Choice Hotels Looks to High-End Travelers to Boost Revenue

Choice knows where the money is, and right now it’s not in midscale brands. Will upgrading Comfort Inn be enough to lift room rates?

10 May 2019

Choice Hotels plans to shift its focus towards higher-end lodgings in a bid to attract upscale business travelers.

The hotel giant struggled somewhat last quarter, as revenue per available room declined nearly 1 percent domestically, driven primarily by flatness in its midscale and economy brands. Choice was also hurt by construction costs, and the partial government shutdown, the company said in an earnings call Thursday. Choice aims to raise revenue by expanding its footprint in the upscale segment, potentially with a new brand acquisition, as well as by upgrading its most popular midscale brand, Comfort Inn.

"One of our most successful initiatives has been growing our share in the upscale segment. We believe that our strategic focus on upscale will continue to evolve our portfolio and drive top line growth because of the revenue-intense nature of the brands," said Dominic Dragisich, chief financial officer of Choice Hotels.

Total revenue for the quarter was $218.3 million, a 4 percent increase from the year before. The company stock declined about 3 percent after market open, but has since partially recovered.

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