Dive Brief:
- Choice Hotels International’s total revenues in the first quarter of 2024 reached $331.9 million, down 0.3% year over year, according to an earnings report published Wednesday. The hotel company’s adjusted EBITDA, though, grew 17% year over year to $124.3 million in the quarter.
- Choice’s global development pipeline also grew in Q1, up 10% quarter over quarter to a company record of over 115,000 rooms. Domestically, extended stay and conversion hotels drove pipeline and portfolio growth.
- With domestic franchise agreements for the company’s upscale, extended stay and midscale brands increasing 7% year over year in Q1, CEO Patrick Pacious said he is “very encouraged by [Choice’s] existing and future portfolio prospects,” during a Wednesday call with analysts.
Dive Insight:
Choice saw 11% quarter-over-quarter growth in its domestic rooms pipeline in Q1, including a 59% increase for conversion rooms, according to the company’s earnings report.
Additionally, 80% of the total domestic franchise agreements awarded in the first quarter were for conversion hotels.
On the heels of strong conversion activity in Q1, Choice relaunched Park Inn by Radisson as a premium conversion brand earlier this month.
Extended stay was also a leader of growth for Choice in the first quarter. The company’s domestic extended stay portfolio grew 17.4% year over year, with “increases in each of the segment's brands,” according to the report.
In Q1, Choice opened WoodSprings Suites and Everhome Suites extended stay hotels, including a dual-property concept in Georgia.
“We are seeing particularly strong traction with our newest extended stay brand Everhome Suites, with four hotels now open and nearly 70 domestic projects in the pipeline, including 20 under construction,” Choice CFO Scott Oaksmith said during the Wednesday earnings call.
Industry-wide extended stay dominated the U.S. hotel construction pipeline in Q1, Lodging Econometrics reported.
The majority (92%) of the total domestic franchise agreements Choice awarded in the first quarter were for its extended stay, midscale and upscale brands, according to its earnings report.
Choice made a concerted push in upscale in Q1, expanding its Cambria brand and focusing marketing efforts on several of its upper-tier brands.
In the first quarter, Choice posted net income and diluted earnings per share that were down 41% and 39% year over year, respectively. The company attributed the results in part due to “transaction pursuit costs” from its efforts to acquire its peer Wyndham Hotels & Resorts.
Choice ended its pursuit of Wyndham in March. When asked during the Wednesday call if the company would pursue the deal again in the future, Pacious said “the strategic rationale still makes sense.”
