Choice Hotels International is among the largest hotel chains in the world. The company has some 597,000 hotels under its many brands. Having a strong brand is important in the ever-competitive hotel industry. Choice Hotels has well-known brands like Comfort Inn, Quality Inn, Comfort Suites, Sleep Inn, Clarion Hotels, and Cambria Hotels under its belt. It is true that the pandemic has severely impacted the travel activities in the corporate as well as leisure space. However, once the pandemic comes under control and eventually fades away, long-term investors may want to look at hotel stocks at this time.
Recent Performance of Choice Hotels
Choice Hotels reported its third-quarter 2020 results in early November of 2020. Revenues were down 32% at $210.8 million. Earnings per share was also down substantially from $1.36 per share in Q32019 to $0.26 per share on a diluted basis. Operating income halved to $51 million from over $100 million in Q32019. All segment revenues were down on a year-on-year basis. The owned hotels segment saw the most revenue drop at more than 50%. Royalty fees from franchise locations were $79 million as opposed to $113 million in Q32019. Relicensing and initial franchise fees were down only about 10% at $6 million as opposed to $6.7 million in Q32019.
Choice Hotels stock has been on an uptrend since 1st February 2021. It has gained more than 5% in the first week of February 2021. On a 1-year basis, the stock is up more than 2% due to the fact that 2020 was a difficult year for the hotel industry as a whole. A peer of Choice Hotels is Wyndham Hotels. It is up 6% in the first week of February 2021 and up more than 5% on a 1-year basis. The other big name in the hotel industry is Marriott. Its stock is up almost 10% in February 2021 and but down 11% on a 1-year basis.