Choice Hotels International, one of the world’s largest lodging franchisors, today 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 outperformed 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,” said Patrick Pacious, president and chief executive officer, 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 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% for fourth quarter 2020, compared to the same period of the prior year, and improved by 370 basis points from third quarter 2020. Full year and fourth quarter 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 (see Exhibit 7 for weekly RevPAR trends).
- The company 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.
- The company awarded 427 domestic franchise agreements in 2020, a 38% decrease compared to the prior year. Over 70% of the agreements awarded in 2020 were for conversion hotels and 28% were executed in the month of December.
- Net income was $7.9 million for fourth quarter and $75.4 million for full year 2020, representing diluted earnings per share (EPS) of $0.14 and $1.35, respectively.
- Full year adjusted net income, excluding certain items described in Exhibit 6, decreased 49% over the prior full year period to $123.9 million.
- Full year adjusted diluted EPS were $2.22, a decrease of 49% over the prior full year period, while fourth quarter 2020 adjusted diluted EPS were $0.51, a 45% decrease from fourth quarter 2019.
- Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for full year 2020 were $241.1 million, a 35% decrease from the same period of 2019. Adjusted EBITDA for fourth quarter 2020 were $54.7 million, a 35% decrease from fourth quarter 2019.
- The company reported cash flow from operations of over $115 million for full year 2020.
Choice Hotels International, Inc. is one of the largest lodging franchisors in the world. With more than 7,100 hotels, representing nearly 600,000 rooms, in over 40 countries and territories as of December 31, 2020, the Choice® family of hotel brands provide business and leisure travelers with a range of high-quality lodging options from limited service to full-service hotels in the upscale, midscale, extended-stay and economy segments.
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