First-quarter Choice Hotels International's systemwide
business travel revenue per available room increased 10 percent year over year,
the company said Thursday, boosted by Choice's increasing share of upscale and
extended-stay properties and what the company called a "resilient"
corporate customer profile.
Business travelers comprised 40 percent of Choice's
first-quarter business, president and CEO Patrick Pacious said on a Thursday
earnings call, which he said is "well balanced."
Despite economic turbulence, Choice's business travel demand
should remain sturdy due to its customer makeup, Pacious said.
"Choice's business travelers have a relatively
resilient profile. These are guests whose job cannot be accomplished without
traveling," he said. "They comprise key categories such as
construction, regional sales, utilities, and medical staffing, and we are now
capturing additional longer-term opportunities from companies involved in the
substantial infrastructure investments required by GenAI and the push toward
the reshoring of American manufacturing."
Choice CFO Scott Oaksmith on the call said the company's
"investments in our capabilities to drive more business travel with an
expanded sales force going after new segments and verticals, and really
improving the effectiveness of our sales tools" in the first quarter and
the fourth
quarter of 2024 "really came to fruition."
Traditionally a franchisor in midscale and economy tiers,
Choice since its 2022 acquisition of Radisson
Hotel Group Americas has planted a flag in the upscale tiers with the
Radisson Blu brand alongside its Cambria and Ascend brands. The company last
year additionally relaunched
its Radisson Individuals soft brand as an upper upscale brand. Choice
also has increased its extended-stay presence; Pacious said the company now has
53,000 extended-stay rooms, up 19 percent from five years ago. Those moves, he
said, help attract business travelers.
Like many hotel companies, Choice cut its full-year 2025
revenue per available room projection after overall demand softened in March.
The company now projected 2025 RevPAR to fall in a range of a 1 percent
decrease to a 1 percent increase from 2024 levels; the prior forecast was for a
1 percent to 2 percent increase. Oaksmith said overall April RevPAR declined
about 1 percent year over year, once the effects from the shift in the Easter
holiday and last year's solar eclipse were removed.
Choice Q1 Metrics
Choice's first-quarter domestic RevPAR increased 2.3 percent
year over year to $46.28, while its average daily rate increased 1.7 percent to
$90.78 and its occupancy increased 0.3 percentage points to 51 percent.
Total first-quarter Choice revenue was nearly $332.9
million, up a bit shy of $1 million from the prior-year quarter.
Choice at the end of Q1 had about 647,600 rooms in its
system, up nearly 3 percent year over year. The company reported a pipeline of
about 95,000 rooms, down from 115,000 rooms at the end of the first quarter of
2024.
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