Choice Hotels Mulls Options for a Tech Division That Struggled to Break Even
Photo Credit: Choice Hotels is pursuing strategic alternatives for its technology division, which provides tech services to hotels. Pictured is the chain's headquarters in Rockville, Maryland. Choice Hotels via Facebook
Skift Take
Choice talks a good game about its SkyTouch subsidiary. But signs point to continued heartache. Expect the franchisor to focus instead on the vacation rental software it gained by acquiring Dutch startup Maxxton plus its own reservation system.
Choice Hotels, the hotel franchisor, has had a sick subsidiary on its hands for a couple of years. But on Thursday, it said the patient is stabilized.
In early 2013, Choice launched a subsidiary called SkyTouch Technology to sell its cloud-based property management system and related services to hotels that are not its franchisees.
For years, the division lost money. For example, in 2014, it generated a net loss to the company of up to $20 million. Investors have pressured Choice to either make SkyTouch profitable, sell it, or close it down.
Choice admits that it talked with three entities since the last earnings call about SkyTouch. It has been continuing to evaluate potential strategic alternatives for the subsidiary.
On Thursday Choice reported that SkyTouch is "expected to break approximately even" in 2017, thanks to increased revenues and reduced expenditure.
When answering questions from investment analysts, Choice chief executive Stephen Joyce said "the bulk of i
