Choice Hotels CEO: Big-Time Industry Consolidation Is Possible

Choice Hotels International Inc. (CHH) is fresh off a quarter where more of its rooms were occupied and room rates were higher than a year ago.

Choice Hotels International Inc. (CHH) is fresh off a quarter where more of its rooms were occupied and room rates were higher than a year ago. And for the operator of household name hotel brands such as Comfort Inn and Econo Lodge, the solid results came in spite of a mixed U.S. economy. ‘At the beginning of the year, you had a lot of people calling for robust GDP, particularly toward the end of the year,’ said Choice Hotels president and CEO Steve Joyce in an interview with TheStreet. According to Joyce, he didn’t sense a ‘groundswell building’ in the economy during the second quarter, but was quick to point out the hotel industry continues to hold up very well. And the industry’s resilience showed in the company’s latest results. Second quarter revenue for Choice Hotels increased 17% year over year to $232.2 million, beating consensus forecasts for $208.3 million. Earnings per share came in at $0.62, surpassing Wall Street’s estimates of $0.58. Revenue per available room (REVPAR), a key industry metric used to assess a hotel’s overall performance, rose 6.7% against the company’s guidance for 7%. Occupancy improved by 3.8%. The quarter was driven by Choice Hotels’ biggest brands in Comfort Inn and Quality, which collectively operate over 2,500 locations and represent about 200,000 rooms. TheStreet's Brian Sozzi reports from New York.