Choice Hotels ( NYSE: CHH ) shares gained sharply on Thursday after rising above revenue estimates and offering a rosy picture of the integration of its Radisson Hotel acquisition.
For the second quarter, the hotel chain narrowly missed EPS estimates, but rose $45.73M above expectations for revenue after a 32.2% jump in the metric from 2021. Domestic revenue per available room (RevPAR) growth sequentially, jumping 13% from the prior quarter and outpacing 2019 levels for the 13th consecutive month. Management estimated that level of RevPAR growth outpaced the total industry by 360 basis points.
"Once again, Choice Hotels drove impressive quarterly results that outperformed the industry, while announcing the most significant acquisition in our company's history and recycling over $140M of capital through July," CEO Patrick Pacious said. "The acquisition of Radisson Hotels Americas, which is expected to close this month, will mark the next chapter in Choice's well-established asset-light strategy of investing in higher revenue segments and locations, and build on our strong track record of growing the brands of tomorrow.”
The $675M acquisition of Radisson is set to add 67K rooms to the group’s growing footprint. The company's total domestic pipeline of hotels amounts to 84K rooms as of the close of the second quarter. The chain also noted it had offloaded certain hotels to bolster its balance sheet, with the sale of the Southlake DFW location fetching $30M in the quarter.
Shares rose 5% in premarket trading.
Read more on the details of the quarter .
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Choice Hotels shares head higher on revenue acceleration, Radisson integration