Choice Hotels Achieves Record Growth & Earnings in 2024
CHOICE HOTELS INTERNATIONAL reported a 16 percent year-over-year increase in net income to $299.7 million in 2024 and a 12 percent rise in adjusted EBITDA to a record $604.1 million, exceeding its full-year guidance. The company’s global system size grew 3.3 percent to 653,810 rooms, including 4.3 percent growth in its domestic upscale, extended-stay and midscale portfolio.
It opened 407 hotels globally in 2024, a 21 percent increase, including its 515th extended-stay hotel in the fourth quarter, Choice said in a statement.
“Choice Hotels generated another year of strong results in 2024, exceeding the top end of our earnings guidance and delivering a 4.3 percent year-over-year net increase in our more revenue-intense domestic rooms portfolio, a testament to the success of our growth strategy,” said Patrick Pacious, Choice president and CEO. “In 2024, we also successfully relaunched four brands, expanded our partnerships business, increased our international footprint, achieved record organic rewards program growth, and unlocked new value through additional ancillary revenue opportunities.”
The company’s domestic RevPAR grew 4.5 percent in the fourth quarter, outperforming the industry by 90 basis points and its chain scales by 30 basis points. Domestic ADR rose 3.1 percent, occupancy increased 80 basis points and extended-stay RevPAR grew 5.9 percent year over year.
Key highlights:
- Adjusted diluted EPS rose 13 percent to $6.88 in 2024, exceeding full-year guidance.
- Formed a strategic partnership with Westgate Resorts, adding 21 hotels and 14,471 rooms to the domestic portfolio, expanding Choice Privileges members’ access to over 180,000 upscale, upper-upscale, and luxury rooms worldwide.
- Repurchased 3.1 million shares for $382.1 million, representing 6 percent of market capitalization at the start of the year.
- Full-year 2025 net income is projected between $288 million and $300 million, with adjusted EBITDA between $625 million and $640 million.
- Platform and procurement services fees increased 5 percent to $17.7 million in the fourth quarter.
- The domestic effective royalty rate rose 7 basis points to 5.06 percent for 2024 and 6 basis points to 5.09 percent in the fourth quarter.
Pipeline growth and 2025 outlook
The domestic net rooms portfolio grew 3 percent from year-end 2023, with net unit growth accelerating after Sept. 30, 2024. Domestic upscale, extended-stay, and midscale units increased 1.5 percent. The domestic extended-stay net rooms portfolio grew 9.8 percent, with a pipeline nearing 43,000 rooms.
The global upscale net rooms portfolio grew 43.9 percent, with a pipeline nearing 25,000 rooms, Choice said. The international net rooms portfolio grew 4.4 percent, driven by a 58 percent increase in international hotel openings in the fourth quarter. As of Dec. 31, the global pipeline exceeded 97,000 rooms, including nearly 83,000 domestic rooms.
“As we enter 2025, we will continue to realize earnings growth from past investments, expand the scale of our business, and accelerate growth in the coming years,” Pacious said.
Choice expects 2025 net income between $288 million and $300 million and adjusted net income between $333 million and $345 million. Adjusted EBITDA is projected between $625 million and $640 million, with domestic RevPAR growth of 1 percent to 2 percent and global net system rooms growth of about 1 percent.
Choice recently launched its 2025 global campaign, “Check Into More,” featuring Keegan-Michael Key for a second year, promoting guest experiences and brand loyalty across 22 brands.
