2018 success for Choice Hotels after acquisition of WoodSpring Suites
Choice Hotels report a healthy performance for the first quarter of 2018, bolstered by the closing of the deal to acquire extended stay group WoodSpring Suites in February.
Choice Hotels’ first quarter returns have seen a boost after the purchase of WoodSpring Suites. The acquisition of the extended stay brand was clearly a good move, and their profits are up 3% on this time last year. We find out more.
WoodSpring Suites a good choice for Choice
Choice Hotels’ decision to purchase extended stay brand WoodSpring Suites was announced in December 2018. The deal closed in February of this year, and no doubt has been a major contributing factor to Choice Hotels’ strong first quarter performance in 2018. Choice Hotels purchased WoodSpring Suites for $231m and the group saw increases across many facets of their first quarter returns. Their net income increased by 3% on last year, while their adjusted net income grew 25% and their RevPAR was up 3.5%. WoodSpring Suites’ RevPAR also increased by 3.5%, so great results overall for the fledgling deal, cementing the fact that buying WoodSpring was a great choice for Choice. WoodSpring Suites experienced 21 percent RevPAR growth and 48 percent GRR growth over the last three years.
Extended stay a safe bet
Choice Hotels knew they were on to a good thing when purchasing WoodSpring Suites. Extended stay accommodation continues to grow in popularity, and is one of the healthiest sectors of the hospitality industry. Buying WoodSpring added nearly 240 extended-stay hotels to the Choice Hotels portfolio, creating an extended-stay portfolio of more than 350 properties with existing brands, Mainstay Suites and Suburban Extended Stay. Patrick Pacious, president and CEO, Choice Hotels, said, “The acquisition enables us to incorporate best practices from WoodSpring’s proven model across our extended-stay brands, and further strengthens Choice’s position as a leader in both hospitality and franchising.” Pacious also said that WoodSpring added 33 new franchise agreements in 2018, the majority signed after the company was purchased by Choice. 17 of these are set to open this year, but Choice will also be focusing on improving its portfolio beyond just the WoodSpring brand. Comfort, Choice’s midscale brand, will also be a focus for 2018, as Choice plans to give the brand an update, with a new identity and modernised reception areas and guest rooms planned for its 1600 properties by 2020.
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