updated - May 21, 2013 Tuesday EDT
Choice Hotels International Inc. saw higher revenue and earnings on rising hotel occupancy and rates.
The number of U.S. franchise contracts signed with Choice in the second quarter was up 54 percent compared to the second quarter of 2011, with "meaningful gains" in both new construction and conversion hotel franchises. Franchise revenue was up 6 percent.
"We're seeing both strong (revenue per available room) and global system growth," said Steve Joyce, president and CEO of the company in a statement. "We are very excited about accelerating momentum in the franchise development world."
Second-quarter revenue was $173.6 million, up 5 percent from $165.3 million in the comparable quarter. Net income was $31.9 million, or 55 cents per share, compared with $27.6 million, or 40 cents per share.
During the quarter, Choice executed 106 new franchise sales contracts in the U.S., an increase from the first quarter, and executives said they are optimistic the development environment will continue to improve.
Conversion franchise sales were up 40 percent from 61 in the second quarter of 2011 to 85 in the second quarter of 2012. New-construction sales were up 163 percent, from eight deals in second-quarter 2011 to 21 deals in second-quarter 2012.
Revenue per available room was up 7.7 percent from last spring, while occupancy rose 2.5 percent and daily rates rose 2.8 percent, Choice reported.
The company forecasts full-year revenue per available room will rise between 6 percent and 7 percent.
Choice Hotels franchises 6,200 hotels and ended the quarter with 453 more hotels under construction or waiting brand conversion.
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