Choice Hotels Q4 2024: Discrepancies Rise Over RevPAR, Growth Expectations, and Strategic Acquisitions

These are the key contradictions discussed in Choice Hotels International's latest 2024Q4 earnings call, specifically including: Net Reimbursable Revenues and RevPAR Impact, Growth and EBITDA Expectations, RevPAR Growth Expectations, Recyclable Capital Investments, and the Impact of Acquisitions:



Strong Financial Performance and Revenue Growth:
- Choice Hotels International reported a 12% year-over-year increase in adjusted EBITDA and a 13% year-over-year increase in adjusted earnings per share for 2024, exceeding their guidance.
- The growth was driven by global rooms increase, focusing on revenue-intense segments, and strategic investments in franchise growth and technology enhancements.

Pipeline and Conversion Growth:
- The company opened 21% more hotels worldwide in 2024 compared to the prior year, with over 80% of openings being conversion hotels.
- This was due to strategic focus on conversion hotels to rapidly move properties through the pipeline and capitalize on the high demand for conversion capabilities.

RevPAR Performance and Market Share:
- Choice Hotels' fourth-quarter domestic RevPAR outperformed its industry segment by 30 basis points, increasing 4.5% year-over-year.
- This was achieved through effective franchisee tools, brand portfolio enhancements, and capturing demand in disaster-affected regions.

Investment in Technology and Franchisee Tools:
- The company invested in dynamic pricing capabilities, resulting in a 45% year-over-year increase in group account revenue and a 20% year-over-year increase in business transient revenue in Q4.
- These investments enhanced franchisee tools and capabilities, driving top-line revenue growth and improved occupancies.

International Expansion and Partnerships:
- Choice Hotels expanded its international footprint with a 5% increase in RevPAR performance year-over-year in EMEA and a 58% increase in hotel openings.
- Strategic partnerships, such as the direct franchising agreement in Spain and collaboration with Zenitude Residential Hotels, contributed to this growth.