Choice Hotels International (CHH) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenues of $435.2M, up 2% year-over-year, and net income of $87.1M, up 3% year-over-year.

• Adjusted EBITDA reached a Q2 record of $161.7M, up 6% year-over-year; adjusted EPS set a record at $1.84, up 5% year-over-year.

• Global rooms pipeline grew 22% year-over-year, with hotel openings up 20% and international portfolio expanding by 1.6%.

• Returned $347M to shareholders year-to-date through July via dividends and share repurchases.

• Strong performance in revenue-intense brands, conversions, extended stay, and mid-scale segments, with notable international expansion.

Financial highlights

• Revenues excluding reimbursable revenue increased 14% to $258.9M in Q2 2024 year-over-year.

• Adjusted EBITDA hit $161.7M, up 6% year-over-year; adjusted EPS was $1.84, up 5% year-over-year.

• Net income for Q2 was $87.1M, up from $84.7M in Q2 2023; diluted EPS rose to $1.80.

• Domestic RevPAR down 0.5% year-over-year, but up 11% versus 2019; average daily rates up 15.1% over 2019.

• Effective royalty rate increased 5 basis points to over 5%, adding $5M in annual royalties.

Outlook and guidance

• Raised full-year 2024 adjusted EPS guidance to $6.40–$6.65, a 7% increase at midpoint; adjusted EBITDA guidance maintained at $580M–$600M.

• Full-year domestic RevPAR guidance lowered to -1.5% to -3.5% year-over-year.

• Net income for full-year 2024 expected between $260M and $272M, assuming a 24.5% effective tax rate.

• Expect continued acceleration in unit growth, especially in revenue-intense brands and international markets; domestic net unit growth for upscale, extended stay, and midscale brands expected at ~2%.

• Long-term strategy targets high single-digit EBITDA growth, supported by brand mix and pipeline.