Choice Hotels International's extension into the upscale tier through its acquisition of the Radisson Hotel Group Americas portfolio and subsequent expansion helped increase the share of business travel in its overall demand mix and its higher-end revenue, executives said Monday during the company's third-quarter earnings call.
Choice in the third quarter had "renewed strength in our corporate transient business travel, particularly in the transportation and government verticals," CEO Patrick Pacious said on the call.
The company's upscale offering, boosted by the Radisson brands the company acquired in 2022, allows Choice more access to a wider range of business travelers, Pacious added, a trend showing up in the company's business mix.
"The growth in both business transient and in group is pretty impressive," Pacious said, adding that business travel demand at the company is approaching pre-pandemic levels. "The business versus leisure mix in the quarter for us was 65 percent leisure and 35 percent business, which is pretty high for us on the business transient side.
"Now that we have the Radisson brands as a component of our total hotel inventory, we're able to drive more business travel as a percentage of the overall rooms count," he continued. "So it is expected for us to be a key driver for us as we move forward."
Third-quarter revenue per available room at Choice's domestic upscale and higher holdings increased 1.5 percent year over year, the only Choice tier to increase. Overall Choice domestic systemwide RevPAR declined 2.5 percent year over year, a figure executives said was hindered by calendar shifts and severe weather but nonetheless better than they expected a quarter ago.
Pacious also noted the company's investment in its extended-stay segment, units of which have increased quarter over quarter by at least 10 percent for five straight quarters.
Choice Q3 Metrics
Choice's third-quarter domestic systemwide RevPAR decreased 2.5 percent year over year to $62.41, while average daily rate declined 1.2 percent to $102.10 and occupancy dropped 0.8 percentage points to 61.1 percent.
Choice projected full-year 2024 RevPAR to decline 1 percent to 2 percent year over year, up from the 1.5 percent to 3.5 percent decline it projected last quarter.
Choice's global system size increased 1.2 percent year over year to more than 7,500 hotels with nearly 635,000 rooms. Its global pipeline increased 11 percent to more than 110,000 rooms.
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