Dive Brief:
- Choice Hotels International’s global pipeline increased 22% year over year in the second quarter of 2024 to a Q2 record of more than 114,000 rooms, according to an earnings report published Thursday. Domestically, Choice’s rooms pipeline grew 11% year over year in the quarter.
- The hotel company also increased its system size in Q2, with global hotel openings up 20% year over year. Choice’s total domestic system size reached some 6,200 hotels, or more than 494,000 rooms, in the quarter.
- “Robust demand,” particularly for hotel conversions and extended stay, propelled Choice’s pipeline growth in the quarter, CEO Patrick Pacious said in a statement.
Dive Insight:
Choice’s domestic pipeline growth in Q2 included a 65% year-over-year increase in conversion rooms, according to the earnings report. And the company’s current domestic pipeline comprises approximately 36% hotel conversions, Pacious said during a Thursday earnings call with analysts.
Of the total domestic franchise agreements Choice awarded year-to-date through June 30, 82% were for conversion hotels, signaling continued developer interest in the alternative to new construction.
In May, Choice relaunched Park Inn by Radisson, repositioning it as “an innovative conversion brand that delivers a premium value lodging option,” Pacious said on the call.
Part of Choice’s broader push in the upscale segment, Park Inn by Radisson has had a strong initial reception, Pacious said. Choice has already executed 19 global franchise agreements for the brand, and five hotels were open across the U.S. and Canada as of the end of June.
Conversion hotels similarly drove pipeline growth for Choice in the first quarter of 2024.
“In addition to the continued momentum in conversions, we are pleased to see increasing developer interest for our extended stay and midscale new construction brands,” Pacious said on the call.
Some 89% of the total domestic franchise agreements awarded year-to-date through June 30 were for the company's upscale, extended stay and midscale brands, according to the earnings report.
Choice’s extended stay WoodSpring Suites brand, specifically, grew its unit count 10% year over year in Q2. The brand ranked No. 1 in guest satisfaction among economy extended stay hotel brands in the J.D. Power 2024 North America Hotel Guest Satisfaction Index Study published last month.
Choice’s midscale extended stay brand, Everhome Suites, expanded in the second quarter with new developments and openings across the country.
Beyond development, Choice’s total revenues increased 2% year over year in the second quarter, and the company’s adjusted EBITDA rose 6% annually to a quarterly record of $161.7 million.
