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Monday, November 29, 2021

Choice: Q3 ‘Exceptional’, RevPAR Exceeded 2019 Levels

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Choice Hotels reported “exceptional” third-quarter results, Chairman and CEO Patrick Pacious said in an earnings conference call Thursday, adding that it has been the strongest quarter of the year with an increase in national revenue per available room for the year. 11.4 percent compared to the third quarter of 2019.

“RevPAR has exceeded 2019 levels for five consecutive months, and the trend continues into the fourth quarter,” Pacious said.

National occupancy levels reached 64.9 percent for the quarter, 1.5 percentage points more than in the same period of 2019. The average daily rate was $ 94.59, an increase of 8.8 percent with compared to two years ago. Net income increased 53 percent from 2019 to $ 116.7 million.

Choice’s extended-stay portfolio continued to perform well, with systemwide RevPAR growth of 18.2 percent during the quarter compared to 2019, driven by 82 percent occupancy levels and a 9 percent increase in ADR, according to the company. Its mid-scale portfolio also saw increases over 2019 quarterly key performance metrics, with RevPAR growing 9.7 percent and ADR up 9.3 percent.

The company granted 289 national franchise agreements year-to-date through September 30, an annual increase of 25 percent. Eighty-nine of those were during the third quarter, a 10 percent increase over 2020. Choice’s national portfolio at the end of the quarter reached nearly 860 hotels representing more than 71,000 rooms.

Choice expects national RevPAR for full year 2021 to exceed 2019 levels and grow approximately 1 percent compared to full year 2019.

Pacious attributed the strong performance to Choice’s long-term growth strategy and strength in leisure demand, noting a new revenue management system that the company began rolling out over the summer and currently includes around 5,000 of the company’s hotels as critical to maintaining ADR growth.

Additionally, he said there has been “continued momentum” in business travel trends, with “an additional clue for growth,” and that business travel demand has returned to levels similar to those of the third quarter of 2019. A key driver for future business travel could be the infrastructure bill, Pacious added. Based on the conversations Choice has had with key suppliers in recent weeks, they are “thinking about construction and manufacturing construction here in the United States,” he said.

RELATED: Choice Q2 Earnings

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