Silver Spring, Maryland-based Choice Hotels International Inc. (CHH) recently inked a corporate contract with priceline.com Incorporated’s (PCLN) subsidiary Booking.com. This was done with the clear intent of enhancing the company’s online coverage, mainly in the international market.
Now, the company’s customers across 180 countries will be able to deploy Choice Hotels’ various services through the online travel agency (:OTA), Booking.com. This agreement ensures free accessibility to 6,200 Choice Hotels worldwide.
Moreover, this contract will give a platform to Choice Hotels to expand its business in the global market and form new alliances with other OTAs. Post agreement, the company’s franchise properties are likely to witness a rise in its traffic growth.
Choice Hotels’ currently franchises 6,200 hotels with nearly 499,000 rooms across the U.S. and 30 other countries. During the fourth quarter of 2012, Choice Hotels entered into 214 domestic hotel franchise agreements. These consist of 174 refurbishment projects and 40 new constructions. As of December 31, 2012, the company’s pipeline included 482 hotels, consisting of almost 38,969 rooms worldwide.
The company recently reported fourth-quarter 2012 adjusted earnings from continuing operations of 45 cents, breezing past the Zacks Consensus Estimate by 4 cents. The results missed the year-ago earnings by a penny. Revenues increased 7% annually to $178.3 million with the rise in the franchise revenues.
Given its significant expansion plan, international exposure, strong brand recognition and better financial performance, we believe the company is in a position to proceed on its high growth trajectory, going forward.
Choice Hotels currently carries a Zacks Rank #2 (Buy). Another hotel company Wyndham Worldwide Corporation’s (WYN) fourth quarter 2012 adjusted earnings surpassed the Zacks Consensus Estimate and the prior-year levels. Wyndham currently carries a Zacks Rank #2 (Buy).
Another company in the sector worth a mention is Churchill Downs Inc. (CHDN), which carries a Zacks Rank #2 (Buy).
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