Choice Hotels Boosts Presence in N.D. - Analyst Blog

In order to extend its reach in North Dakota, Choice Hotels International Inc. ( CHH ) is set to launch a new hotel under its contemporary brand - Cambria Suites - in West Fargo, N.D. in association with KAJ Hospitality. The new four-storey, 103-room property, which marks the brand's first franchisee property is slated for a 2014 opening.

North Dakota is one of the fastest growing states in the United States, growing thrice the national rate. The city of West Fargo is also witnessing economic growth as evident from the city-wide growth rate of 72.9% last year. Commercial building permits issued by the city increased 480% year over year.

The city's economic growth is expected to draw several companies, thereby increasing the number of business travelers. This is validated by an estimated investment of more than $17 million toward the hotel and convention center projects in the greater West Fargo area.

With improving economic conditions, the hotel industry seems to be improving in the U.S. With lower supply in the U.S., revenue per available room (RevPAR) is improving on strong demand and continued higher pricing.

In order to benefit from such lucrative opportunities, Choice Hotels is consistently making efforts to expand its presence in the U.S. This Zacks Rank #3 (Hold) company has set a trend in hotel design with its upscale Cambria Suites brand while offering value proposition at the same time.

Since its launch in 2005, the brand has built a substantial development pipeline. Currently, about 19 Cambria Suites branded properties are operating domestically and there are several in the pipeline. Among them, Cambria Suites Miami is scheduled to open this fall.

Several other hoteliers including Marriott International Inc. ( MAR ) and Hyatt Hotels Corp. ( H ) have a presence in North Dakota while another hotelier Starwood Hotels & Resorts Worldwide Inc. ( HOT ) will open a property in the state this September, thus giving a tough competition to Choice Hotels.

CHOICE HTL INTL (CHH): Free Stock Analysis Report

HYATT HOTELS CP (H): Free Stock Analysis Report

STARWOOD HOTELS (HOT): Free Stock Analysis Report

MARRIOTT INTL-A (MAR): Free Stock Analysis Report

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

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

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