Choice Hotels International (CHH) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 results with adjusted EBITDA up 14% to $177.6M, adjusted EPS up 23% to $2.23, and net income of $105.7M, raising full-year guidance for net income, adjusted EBITDA, and EPS.

• Global hotel pipeline reached over 110,000 rooms, up 11% year-over-year, with a 54% increase in conversion rooms and international hotel openings tripling.

• Opened 190 new hotels YTD through September, a 19% increase in domestic openings year-over-year; global hotel openings in Q3 increased 75%.

• Rewards program membership rose 8% year-over-year to 68 million, expanding access to upscale and luxury hotels.

• Over $395M returned to shareholders via dividends and share repurchases year-to-date, with available liquidity of ~$676M at Q3 end.

Financial highlights

• Q3 revenues (excluding reimbursable revenue) increased 17% to $256.1M; total Q3 revenues were $428.0M, up 1% year-over-year.

• Adjusted EBITDA reached $177.6M, up 14% year-over-year; adjusted net income was $106.2M.

• Diluted EPS for Q3 2024 was $2.22, up 23% year-over-year.

• Domestic system effective royalty rate increased 6 basis points to 5.05% year-over-year.

• Domestic RevPAR declined 2.5% year-over-year in Q3, but occupancy improved 80 bps sequentially.

Outlook and guidance

• Raised full-year 2024 adjusted EBITDA guidance to $590–$600M, up 10% year-over-year at midpoint.

• Adjusted EPS guidance increased to $6.70–$6.87, up 11% year-over-year at midpoint.

• Full-year net income guidance raised to $276–$284M; adjusted net income to $323–$331M.

• Domestic RevPAR expected to decline 1–2% for full-year 2024; domestic net unit growth for key brands projected at ~2%.

• Projected 2024 annual dividend rate is $1.15 per share, or about $56M in aggregate, subject to board approval.