Choice Hotels International Inc. reported a net income increase for full-year 2024 of 16% to $299.7 million, which exceeded the top end of the company’s full-year 2024 guidance. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for 2024 increased 12% to a company record of $604.1 million, also exceeding the top end of the company’s full-year 2024 guidance.
“Choice Hotels generated another year of strong results in 2024, exceeding the top end of our earnings guidance and delivering a 4.3% year-over-year net increase in our more revenue-intense domestic rooms portfolio, a testament to the success of our growth strategy,” said Patrick Pacious, president/CEO, Choice. “In 2024, we also successfully relaunched four brands, substantially expanded our partnerships business, significantly increased our international footprint, achieved record organic rewards program growth and unlocked new value through additional ancillary revenue opportunities. As we enter 2025, we will continue to realize the earnings growth from our past investments, meaningfully expand the scale of our business and accelerate our growth in the coming years.”
Highlights include:
- Adjusted diluted EPS increased 13% to $6.88 for full-year 2024, compared to 2023, exceeding the top end of the company’s full-year 2024 guidance.
- Increased net global rooms system size by 3.3%, including 4.3% growth for domestic upscale, extended-stay and midscale rooms portfolio, compared to Dec. 31, 2023.
- Opened 407 hotels globally, a 21% increase for full-year 2024, compared to 2023, which included opening the 515th extended-stay hotel domestically in the fourth quarter.
- Entered into a strategic partnership with Westgate Resorts, which added 21 hotels and 14,471 rooms to the domestic portfolio in fourth-quarter 2024, expanding Choice Privileges rewards program members’ access to more than 180,000 upscale, upper-upscale and luxury rooms worldwide.
- Increased domestic RevPAR by 4.5% for the three-month period ended Dec. 31, 2024, compared to the same period of 2023, outperforming the industry and the respective chain scales in which the company competes by 90 basis points and 30 basis points, respectively.
- Repurchased 3.1 million shares of common stock for $382.1 million during full-year 2024, representing 6% of the company’s market capitalization at the beginning of 2024.
- Full-year 2025 net income is expected to range between $288 million and $300 million; full-year 2025 adjusted EBITDA is expected to range between $625 million and $640 million.
Financial performance
- Platform and procurement services fees increased 5% to $17.7 million for fourth-quarter 2024, compared to the same period of 2023.
- Domestic ADR grew by 3.1% and occupancy levels increased by 80 basis points for fourth-quarter 2024, compared to the same period of 2023. The domestic extended-stay segment achieved RevPAR growth of 5.9% for the fourth quarter, compared to the same period of 2023.
- The domestic effective royalty rate increased 7 basis points to 5.06% and 6 basis points to 5.09% for full-year and fourth-quarter 2024, respectively, compared to the same periods of 2023.
System size and development
- Domestic net rooms portfolio grew by 3% from year-end 2023. Domestic net unit growth accelerated from Sept. 30, 2024, and domestic upscale, extended-stay and midscale units grew by 1.5% from year-end 2023.
- Domestic extended-stay net rooms portfolio grew by 9.8% from year-end 2023, and its pipeline reached nearly 43,000 rooms. Global upscale net rooms portfolio grew by 43.9% from year-end 2023, and its pipeline reached nearly 25,000 rooms.
- International net rooms portfolio grew by 4.4% from year-end 2023, highlighted by a 58% increase in international hotel openings in fourth-quarter 2024.
- Global pipeline as of Dec. 31, 2024, was more than 97,000 rooms, of which nearly 83,000 rooms were domestic.
Outlook
- The company’s outlook for full-year 2025 includes:
- Net income between $288 million and $300 million
- Adjusted net income between $333 million and $345 million
- Adjusted EBITDA between $625 million and $640 million
- Domestic RevPAR growth between 1% and 2%
- Global net system rooms growth of approximately 1%
