Choice: Q2 Corp. Travel Share Near Historical Levels

Business travel’s share of Choice Hotel International’s second-quarter volume was about 30 percent, approaching the company’s typical historical level as the segment continues to recover, company executives said Thursday on an earnings call. Meanwhile, Choice will look to its pending acquisition of Radisson Hotel Group Americas to further juice demand among corporate travelers, Choice president CEO Patrick Pacious said.

That $675 million acquisition, announced in June and which executives expect to close this month, will “expand our customer reach to a higher-income and younger demographic as well as with business travelers,” Pacious said during the conference call.

The deal could further what Pacious called “favorable” business travel trends after a second quarter in which demand steadily continued to recover.

“In the second quarter, we drove sequential quarter-over-quarter increases in our business travel bookings with demand surpassing 2021 levels,” Pacious said. “The business travel component of our guest mix continues to approach historical levels and accounted for 30 percent of stays in the second quarter.”

Pacious said he expected business demand at Choice, which owns 12 brands including Comfort, Quality Inn and WoodSpring Suites, to continue through the third quarter, fueled by ” the additional onshoring of the U.S. supply chain” and the passage of the U.S. infrastructure bill, which could further spur blue-collar travel demand. 

Additionally, Pacious suggested the specter of an economic downturn could spook some businesses to increase sales-related travel. 

“Companies, I think, are beginning to kind of get back to normal and start looking at an economy that is maybe a little bit different than what [we’d] been experiencing a year ago when we saw … economic growth,” Pacious said.” I think you are seeing a little bit of economic slowdown. So businesses are coming back, and they are sending their salesforces out to say, hey, we need to we need to get back on the game here.”

Q2 Performance

Choice’s second-quarter systemwide domestic average daily rate increased 15.3 percent year over year to $95.34, and occupancy decreased to 61.8 percent from 62.3 percent one year ago. Revenue per available room increased 14.3 percent year over year to $58.89.

Total second-quarter revenue increased 32 percent year over year to $368 million. Total Revenue excluding marketing and reservation system fees increased 25 percent to $178.6 million. Net income increased to $106.2 million compared with $85.9 million in the second quarter of 2021.

Choice at the end of the second quarter had in its development pipeline 910 hotels totaling about 84,000 rooms. The Radisson deal would add about 67,000 rooms to Choice’s portfolio. 

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