Choice Hotels 4Q revenue $390M, est. $374.6M

Choice Hotels 4Q revenue $390M, est. $374.6M

Choice Hotels International Reports Q4 2024 Revenue of $390M, Exceeding Estimates

Choice Hotels International Inc. (CHH) reported fourth-quarter 2024 revenue of $390 million, surpassing the estimated $374.6 million. The results reflect strong performance across key metrics, including a 4.5% year-over-year increase in domestic RevPAR (revenue per available room), driven by a 3.1% rise in average daily rate (ADR) and 80 basis points of occupancy growth. Domestic RevPAR outperformed industry benchmarks by 90 basis points and chain scales by 30 basis points.

The company's adjusted earnings per share (EPS) for Q4 2024 came in at $1.55, with adjusted EBITDA reaching $140 million. These figures align with management's guidance for FY 2025, which projects adjusted EBITDA between $625–$640 million and diluted EPS of $6.04–$6.29. The Q4 results were bolstered by robust business travel demand, which accounted for 40% of revenue mix, with business transient revenue rising 14% year-over-year and group sales revenue increasing 45%.

Strategic growth in "revenue-intense" segments, such as upscale and extended-stay properties, contributed to the performance. Domestic extended-stay rooms grew 9.8% YoY, while global upscale rooms expanded 43.9%. The company's pipeline includes approximately 97,000 rooms, with 98% aligned to higher-margin brands.

Capital discipline remained a focus, with $699.5 million in liquidity at year-end and $392.5 million in adjusted free cash flow (FCF) generated in 2024, representing 65% FCF conversion. Shareholder returns totaled over $435 million through buybacks and dividends, including a $0.2875/share dividend declared for April 2025.

Despite sequential revenue moderation from Q3 ($428 million), management highlighted favorable trends in ancillary fees, loyalty program growth (69 million co-brand card members), and international expansion, particularly in EMEA. Challenges included a $18 million reimbursable fund deficit in 2024, with a planned $50 million add-back in 2025.

For FY 2025, Choice Hotels anticipates 1%–2% domestic RevPAR growth, mid-single-digit effective royalty rate expansion, and ~1% global system room growth, reflecting confidence in sustained demand and operational execution.