CHOICE HOTELS INTERNATIONAL reported a record $428 million in third-quarter revenue, a 1 percent increase from last year. Net income rose 15 percent to $105.7 million. As of Sept. 30, the global pipeline surpassed 110,000 rooms, an 11 percent increase from the previous year, with conversion rooms up 54 percent.
Domestically, the room pipeline grew 10 percent year-over-year, with conversion rooms rising 68 percent, Choice said in a statement.
“Choice Hotels generated another quarter of record financial performance, demonstrating the successful execution of our growth strategy and giving us the confidence to raise our full-year guidance,” said Patrick Pacious, president and CEO. “We accelerated unit growth, expanded our global pipeline, grew our international reach, and significantly increased our rewards program. This momentum, combined with our strong business model, positions us to sustain growth while returning significant capital to shareholders.”
Net income was accompanied by a 23 percent increase in diluted EPS to $2.22, a quarterly record. Adjusted net income rose 15 percent to $106.2 million, with adjusted diluted EPS reaching a record $2.23, up 23 percent. Adjusted EBITDA climbed 14 percent to $177.6 million. The company also raised its midpoint guidance for full-year 2024 net income, adjusted EBITDA, and both diluted and adjusted EPS.
Pipeline, revenue and outlook
Hotel openings worldwide rose 75 percent compared to the previous year. Unit and room growth accelerated across domestic and international markets, with a 1.8 percent rise in the upscale, extended-stay, and midscale rooms portfolio. International room numbers increased by 3.8 percent, with international hotel openings tripling.
Choice recently opened its 500th extended-stay property, Everhome Suites in Glendale, Arizona, marking the fastest-growing economy extended-stay portfolio, according to STR data. The company also launched "Lobby in a Box," a modular design package to streamline extended-stay hotel conversions and enhance the guest experience.
Excluding reimbursable revenue, third-quarter revenues rose 17 percent to $256.1 million, with reimbursable revenue totaling $171.8 million. Platform and procurement services fees increased 4 percent to $16.2 million. The domestic effective royalty rate grew 6 basis points to 5.05 percent, while domestic RevPAR decreased by 250 basis points year-over-year. Domestic occupancy rose by 80 basis points from the previous quarter.
Looking ahead, Choice Hotels expects full-year net income between $276 million and $284 million, adjusted net income between $323 million and $331 million, and adjusted EBITDA between $590 million and $600 million. Domestic RevPAR is projected to decline 1 to 2 percent, with domestic net unit growth of about 2 percent.
Choice recently relaunched Radisson Individuals in the Americas as an upper-upscale soft brand for full-service, boutique, and independent hotels, following its 2022 acquisition of Radisson Hotels Americas.
