Choice Hotels International reported a 1.4 percent year-over-year decline in revenue per available room during the third quarter, driven by a 160-basis point drop-off in occupancy to 68.6 percent.
The company attributed the dip to "one-time impacts," including calendar shifts to the middle of the week for the July 4 and Jewish holidays, as well as negative impact from Hurricane Florence in September. Marriott International during its recent earnings call blamed tepid third-quarter RevPAR growth on weak transient demand during September. Choice president and CEO Patrick Pacious nevertheless held positive on Choice's third-quarter results and said the fourth quarter is looking strong.
The company executed 159 new domestic franchise agreements during the quarter, including 27 for Choice's extended-stay brands, which covers the 2018-acquired WoodSpring Suites. Choice's domestic pipeline of hotels that are awaiting conversion, under construction or approved for development totaled 968 hotels for the quarter, a 29 percent year-over-year increase. As of Sept. 30, the company's systemwide portfolio totaled 6,922 properties, 1,135 of which were in international markets.
Third-quarter net income rose 40 percent year over year to $80 million.
New Clarion Pointe Brand
At the end of September, Choice launched a midscale select-service brand called Clarion Pointe, an extension of the full-service Clarion brand. Pacious said Choice used Clarion as a tie-in for its new product because Clarion has the greatest brand equity in the Choice portfolio. Additionally, many Clarion owners also own midscale products they're interested in tying to a select-service conversion brand, he said. Clarion Pointe already has a dozen franchise agreements in place and another 75 properties in the pipeline, according to Pacious. The first Clarion Pointe property is expected to open during the first quarter of 2019.
Book on Google Skirts OTAs
Choice this week announced it had enabled Book on Google, which allows users to search, select and reserve a hotel on Google using their saved Google credentials. The reservations are handled by Choice Hotels, which means owners will be able to reduce the commissions they pay to online travel agencies, Pacious said, and Choice will own the customer
data on those bookings, a growing concern for hoteliers.
The decision to opt in to Book on Google goes hand-in-hand with Choice's ongoing efforts to reduce commissions through loyalty member direct bookings. Choice Privileges added 4 million members so far in 2018, Pacious said, growing the program to 39 million members.
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