Dive Brief:
- Choice Hotels International’s global pipeline reached a record high of more than 110,000 rooms in the third quarter of 2024, growing 11% year over year, according to a Monday earnings report.
- The hotel company also increased its system size, with global hotel openings in Q3 up 75% year over year, according to the report. Domestically, Choice opened 190 hotels year to date in Q3, up 19% compared to the prior-year quarter.
- Growth in hotel conversions and increased demand for Choice’s upscale Radisson Americas brands contributed to the company's development results in the quarter, CEO Patrick Pacious noted during a Monday earnings call.
Dive Insight:
Choice’s global pipeline growth in the third quarter was “highlighted by a 54% increase for conversion rooms,” the company detailed in the report. Choice’s domestic rooms pipeline, particularly, increased by 10% year over year, including a 68% increase for conversion rooms, in Q3.
Of the domestic franchise agreements that Choice executed for conversion hotels over the 12-month period ending Sept. 30, 141 opened in the same year, a 17% increase from the same period the prior year.
“Our best-in-class hotel conversion capability moves projects rapidly through the pipeline and is a key differentiator for winning new franchise agreements,” Pacious said on the call, adding that he expects Choice’s “hotel conversion core competency to continue to be a key growth driver throughout the remainder of this year.”
Robust demand for hotel conversions similarly propelled Choice’s pipeline growth in the second quarter of this year. In May, the company relaunched Park Inn by Radisson, repositioning it as “an innovative conversion brand,” Pacious said during a Q2 earnings call.
Choice has relaunched other Radisson brands this year as part of a larger push in upscale, including Radisson and Radisson Blu in the second quarter. In October, Choice debuted the new Radisson Individuals. Choice assumed these and other brands when it acquired Radisson Hotels Americas in 2022.
Upscale was an area of growth for Choice in Q3, with openings for its Cambria and Ascend brands contributing to systemwide rooms growth in the quarter. Additionally, just after quarter-end, Choice opened its 500th extended stay hotel.
In Q3, Choice’s domestic upscale, extended stay and midscale portfolio increased 1.3% year over year for hotels and 1.1% for rooms, according to the report.
Beyond development, Choice posted $428 million in total revenues in the third quarter, representing a 1% year-over-year increase. The company also reported 14% year-over-year growth in adjusted EBITDA.
“Our third-quarter domestic RevPAR exceeded our prior expectations as we drove better-than-expected performance from our Radisson Americas portfolio and extended stay segments,” Choice CFO Scott Oaksmith said during the Monday call.
