Choice Hotels International Inc. recently provided an update on its business, including the rapid integration of the Radisson Hotels Americas portfolio into its franchisee system.
Key updates include:
- The company continues to successfully execute its strategy of expanding the reach of its franchise business in more revenue intense segments in 2023, with new hotels added within a brand generating, on a comparable basis, an average of 20% higher royalty revenue than hotels exiting the brand.
- In 2024, the company expects to generate more than 10% adjusted EBITDA growth at the midpoint, year-over-year, driven by approximately $20 million in incremental contribution from Radisson Hotels Americas as well as organic growth in more revenue intense segments and markets, strong effective royalty rate growth, and other factors.
- The company executed an average of more than four hotel openings per week, for a total of 107 hotel openings year-to-date through June 30, a 39% increase compared to the same period of 2022. This growth was driven by an increase in conversion hotel openings of 45% and a 24% increase in new construction hotel openings.
- For the first half of 2023, the company grew hotel openings across all segments, year-over-year, increasing openings in the upscale segment by 83%, the midscale segment by 42%, the extended stay segment by 50% and the economy segment by 11%.
- During the month of May, the company executed the highest number of hotel openings within the extended-stay segment since 2020, including a record number of hotels opened for the WoodSpring Suites brand in a single month. The company remains optimistic about extended-stay franchise business growth and expects the number of its extended-stay units to increase at an average annual growth rate of more than 15% over the next five years.
- The company has achieved approximately $80 million of annual recurring synergies, exceeding the company’s original synergy target. The company anticipates unlocking additional cost and revenue opportunities for future synergies.
- The company is ahead of its schedule to complete key integration milestones, including onboarding the nearly 600 Radisson Americas hotels onto its reservation delivery engine and merging the two loyalty programs by the end of the third quarter—within just a year of the acquisition. Complete integration by the end of 2023 is expected to help further drive the Radisson Hotels Americas franchisees’ topline performance and profitability.
- The company drove a turnaround of Radisson Hotels Americas’ results in 2022 and remains ahead of schedule in delivering expected Radisson Hotels Americas adjusted EBITDA contribution of more than $60 million in 2023, which is expected to grow to more than $80 million in 2024.
