Choice hotels sees profit drop 6.5% in third quarter
Thursday, October 30, 2008: For the third quarter this year, Choice Hotels International reported a total profit of US$35.9 million, 6.5% down from the same period in 2007.
Ending the three months to September end, the hotel chain which operates brands Comfort Inn and Clarion, saw a lift of 9% for revenue, recording a total of US$191.2 million, resulting in diluted earnings per share (EPS) for the period coming in at US$0.57.
“As we continue to face an uncertain economic environment, we are confident that our unrelenting focus on our franchisees’ profitability, aided by Choice’s strong centralized support systems will position us well to achieve continued long-term profitable growth,” said Stephen Joyce, Choice President and CEO.
Looking to the fourth quarter, Choice predicts that it won’t make previous projections of profits as this economic instability continues.
“RevPAR is expected to decline approximately 6% for fourth quarter 2008 and decline approximately 1.5% for full-year 2008,” says Choice.
Though it adds, “The uncertainty around the current economic environment and credit market conditions and their impact on travel patterns and hotel development activities makes it difficult to predict future results.”
Choice reports that in the three months the daily rate across its hotels reached US$78.96, up a little over two dollars from the previous year. Unfortunately occupancy dropped to 64.1% from 66.9% negating any increases in gains.
“The fundamental resiliency of Choice’s business model was evident in our third quarter results, as the company grew its franchising revenues and once again demonstrated robust domestic unit and room growth during a period marked by significant industry-wide occupancy declines,” adds Mr Joyce.