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The Internet gives us another powerful marketing tool, with Choicehotels.com, our proprietary Internet site, providing consumers with ease of use, foreign language capability and our Best e-rate Guarantee program. We also have forged agreements with major third-party travel Web sites to obtain preferred placement and reduced fees for our hotels. By leveraging our size, scale and distribution, we have helped our franchisees to capture business more effectively by improving the yield through these sites.
Since I joined Choice in the fall of 1998, the percentage of reservations booked on-line on our own Web site and third-party sites has grown dramatically from 1.3% in 1998 to 33.4% in 2003, as more and more consumers turn to the Internet to transact personal business. Of that Internet business, almost 56% comes directly to our proprietary site, choicehotels.com.
At the same time, our call centers continue to handle more than 10 million reservations inquiries a year, with our ability to convert calls into booked rooms steadily improving.
For 2004 we aim to sustain our unit growth momentum while continuing to improve product quality, enhance brand reputation and build greater guest loyalty. Choice has made great strides in the past five years and has consistently delivered a strong performance for its shareholders despite the economic downturn and the dampening impact on travel of the war on terrorism.
The volatility of world events reminds us that the environment in which we operate will continue to present unexpected challenges. But our resiliency and performance of the past few years gives me confidence in our ultimate ability to persevere and perform well.
I have been extremely fortunate to have the benefit of a dedicated Board of Directors that has provided wise counsel and strong support for our initiatives. This past year we decided to pay a cash dividend on our common stock, and we have continued to build shareholder value through targeted share repurchases.
I also have enjoyed the support of our 1,500 associates who have diligently worked to make Choice a better company and a better place to work, earning us recognition for “Workplace Excellence” from the Maryland Work-Life Alliance and as one of the “50 Great Places to Work” from Washingtonian magazine.
As the economy gathers strength and more travelers return to the road, our future looks very bright. At our more than 4,800 hotels worldwide, our owners and their staffs are ready to welcome you. Behind that effort are our associates and vendor partners who share a commitment to deliver great service.
With customer profitability as our passion, we can create a franchise success system unequalled in our industry and a company renowned for steadily growing shareholder value.
Charles A. Ledsinger, Jr.
President and Chief Executive Officer
March 22, 2004
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