Choice Hotels International, Inc.‘s (CHH Quick QuoteCHH – Free report) of the upscale brand – Cambria Hotel – recently unveiled a new hotel prototype. The option enables developers to build bespoke Cambria hotels at reduced costs and increase growth in new markets.
Specially designed for the secondary and leisure market, the new option offers an inexpensive prototype, a lean construction and an optimized personnel structure. The prototype enables hotel development with a lower cost per key by reducing the number of square meters in the right places (by 20%). It also comes with a streamlined F&B concept that includes a 35% smaller kitchen with programmable vector cooking technology and a reduced culinary staff model.
Although the prototype includes a reduction in the number of rooms and common areas, the brand’s trademark and amenities are retained. These include the bar-forward food and beverage concept, spacious guest rooms, luxurious spa-inspired bathrooms and outdoor areas.
Regarding the prototype, Mark Shalala, senior vice president of development, Upscale Brands, Choice Hotels said, “The Cambria brand has expanded through new engineering and adaptive reuse projects, and this new prototype option builds on it with flexible, cost-effective design for Developers in markets that have the sales potential to significantly expand the existing Cambria customer base. “
The Cambria Hotels brand has been a key growth driver for the company. In the second quarter of 2021, the number of domestic upscale hotels increased 24% year over year, driven by an 11% increase in room counts for the Cambria Hotels brand and 28% for the Ascend Hotel Collection. With 60 Cambria hotels open, the company announced the brand had penetrated eight of the top 10 markets and 36 of the top 50 in the United States. Going forward, the company expects accelerated expansion in major US cities such as Chicago, Los Angeles, Nashville, New Orleans, Phoenix and Washington, DC
Value for money
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So far this year, Choice Hotels stocks have risen to 18.4% compared to Industry10.7% growth. In particular, the company benefits from expansion strategies through acquisitions and franchise agreements. In the future, it should benefit from continuous expansion strategies, the further development of the mid-range brand and the transformation and further development of the Comfort brands. Earnings estimates for 2021 have risen over the past 60 days, showing analysts’ optimism about the stock’s growth potential.
Zack’s Rank & Key Picks
Choice Hotels is currently rated # 3 (Hold) by Zacks. You can see The full list of current Zacks # 1 ranked (Strong Buy) stocks can be found here.
Some better-valued stocks in the zacks Cyclical consumption Sector are Bluegreen Vacations Holding Corporation (BVH quick offerBVH – Free report), RCI Hospitality Holdings, Inc. (RICK Quick QuoteRICK – Free report) and Caleres, Inc. (CAL quick offerCAL – Free report), each with a Zacks rank of # 1.
In 2021, Bluegreen Vacations earnings are expected to grow 172%.
RCI Hospitality has a 12% growth rate in earnings per share for three to five years.
Caleres has an average earnings surprise of 1,001.6% for the past four quarters.
