Choice Hotels International, Inc. has reported its results for the three months and year ended 2016, and recorded a record increase in share price late in the year.
Net income for the fourth quarter of 2016 was $31.8 million or $0.56 per diluted share, compared with $29.2 million or $0.51 per diluted share for the fourth quarter of 2015. Fourth quarter adjusted earnings before income taxes, depreciation and amortization (EBITDA) was $56.0 million, compared with $50.6 million in the prior year, an increase of 11 per cent.
“We are pleased to report another record year of revenue, operating income and net income performance,” said Stephen P. Joyce, CEO of Choice Hotels. “2016 was a strong year for Choice Hotels highlighted by our domestic RevPAR growth which continues to outpace industry performance and strong development results.
“There are many contributing factors to our success highlighted by our efforts to deliver new strategic programs and tools designed to increase reservation delivery to our franchisees, the acceleration of our growth and performance in the upscale category, and our strong development momentum. We are optimistic that our expanded programs and services will result in continued strong RevPAR performance and developer interest in 2017 and beyond.”
Highlights of the company’s fourth quarter and full-year 2016 results are as follows:
• Diluted earnings per share (EPS) for the fourth quarter totaled $0.56, an increase of 10 per cent from the comparable period of the prior year, and increased 11 per cent for the full year to $2.46; excluding executive termination benefits, full year adjusted diluted EPS increased 12 per cent over the prior year.
• Net income totaled $31.8 million for the fourth quarter and $139.4 million for the full year.
• Adjusted EBITDA from hotel franchising activities for the fourth quarter increased 8 per cent from the prior year fourth quarter to $61.4 million and increased 7 per cent to $273.3 million for the full year.
• Adjusted hotel franchising margins for the fourth quarter increased 110 basis points from the prior year fourth quarter to 64.4 per cent, and increased 90 basis points to 68.2 per cent for the full year.
• Domestic royalty fees for fourth quarter totaled $68.4 million, an increase of 8.4 per cent from the comparable period of the prior year; full year domestic royalties increased 6.9 per cent to $300.7 million from the same period of 2015.
• Domestic system-wide revenue per available room (RevPAR) increased 5 per cent and 3.9 per cent for the fourth quarter and full year, respectively. Occupancy and average daily rates increased 150 basis points and 2.3 per cent, respectively in the fourth quarter from the same period of 2015.
• Domestic RevPAR performance for the fourth quarter of 2016 exceeded total industry results by 180 basis points, and also exceeded growth reported by Smith Travel Research for the primary chain scale segments in which the company competes.
• Comfort family of brands and Sleep recorded 27 and 31 consecutive months of RevPAR index gains compared to its competition, respectively.
• Cambria hotel & suites achieved full year RevPAR of over $100.
• Effective royalty rate increased 13 basis points and 11 basis points for the fourth quarter and full year 2016, respectively.
• Domestic hotels as of December 31, 2016, increased 1.6 per cent from December 31, 2015.