Dive Brief:
- Choice Hotels International posted record total revenues of $1.5 billion for full-year 2023, up 10% compared to the same period of 2022, according to an earnings report published Tuesday. The company also saw record adjusted EBITDA for the year at $540.5 million, up 13% year over year.
- For the full year, Choice also saw portfolio growth — particularly in its domestic upscale, extended stay and midscale brands — with its legacy portfolio increasing by 1.8% for hotels and 2.4% for rooms year over year, the report detailed. In the fourth quarter, Choice’s global development pipeline increased 6% to more than 105,000 rooms.
- In the report, Choice President and CEO Patrick Pacious said the company’s positive results and momentum give him confidence in 2024 and beyond. He reiterated that Choice continues to pursue the acquisition of Wyndham Hotels & Resorts and is encouraged by where the deal stands.
Dive Insight:
In addition to exceeding the top end of the company's full-year adjusted EBITDA guidance, Choice saw growth from the completion of the Radisson Americas’ integration in December.
“We significantly expanded our rewards program, increased our geographic reach, unlocked new value through our platform capabilities, and created step function growth through the rapid completion,” Pacious said in a statement.
The company also increased its development pipeline, with hotel conversions being a top growth driver. According to the report, Choice’s global pipeline for conversion rooms increased by 16% year over year in the fourth quarter and by 34% year over year for full-year 2023.
With strong performance and portfolio growth at its back, Pacious said the company continues its pursuit to acquire peer Wyndham Hotels & Resorts, with Choice able to “create meaningful value for franchisees and shareholders of both companies.”
“Our demonstrated track record of improving the delivery of direct business to franchisees positions us to further accelerate value creation for all stakeholders through a compelling combination with Wyndham Hotels & Resorts,” Pacious said in a statement.
In October, Choice made a $7.8 billion public bid to buy Wyndham. Wyndham has rejected the proposal, as well as an exchange offer made in December, claiming its shareholders are being undervalued and antitrust risk is real.
Pacious said during a Tuesday earnings call with analysts that “there's opportunity to improve Choice’s offer” if Wyndham would engage in “constructive private dialogue” with Choice.
Furthermore, Pacious said he remains encouraged by Choice’s progress on the regulatory front. Choice and Wyndham are roughly six weeks into a Second Request by the Federal Trade Commission, part of its larger investigation into the deal.
Also on the horizon is a proxy contest set to take place at Wyndham's 2024 Annual Meeting of Stockholders. In January, Choice nominated eight individuals to stand for election at the meeting, vying for seats on the company’s board of directors. If elected, the nominees could skirt current Wyndham leadership.
Pacious said these nominees would “exercise their independent judgment to serve Wyndham shareholders' best interests,” which Choice believes “is to move with urgency to maximize the value that can be created through a combination.”
Wyndham’s board has condemned the nominations, calling the move “a blatant scheme to mislead shareholders.”
