Choice: Corp. Travel Momentum Should Continue in ’23
Choice Hotels International’s fourth-quarter revenue, rates and occupancy all surpassed pre-pandemic benchmarks, while showing strength in the business transient segment, executives said Wednesday during an earnings call.
“In 2022, we drove year-over-year increases in our business travel bookings,” Choice Hotels president and CEO Patrick Pacious said. “The revenue generated from our business managed accounts more than doubled when compared to 2019,” he added.
Looking ahead, Choice executives expect business travel in “key industry verticals to increase, fueled by the onshoring of the U.S. supply chain and significant nationwide investments in infrastructure,” according to Pacious. The company also anticipates “additional tailwinds from business travelers … especially in the context of the Radisson Americas acquisition and the growth in our brand portfolio mix in segments and hotels that generate higher royalties per unit,” Pacious said.
Choice executives also noted some industry trends as factors in the company’s fourth-quarter results, including the rise of remote work, rising salaries and extended trips, calling them “long-term fundamentals.”
“Travel is occurring more in different months of the year,” Pacious said. “We’re seeing more Sunday and Thursday night travel … extending the weekend.”
These trends are strong tailwinds for the company’s long-term growth, according to executives. “Choice’s resilient business model has historically delivered stable returns throughout both expanding and contracting economic cycles,” Pacious said.
Q4 Performance
Choice’s fourth-quarter revenue per available room climbed 20.4 percent from 2019 benchmarks to $49.40 and increased 6.1 percent over Q4 2021. Choice’s fourth-quarter average daily rate increased 17.4 percent over 2019 levels to $91.30 and increased 7.2 percent from Q4 2021. The hotel company’s systemwide occupancy in Q4 increased 1.3 percentage points from 2019 levels to 54.1 percent, which was down from the 54.7 percent seen in Q4 2021.
Choice executives credit the company’s RevPAR growth to its extended-stay portfolio. “We also further invested in the extended-stay segment, which continues to be a significant driver of our pipeline and RevPAR,” executives said.
As for total revenue, Choice reported more than $361 million in Q4, topping last year’s $284 million. Net income was $55.5 million, compared with $64.1 million one year prior.
Angelique Platas www.businesstravelnews.com