#USA #financial results #Choice Hotels #North Bethesda #RevPAR

Overview of First Quarter 2025 Results

Choice Hotels International, Inc. (NYSE: CHH), a prominent player in the global lodging franchising sector, has disclosed its financial results for the first quarter of 2025. The latest figures reflect the company's robust growth trajectory, underscoring its strategic positioning in a competitive marketplace.

Key Financial Highlights

• - Net Income Growth: The company experienced a significant increase in net income, soaring 44% to reach $44.5 million. This translates to a diluted earnings per share (EPS) of $0.94, representing a remarkable 52% rise compared to Q1 2024.
• - Adjusted EBITDA: For the first quarter, Choice Hotels reported a record adjusted EBITDA of $129.6 million, marking a 4% increase from the same period in the previous year.
• - Diluted Adjusted EPS: The adjusted diluted EPS for the first quarter stood at $1.34, also a first-quarter record and 5% higher than the previous year.

Additionally, the company's net global rooms system expanded by 2.8%, with upscale, extended stay, and midscale segments showing substantial contributions.

Performance Metrics

• - RevPAR Increase: The domestic revenue per available room (RevPAR) rose by 2.3% year-over-year, outpacing competitors by 60 basis points. Notably, the extended stay portfolio's RevPAR skyrocketed by 6.8%, further establishing Choice Hotels as a market leader in this segment.
• - Room Portfolio Growth: The domestic extended stay segment saw a remarkable 10.8% increase in portfolio size compared to the previous year, highlighting the company's commitment to developing high-demand lodging options.

Leadership Insights

Patrick Pacious, President and CEO of Choice Hotels, commented on the results, emphasizing the effectiveness of the company's growth strategy. He noted, "Our distinctive positioning has empowered us to outperform peers, enhance market share, and emerge more robust even during economic fluctuations. The diversification of our growth avenues and the strengthening of our customer profile contribute significantly to our future stability and growth trajectory."

Revenue Breakdown

For the first quarter of 2025, total revenues reached approximately $333 million. Key revenue streams included:

• - Franchise and Management Fees: $145 million
• - Partnership Services and Fees: $25 million, reflecting a strong year-over-year increase of 28% compared to Q1 2024.
• - Owned Hotels Revenue: Contributed $27.9 million, showcasing the performance of company-operated properties.

The domestic average daily rate (ADR) also saw positive movement, increasing by 1.7%, and occupancy levels rose by 30 basis points compared to the same period last year.

System Development and Expansion

Choice Hotels has prioritized expansion, increasing its domestic room portfolio by over 2.3%. Breakdown of the growth includes:

• - Domestic Upscale and Extended Stay Rooms: 3.6% growth noted, underscoring focus on premium market segments.
• - International Presence: The international portfolio expanded by 4.4%, indicating strong global demand for Choice Hotels’ properties.
• - Future Prospects: The global pipeline now exceeds 95,000 rooms, demonstrating ongoing commitment to growth and innovative services.

Financial Outlook

Looking ahead, the company is adapting its outlook to accommodate a more tempered forecast for domestic RevPAR growth, accounting for changing economic conditions. Full-year net income is projected to range between $275 million and $290 million, reflecting pragmatic expectations amid evolving market dynamics.

The achievements of the first quarter establish a promising foundation for the remainder of 2025, as Choice Hotels continues to leverage its strengths and focus on strategic development, enhancing its portfolio to meet diverse traveler needs.

Conclusion

Choice Hotels International's Q1 2025 results not only highlight impressive financial growth but also affirm the company’s resilience and strategic foresight in the lodging industry. As the hospitality sector continues to rebound, Choice Hotels remains committed to fostering innovation and delivering exceptional experiences to guests, positioning itself for sustained success.