This strong expansion means that its forthcoming hotel total stands at 1,029 sites, representing approximately 100,000 rooms.
Choice revealed its latest development figures within its Q4 2022 earnings results. In terms of its franchising, the company awarded 590 US agreements last year, an 11% increase compared to the prior year.
Of the total agreements awarded, 87% were for the company’s upscale, midscale and extended-stay brands. In addition, the company awarded a record number of franchise agreements to underrepresented and minority owners in 2022, bringing the total number of executed contracts to 345 since the inception of the programme.
There was a company record for domestic extended-stay franchise agreements in 2022, increasing 77% compared to the same period of 2021.
Extended stay success
Analysing development by segment, Choice reported that its extended-stay US pipeline was hugely promising, reaching 496 hotels as of 31 December 2022, a 34% increase in a year.
Patrick S. Pacious, president, CEO and director, reported in the firm’s Q4 2022 earnings call: “In 2022, we grew the system size across our 20 brands in the higher revenue segments by approximately 10% year-over-year.
“In addition to our traditional strength in the upper midscale and midscale segments, the company has well-established brands with significant growth potential in the two segments with the highest developer and guest demand: extended-stay and upscale.”
Pacious further revealed: “Last year’s strong developer interest for our extended-stay brands marked a record year for executed contracts. This pipeline now represents half of the total domestic pipeline and will continue to serve as a growth engine for years to come.
“Our newest extended-stay brand, Everhome Suites, which opened its first hotel last year, is on the cusp of major growth, gaining impressive traction across the development community with over 40 domestic franchise agreements awarded last year and 60 projects already in the pipeline.”
Spring in the step
Another Choice extended stay brand, Woodspring Suites, increased its domestic pipeline 47% year on year to reach 310 projects by the end of the year.
Pacious is forecasting this rapid expansion to continue, saying: “We expect the brand’s openings this year to exceed 2022 levels. Overall, we remain very optimistic about our extended-stay segment growth and now expect the number of our extended-stay units to increase at an average annual growth rate of more than 15% over the next five years.”
Over in the upscale segment, Cambria Hotels now has 69 domestic properties in the pipeline, 19 of which are projects under active construction as of the end of December. This will nearly double its portfolio from its current 65 sites, with this total itself representing a 14% expansion in 2022.
Pacious outlined: “The Cambria brand had one of its best years ever. We awarded nearly 30 domestic contracts in 2022, doubling the number of the brand’s franchise agreements sold year-over-year. 2023 is shaping up to be another great year for Cambria as we expect 10 additional hotels to open across the country.”
Choice’s overall upscale presence grew by 29% last year, driven by the acquisition of Radisson Hotels Americas and Cambria’s growth.
Pacious forecast further expansion for the segment in the years to come too, stating: “We expect that the Radisson Americas acquisition will enable us to build on our momentum in the upscale segment, accelerating the growth of our Cambria and Ascend Hotel Collections brands and, at the same time, allowing us to expand the Radisson portfolio.”
Pacious further analysed: “We continued to strengthen our core portfolio of brands. Within this category, our upper-midscale segment grew by 24% year-over-year, reaching more than 2,200 domestic hotels in 2022 alone.”
The company’s upscale, extended-stay and midscale segments overall reported a 9.5% increase in hotels and 10.5% increase in rooms since 31 December 2021. The amount of hotels in these sectors is expected to grow approximately 1% for full-year 2023, compared to full-year 2022.
As for how Choice’s portfolio currently stands, the total number of domestic US hotels and rooms rose 6.5% and 7.9% respectively, during 2022. Therefore the US system size was 6,296 hotels and 494,409 keys at year end.
Internationally, the key count rose by 9.6% across the year, from 121,716 to 133,395 rooms. In terms of site numbers, global hotels increased by 6.6% from 1,117 to 1,191.
Altogether this means Choice’s system now comprises 7,487 properties and 627,804 keys, equating to 6.5% and 8.3% upticks, year on year.