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Choice Hotels International (CHH) 8 Aug 24 2024 Q2 Earnings call transcript
AInvestThursday, Aug 8, 2024 10:48 pm ET
1min read
CHH --

Choice Hotels International, a leading hotel franchisor, recently held its second quarter 2024 earnings call, providing valuable insights into the company's financial performance, growth opportunities, and strategic initiatives.

Strong Financial Performance and Growth Outlook

In the second quarter of 2024, Choice Hotels International reported a robust financial performance, with adjusted EBITDA reaching $162 million, representing a 5% year-over-year increase. The company's adjusted EPS also grew by 5% compared to the same period last year, highlighting the company's solid financial health.

Looking ahead, Choice Hotels International is confident in achieving an adjusted EBITDA growth of 9% at the midpoint of its outlook range for 2024. This optimistic outlook is driven by the company's strategic focus on increasing its system size, expanding its international portfolio, and growing its portfolio of revenue-intense hotels.

Strategic Investments and Growth Initiatives

Choice Hotels International has been strategically investing in initiatives to enhance its franchise business and drive revenue growth. These initiatives include the expansion of its upscale and extended-stay brands, which have been key drivers of growth. The company's recent acquisition of Radisson Americas has significantly strengthened its portfolio, adding a robust domestic and international presence.

Additionally, Choice Hotels International's focus on conversions has been a game-changer, with a 14% increase in domestic franchise agreements for conversion hotels in the second quarter. The company's conversion competency has allowed it to successfully launch new brands and attract developer interest, particularly in the extended-stay segment, where it has seen significant traction.

Trends and Challenges in the Hospitality Industry

The hospitality industry has been experiencing a recovery from the COVID-19 pandemic, with travel trends normalizing and long-term business and leisure trends remaining favorable. Choice Hotels International is well-positioned to capitalize on these trends, with its focus on revenue-intense hotels and strategic partnerships, such as its long-term partnership with AAA.

However, the company has also faced challenges, including the sequential improvement in domestic RevPAR performance being slightly slower than anticipated, leading to a moderated outlook for the remainder of the year. Despite these challenges, Choice Hotels International remains optimistic about its future prospects, with a focus on continued growth and value creation for its stakeholders.

Conclusion

Choice Hotels International's second quarter 2024 earnings call provided a comprehensive overview of the company's financial performance, strategic initiatives, and future outlook. With a strong financial foundation, strategic investments, and a focus on growth, Choice Hotels International is well-positioned to capitalize on the opportunities in the hospitality industry and continue its growth trajectory.

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