Choice Hotels International Reports A 7% Increase In Second Quarter Domestic RevPAR
Published on : Wednesday, July 29, 2015
Choice Hotels International, Inc. today reported the following highlights for the second quarter 2015:
- Revenues for the three months ended June 30, 2015 totaled $232.2 million, an increase of 17 percent from the same period of 2014.
- Domestic hotel executed franchise agreements totaled 139 for the three months ended June 30, 2015, an increase of 11 percent from the same period of 2014.
- New domestic hotel franchise agreements executed in the second quarter of 2015 for the Comfort family of brands increased 67 percent over the same period of the prior year with nearly 60 percent of agreements representing new construction hotels.
- Executed 5 new domestic franchise agreements during the three months ended June 30, 2015 for the Cambria hotels & suites brand expanding to new markets including Philadelphia, PA and Memphis, TN.
- Domestic relicensing and contract renewal transactions totaled 85 for the three months ended June 30, 2015, an increase of 13 percent from the same period of 2014.
- The company’s new construction domestic pipeline of hotels under construction or approved for development increased 30 percent from June 30, 2014, and the total pipeline increased 22 percent. The increase in the new construction hotel pipeline was led by the company’s Comfort family of brands which increased 44 percent over the same period of the prior year.
- Franchising revenues for the three months ended June 30, 2015, totaled $98.6 million, an increase of 5 percent from the same period of 2014.
- Domestic royalty fees for the three months ended June 30, 2015, totaled $75.8 million, an increase of 6 percent from the same period of 2014.
- Domestic system-wide revenue per available room (“RevPAR”) increased 6.7 percent in the second quarter of 2015, as occupancy and average daily rates increased 170 basis points and 3.8 percent, respectively from the same period of 2014.
- Domestic units increased 0.3 percent from June 30, 2014.
- Earnings before interest, taxes, depreciation and amortization (“EBITDA”) from franchising activities for the three months ended June 30, 2015, totaled $69.8 million, an increase of 5 percent from the same period of 2014.
- Diluted earnings per share (“EPS”) from continuing operations for the three months ended June 30, 2015, totaled $0.62, an increase of 3 percent from the same period of 2014.
- On July 21, 2015, the company completed the refinancing of its existing $350 senior secured credit facility with a new five year, $450 million senior unsecured revolving credit facility.
“We are pleased with our second quarter operating results that were highlighted by strong domestic RevPAR performance and franchise sales results,” said Stephen P. Joyce, president and chief executive officer, Choice Hotels. “Once again our RevPAR performance continued to outpace the gains reported by Smith Travel Research in the chain scale segments in which we compete and as reflected in our franchise sales results our programs to accelerate the growth of the Cambria hotels and suites and Comfort brands have been well received by developers and franchisees. We continue to be optimistic that these programs will drive the continued improvement and expansion of these brands.”
During 2014, the company entered into and completed a plan to sell its three owned hotels operated under the MainStay Suites brand. The company determined that the sale of these hotels met the definition of a discontinued operation since the operations and cash flows of these components have been eliminated from the on-going operations of the company and the company does not have significant continuing involvement in the operations of the hotels after the transaction. As a result, the company’s consolidated statement of income for the three and six months ended June 30, 2014, reflects these three company-owned hotels as discontinued operations.
Summarized financial information related to these discontinued operations is presented in Exhibit 9 of this press release.
The company’s consolidated 2015 outlook reflects the following assumptions:
- All figures assume no repurchases of common stock under the company’s share repurchase program; and
- The effective tax rate for continuing operations is expected to be approximately 32% for both the third quarter and full-year 2015, respectively.
- EBITDA from franchising activities for full-year 2015 are expected to range between $254 million and $257 million;
- Net domestic unit growth for 2015 is expected to be approximately 1%;
- RevPAR is expected to increase approximately 6.5% for the third quarter and range between 6.5% and 7.5% for full-year 2015; and
- The effective royalty rate is expected to increase 2 basis points for full-year 2015 as compared to full-year 2014.
- Net reductions in EBITDA relating to our investment in the SkyTouch division for full-year 2015 are expected to range between $15 million and $20 million.
The company’s third quarter 2015 diluted EPS is expected to be $0.72. The company expects full-year 2015 diluted EPS to range between $2.18 and $2.22 and full year 2015 EBITDA to range between $237 million and $241 million.
Choice will conduct a conference call on Wednesday, July 29, 2015 at 9:00 a.m. EDT to discuss the company’s second quarter 2015 results. The dial-in number to listen to the call is 1-855-638-5678, and the access code is 72461415. International callers should dial 1-920-663-6286 and enter the access code 72461415. Interested investors and other parties wishing to access the call via the webcast should go to the website and click on the Investor Info link. The Investor page will feature a conference call microphone icon to access the call.
The call will be recorded and available for replay beginning at 1:00 p.m. EDT on Wednesday, July 29, 2015 through Wednesday, August 5, 2015 by calling 1-855-859-2056 and entering access code 72461415.
Source:- Choice Hotels International
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