Higher expenses swallow revenue gains at Choice Hotels

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Choice Hotels International’s second-quarter profit fell 11% from a year earlier due to higher selling and interest expenses.

Those expenses more than offset higher demand it its franchised Comfort Inn, Quality and Econo Lodge hotels.

U.S. revenue per available room (RevPAR) rose 3.5% from a year earlier. RevPAR at Quality hotels rose 4.6%, while RevPAR for Comfort Inn, Comfort Suites and Clarion hotels increased about 3%.

Choice's revenue rose 5.7% to $183.6 million, but net income fell 11% to $28.2 million, as selling expenses rose 23% and interest expense tripled to $10.8 million, primarily on additional debt stemming from a $600 million cash dividend paid out last August.

Follow Danny King on Twitter @dktravelweekly.

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