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Coronavirus Impact on Choice Hotels

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Choice Hotels International, Inc. announced yesterday the withdrawal of its previously issued full year 2020 guidance. The company cited the novel Coronavirus’ (COVID-19) impact on the global economy as the reason for the withdrawal. Choice Hotels joins other hotel chains in its decision to retract its 2020 estimates in light of the Coronavirus’ extreme worldwide impact.

As of Q2 2019, Choice Hotels franchised 7,005 properties in 41 countries and territories worldwide. The hotel giant operates under twenty-four brands across the mid-tier category, including:

  • Comfort Inn, Comfort Inn & Suites, Comfort Suites;
  • Cambria Suites;
  • Quality Inn, Quality Inn & Suites, Quality Suites, Quality Hotel, Quality Resort;
  • Clarion Hotel, Clarion Inn, Clarion Inn & Suites, Clarion Suites, Clarion Resort, Clarion Collection Hotel;
  • Sleep Inn, Sleep Inn & Suites;
  • Rodeway Inn, Rodeway Inn & Suites;
  • Econo Lodge, Econo Lodge Inn & Suites;
  • Mainstay Suites;
  • Suburban Extended Stay Hotel;
  • and Ascend Collection.

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Choice Hotels’ Statement

Choice Hotels issued a statement by Patrick Pacious, President & Chief Executive Officer of Choice Hotels addressing the outlook and virus. “The safety and well-being of guests, franchisees and associates is our top priority during these challenging and unprecedented times. We are working closely with our hotel owners and operators in managing difficulties posed by COVID-19 and helping mitigate the impact on their business by providing best-in-class franchisee resources and implementing timely changes to policies and procedures aimed at extending relief and minimizing disruptions. Concurrently, we remain committed to serving guests and the communities across the world where our hotels operate.

Pacious noted the company was not immediately able to quantify the impact on projected results. The CEO stated Choice Hotels would monitor the situation and would likely provide an update during the company’s earnings call.

Choice Hotels ended remarks with Pacious statement “[w]e are confident in the continued resiliency of our asset-light franchise business model, the strength of our proven brands, and our ability to navigate through these trying times. We are deeply proud of Choice Hotels’ contributions to the hotel industry and the foundation that we’ve built over the course of our more than 80-year history, all of which position the company for continued, long-term success.”

It is unclear how deep a blow the coronavirus will deliver to Choice Hotels and its 7,000 franchise hotels. However, with travel restrictions in place in many countries, including throughout the US, and tourism numbers significantly down, it goes without saying bottom lines will take a significant hit.

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