Choice Hotels International’s domestic systemwide revenue per available room growth increased 13.9 percent in Q4 compared to the same period of 2019, driven by an increase in average daily rate of 9.5 percent and a 210-basis-point increase in occupancy levels versus fourth quarter 2019.
RevPAR was up 2.2 percent for full-year 2021 compared to 2019, exceeding full-year 2021 guidance by 120 basis points. RevPAR growth surpassed 2019 levels for the last seven months of 2021, a trend that has continued in the first quarter of 2022.
Total revenues were $1.1 billion for full-year 2021, a 4 percent decrease compared to the same period of 2019, and $284.6 million in fourth quarter 2021, a 6 percent increase compared to the same period of 2019.
“Our goal is not to simply exceed 2019 performance levels, but rather to capitalize on current and future investments to fuel our long-term growth and drive our RevPAR performance to new levels,” President and CEO Patrick Pacious said on a call with investors.
Development
Choice awarded 239 domestic franchise agreements in fourth quarter 2021, a 23 percent increase compared to the same period of the previous year. The company's domestic franchise agreements for new construction hotels increased 58 percent for fourth quarter 2021 compared to the same period of 2020.
The company's extended-stay portfolio reached 474 domestic hotels as of Dec. 31, a 6 percent increase since Dec. 31, 2020, with the domestic pipeline reaching over 340 hotels awaiting conversion, under construction or approved for development. For full-year 2021, the company's extended-stay domestic franchise agreements increased 27 percent compared to the same period in 2020.
Choice's total domestic pipeline of hotels awaiting conversion, under construction or approved for development, as of Dec. 31, increased 2 percent to nearly 880 hotels from third quarter 2021, representing more than 75,000 rooms.
CFO Dominic Dragisich noted that the company’s brand strategy is focused on driving growth across the “higher-value and more revenue-intense” upscale, extended-stay and midscale segments. An upper-midscale brand like Comfort is approximately three times as revenue intense as an economy segment product, Pacious explained, while a Cambria hotel could be “upwards of 10 or more times greater on a revenue intensity basis” than an economy hotel. Extended-stay is particularly valuable, he added, because of the high royalty fee associated with it as well as the higher room count. “A WoodSpring product could be three times the revenue intensity of a more transient economy hotel as well.”
Looking Ahead
Pacious said he expects the company to fare well in Q1 2022 despite the omicron COVID-19 variant. “In fact, our January RevPAR results exceeded 2019 levels by approximately 12 percent,” he said, crediting the company’s predicted growth on “long-term investments” designed to capitalize on the consumer trends that have accelerated during the pandemic favoring leisure travel, limited-service hotels and longer length of stay. “We expect these trends to continue to be strong, long-term tailwinds for our company.”
While the company exceeded prepandemic levels for RevPAR and adjusted earnings before interest, taxes, depreciation and amortization for full-year 2021, Dragisich called the precise recovery trends for full-year 2022 “somewhat uncertain.” Still, he expects the overarching trends to continue to drive performance, and 2022 likely will be a year of investments for the company. “We will continue to monitor the broader environment with its recovery trends, adjusting the level of our investments accordingly.”