Published on : Wednesday, February 19, 2014
Choice Hotels International, Inc., today reported the following highlights for the fourth quarter and full-year 2013:
Fourth Quarter Highlights
Diluted earnings per share (“EPS”) for the three months ended December 31, 2013 totaled $0.46, an increase of 10% from the same period of 2012.Earnings before interest, taxes, depreciation and amortization (“EBITDA”) from franchising activities for the three months ended December 31, 2013 totaled $52.2 million, an increase of 8% from the same period of 2012. Franchising revenues for the three months ended December 31, 2013 totaled $78.8 million, an increase of 2% from the same period of 2012.
Domestic system-wide revenue per available room (“Rev PAR”) increased 1.3% for the three months ended December 31, 2013 from the same period of 2012 as hotel operations in the Northeast and Mid-Atlantic regions as well as hotels near national parks were impacted by the government shutdown. Domestic RevPAR results reflect occupancy and average daily rates increases of 50 basis points and 0.4%, respectively. Initial franchise and relicensing fees for the three months ended December 31, 2013 totaled $5.8 million, an increase of 11% from the same period of 2012.
The company executed 215 new domestic hotel franchise contracts for the three months ended December 31, 2013 compared to 214 new domestic hotel franchise contracts for the same period of 2012. Domestic hotel contracts executed during the three months ended December 31, 2012 included an agreement with affiliates of Colony Capital, a private international investment firm, and hospitality management company Aimbridge Hospitality, to convert 46 properties, formerly operated as Jameson Inns, to the company’s Quality Inn, Comfort Inn and Econo Lodge brands. Excluding this transaction, domestic franchise agreements executed during the fourth quarter of 2013 increased 28% from the same period of 2012.
Domestic relicensing and contract renewal transactions for the three months ended December 31, 2013 totaled 85 contracts, an increase of 8% from the same period of 2012.
Franchising selling, general and administrative expenses (“SG&A”) for the three months ended December 31, 2013 totaled $26.6 million, a 7% decline from the same period of 2012. Excluding a loss on settlement of the company’s pension plan during the fourth quarter of 2012 totaling $1.8 million, franchising SG&A declined by approximately $0.1 million.
“We are pleased with our fourth quarter operating results which reflect a continued improvement in the domestic franchise development environment,” said Stephen P. Joyce, president and chief executive officer of Choice Hotels International. “Our development results reflect a 14% increase in our conversion franchise agreements over the prior year and we expect that the conversion franchise sales environment will continue to improve. In addition, we are optimistic that the new construction environment for our brand segments will gradually improve in 2014 and beyond.”
Full-Year Highlights
EBITDA from franchising activities in 2013 totaled $214.3 million, an increase of $10.7 million or 5% from 2012. Franchising revenues in 2013 totaled $316.4 million, an increase of $14.2 million or 5% from 2012. Domestic royalty fees in 2013 totaled $242.5 million, an increase of 3% from 2012.
Domestic system-wide Rev PAR increased 3.0% in 2013 as occupancy and average daily rates increased 80 basis points and 1.6%, respectively. Domestic unit and room growth increased 1.9% and 1.1% from December 31, 2012, respectively. Initial franchise and relicensing fees in 2013 totaled $18.7 million, an increase of $4.5 million or 32% from 2012.The company executed 530 new domestic hotel franchise contracts in 2013, an increase of 57 contracts or 12% from 2012.Domestic relicensing and contract renewal transactions in 2013 totaled 289 contracts, an increase of 52 contracts or 22% from 2012.Procurement services revenues in 2013 totaled $20.7 million, an increase of $2.7 million or 15% from 2012.
Franchising SG&A expenses in 2013 totaled $102.1 million, a 3.6% increase from 2012.
Franchising margins for 2013 were 65.0%, an increase of 10 basis points from 2012.
Publicly launched and executed initial third-party customer contracts for the Sky Touch Technology division of the company (“Sky Touch”), a division that develops and markets cloud based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company.
“Our investment in additional growth opportunities that are complementary to our core hotel franchising business model has resulted in our strategic alliance with Bluegreen Vacations as well as the launch of our Sky Touch division. We are pleased with the progress we have achieved in both of these initiatives. Our alliance with Bluegreen Vacations has resulted in more than 20 new Ascend Hotel Collection hotels and has generated approximately $3.5 million of total revenues in 2013.”
“In addition, we have executed several customer contracts for the Sky Touch division. These new customers join more than 5,500 of our current franchisees who already use our cloud-based technology systems. Together, our new and existing users generate more than $30 million of corporate and marketing and reservation system revenues for the company,” said Joyce.
Source:-Choice Hotels
Tags: Choice Hotels International Reports Fourth Quarter And Full-Year 2013 Results, Hotel News
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