TRENDING : Q1 REPORT
CHOICE HOTELS posts record Q1 revenue
By KATHAKALI NANDI
It was a record-setting first quarter for Choice Hotels International . The hotel franchisor hit record-high revenue of $ 332.8 million , which was 29 % higher than at the same time a year ago .
Net income surpassed the top end of Choice ’ s guidance and reached $ 52.8 million .
Due to one-time items , including integration costs of Radisson Hotels Americas and the timing of the net reimbursable expenses , net income and diluted EPS were 22 % and 15 % lower , respectively in Q1 2023 compared to the same period in 2022 .
EBITDA reached $ 106.4 million , a first-quarter record and a 10 % rise from the same period a year ago .
A 5.2 % increase in ADR and 34-basis-point rise in occupancy levels helped improve domestic RevPAR by 5.9 %.
The company in February signed a multi-year agreement with Wells Fargo and Mastercard to introduce a new co-branded credit card , which is expected to boost incremental adjusted EBITDA this year and in the future .
“ Building on our record 2022 earnings results , our distinct growth strategy and best-in-class franchising business engine drove first quarter performance to new levels , with adjusted EBITDA increasing by 10 % YOY ,” said Patrick Pacious , president and CEO of Choiece Hotels International . “ At the same time , we are ahead of plan integrating the Radisson Hotels Americas business unit , which we expect will further accelerate our transformative growth .”
FINANCIAL PERFORMANCE Total revenues , barring reimbursable revenue from managed and franchised properties , jumped 34 % to $ 175 million in Q1 2023 compared to the same period of 2022 .
Platform and procurement services fees surged 18 % to $ 13.8 million ; while royalty , licensing and management fees increased by 18 % to $ 107.5 million . Domestic royalties jumped 13 % to $ 98.2 million .
DEVELOPMENT Choice reported a 9.5 % and 11 % increase in hotels and rooms , respectively , in its upscale , extended-stay and midscale segments since March 31 , 2022 . As of March 31 , 2023 , domestic rooms and hotels increased 6.5 % and 8.2 %, respectively from the same period last year . International hotel and room count saw a rise of 8.2 % and 9.6 %, respectively .
The domestic size of Choice ’ s upscale and upper-midscale segments rose by 29 % and 24 %, respectively , since March 31 , 2022 . This was helped by an increase in the number of hotels as a result of the acquisition of Radisson Hotels Americas and the rise in Cambria Hotels and the Comfort family of brands .
Among the total domestic franchise agreements awarded in Q1 2023 , 88 % were for the company ’ s upscale , extended-stay and midscale brands , while 75 % were for conversion properties . Domestic franchise agreements awarded for the upscale segment jumped 13 % from the same period in 2022 .
Choice ’ s domestic pipeline improved 11 % to 89,000 rooms totaling 925 hotels . The extended-stay domestic pipeline reached 475 hotels , posting a 28 % rise . The upscale domestic pipeline increased 16 %, while the global pipeline soared 14 % to represent 988 hotels totaling 96,000 rooms .
32 hotelsmag . com June 2023