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Choice Hotels (CHH) Expands by Opening Third Hotel in Atlanta
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Choice Hotels International, Inc. (CHH - Free Report) has collaborated with Vikas Patel of Mountain View Hospitality to open the third WoodSpring hotel in the greater Atlanta region. The 122-room hotel named WoodSpring Suites Atlanta Conyers is exclusively designed for extended stay travelers. It is located in close proximity to several hospitals and universities — including the Mercy Heart Clinic, Rockdale Health Center and Oxford College of Emory University.
The move underscores Choice Hotels’ efforts to expand its footprint globally and strengthen its portfolio. Driven by its expansion strategy, shares of Choice Hotels have gained 23.9% in the past two years against the industry’s 7.4% decline.
Expansion Strategy Bodes Well
Choice Hotels relies heavily on expansion in both domestic as well as international markets. Apart from constant franchise expansion, the company recently added 239 extended-stay hotels in 35 states to its portfolio through the acquisition of Woodspring Suites.
Choice Hotels expects to see Woodspring having 250 hotels by the beginning of 2019. In the first nine months of 2018, Choice Hotels opened 11 WoodSpring hotels in top markets like Chicago, Seattle, Charlotte and Detroit. Growth in these hotels is expected to accelerate in 2019. Additionally, in the fourth quarter, the company finalized an agreement with a developer to build more than 20 additional WoodSpring Suites over the next 4 years. Net domestic unit growth for 2018 is expected to be 7-8%.
Meanwhile, alongside domestic growth, management continues to expand its international footprint in new countries. In April, the company announced its alliance with Sercotel, a leading hotel operator and franchisor based in Spain. This alliance will enable the extension of Choice Hotels’ global footprint in Spain and other markets as well as the creation of opportunities for additional hotel development across Europe and Latin America.
Bottom Line
We believe that the addition of WoodSpring Suites Atlanta Conyers will further drive Choice Hotels’ overall top line. In the third quarter of 2018, revenues increased 8% year over year. For 2018, the Zacks Consensus Estimate pegs revenues of $1.06 billion, reflecting 5% growth from 2017. This expansion is part of Choice Hotels’ strategy to fend off intense competition from the likes of Marriott (MAR - Free Report) , Hyatt (H - Free Report) and Hilton (HLT - Free Report) .
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Choice Hotels (CHH) Expands by Opening Third Hotel in Atlanta
Choice Hotels International, Inc. (CHH - Free Report) has collaborated with Vikas Patel of Mountain View Hospitality to open the third WoodSpring hotel in the greater Atlanta region. The 122-room hotel named WoodSpring Suites Atlanta Conyers is exclusively designed for extended stay travelers. It is located in close proximity to several hospitals and universities — including the Mercy Heart Clinic, Rockdale Health Center and Oxford College of Emory University.
The move underscores Choice Hotels’ efforts to expand its footprint globally and strengthen its portfolio. Driven by its expansion strategy, shares of Choice Hotels have gained 23.9% in the past two years against the industry’s 7.4% decline.
Expansion Strategy Bodes Well
Choice Hotels relies heavily on expansion in both domestic as well as international markets. Apart from constant franchise expansion, the company recently added 239 extended-stay hotels in 35 states to its portfolio through the acquisition of Woodspring Suites.
Choice Hotels expects to see Woodspring having 250 hotels by the beginning of 2019. In the first nine months of 2018, Choice Hotels opened 11 WoodSpring hotels in top markets like Chicago, Seattle, Charlotte and Detroit. Growth in these hotels is expected to accelerate in 2019. Additionally, in the fourth quarter, the company finalized an agreement with a developer to build more than 20 additional WoodSpring Suites over the next 4 years. Net domestic unit growth for 2018 is expected to be 7-8%.
Meanwhile, alongside domestic growth, management continues to expand its international footprint in new countries. In April, the company announced its alliance with Sercotel, a leading hotel operator and franchisor based in Spain. This alliance will enable the extension of Choice Hotels’ global footprint in Spain and other markets as well as the creation of opportunities for additional hotel development across Europe and Latin America.
Bottom Line
We believe that the addition of WoodSpring Suites Atlanta Conyers will further drive Choice Hotels’ overall top line. In the third quarter of 2018, revenues increased 8% year over year. For 2018, the Zacks Consensus Estimate pegs revenues of $1.06 billion, reflecting 5% growth from 2017. This expansion is part of Choice Hotels’ strategy to fend off intense competition from the likes of Marriott (MAR - Free Report) , Hyatt (H - Free Report) and Hilton (HLT - Free Report) .
Choice Hotels currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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