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Choice Hotels Expands Footprint With 3 New Hotels in Europe

Zacks Equity Research

Choice Hotels International, Inc. CHH is consistently trying to fortify its presence worldwide. To this end, the company has announced the addition of three new hotels in  Europe. Currently, the company’s European portfolio has more than 426 hotels in 19 countries.

While V8 Hotel Köln @Motorworld is located in Cologne, Germany, Quality Hotel Ostrava City and Hotel Aquarius Venice are based in the Czech Republic and Italy, respectively. Both Hotel Aquarius Venice and V8 Hotel Köln @Motorworld are part of Ascend Hotel Collection, while Quality Hotel Ostrava is the first Quality-branded hotel in the Czech Republic.

Choice Hotels is quite confident about the success of these hotels as the European market has incredible growth opportunities. We also believe that the continual addition of hotels will help Choice Hotels fend off intense competition from the likes of Marriott MAR, Hilton HLT and Hyatt H.

Notably, shares of the company have gained 12.3% compared with the industry’s 25.5% rally in the past three months.

Strategic Expansion to Drive Growth

Choice Hotels relies heavily on expansion in domestic as well as international markets. In the fourth quarter of 2018, this hotelier awarded 73 total franchise agreements, out of which 43 were domestic and 30 international. Alongside domestic growth, the company continues to expand its international footprint — the key markets being Spain, Colombia, Panama, the Caribbean and Canada.

Moreover, the company strengthened its mid-scale presence with the launch of Clarion Pointe. The brand is expected to expand through 21 Clarion Pointe franchise agreements. Last year, the company announced an alliance with Sercotel — a leading hotel operator and franchisor in Spain. Apart from fortifying Choice Hotels’ global footprint in Spain and other markets, this alliance will open up opportunities for hotel development in Europe and Latin America.

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.

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