Choice Hotels International has reported a growth in its global pipeline during the first quarter of the year, especially in the development of conversion hotels. The Maryland-based hotel franchisor, which operates nearly 7,500 hotels across 22 brands such as Comfort and Quality Inn, revealed that its global pipeline of rooms increased by 10% to a record of over 115,000 in the first quarter. The pipeline for conversion rooms saw a worldwide increase of 36% and a 59% surge in the U.S. during the same period.
The company’s adjusted EBITDA, a profitability measure, rose by 17% from the previous year to $124 million, setting a new first-quarter record. Choice Hotels executives highlighted the strong performance of the approximately 600 Radisson Americas hotels it purchased for $655 million in 2022.
“We’re unlocking the revenue synergies from the Radisson Americas acquisition, which has significantly improved our growth profile and introduced new incremental earnings streams,” said CEO Patrick Pacious.
In an effort to further capitalize on travel demand, Choice Hotels revamped and relaunched its Park Inn by Radisson brand in April to cater to value-conscious guests. The first hotel under this brand is set to open in the third quarter.
The hotel group has been concentrating on expanding its presence in the upscale, extended-stay, and midscale segments, which generate higher revenues. Despite broader economic uncertainty, executives reported steady demand for the group’s brands.
Choice Hotels’ domestic revenue per available room, a crucial metric in the hotel sector, was 8.2% higher than pre-pandemic levels. However, with U.S. inflation rising 22% since March 2022, this suggests a potential softening. Compared to the previous year, revenue per available room decreased by 5.9%.
Despite potential slowing in travel growth, Choice Hotels maintained its full-year guidance for adjusted EBITDA between $580 and $600 million, indicating that executives anticipate overall profitability metrics to align with previous forecasts.
Source: skift.com