Business travel's contributions to Choice Hotels International's first-quarter revenue increased 3 percent year over year, driven by a 14 percent increase in small and midsized business revenue, the company announced Thursday.
Choice CEO Patrick Pacious during the company's quarterly earnings call said that Choice's "value-oriented" brands give the company a level of resilience when affordability becomes a key factor in travel decisions.
"We are seeing continued strength in small and midsized business travelers and group demand," Pacious said. "Employment growth continues in sectors such as healthcare, construction, and utilities, driving workforce-based travel from customers who rely on our hotels."
First-quarter group revenue contributions increased 9 percent year over year, owing to recurring event-driven demand, such as youth sports.
Choice Q1 Metrics
Choice's systemwide first quarter RevPAR declined 0.8 percent year over year to $47.45, as average daily rate fell 0.6 percent to $90.73 and occupancy dipped 0.1 percentage point to 52.3 percent. Pacious attributed the declines to year-over-year hurricane-related impacts that affected 20 percent of Choice's portfolio. Excluding hurricane-impacted properties, first quarter RevPAR rose 1.8 percent year over year.
In the United States, first quarter RevPAR fell 2.3 percent year over year to $45.18, as ADR declined 2.1 percent to $88.74 and occupancy dropped 0.1 percentage point to 50.9 percent.
Looking ahead, Choice maintained its prior guidance that full-year systemwide RevPAR will land between a 2 percent year-over-year decline and a 1 percent increase.
First quarter total revenue increased 2.3 percent year over year to $340 million.
First quarter global net rooms grew 1.7 percent year over year, driven by 2.5 percent growth in "higher revenue extended stay, midscale, and upscale brands," the company stated. Pacious said extended stay "remains a key growth driver" for Choice and the segment now accounts for 40 percent of the company's U.S. pipeline.
As of March 31, the Choice Privileges loyalty program surpassed 75 million members, up 7 percent year over year. The growth comes after Choice enacted changes earlier this year that lowered the amount of annual room nights members needed to move up a tier.
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