Choice Hotels reported "exceptional" third-quarter
results noted president and CEO Patrick Pacious on a Thursday earnings call,
adding that it has been the strongest quarter of the year with domestic revenue
per available room up 11.4 percent compared with the third quarter of 2019.
"RevPAR has now exceeded 2019 levels for five consecutive
months, with the trend continuing into the fourth quarter," Pacious said.
Domestic occupancy levels reached 64.9 percent for the
quarter, up 1.5 percentage points from the same period in 2019. Average daily
rate was $94.59, an increase of 8.8 percent from two years ago. Net income
increased 53 percent from 2019 to $116.7 million.
Choice's extended-stay portfolio continued to perform well,
with systemwide RevPAR growth of 18.2 percent during the quarter versus 2019,
driven by occupancy levels of 82 percent and a 9 percent increase in ADR,
according to the company. Its midscale portfolio also saw increases over 2019 quarterly
key performance metrics, with RevPAR growth of 9.7 percent and ADR up 9.3
percent.
The company awarded 289 domestic franchise agreements
year-to-date through Sept. 30, a 25 percent year-over-year increase. Eighty-nine
of those were during the third quarter, a 10 percent increase over 2020. Choice's
domestic pipeline at the end of the quarter reached nearly 860 hotels
representing more than 71,000 rooms.
Choice expects domestic RevPAR for full-year 2021 to surpass
2019 levels and grow at approximately 1 percent compared with full-year 2019.
Pacious credited Choice's long-term growth strategy and the
strength of leisure demand for the strong performance, and he called out a new
revenue management system the company began to deploy during the summer and
which currently includes about 5,000 of the company's hotels as being critical
for maintaining ADR growth.
Further, he said that there has been "continuing
momentum" in business travel trends, with "additional runway for
growth," and that business travel demand has returned to levels similar to
the third quarter of 2019. A key driver for future business travel could be the
infrastructure bill, Pacious added. Based on conversations Choice has had with
key vendors in recent weeks, they are "thinking about onshoring and
building manufacturing here in the United States," he said.
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