Choice Hotels' Q2 revenues jump 17 percent

Choice Hotels International reported that its revenues for the second quarter of 2015 jumped 17 percent over the same period last year, totaling $232.2 million. Domestic hotel executed franchise agreements totaled 139 for the three months ended June 30, 2015, an increase of 11 percent over the same time last year. 

New domestic hotel franchise agreements executed in the second quarter of 2015 for the Comfort family of brands increased 67 percent over the same period of the prior year with nearly 60 percent of agreements representing new construction hotels.

The company's new construction domestic pipeline of hotels under construction or approved for development increased 30 percent from June 30, 2014, and the total pipeline increased 22 percent. The increase in the new construction hotel pipeline was led by the company's Comfort family of brands which increased 44 percent over the same period of the prior year.

Franchising revenues for the three months ended June 30, 2015, totaled $98.6 million, an increase of 5 percent from the same period of 2014. Domestic royalty fees for the three months ended June 30, 2015, totaled $75.8 million, an increase of 6 percent from the same period of 2014.

Domestic system-wide revenue per available room increased 6.7 percent in the second quarter of 2015, as occupancy and average daily rates increased 170 basis points and 3.8 percent, respectively from the same period of 2014.

EBITDA from franchising activities for the three months ended June 30, 2015, totaled $69.8 million, an increase of 5 percent from the same period of 2014.

"We are pleased with our second quarter operating results that were highlighted by strong domestic RevPAR performance and franchise sales results," said Steve Joyce, president and CEO of Choice Hotels International. "Once again our RevPAR performance continued to outpace the gains reported by Smith Travel Research in the chain scale segments in which we compete and as reflected in our franchise sales results our programs to accelerate the growth of the Cambria hotels and suites and Comfort brands have been well received by developers and franchisees. We continue to be optimistic that these programs will drive the continued improvement and expansion of these brands."

During 2014, the company entered into and completed a plan to sell its three owned hotels operated under the MainStay Suites brand. The company determined that the sale of these hotels met the definition of a discontinued operation since the operations and cash flows of these components have been eliminated from the on-going operations of the company and the company does not have significant continuing involvement in the operations of the hotels after the transaction. As a result, the company's consolidated statement of income for the three and six months ended June 30, 2014, reflects these three company-owned hotels as discontinued operations.