Choice Hotels International reported strong growth in its global pipeline, with an increase of 10% in the first quarter to a company record of over 115,000 rooms. The pipeline for conversion rooms saw a significant increase of 36% worldwide and 59% in the U.S. The company has been focusing on expanding in higher-revenue segments such as upscale, extended-stay, and midscale. The CEO, Patrick Pacious, highlighted that the value in the pipeline is double that of the existing system, showing positive prospects for future growth.
Adjusted EBITDA for Choice Hotels climbed 17% year-over-year to $124 million, setting a company record for the first quarter. Executives also noted the positive performance of the Radisson Americas hotels acquired in 2022 for $655 million, stating that revenue synergies from the acquisition have enhanced growth and opened new earnings streams. The company redesigned and relaunched its Park Inn by Radisson brand in April to target value-conscious guests, with the first hotel opening in the third quarter.
Despite concerns about softening travel demand, Choice Hotels reported that its domestic revenue per available room was 8.2% above pre-pandemic levels. However, U.S. inflation has risen by 22% since March 2022, indicating a slight softening. Despite this, the company maintained its full-year guidance for adjusted EBITDA between $580 and $600 million, suggesting confidence in consistent profitability metrics. The company’s performance indicates resilience in the face of broader economic uncertainty.
The Accommodations Sector Stock Index Performance Year-to-Date shows the performance of hotels and short-term rental sector stocks within the ST200, which includes publicly traded companies in global markets such as international and regional hotel brands, hotel REITs, management companies, alternative accommodations, and timeshares. The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth over a trillion dollars into a single number, providing insight into the overall performance of the accommodations sector.
Overall, Choice Hotels International has demonstrated strong growth in its global pipeline and financial performance, with a focus on expanding in higher-revenue segments. Despite concerns about softening travel demand and rising inflation, the company remains confident in its full-year guidance for adjusted EBITDA. By investing in acquisitions like Radisson Americas and redesigning brands like Park Inn by Radisson, Choice Hotels is positioning itself for continued success in the evolving travel industry. The positive outlook for the company’s future growth highlights its resilience and adaptability in the face of changing market conditions.
