Choice Hotels International, Inc.’s CHH upscale brands, the Ascend Hotel Collection and Cambria Hotels, have been doing solid business and performed impressively in the first half of the year.
In second-quarter 2021, the company’s Ascend Hotel Collection RevPAR change outperformed the upscale segment by more than 26 percentage points, compared with second-quarter 2019. The brand has been well received on account of smart conversion opportunities.
During the first half of 2021, Ascend brand achieved RevPAR growth of 12 percentage points against local competitors compared with the first half of 2019. In July, the brand’s RevPAR rose 17.7% owing to an increase in average daily rate of 20.7% compared with 2019.
Meanwhile, the company’s Cambria Hotels recorded the strongest growth in RevPAR Index in the brands' history. The brand witnessed a gain of approximately 15 percentage points against local competitors in the first half of the year, compared to 2019. In the first half of the year, both Ascend and Cambria brands witnessed strong occupancy and average daily rate growth.
Janis Cannon, senior vice president, upscale brands, Choice Hotels said, “With Americans rediscovering domestic destinations and the continued return to travel, as well as the trend of work from anywhere, guests are increasingly turning to Ascend and Cambria, thanks to their uniquely local experience and upscale amenities that allow for exploration. As a result, our upscale brands are outperforming the local competition at record levels.”
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In the past six months, shares of the company have gained 16.5%, against the industry’s decline of 4.7%. Choice Hotels’ riveting growth potential depends on consistent expansion of its brands. During first and second-quarter 2021, it executed 89 and 200 domestic franchise agreements, out of which more than 80% and 43% were for conversion hotels, respectively. Apart from focusing on domestic growth, the company continues to expand its international footprint in new countries.
Choice Hotels currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the Zacks Consumer Discretionary sector are Vista Outdoor Inc. VSTO, Civeo Corporation CVEO and InterContinental Hotels Group PLC IHG. Vista Outdoor sports a Zacks Rank #1 (Strong Buy), while Civeo and InterContinental Hotels Group and carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Vista Outdoor’s 2022 earnings are expected to surge 66.4%.
Civeo has a three-five year expected earnings per share growth rate of 10%.
InterContinental 2021 earnings are expected to increase 12.9%.
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