Choice Hotels International’s systemwide first-quarter occupancy, average daily rate and revenue per available room all declined year over year, although its upscale holdings bucked that trend and executives during a Wednesday earnings call said April was a stronger month.
Systemwide RevPAR in the first quarter declined 5.9 percent year over year, which Choice CFO Scott Oaksmith attributed to the shift into the first quarter of the Easter holiday this year, as well as “tougher year-over-year comps as we were the first hotel company to return to and significantly exceed pre-pandemic RevPAR levels.”
Choice executives didn’t directly address business travel demand trends, but the company’s upscale holdings, including the Radisson brands the company acquired in 2022, fared better in the first quarter. Choice systemwide Q1 upscale RevPAR increased 1.3 percent year over year, while ADR increased 2.3 percent. Occupancy declined, however, as it did in all Choice tiers.
The company maintained its projection, issued last quarter, that full-year 2024 RevPAR would range from steady year over year to an increase of 2 percent.
“We expected Q1 to be softer,” said Choice CEO Patrick Pacious. “April did turn positive. So we are feeling pretty good about the trend. And as we expect to see both in our forecast and in our guidance, we expect to see RevPAR improvement from here forward.”
Eyes on Wyndham?
Choice in March abandoned its effort to acquire Wyndham Hotels & Resorts, but Pacious declined to explicitly rule out a scenario posed by an analyst during the call in which the company could renew the pursuit. When asked by Truist Securities analyst Patrick Scholes if Choice could try again if Wyndham’s stock remains around $75 per share—Choice in its hostile bid offered Wyndham shareholders $90 per share—Pacious didn’t say no.
“You don’t see a lot of opportunities to create over $2 billion in value creation for shareholders on both sides,” Pacious said, noting that the company “felt very confident about the progress we were making” concerning the deal’s possible regulatory obstacles.
“So it’s really a question, I think, which should be answered by the Wyndham shareholders in the future,” he said.
Wyndham’s stock closed Wednesday at $72.56 per share.
Choice Q1 Performance
Choice systemwide first-quarter ADR declined 2.1 percent year over year to $89.23 while occupancy declined 2 percentage points to 50.7 percent. Systemwide RevPAR was $45.24, down from $48.06 one year ago.
Total first-quarter revenue declined 0.3 percent year over year to about $331.9 million, while net income declined to about $31 million from $52.8 million one year prior.
Choice said its global development pipeline as of March 31 was about 115,000 rooms. The company reported a pipeline of about 105,000 rooms at the end of December.
