In the three months since Choice Hotels International closed on its $231 million acquisition of WoodSpring Suites, the company's performance has been boosted, as its Q1 2018 have revealed.
Choice Hotels CEO Pat Pacious said the extended-stay segment continues to dramatically exceed RevPAR growth across the wider hotel sector. Choice reported a 3.5 per cent increase in both domestic and system-wide REVAR compared to the same period last year, which Pacious attributed to gains in both occupancy and average daily rates. Total revenues for the company were also up 11 per cent year-over-year.
In comparison, the WoodSpring portfolio achieved a 13.5 per cent increase in RevPAR, an increase that Pacious said is both unexpected and sustainable for the forseeable future: "There is no indication that this was a one-time phenomenon. The extended-stay business is strong, and with WoodSpring's model we believe we outpaced the rest of the segment."
Pacious said WoodSpring's performance could be attributed to its higher-than-average room count. WoodSpring prototypes consist of 122 suites, which Pacious said allows the brand to accelerate and outpace unit growth as more properties are added to its development pipeline.
In Q1 WoodSpring signed 33 new development contracts, 31 of which were signed after the brand's acquisition closed. Choice's two other extended-stay brands, MainStay Suites and Suburban Extended Stay, signed 13 new development contracts between them in the last quarter.
Pacious said WoodSpring expects to open 17 hotels in total this year, while a further 50 properties will begin construction: "We want to pass a milestone of 250 WoodSpring hotels open this year, and we will be accelerating this growth in 2019."
The WoodSpring figures tally with the latest Highland Group report which found that extended stay REVPAR was satirising despite considerable supply growth.