Hotel Development and Operations - The company has developed or acquired eight Cambria hotels, one Everhome Suites, one Radisson RED, one Radisson Blu, and one Country Inn & Suites, aiming to strategically increase brand presence in the U.S.[25] - The company currently operates 7,586 opened hotels, including ownership of 12 hotels and management of 13 hotels, positioning itself well in various lodging cycles[34] - The company focuses on maximizing revenues and managing costs for owned hotels, utilizing third-party management companies for most of its properties[26] - The company allocates capital to incentivize franchise development in strategic markets, with growth investments expected to enhance profitability and shareholder value[27] - The company’s hotel development strategy focuses on key markets with strong growth potential, aiming to drive guest satisfaction and brand preference[25] - The company anticipates targeting dispositions of owned hotels to franchisees under long-term franchise agreements in the future[25] - The company plans to strategically develop and manage hotels to enhance brand presence and guest satisfaction, aiming to increase franchise agreements awarded[79] - The company reported a total of 1,258 international properties with 142,071 rooms as of December 31, 2024, indicating growth in international markets[84] Franchise Operations and Revenue - The company benefits from significant operating leverage, as variable operating costs associated with franchise system growth have historically been less than the incremental fees generated from new franchises[41] - The company aims to improve franchisee profitability by enhancing RevPAR, reducing operating costs, and increasing guest satisfaction through various services and technologies[43] - The company’s strategy includes building strong brands and delivering exceptional services to increase gross room revenues and improve effective royalty rates[45] - The domestic franchise agreements typically range from 10 to 30 years, allowing franchisees to operate under one of 22 brands[74] - Franchise fees typically consist of a royalty fee ranging from 5% to 6% of gross room revenues and marketing fees ranging from 3% to 4%[95] - The company aims to improve revenue per available room (RevPAR) and reduce operating costs for franchisees, which directly impacts franchisee profitability[96] - The effective royalty rate increased to 5.06% in 2024 from 4.99% in 2023, indicating a positive trend in revenue generation[75] - Franchise fee revenues reflect the seasonality of the lodging industry, typically lower in the first and fourth quarters compared to the second and third quarters[118] Brand and Marketing Strategy - The company’s family of brands includes 22 brands and brand extensions, catering to various price points and market needs, which supports both new construction and conversion opportunities[39] - The company aims to enhance brand awareness through national marketing campaigns and loyalty program promotions, targeting both leisure and business travelers[50] - The central reservations system is crucial for delivering guests to franchisees via multiple channels, including call centers and online travel agents, which helps reduce costs and operational complexity[51] - The Ascend Hotel Collection allows upscale hotels to maintain their brand identity while benefiting from Choice Hotels' global distribution and loyalty programs[55] - The Comfort brand family offers a welcoming experience with modern amenities and a signature free hot breakfast, catering to both leisure and business travelers[60] - Everhome Suites provides a "Closer to Home" experience for longer-staying guests, featuring fully equipped kitchens and dedicated workspaces[69] - Marketing and advertising programs are aimed at increasing consumer awareness and preference, utilizing various channels including national television and digital advertising[97] Technology and Innovation - The central reservation system (CRS) is designed to deliver higher average daily room rates (ADR) compared to direct bookings, enhancing the value proposition for hotel owners[102] - The proprietary property management system, ChoiceADVANTAGE, helps franchisees optimize rates and inventory, contributing to improved RevPAR[108] - The company is focused on enhancing technology to support digital communications and guest experience personalization through initiatives like choiceEDGE[107] - The company continues to implement an integrated reservation and distribution strategy to reduce franchisee costs and improve satisfaction[105] Human Capital and Corporate Culture - The company had approximately 1,700 associates globally, with 1,570 domestic and 125 international associates as of December 31, 2024[129] - Nearly 81% of associates participated in the 2024 engagement survey, achieving a high engagement score five points above the benchmark[138] - The company offers a comprehensive benefits package, including a 401(k) matching program, paid family leave, and wellbeing days[137] - The company has 12 Choice Resource Groups (CRGs) that support personal and career development for associates[132] - The company emphasizes a culture of respect and belonging, with initiatives focused on inclusion and diversity[133] - The Board of Directors conducts semi-annual talent reviews focusing on senior leadership levels[131] - The company is committed to fair and competitive pay, conducting annual fair pay analyses for all U.S. based roles[135] Risks and Challenges - The company is subject to various operational risks common in the lodging and franchising industries, impacting revenue derived from hotel franchising and management fees[155] - The company faces risks related to its indebtedness, including the potential inability to generate sufficient cash flow to meet debt service obligations, which could necessitate refinancing on unfavorable terms[159] - A portion of the company's borrowings are at variable interest rates, exposing it to market risk from adverse changes in interest rates, which could significantly increase debt service obligations[160] - Labor shortages could restrict the company's ability and that of its franchisees to operate hotel properties or grow the business, potentially leading to increased labor costs[167] - The company is subject to compliance with anti-corruption and anti-bribery laws, and violations could result in significant liabilities that adversely affect financial results and reputation[165] - The company may face challenges in growing its franchise system due to competition and changing market conditions, which could impact cash flows and margins negatively[171] - The company is exposed to risks associated with climate change, which could lead to increased operating costs and affect demand for its services[168] - The company relies on third-party operators for significant services, and failures by these operators could result in material adverse consequences for the business[158] - The company may not achieve its objectives for growth in the number of franchised hotels, which significantly affects its results and is subject to numerous risks[175] - Franchise agreements typically have an initial term of 10 to 30 years, and termination risks may negatively impact revenues[179] - Deterioration in franchisees' financial conditions can lead to occupancy declines, adversely affecting their operating results and financial stability[180] - The hotel industry is highly competitive, with franchisees facing competition from properties with greater marketing and financial resources[182] - The company may incur losses related to financial support provided to franchisees, which could affect overall revenues[183] - Franchisees are contractually obligated to pay system service fees, but declines in their revenue generation may hinder the company's ability to recover these advances[185] - Franchisees' failure to invest in property maintenance could harm brand reputation and lead to potential terminations of franchise agreements[186] - The company is exposed to risks from technology disruptions, which could impact revenue and franchisee relationships[188] - The increasing use of AI by online travel intermediaries may shift consumer loyalty away from the company's brands, affecting direct bookings[200] Financial Performance - Royalty fees for 2024 were reported at $454,723,000, a decrease of 0.8% from $458,077,000 in 2023[75] - Average occupancy percentage for 2024 was 56.4%, a slight decline from 56.9% in 2023[75] - Average daily room rate (ADR) for 2024 was $96.67, showing a marginal decrease from $96.92 in 2023[75] - Revenue per available room (RevPAR) for 2024 was $54.54, down from $55.19 in 2023, reflecting challenges in occupancy rates[75] Corporate Governance and Recognition - The company received multiple accolades in 2024, including recognition from Newsweek for being one of the "World's Most Trustworthy Companies" and "America's Best Mid-Size Companies"[139]

Core Insights - Choice Hotels reported revenue of $389.77 million for the quarter ended December 2024, reflecting an 8.8% increase year-over-year and a surprise of +3.12% over the Zacks Consensus Estimate of $377.97 million [1] - The earnings per share (EPS) for the quarter was $1.55, up from $1.44 in the same quarter last year, with an EPS surprise of +3.33% compared to the consensus estimate of $1.50 [1] Financial Performance Metrics - RevPAR (Revenue per Available Room) grew by 4.5%, exceeding the average estimate of 1.8% based on three analysts, with a reported RevPAR of $50.51 compared to the estimated $49.48 [4] - Domestic franchise rooms totaled 511,739, surpassing the average estimate of 496,427 [4] - Occupancy rate was reported at 53.6%, slightly below the average estimate of 54.1% [4] - Total franchise rooms reached 653,810, exceeding the estimated 641,044 [4] - Average Daily Rate (ADR) was $94.32, higher than the estimated $92.04 [4] Revenue Breakdown - Other revenues from franchised and managed properties amounted to $200.80 million, exceeding the average estimate of $190.37 million, representing a year-over-year change of +10.6% [4] - Royalty, licensing, and management fees generated $120.14 million, slightly below the average estimate of $121.07 million, with a year-over-year increase of +2.8% [4] - Revenues from owned hotels were $28.11 million, surpassing the average estimate of $26.87 million, reflecting a +19.3% year-over-year change [4] - Initial franchise fees were reported at $6.47 million, slightly below the average estimate of $6.67 million, indicating a -1.1% year-over-year change [4] - Platform and procurement services fees totaled $17.69 million, close to the estimated $17.72 million, with a +4.5% change year-over-year [4] - Other revenues reached $16.55 million, exceeding the average estimate of $14.58 million, representing a significant year-over-year change of +28.9% [4]

Core Viewpoint - Choice Hotels reported quarterly earnings of $1.55 per share, exceeding the Zacks Consensus Estimate of $1.50 per share, and showing an increase from $1.44 per share a year ago, indicating a 3.33% earnings surprise [1] - The company posted revenues of $389.77 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.12% and up from $358.4 million year-over-year [2] Earnings Performance - Over the last four quarters, Choice Hotels has surpassed consensus EPS estimates three times [2] - The company had a significant earnings surprise of 16.75% in the previous quarter, where it reported earnings of $2.23 per share against an expectation of $1.91 per share [1][2] Stock Performance and Outlook - Choice Hotels shares have increased approximately 4% since the beginning of the year, compared to a 4.5% gain in the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $1.40 on revenues of $344.37 million, and for the current fiscal year, it is $7.01 on revenues of $1.62 billion [7] Industry Context - The Hotels and Motels industry is currently ranked in the bottom 32% of over 250 Zacks industries, which may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the outlook for the industry can materially affect stock performance [5][8]

Financial Performance - Net income for full-year 2024 increased 16% to $299.7 million, with diluted EPS of $6.20, a 22% increase compared to 2023[1] - Adjusted EBITDA for full-year 2024 reached a record $604.1 million, up 12% from the previous year[1] - Total revenues for Q4 2024 reached $389.77 million, a 8.7% increase from $358.40 million in Q4 2023[27] - Adjusted net income for Q4 2024 was $75.80 million, compared to $28.95 million in Q4 2023, reflecting a significant increase[27] - Adjusted earnings per share (EPS) for Q4 2024 was $1.62, up from $0.58 in Q4 2023[27] - EBITDA for the year ended December 31, 2024, was $463.77 million, compared to $375.03 million for the previous year, indicating a strong operational performance[27] - Net income for the year ended December 31, 2024, increased to $299,665,000, up from $258,507,000 in 2023, representing a growth of 15.9%[31] - For the full year 2024, Adjusted Net Income reached $332,359,000, compared to $311,541,000 in 2023, marking a 6.7% growth[43] Revenue Metrics - Domestic revenue per available room (RevPAR) grew by 4.5% for Q4 2024, outperforming the industry by 90 basis points[1] - Domestic average daily rate (ADR) increased by 3.1% and occupancy levels rose by 80 basis points in Q4 2024[5] - Average Daily Rate (ADR) for the total domestic hotel system increased to $96.67 for the year ended December 31, 2024, compared to $96.92 in 2023, a decrease of 0.3%[34] - Revenue per available room (RevPAR) for the total domestic hotel system increased to $54.54 for the year ended December 31, 2024, compared to $55.19 in 2023, a decrease of 1.2%[34] Growth and Expansion - The global net rooms system size increased by 3.3%, with a 4.3% growth in the domestic upscale, extended stay, and midscale portfolio[1] - The company opened 407 hotels globally in 2024, a 21% increase compared to 2023[1] - The global pipeline as of December 31, 2024, was over 97,000 rooms, with nearly 83,000 rooms being domestic[9] - Total number of hotels increased to 7,586 with 653,810 rooms as of December 31, 2024, compared to 7,527 hotels and 632,986 rooms in 2023, reflecting a growth of 0.8% in hotels and 3.3% in rooms[39] Future Projections - Full-year 2025 net income is projected to be between $288 million and $300 million[4] - Adjusted diluted EPS for full-year 2025 is expected to range from $6.98 to $7.24[10] - The company projects Adjusted EBITDA for 2025 to be between $625,000,000 and $640,000,000[46] - The estimated Adjusted Net Income for 2025 is projected to be between $333,000,000 and $345,000,000[46] - The projected Diluted EPS for 2025 is expected to range from $6.04 to $6.29[46] Shareholder Actions - The company repurchased 3.1 million shares for $382.1 million during full-year 2024, representing 6% of its market capitalization[4] Assets and Liabilities - The company reported a total of 2,530.53 million in total assets as of December 31, 2024, an increase from 2,394.80 million in 2023[29] - The company’s long-term debt increased to $1.77 billion in 2024 from $1.07 billion in 2023, reflecting strategic investments and expansions[29] - Cash and cash equivalents at the end of the period increased to $40,177,000 as of December 31, 2024, from $26,754,000 in 2023[31] - Net cash provided by operating activities for the year ended December 31, 2024, was $319,403,000, compared to $296,554,000 in 2023, an increase of 7.7%[31] - Investments in owned hotel properties for the year ended December 31, 2024, totaled $106,750,000, up from $68,560,000 in 2023, representing a significant increase of 55.7%[31] - Net cash used in investing activities decreased to $84,571,000 for the year ended December 31, 2024, from $265,626,000 in 2023, indicating a reduction of 68.2%[31] Operational Costs - The company reported a net reimbursable deficit from franchised and managed properties of $13,559,000 for the year ended December 31, 2024[43] - Operational restructuring charges for the full year 2024 amounted to $4,296,000, slightly up from $4,216,000 in 2023[43] - The company incurred global ERP system implementation costs of $1,041,000 for the year ended December 31, 2024[43] - The company anticipates interest expense for 2025 to be between $87,200,000 and $88,200,000[46]

Core Insights - Choice Hotels International, Inc. reported strong financial performance in 2024, exceeding the top end of its earnings guidance and achieving a 4.3% year-over-year increase in its domestic rooms portfolio, indicating the effectiveness of its growth strategy [3][10] - The company successfully relaunched four brands, expanded its partnerships, increased its international presence, and achieved record growth in its rewards program, positioning itself for continued growth in 2025 [3][10] Financial Performance - Total revenues for Q4 2024 were $390 million, up from $358 million in Q4 2023, while full-year revenues reached $1.585 billion, compared to $1.544 billion in 2023 [4] - Net income for full-year 2024 increased by 16% to $299.7 million, with diluted earnings per share (EPS) rising by 22% to $6.20 [10] - Adjusted EBITDA for full-year 2024 was a record $604 million, a 12% increase from the previous year [10] System Size and Development - The global net rooms system size grew by 3.3% to 653,810 rooms, with domestic upscale, extended stay, and midscale rooms increasing by 4.3% [6][10] - The domestic extended stay net rooms portfolio grew by 9.8%, with a pipeline of nearly 43,000 rooms, while the global upscale net rooms portfolio grew by 43.9% [7][12] Balance Sheet and Liquidity - As of December 31, 2024, the company had total available liquidity of $699.5 million and a net debt leverage ratio of 2.9 times [8] - Cash flows from operating activities for full-year 2024 were $319.4 million, an 8% increase compared to 2023 [8] Shareholder Returns - The company repurchased 3.1 million shares for $382.1 million during 2024, representing 6% of its market capitalization at the beginning of the year [10][13] - Cash dividends paid totaled $55.5 million in 2024 [13] Outlook - For full-year 2025, the company expects net income to range between $288 million and $300 million, with adjusted EBITDA projected between $625 million and $640 million [14] - Domestic revenue per available room (RevPAR) growth is anticipated to be 1% to 2% for 2025 [16]

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.It also includes access to the Zacks Style Scores. What are the Zacks Style Scores? The Zac ...

Analysts on Wall Street project that Choice Hotels (CHH) will announce quarterly earnings of $1.50 per share in its forthcoming report, representing an increase of 4.2% year over year. Revenues are projected to reach $377.97 million, increasing 5.5% from the same quarter last year.The consensus EPS estimate for the quarter has been revised 0.2% lower over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this ...

Choice Hotels International (NYSE: CHH ), based in Maryland, is a leader in the global hospitality industry with several low-end to midscale hotel brands including Radisson and Quality Inn. The company is reporting Q4 earnings on Feb. 20, 2025, and while Q4 2024With over three years of finance and consulting experience, Nikola is laser focused on finding value in North American public equities that don't have a ton of hype. His professional experience includes corporate credit risk analysis, consulting for ...

Group 1 - Choice Hotels International is actively supporting communities affected by wildfires in California through donations and relief efforts [1][2] - In 2024, Choice Hotels and its Choice Privileges members contributed a total of $217,000 to the American Red Cross for wildfire relief [2] - Choice Hotels operates over 7,500 hotels with nearly 635,000 rooms across 45 countries, offering a diverse portfolio of 22 brands [3] Group 2 - The company emphasizes its commitment to social responsibility and community support as part of its corporate values [1][2] - Choice Hotels provides a rewards program, Choice Privileges, which allows members to earn reward nights and personalized perks [3]

"Choice Hotels ran through the finish line in 2024, and we're determined to build on that strong momentum in the coming year," said Choice Hotels International President and CEO Patrick Pacious. "Our unique revenue-intense growth strategy and unyielding focus on driving our owners' revenue up and their costs down will continue to power the future for Choice and our hotel owners — and that future is bright." Leading from the Front in Extended Stay In the fast-growing extended stay segment, Choice matched its ...