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Choice Hotels' (CHH) Cambria Brand Unveils New Hotel Prototype

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·3 min read
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Choice Hotels International, Inc.'s CHH upscale brand — Cambria Hotel — recently introduced a new hotel prototype. The option enables developers to build customized Cambria hotels at a reduced cost and boost growth across new markets.

Designed specifically for secondary and leisure markets, the new option offers a cost-effective prototype, streamlined structural design and an optimized staffing structure. The prototype enables hotel development with a lower cost-per-key by reducing square footage in the right places (by 20%). It also comes with a streamlined F&B concept, that includes a 35% smaller kitchen featuring programmable vector cooking technology and a reduced culinary staffing model.

Although the prototype involves reduction in rooms and public areas, the brand’s hallmark and signature amenities remain intact. This includes the presence of Bar-forward food and beverage concept, spacious guest rooms, Luxe spa-inspired bathrooms as well as outdoor spaces.

With reference to the prototype, Mark Shalala, senior vice president of development, upscale brands, Choice Hotels, stated, "The Cambria brand has expanded through new construction and adaptive reuse projects, and this new prototype option builds on that with a flexible, cost-efficient design for developers in markets that have a distribution potential to significantly grow the existing Cambria customer base.”

The Cambria Hotels brand has been a major growth driver for the company. During the second quarter of 2021, the number of domestic hotels in the upscale segment rose 24% year over year owing to an increase in room count of 11% for the Cambria Hotels brand and 28% for the Ascend Hotel Collection. With 60 Cambria hotels open, the company stated that the brand has entered eight of the top 10 markets and 36 of the top 50 in the United States. Going forward, the company anticipates ramped-up expansion across major U.S. cities like Chicago, Los Angeles, Nashville, New Orleans, Phoenix and Washington, D.C.

Price performance

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So far this year, shares of Choice Hotels have gained 18.4% compared with the industry’s 10.7% growth. Notably, the company is benefiting from expansion strategies through acquisitions and franchise agreements. Going forward, it is likely to benefit from continual expansion strategies, enhancement of the mid-scale brand as well as transformation and advancement of the Comfort brands. Earnings estimates for 2021 have moved up in the past 60 days, depicting analysts’ optimism regarding the stock’s growth potential.

Zacks Rank & Key Picks

Choice Hotels currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the Zacks Consumer Discretionary sector are Bluegreen Vacations Holding Corporation BVH, RCI Hospitality Holdings, Inc. RICK and Caleres, Inc. CAL, each sporting a Zacks Rank #1.

2021 earnings for Bluegreen Vacations are expected to surge 172%.

RCI Hospitality has a three-five year earnings per share growth rate of 12%.

Caleres has a trailing four-quarter earnings surprise of 1,001.6%, on average.

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Choice Hotels International, Inc. (CHH) : Free Stock Analysis Report

RCI Hospitality Holdings, Inc. (RICK) : Free Stock Analysis Report

Caleres, Inc. (CAL) : Free Stock Analysis Report

Bluegreen Vacations Holding Corporation (BVH) : Free Stock Analysis Report

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