Quantcast

Choice Hotels (CHH) Expands Cambria Brand, Eyes Unit Growth


Shutterstock photo

Choice Hotels International, Inc. CHH continues to expand through franchise agreements. To this end, the company recently announced that it strengthened its mid-scale presence by opening Cambria Hotel Charleston Riverview under its Cambria brand. Notably, the 126-roomed hotel marks the brand's expansion in South Carolina.

Earlier, Cambria hotels signed an agreement with Koucar Management to build hotels in Detroit and Portland in 2020 and 2021. The current move underscores Choice Hotel's strategy of expansion of its mid-scale properties.

Backed by a portfolio of well-segmented brands, shares of the company have gained 4.9% in the past year against the industry 's decline of 9.2%.

Brand Strengthening and Expansion Bode Well

Choice Hotels relies heavily on expansion in domestic as well as international markets. In the first quarter of 2019, this hotelier awarded 79 total franchise agreements. Alongside domestic growth, the company continues to expand its international footprint in new countries. Key international operating markets include Spain, Colombia, Panama, the Caribbean and Canada.

Moreover, Choice Hotels recently strengthened its mid-scale presence, with the launch of Clarion Pointe. Expansion of the brand is expected to occur through 21 Clarion Pointe franchise agreements. Meanwhile, in the last year, the company announced an alliance with Sercotel, a leading hotel operator and franchisor based in Spain. This alliance will enable the extension 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.

Our Take

Notably, 99% of the company's revenues come from the franchise business. The number of domestic franchised hotels and rooms increased 6.6% and 9%, respectively, in 2018.

The Cambria brand has more than 40 hotels across the United States, with plans to expand in prime markets this year. This will help the brand reach another milestone with 50 coast-to-coast hotel openings in 2019.

We also believe that the continual addition of hotels will help Choice Hotels to fend off intense competition from the likes of Marriott MAR , Hilton HLT and Hyatt H .

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.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 - 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Hyatt Hotels Corporation (H): Free Stock Analysis Report

Marriott International (MAR): Free Stock Analysis Report

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

Hilton Worldwide Holdings Inc. (HLT): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.





This article appears in: Investing , Business , Stocks
Referenced Symbols: H , MAR , CHH , HLT



More from Zacks.com

Subscribe







Zacks.com
Contributor:

Zacks.com

Equity Research












Research Brokers before you trade

Want to trade FX?