Choice Hotels International’s revenue per available room increased in the first quarter of 2023, driven by rate and occupancy gains, president and CEO Patrick Pacious said Tuesday during an earnings call.
Choice’s domestic RevPAR reached $48.08 in Q1, up 5.9 percent year over year. Domestic average daily rate was $91.21 in Q1, up 5.2 percent. Notably, Choice’s first-quarter occupancy was 52.7 percent, up 34 basis points over 2022.
Pacious highlighted consumer and industry trends driving “significant uptick in travel demand,” including remote work and U.S federal investment in manufacturing and infrastructure.
With these trends, the company expects business travel in its key industry verticals, including transportation, logistics and construction, to increase, Pacious said.
“Industry experts estimate that these investments will generate between 50 [million] and 100 million room nights over the next decade,” he said, adding that this estimate was especially positive for Choice’s extended-stay segment. The company also expects additional corporate travel tailwinds from the healthcare and financial and professional services industries, “especially in the context of the Radisson Americas acquisition,” Pacious said.
In Q1, business travel bookings increased 9 percent year over year across Radisson’s brands. These brands’ RevPAR increased 11.2 percent year over year.
Additionally, Choice noted a 2 percentage-point increase in occupancy in Q1 on Thursdays and Sundays over 2019 levels.
Additional Q1 Results
Choice increased domestic upscale franchise agreements by 13 percent year over year and expanded its pipeline for the sector to more than 120 hotels, up 16 percent.
The company also further invested in the extended-stay segment, expanding its domestic pipeline to 475 hotels, a 28 percent increase year over year. Choice remains “very optimistic” about its extended-stay business and expects units in this segment to increase at an average annual growth rate of more than 15 percent the over next five years, Pacious said.
Choice’s total revenue was a Q1 record for the company at $332 million, up 29 percent year over year. The company also reported net income of $52.8 million in the first quarter.
[email protected] (Angelique Platas)
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