Choice Hotels(US:CHH) ZACKSยท2024-12-11 08:16Industry Overview - The Zacks Hotels and Motels industry is currently facing challenges such as rising costs, weakening demand, geopolitical tensions, and ongoing economic uncertainty [2] - Industry participants are focusing on growth strategies, including portfolio expansion, property conversions, strategic partnerships, and enhancing loyalty programs [2] - The industry has shown resilience through cost-cutting measures and digital innovations while balancing profitability and guest satisfaction [2] Current Trends - High costs remain a significant concern, with rising labor costs due to shortages affecting service quality and operational capacity [4] - RevPAR (Revenue per Available Room) and ADR (Average Daily Rate) growth projections for 2024 have been lowered, with RevPAR expected to increase by 1.4% and ADR by 1.5%, down from earlier forecasts of 4.1% and 3.1% respectively [5] - Digitalization is driving growth, with hotel owners leveraging mobile check-in, self-service bookings, and pricing optimization to enhance customer experience and capture market share [6] Industry Performance - The Zacks Hotels and Motels industry has outperformed the S&P 500 over the past year, appreciating by 35% compared to the sector's 21% increase [11] - The industry is currently trading at a trailing 12-month EV/EBITDA of 18.84X, slightly below the S&P 500's 18.93X [12] Company Highlights - Choice Hotels: The company is experiencing accelerated unit growth and has enhanced its rewards program, with a projected EPS growth of 12% for 2024 [13][14] - Marriott International: Benefiting from increased global travel demand, Marriott's top line is expected to grow by 5.9% in 2024, with shares gaining 33.6% over the past year [15][16] - Hyatt Hotels: Hyatt anticipates a RevPAR increase of 3% to 4% in 2024, supported by new hotel openings and growth initiatives, with a projected EPS growth of 52% [17][18]