ROCKVILLE, Md. — Choice Hotels International, Inc. reported its results for the three months and year ended December 31, 2020.
“Despite a year of unprecedented challenges brought upon us by the pandemic, Choice Hotels drove results that significantly out-performed the industry, achieved a number of major milestones in the execution of our long-term strategy and positioned the company to continue to grow our share of travel demand in the years to come,” says Patrick Pacious, president and CEO, Choice Hotels. “These results are a testament to the success of our winning strategy to grow our limited-service brands in more revenue-intense segments and the right locations. We believe that our long-term view, compelling franchisee value proposition, well-segmented brand portfolio and strong balance sheet will help us further capitalize on growth opportunities in 2021 and beyond.”
Throughout 2020, Choice Hotels provided a broad range of support to its franchisees, guests and communities while improving its overall financial and liquidity position. Highlights of fourth quarter (Q4) and full-year 2020 results include:
- Domestic systemwide Revenue Per Available Room (RevPAR) change outperformed the total industry by nearly 26 percentage points, declining 25.1 per cent for Q4 2020, compared to the same period of the prior year, and improved by 370 basis points from the previous quarter. Full-year and Q4 2020 RevPAR performance also exceeded the chain-scale segments in which the company competes, as reported by STR.
- Fourth quarter 2020 domestic RevPAR change outperformed the industry by an average of 26 percentage points per week, an approximately 600 basis points expansion since third quarter 2020.
- The company awarded 427 domestic franchise agreements in 2020 — a 38-per-cent decrease compared to the prior year. More than 70 per cent of the agreements awarded in 2020 were for conversion hotels and 28 per cent were executed in the month of December.
- Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for full-year 2020 were $241.1 million, a 35-per-cent decrease from 2019. Adjusted EBITDA for Q4 2020 were $54.7 million, representing a 35-per-cent decrease from Q4 2019.
The company also achieved a number of major milestones in the execution of its long-term strategy to grow its presence in more revenue-intense segments and locations, including a return to unit growth for the Comfort brand family following the successful completion of its transformation, significant expansion of its extended-stay portfolio and the continued growth of Cambria Hotels.
Choice’s extended-stay portfolio continued to outperform the industry in 2020, with an average domestic systemwide occupancy rate of 69 per cent. The portfolio achieved average weekly occupancy rates of 70 per cent since the onset of the pandemic in mid-March through December 31, 2020 — exceeding the industry weekly average by 30 percentage points.
Looking ahead, the company currently expects to see a sequential quarter-over-quarter improvement in RevPAR change for the quarter ending March 31, 2021 versus the same periods of 2020 and 2019. Through mid-February, the company’s year-to-date 2021 RevPAR has declined by approximately 18 per cent in year-over-year comparison.
