inns established a partnership with Associated Inns and Restaurants Company of America (AIRCOA Holdings), a Denver-based firm that was one of the largest independent hotel management companies in the United States.[16] Quality Inns agreed to merge its upscale Quality Royale brand with AIRCOA's Clarion Collection,[17] which had originally been established in 1983 as a referral chain.[18] The Clarion brand thus replaced Quality Royale as one of Quality Inns' three franchise offerings.[11]
In September 1987, the company announced plans for a lower-price chain with smaller rooms called McSleep Inn, intended to compete with chains like Motel 6. Rather than converting existing hotels to the brand, McSleep Inn locations would be purpose-built to keep costs to a minimum. In announcing the new chain, the CEO of Quality Inns stated that "obviously the name is a takeoff on McDonald's", sparking a legal battle over whether McSleep Inn was infringing on the McDonald's trademark.[19] McDonald's won the ensuing court case in September 1988, forcing Quality Inns to change the name of the chain, whose first locations were then under construction, to Sleep Inn.[7][20] Additionally, Microtel Inn and Suites founder Loren Ansley claimed that Quality Inns stole his business model, which he had presented to Quality executives before deciding to start his own chain.[21] The first Sleep Inn location opened in Salisbury, North Carolina, on May 15, 1989.
Bainum Sr. led Quality Inns until 1987, when his son, Stewart W. Bainum Jr., took over the role of chairman and chief executive.[8][23] Bainum's other business, Manor Care, Inc., which owned and managed nursing homes, bought Quality Inns in 1990. In July of that year, the company acquired the Rodeway Inn chain from Prime Motor Inns, making Quality Inns the largest hotel franchisor in the world.[24] In August, Quality Inns bought Econo Lodge of America, owners of the Econo Lodge and Friendship Inns chains.[25] Shortly thereafter, the company's name was changed to Choice Hotels.[7]
Choice Hotels created a joint venture with Canadian motel chain Journey's End in 1993, turning that company's properties into "Comfort Inn by Journey's End" and "Quality Inn by Journey's End".[26] The "by Journey's End" branding was later dropped.
Manor Care spun off its hotels business in 1996,[27] and Choice Hotels became a publicly traded company, holding an initial public offering in 1997.[6] The new company was exclusively responsible for franchising and did not own any of its hotel locations; all hotels formerly owned by Manor Care were split off under a separate company, Sunburst Hospitality Corporation, which became the largest franchisee of Choice Hotels brands. In 1996, Choice Hotels introduced its first extended-stay hotel brand, MainStay Suites, which was advertised as the first mid-price extended-stay chain.[28] The first MainStay Suites location opened in Plano, Texas in November 1996. In 1997, the Friendship Inn brand was eliminated, with its locations being converted to the Rodeway brand.[29]
In July 1998, Choice Hotels created a partnership with Flag International Ltd., the largest hotel chain in Australia, allowing Flag to use the Clarion, Quality, and Comfort brands.[30] The brands quickly outstripped the Flag Hotel chain in popularity in Australia, and Choice Hotels acquired Flag International outright in 2003.[31] The last remaining Flag Hotels were converted to other Choice brands in 2008.[32]
In January 2005, the company announced the creation of its new Cambria Suites brand.[3][33] The Cambria brand was created as an upscale, limited-service hotel chain marketed to business travelers.[33] The first Cambria Suites location opened near Boise Airport in Boise, Idaho in April 2007.[34]
In September 2005, Choice Hotels acquired the Atlanta-based Suburban Franchise Holding Company, giving the company the franchise rights to the Suburban Extended Stay Hotel brand.[35] The chain was originally founded as Suburban Lodges of America in 1987.[36] The company-owned Suburban Lodges were purchased by InTown Suites in 2002, while the franchise locations became Suburban Extended Stay Hotels.[37] In 2022, the chain was rebranded as Suburban Studios.[38]
In 2008, Choice Hotels was the first industry chain to establish a "soft brand", Ascend Hotel Collection.[39][40][41] The Ascend Hotel Collection includes upscale boutique and historic hotels whose owners are subject to fewer fixed brand standards compared with Choice's other brands.[39]