Choice: Business Travel Share of 2024 Revenue Rises
After a fourth quarter in which its business transient revenue increased 14 percent year over year, the share of Choice Hotels International's business that the segment represents has risen to about 40 percent, president and CEO Pat Pacious said...
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After a fourth quarter in which its business transient revenue increased 14 percent year over year, the share of Choice Hotels International's business that the segment represents has risen to about 40 percent, president and CEO Pat Pacious said on a Thursday earnings call.
Pacious in the prior quarter said business travel comprised about 35 percent of Choice's demand, a figure he at the time said was "pretty high for us." But Choice's focus on expanding its upscale offerings has paid off with increased corporate business.
Traditionally a franchisor in midscale and economy tiers, Choice since 2022 acquisition of Radisson Hotel Group Americas has planted a flag in the upscale tiers with the Radisson Blu brand alongside its Cambria and Ascend brands. The company last year additionally relaunched its Radisson Individuals soft brand as an upper upscale brand.
The moves have helped boost Choice's business travel volume, Pacious said, adding that momentum has continued this year.
"So far in the first quarter of 2025, our business travel is trending up, fueled by both group and business transient travel as we are seeing a pickup in locally negotiated business and year-over-year revenue growth through our digital channel that delivers mid-week and corporate-managed business," he said.
Choice CFO Scott Oaksmith on the call pointed to the technology, energy, transportation and construction sectors as areas of the strength in the fourth quarter. The technology sector in particular offers Choice business travel opportunity, Pacious said.
"Traction in the technology vertical is particularly encouraging," Pacious said, "and we believe we have a meaningful long-term opportunity to capture growing demand for both the technology and energy-related sectors driven in part by the significant infrastructure investments required by GenAI."
Pacious also highlighted Choice's growing extended-stay segment as a corporate destination, noting the company added more than 4,500 rooms in the segment in 2024.
Choice Q4, Full-Year Metrics
Choice's fourth-quarter domestic revenue per available room increased 4.5 percent year over year to $50.51, while average daily rate rose 3.1 percent to $94.32 and occupancy increased 0.8 percentage points to 53.6 percent.
For full-year 2024, Choice domestic RevPAR declined 1.2 percent year over year to $54.54, while ADR declined 0.3 percent to $96.67 and occupancy rose 0.5 percentage points to 56.4 percent.
Choice projects full-year 2025 RevPAR to increase 1 percent to 2 percent year over year.
Total fourth-quarter revenue increased 9 percent year over year to $390 million, and full-year revenue rose 2.7 percent to nearly $1.59 billion. Fourth-quarter net income increased to $76 million from $29 million the year prior, and full-year income rose to $300 million from $259 million in 2023.
Choice global system size at the end of 2024 increased by 3.3 percent to more than 653,800 rooms. Its development pipeline stood at more than 97,300 rooms, down from about 105,000 rooms the year prior. Pacious said 25,000 of the rooms in the current pipeline were for the upscale and higher tiers.
