With fresh new-construction brands -- Sleep Inn, Comfort lnn, Comfort Suites and MainStay Suites -- and brands suited primarily for conversions -- Quality, Clarion, Rodeway Inn and Econo Lodge -- Choice is well-positioned with the right brand to suit any business strategy in any economic cycle. The Company's strategic plan calls for leveraging the strengths of each brand for the benefit of both the franchisees and stockholders.

The strategic plan is guided by the principle that Choice's business portfolio includes a bundle of trademarks and brands that range from older, mature assets to new and growing ones.

This plank addresses the need to allocate resources to accelerate the growth of new brands as well as to renew mature brands. Key strategies for implementing this plan are 1) building trademark equity and 2) becoming more consumer-focused .

Aggressive initiatives will be undertaken to build Choice's portfolio of new and renewed brands that lead the industry in consumer preference.

Specific initiatives by brand include:

   Comfort Inns & Comfort Suites

For the 1998 fiscal year, Choice will research, develop and implement a marketing plan to promote the Comfort trademark with a strong positioning as the leader in the limited-service category.

   Quality Inns, Hotels & Suites

Choice is continuing to revitalize the Quality brand by emphasizing its competitive advantages including the Quality Executive Room, free in-room coffee, 100 percent satisfaction guarantee and Quality Sleeper mattress by Serta. To grow the brand, Choice is promoting the Quality Inn & Suites conversion package to owners of established, mid-priced properties.

   Clarion Inns, Hotels, Suites & Resorts

Development efforts will be focused in smaller metropolitan areas where the Clarion brand can compete most effectively. Choice will implement a 100 percent satisfaction guarantee for the brand effective October 1997 and a consistent guaranteed meetings program for participating Clarion hotels by Jan. 1,1998.

   Sleep Inn

A marketing campaign for the coming year will promote the brand's number-one ranking among all hotel chains for satisfaction, service and value, as rated by D.K. Shifflet & Associates.

All development efforts will emphasize building more critical mass.

   Econo Lodge

Choice is in the process of implementing a betterment image program for the Econo Lodge brand that includes a 100 percent satisfaction guarantee for guests beginning Jan. 1, 1998, and systemwide completion of the Signature Exterior Renovation Program by June 1998.

The renovation program has been highly successful, improving RevPAR, or revenue per available room, by 12.2 percent among the 153 hotels that have participated to date.

   Rodeway Inn

The Rodeway Inn brand will continue to be positioned to consumers as "senior friendly" and to independent operators as an outstanding franchise alternative.

   Mainstay Suites

Plans to aggressively develop the MainStay Suites brand continue to be based on the strong demand for mid-priced, high-quality, extended-stay lodging nationwide.

   Choice Picks Food Court

Consumer demand for branded, convenient food items, coupled with operator demand for efficient, labor-saving delivery systems, continue to drive development of Choice Picks Food Court, a customized modular food court system.

Development sites were expanded during the year to include non-Choice hotels, outlet malls, high-volume retail stores, contract management companies, time-share resorts, hospitals, movie theaters and convenience stores.

The first Choice Picks Food Courts located outside a lodging venue opened this year at shopping outlet centers in Georgia and Pennsylvania.


  A Year of Firsts     Financial Highlights     Letter to Our Stockholders     Focusing on the Franchisees     Optimizing the Brand Portfolio     Increasing Market Penetration     Improving Margins     Growing Overseas Operations     Leveraging the Spinoff of Franchise Operations