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Choice Hotels International Inc CHH Stock Quote

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NYSE:CHH

Morningstar‘s Stock Analysis CHH

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Economic Moat

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We See Demand for Choice's Brands Improving in 2023 Amid an Uncertain Economic Background

Dan Wasiolek Senior Equity Analyst

Business Strategy and Outlook

| Dan Wasiolek |

While the coronavirus had a material impact on Choice's 2020 demand, the hotelier's U.S. leisure-based portfolio (which represents around 70% of nights) saw a full return to 2019 revenue per available room levels in 2021. We expect the narrow-moat company to gradually expand room share in the hotel industry in the next decade, supported by rejuvenated Comfort brands (28% of 2021 total domestic rooms), newer Cambria, Ascend, and Everhome concepts (8% combined), the acquisition of the Radisson brand in 2022, and a solid loyalty program with over 60 million members in 2022, up from 44 million at the end of 2019. The company has a high-single-digit share of existing U.S. hotel rooms with an expanding pipeline. We see its room growth averaging 2% over the next decade, above the 1.8% supply lift we estimate for the U.S. industry during that time.

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Key Statistics CHH

Company Profile CHH

Business Description

As of Dec. 31, 2021, Choice Hotels operated 579,746 rooms across 13 brands addressing the economy and midscale segments. Comfort Inn and Comfort Suites are the largest brands (29% of the company's total domestic rooms), while Ascend and Cambria (7% of total domestic rooms) are newer lifestyle and select-service brands experiencing strong demand prior to COVID-19. Choice added its 13th brand with the launch of extended-stay brand Everhome in January 2020. Choice closed on its Radisson acquisition in August 2022, which will add around 70,000 rooms. Franchises are 99% of total revenue, and the United States represents 79% of total rooms in 2021.

Contact
1 Choice Hotels Circle, Suite 400
Rockville, MD, 20850
T +1 301 592-5000
Industry Lodging
Most Recent Earnings Sep 30, 2022
Fiscal Year End Dec 31, 2022
Employees 1,500

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