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How did we perform against these objectives? Quite well, as evidenced by our strong results. Here are some highlights:
Company growth: In 2003, we opened a net of 154 domestic hotels, added 470 new franchise contracts and grew our partner services income by almost 11% to $13.2 million.
Customer service delivery: We refocused our franchise service directors to deliver more customized service to meet each hotel’s most critical needs. We also introduced a new quality assurance program that focuses on enhancing guest satisfaction. Our franchisee satisfaction survey showed improvement in a number of service delivery areas, adding to already strong franchisee relations. One measure of franchisee satisfaction is our very high retention rate.
Marketing: Our summer and fall promotions were highly successful in generating more brand awareness and helping our Choice Privileges guest awards program grow by 25% to 2 million members.
Brands: We introduced new prototypes for our Econo Lodge, Sleep Inn and Comfort Suites brands and created a brand extension for our Clarion full-service brand called the Clarion Collection, which features well-established boutique hotels in key urban markets. In addition to our new brand prototypes that reduce construction costs and improve the return on investment, we also enhanced our programs to help owners with renovations and conversions by broadening the scope of goods and services available with our preferred vendors to help franchisees better manage costs and provide amenities desired by their guests.
This significant progress in 2003 sets the stage for even more success this year, in which we will focus even greater attention on working with our franchisee partners to build guest satisfaction and improve hotel performance.
We now are entering a period of economic recovery with hopefully an attendant improvement in RevPAR. We ended the fourth quarter of 2003 with a 5% improvement in RevPAR system-wide, a clear sign that travel is on the rebound. More importantly, that upswing has continued into the first quarter of 2004.
The Travel Industry Association of America (TIA) is forecasting a 4.4% overall increase in travel spending by domestic and international travelers in 2004, with domestic leisure travel predicted to grow by 3.2% and domestic business travel to increase by 4.2%. Arrivals from international travelers are predicted to grow by 5% to 42.2 million. This forecast is good news for our hotel owners, who are well-positioned in the mid-priced and economy segments to capture a good share of that travel increase.
The TIA also predicts that Americans will continue to book their travel at the last minute, with 64% of trips planned within two weeks of taking the trip and with the majority of travel continuing to be highway-related and closer to home, which will match up well with our locations.
So how do we propose to capture more than our fair share of that business? Our marketing programs emphasize the more than 4,800 worldwide locations we offer travelers and the wide range of amenities provided by our eight brands. With more than 57 million room nights booked each year, the Choice system accommodates the traveling public in 49 states and 42 countries and territories globally.
Our marketing promotions focus in part on building the strength of our guest rewards programs, Choice Privileges for the mid-priced brands and EA$Y CHOICE for the economy brands, by offering travelers the opportunity to earn free nights and airline miles quickly and easily. In turn, these programs help build brand loyalty and provide new opportunities for more direct marketing to our frequent and best customers.
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