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Choice Hotels (CHH) Boosts Presence in the US With New Hotels

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Choice Hotels International, Inc. (CHH - Free Report) recently announced a collaboration with Colorado-based firm ServiceStar Capital Management to develop 21 new Everhome Suites extended-stay hotels across the United States. The initiative outlines Colorado, Arizona, Utah, Nevada and Florida expansions.

Everhome Suites, comprises new construction, midscale extended stay offering featuring purpose-built accommodations for how guests live and work during longer-term stays. Given a pipeline of over 30 projects, the company stated that the first hotel is on track to open this month.

Patrick Pacious, president and chief executive officer, Choice Hotels, stated, "The key to the brand's continued success is our ongoing collaboration with growth-minded investors/developers like ServiceStar, whose commitment fuels our shared goal of providing new hotels in the right markets that meet the needs of longer-staying guests."

Apart from Everhome Suites, the company and the association emphasized on the development of 50 WoodSpring Suites hotels across the country. This includes properties (on their existing open and under development portfolio) throughout Colorado, Arizona, Utah, Nevada, Montana and Pennsylvania. The company stated plans to develop WoodSpring Suites in Atlanta, GA and throughout Florida.

More Focus on Expansion

Choice Hotels’ riveting growth potential depends on the continual expansion of its brands. In fact, the company’s portfolio of well-segmented brands is getting evidently stronger. In second-quarter 2022, the company awarded 122 domestic franchise agreements (representing 10,787 rooms) compared with the 111 franchising agreements reported in the prior-year quarter. The company reported sequential increases in its business and group travel demand, driven by a rise in extended vacations, household relocations and temporary remote work assignments. The transition of leisure travel into mainstream business added to the positives.

Backed by the positive trends and segment-specific tailwinds, the company stated that RevPAR and adjusted EBITDA surpassed the 2019 levels. The company anticipates the momentum to continue on the back of investments in infrastructure build and onshoring of the U.S. supply chain.

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So far this year, shares of Choice Hotels have declined 28% compared with the industry’s fall of 13.7%.

Zacks Rank & Other Stocks to Consider

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.

Some other top-ranked stocks in the Zacks Consumer Discretionary sector are Marriott Vacations Worldwide Corporation (VAC - Free Report) , Hyatt Hotels Corporation (H - Free Report) and InterContinental Hotels Group PLC (IHG - Free Report) .

Marriott Vacations sports a Zacks Rank #1. VAC has a trailing four-quarter earnings surprise of 13.9%, on average. The stock has declined 8.5% in the past year.

The Zacks Consensus Estimate for VAC’s current financial year sales and earnings per share (EPS) indicates an increase of 19.7% and 131.4%, respectively, from the year-ago period’s reported levels.

Hyatt carries a Zacks Rank #2. H has a trailing four-quarter earnings surprise of 798.8%, on average. The stock has increased 18.3% in the past year.

The Zacks Consensus Estimate for H’s current financial year sales and EPS indicate growth of 89.1% and 113%, respectively, from the year-ago period’s reported levels.

InterContinental Hotels carries a Zacks Rank #2. IHG has a long-term earnings growth of 32.7%. The stock has declined 17.7% in the past year.

The Zacks Consensus Estimate for IHG’s current financial year sales and EPS indicates growth of 21.7% and 88.4%, respectively, from the year-ago period’s reported levels.