Choice Hotels International Reports 2022 Third Quarter Result

ROCKVILLE, Md. - Choice Hotels International, Inc. (NYSE: CHH), one of the world's largest lodging franchisors, reported its results today for the three months ended September 30, 2022. 

Our third quarter results and the acquisition of the Radisson Hotels Americas business are a significant leap forward in the evolution of both Choice Hotels' competitive position and future growth potential. For 11 consecutive quarters, our RevPAR growth has outperformed the hotel industry, confirming that our strategy of focusing our investments and growth on RevPAR accretive hotel segments and locations is working. Our future growth is now enhanced by the addition of the Radisson Hotels Americas' brands to our best-in-class business delivery engine. Radisson Hotels Americas is expected to provide the company with significant incremental recurring adjusted EBITDA upon its full integration in early 2024. We exceeded our 2019 earnings last year, have built on that strength through the third quarter this year and are confident that the changes we are observing in leisure and business travel behavior that favor our brands will enable us to maximize growth opportunities well into the future. Patrick Pacious, president and chief executive officer, Choice Hotels

Highlights of third quarter 2022 results include:^1,2

• Domestic revenue per available room (RevPAR) growth accelerated quarter-over-quarter, increasing by 15.2% for third quarter 2022, compared to the same period of 2019, outperforming the total industry by 410 basis points.
• Domestic RevPAR growth has surpassed 2019 levels for 16 consecutive months through September 30, 2022, a trend that has continued in the fourth quarter 2022 with October RevPAR increasing approximately 20%, compared to October of 2019.
• The company closed the acquisition of Radisson Hospitality, Inc. ("Radisson Hotels Americas") on August 11, 2022, for a purchase price of $674 million. As of September 30, 2022, the number of global rooms in the company's targeted upper-midscale and upscale segments open and in the development pipeline increased by over 73,000 as a result of the acquisition. At quarter-end, the company had over 730,000 global rooms open or in the development pipeline, including the incremental Radisson Hotels Americas rooms.
• During third quarter 2022, the company resumed share repurchases under its share repurchase program and returned over $230 million in shares, representing nearly 4% of shares outstanding as of September 30, 2022.³ This increased year-to-date returns to shareholders to over $286 million in the form of cash dividends and share repurchases as of September 30, 2022. The company's board of directors approved an increase in the company's share repurchase authorization by 5 million shares in third quarter 2022.
• The number of domestic franchise agreements awarded in third quarter 2022 increased by 38%, compared to the same period of the prior year.
• The company's total domestic pipeline as of September 30, 2022, increased 16% to 1,017 hotels, representing over 98,000 rooms, from September 30, 2021.⁴
• The company's domestic effective royalty rate was 5.04% for the three months ended September 30, 2022 and 5.05% for the nine months ended September 30, 2022, an increase of 5 basis points, compared to the respective 2021 periods.
• The company sold the Cambria Hotel Nashville, Tennessee, property in July 2022 for approximately $110 million and secured a 30-year franchise agreement with the buyer to continue to operate the hotel as a Cambria Hotel. The sale of this hotel increased the recycling of prior investments in Cambria Hotels development projects for the nine months ended September 30, 2022 to over $140 million.⁵

RevPAR Performance Trends

• RevPAR increased 15.2% for third quarter 2022, compared to the same period of 2019, driven primarily by an increase in average daily rate (ADR) of 15.1%, compared to third quarter 2019.
• The company's extended-stay portfolio has consistently exceeded 2019 RevPAR levels since April 2021 and achieved domestic RevPAR growth of 21.8% in third quarter 2022, compared to the same period of 2019. The WoodSpring Suites brand achieved RevPAR growth of 27.5% in third quarter 2022, compared to the same period of 2019, driven by occupancy levels of 81% and a 22% increase in ADR.
• The company's overall midscale portfolio has consistently surpassed 2019 RevPAR levels since June 2021 and achieved domestic RevPAR growth of 11.3% in third quarter 2022 compared to the same period of 2019. In third quarter 2022, the Comfort brand continued to achieve RevPAR share gains versus local competitors, and the brand's domestic RevPAR growth continued to outperform the upper-midscale chain scale, compared to the same period of 2019.
• The company's upscale portfolio achieved domestic RevPAR growth of 18.3% for third quarter 2022, compared to the same period of 2019, and outperformed the upscale chain scale by over 13 percentage points.

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Media Contact

Allie Summers

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