Choice Hotels International reported lean rate increases amid a dip in occupancy in the second quarter, while the company looked overseas for future growth opportunities, according to the company’s quarterly earnings call Tuesday.
In Q2, Choice’s systemwide revenue per available room was $60.32, up 0.5 percent year over year. The hotel company’s average daily rate was $100.10, up 2.8 percent, while occupancy slipped to 60.3 percent in Q2 2023, down from 61.6 percent in Q2 2022.
Choice’s international division performance “exceeded our expectations” with a “pretty impressive” rebound, Choice president and CEO Patrick Pacious said on the call, adding that international second-quarter RevPAR was “significantly” above 2019 levels.
“Our international portfolio-wide RevPAR increased, on a comparable basis, 16 percent, with the Americas region growing 23 percent compared to the same period of 2019. We see this trend as a strong enhancement to our company’s future growth,” he said.
Room to Grow
Pacious highlighted the “white space” and growth opportunities for the company.
“There is white space domestically,” Pacious said. While the company is “having a lot of success with Everhome [Suites] in the midscale extended-stay segment,” he said, it does not have a product in the upscale extended-stay, and “that’s an opportunity for us.”
Internationally, there is “a lot of different product type that doesn’t play well in the Americas region,” Pacious said. “There’s shorter stay … there’s rooms where they convert from a business traveler to a leisure traveler, so there are some different models out there on the international front that really work for certain international markets.”
One area Choice did not comment on was surrounding a possible acquisition of Wyndham Hotels & Resorts—a strategy Wyndham executives also adhered to during that company’s quarterly earnings call. The Wall Street Journal in May cited sources in suggesting possible interest in Wyndham by Choice.
“Our policy is not to comment on market rumors,” Pacious said, adding that “certainly, scale matters, and we have scale today.”
Additional Q2 Results
In the second quarter, Choice reported total revenue of $427.4 million, a “quarterly record,” according to the company and up 16 percent year over year. Net income for the company reached $84.7 million in Q2, down from $106.1 million in 2022.
