News in detail

Choice Hotels looks up in 2Q

- Judy Maxwell (Assistant Editor)
Stephen P. Joyce, CEO of Choice Hotels International

 

More people are traveling in the US and lot of them are staying at Choice Hotels branded properties, said Stephen Joyce, CEO of the Bethesda, MD, franchisor.

Choice Hotels International Inc. saw all key metrics, its earnings and net income increase in the second quarter of 2012, the company reported Thursday, July 26.

  • Diluted earnings per share for the second quarter of 2012 of 55 cents compared to diluted EPS of 46 cents for the second quarter of 2011, a 20 percent increase. 
  • Earnings before interest, taxes, depreciation and amortization increased 14 percent to $53.6m for the three months ended June 30, compared to $47m for the three months ended June 30, 2011.
  • Operating income increased 14 percent from $45.1m for the three months ended June 30, 2011, to $51.6m for the same period of 2012.
  • Net income increased by 16 percent from $27.6m in a year ago 2Q to $31.9m the most recent quarter.
  • Franchising revenues increased 6 percent to $77.8m for the three months ended June 30, from $73.4m for the same period of 2011. 
  • Total revenues increased 5 percent to $173.6 m for the three months ended June 30 compared to the same period of 2011.
  • Domestic royalty fees for the three months ended June 30, increased $4.4m to $59.8m from $55.4m in the three months ended June 30, 2011, an increase of 8 percent.
  • Franchising margins increased from 61.2 percent for the three months ended June 30, 2011, to 65.9 percent for the same period of the current year.
  • Worldwide unit growth increased 1.3 percent from June 30, 2011, comprised of domestic and international unit growth of 1.3 percent and 1.6 percent, respectively. 
  • Domestic system-wide RevPAR increased 7.7 percent in 2Q 2012 compared to the same period of 2011 as occupancy and ADR increased 250 basis points and 2.8 percent, respectively.  
  • The company executed 106 new domestic hotel franchise contracts for the three months ended June 30 compared to 69 new domestic hotel franchise contracts in the same period of the prior year, a 54 percent increase.
  • The number of worldwide hotels under construction, awaiting conversion or approved for development as of June 30 was 453 hotels, representing 37,380 rooms.

‘We are very pleased with our results for the quarter. People are traveling, we are driving record traffic to our hotels and the development environment is improving. Our second quarter results, in fact, were highlighted by the 106 new domestic franchise agreements we executed in the second quarter of 2012, a 54 percent increase over the prior year,’ said Stephen P. Joyce, president and chief executive officer. ‘These results demonstrate our ability to attract owners to our family of 11 brands due to our size, scale and distribution which allow us to deliver guests and create opportunities for our franchisees to achieve exceptional returns on investment.’

Choice Hotels also announced a $600m special cash dividend to shareholders.

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