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Choice Hotels Boosts Comfort Brand Presence in United States

Zacks Equity Research

Choice Hotels International, Inc. CHH continues to expand through franchise agreements. To this end, the company recently announced the opening of Comfort Inn & Suites in Sarasota, FL, thereby strengthening its mid-scale brand. Notably, the property — located at 5985 Brookhill Blvd — is opening on the same lot wherein Sleep Inn and MainStay Suites dual-brand properties were recently built. The new property was developed by WB Services Construction, LLC.

This property will feature rooms and public spaces with a modern design, along with a new Comfort logo. Markedly, the company is banking on the strategy of opening more than one hotel per week in the current year.

Choice Hotels is confident about the success of this new property as it will offer guests easy access to the Sarasota-Bradenton International Airport and Sarasota Event Center.

Strategic Expansion to Drive Growth

Recently, Comfort Hotels also announced the opening of Comfort Inn & Suites Dalton Georgia — a mid-scale brand — under the Comfort brand. Notably, this 76-roomed property marked the company’s 500th hotel featuring the new logo in Dalton, GA.

Markedly, Choice Hotels strengthened mid-scale presence with the launch of Clarion Pointe. Expansion of the brand is expected to be carried out through 21 Clarion Pointe franchise agreements.

Alongside domestic growth, Choice Hotels continues to expand international footprint. Its key international operating markets include Spain, Colombia, Panama, the Caribbean and Canada.

Last year, the company had announced an alliance with Sercotel — a leading hotel operator and franchisor based in Spain. This alliance will enable the expansion 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.

Notably, the Comfort brand has been doing solid business. Also, Comfort’s pipeline has more than 300 properties, out of which 80% are newly constructed. Comfort hotels also anticipates to open 25 more properties this year in major markets such as Dallas, Nashville, Tennessee, Pittsburgh, San Antonio and San Diego. These efforts will help it attract business travelers, improve overall guest experience and increase RevPAR for years to come.

Backed by solid expansion strategies and a strong brand presence, shares of Choice Hotels have gained 23.4% so far this year compared with the industry’s 14.8% rally.

 

 

Zacks Rank & Key Picks

Currently, Choice Hotels carries a Zacks Rank #4 (Sell). Some better-ranked stocks from the same space are American Woodmark Corporation AMWD, Hasbro, Inc. HAS and Vail Resorts, Inc. MTN, each carrying a Zacks Rank of 2 (Buy). You can the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

American, Hasbro and Vail have an impressive long-term earnings growth rate of 9%, 10.7% and 15%, respectively.

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