Press Releases

Choice Hotels International Reports 2022 First Quarter Results

First quarter domestic RevPAR exceeded 2019 levels by 10.4%; applications for new domestic franchise agreements increased 46% year-over-year

ROCKVILLE, Md., May 10, 2022 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE: CHH), one of the world's largest lodging franchisors, reported its results today for the three months ended March 31, 2022.

"Building on the record year we had in 2021, where we surpassed 2019 RevPAR and profitability levels, Choice Hotels' proven business model once again delivered impressive quarterly results, and we expect this momentum to continue as we approach the summer leisure travel season," said Patrick Pacious, president and chief executive officer, Choice Hotels. "With consumers prioritizing spending on leisure travel and continually looking to discover the great American outdoors, our hotels are in the right locations to capture this growing travel demand. We are confident that our long-term investments, compelling franchisee value proposition, and strong financial health, combined with underlying consumer trends that favor leisure travel, limited-service hotels and longer stay occasions, will allow us to drive sustainable growth in 2022 and beyond."

Highlights of first quarter 2022 results include (note that RevPAR metrics are compared to 20191):

  • Domestic systemwide revenue per available room (RevPAR) growth increased by 10.4% for first quarter 2022, compared to the same period of 2019, and outperformed the total industry by 13 percentage points. RevPAR growth was driven by an increase in average daily rate (ADR) of 9.3% and a 60-basis-point increase in occupancy levels versus first quarter 2019.
  • Domestic systemwide RevPAR growth has surpassed 2019 levels for ten consecutive months through March 31, 2022, a trend that has continued in the second quarter of 2022 with April RevPAR increasing approximately 16%, compared to April of 2019. RevPAR for full-year 2022 is expected to increase between 10% and 13%, compared to full-year 2019.
  • Applications received for new domestic franchise agreements increased by 46% in first quarter 2022, compared to the same period of 2021.
  • The company's domestic effective royalty rate for first quarter 2022 increased 3 basis points over first quarter 2021 to 5.05% and is expected to increase by approximately 5 basis points for full-year 2022, compared to full-year 2021.
  • Total revenues increased 41% to $257.7 million for first quarter 2022, compared to the same period of 2021. Total revenues excluding marketing and reservation system fees increased 43% to $131.1 million for first quarter 2022, compared to the same period of 2021.
  • Net income increased $45.1 million to $67.4 million for first quarter 2022, representing diluted earnings per share (EPS) of $1.20, a 200% increase over first quarter 2021.
  • First quarter adjusted net income, excluding certain items described in Exhibit 7, increased 82% to $57.7 million from first quarter 2021, representing adjusted diluted EPS of $1.03, an 81% increase from first quarter 2021.
  • Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for first quarter 2022 was $96.6 million, a 53% increase from the same period of 2021.
  • Adjusted EBITDA margin for first quarter 2022 reached 74%, a 470-basis-point increase from the same period of 2021.
  • During first quarter 2022, the company returned $28 million to shareholders in the form of cash dividends and share repurchases.

RevPAR Performance Trends

  • Choice Hotels' domestic portfolio achieved RevPAR index gains of 320 basis points versus local competitors for first quarter 2022, compared to the same period of 2019, driven by both ADR and occupancy index gains. All of the Choice Hotels' chain scale segments in which the company competes achieved RevPAR index share gains versus local competition for first quarter 2022, compared to the same period of 2019.
  • The company's extended-stay portfolio has consistently exceeded 2019 RevPAR levels since April 2021 and achieved domestic systemwide RevPAR growth of 19.2% in first quarter 2022, compared to the same period of 2019. The WoodSpring Suites brand achieved RevPAR growth of 27.2% in first quarter 2022, compared to the same period of 2019, driven by occupancy levels of 77% and a 24% increase in ADR.
  • The company's overall midscale portfolio has consistently surpassed 2019 RevPAR levels since June 2021 and achieved domestic systemwide RevPAR growth of 7.5% in first quarter 2022 compared to the same period of 2019. In first quarter 2022, the Comfort family brand's domestic systemwide RevPAR growth outperformed the upper-midscale chain scale by 750 basis points, compared to the same period of 2019.
  • The company's upscale portfolio continued to achieve domestic systemwide RevPAR share gains versus its local competitors for first quarter 2022, compared to the same period of 2019, with the Cambria Hotels brand posting gains of 920 basis points for first quarter 2022.

Additional details for the company's first quarter 2022 results are as follows:

Revenues 

  • First quarter 2022 domestic royalties totaled $87 million, a 38% increase from the same period of 2021.
  • Initial franchise and relicensing fees revenues increased 55% to $8.4 million for first quarter 2022, compared to the same period of 2021.
  • Procurement services revenues increased 4% to $11.7 million for first quarter 2022, compared to the same period of 2021.

Development

  • The company awarded 93 domestic franchise agreements in first quarter 2022, a 4% increase compared to the same period of 2021. Excluding the multi-unit transaction for 22 properties as part of the company's strategic alliance with Penn National Gaming in 2021, domestic franchise agreements increased 39% in first quarter 2022, compared to the same period of 2021.
  • The number of domestic franchise agreements awarded for new construction hotels more than doubled in first quarter 2022, compared to the same period of 2021.
  • Of the total domestic agreements awarded in first quarter 2022, 88% were for the company's upscale, midscale and extended-stay brands.
  • The company's extended-stay portfolio continued its rapid expansion, reaching 478 domestic hotels as of March 31, 2022, a 5.3% increase since March 31, 2021, with the domestic pipeline reaching 350 hotels awaiting conversion, under construction or approved for development. The number of new domestic franchise agreements awarded for the company's extended-stay portfolio increased more than threefold for first quarter 2022, compared to the same period of 2021.
  • The number of domestic franchise agreements awarded for the company's midscale segment increased 45% for first quarter 2022, compared to the same period of 2021. In first quarter 2022, the Comfort brand family's domestic franchise agreements for conversion hotels increased by 56% compared to the same period of 2021.
  • For first quarter 2022, the Cambria Hotels brand more than tripled the number of domestic franchise agreements awarded, compared to the same period of 2021.
  • The number of domestic hotels and rooms, as of March 31, 2022, decreased 1.2% and 2.8%, respectively, from March 31, 2021. Excluding the impact from the previously announced departure of 17 AMResorts®-branded properties and the exit of 41 underperforming assets from the portfolio in fourth quarter 2021, the company's domestic upscale, midscale and extended-stay segments reported a 0.7% increase in units compared to March 31, 2021. For full-year 2022, the number of domestic upscale, midscale and extended-stay units is expected to grow between 1% and 2%, compared to full-year 2021.
  • The company's total domestic pipeline of hotels awaiting conversion, under construction or approved for development, as of March 31, 2022, reached 864 hotels, representing nearly 78,000 rooms, a 3.5% increase in rooms from December 31, 2021. This pipeline does not include applications received or master development agreements which commit to future franchise development.  

Balance Sheet and Liquidity

The company further strengthened its liquidity position in first quarter 2022 and continues to benefit from its primarily franchise-only business model, which has historically provided a stable earnings stream, low capital expenditure requirements and significant free cash flow. As of March 31, 2022, the company's total available liquidity consisting of cash and available borrowing capacity through the revolving credit facility increased 37% to $1.13 billion, compared to March 31, 2021. The company generated cash flow from operations of $63.9 million for first quarter 2022, an increase of $63.8 million from the same period of 2021.

Shareholder Returns

During the three months ended March 31, 2022, the company paid cash dividends totaling $13.2 million. Based on the current quarterly dividend rate of $0.2375 per common share outstanding, the company expects to pay dividends of $53 million during 2022, compared to total dividends of $25 million paid in 2021.

During first quarter 2022, the company repurchased $14.8 million of common stock under its stock repurchase program, as well as through repurchases from employees in connection with tax withholding and option exercises relating to awards under the company's equity incentive plans. As of March 31, 2022, the company had 3.3 million shares of common stock remaining under the current share repurchase authorization.

Conference Call

Choice Hotels International will conduct a conference call on, May 10, 2022, at 10:30 a.m. Eastern Time to discuss the company's first quarter 2022 earnings results. The dial-in number to listen to the call domestically is (888) 349-0087 and the number for international participants is (412) 317-5259. A live webcast and accompanying materials will also be available on the company's investor relations website, http://investor.choicehotels.com/ and can be accessed via the Financial Performance and Presentations tab.

About Choice Hotels®

Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world. With nearly 7,000 hotels, representing nearly 600,000 rooms, in 35 countries and territories as of March 31, 2022, the Choice® family of hotel brands provides business and leisure travelers with a range of high-quality lodging options from limited service to full-service hotels in the upscale, midscale, extended-stay and economy segments. The award-winning Choice Privileges® loyalty program offers members benefits ranging from everyday rewards to exceptional experiences. For more information, visit www.choicehotels.com.

Forward-Looking Statements

Certain matters discussed in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as "expect," "estimate," "believe," "anticipate," "should," "will," "forecast," "plan," "project," "assume," or similar words of futurity. All statements other than historical facts are forward-looking statements. These forward-looking statements are based on management's current beliefs, assumptions and expectations regarding future events, which, in turn, are based on information currently available to management. Such statements may relate to projections of the company's revenue, expenses, adjusted EBITDA, earnings, debt levels, ability to repay outstanding indebtedness, payment of dividends, repurchases of common stock and other financial and operational measures, including occupancy and open hotels, RevPAR, the company's ability to benefit from any rebound in travel demand, the company's liquidity, the impact of COVID-19 and economic conditions on our future operations, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other factors.

Several factors could cause actual results, performance or achievements of the company to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, continuation or resurgence of the COVID-19 pandemic, including with respect to new strains or variants; the rate, pace and effectiveness of vaccination in the broader population; changes in consumer demand and confidence, including the impact of the COVID-19 pandemic on unemployment rates, consumer discretionary spending and the demand for travel, transient and group business; the impact of COVID-19 on the global hospitality industry, particularly but not exclusively in the U.S. travel market; the success of our mitigation efforts in response to the COVID-19 pandemic; the performance of our brands and categories in any recovery from the COVID-19 pandemic disruption; the timing and amount of future dividends and share repurchases; changes to general, domestic and foreign economic conditions, including access to liquidity and capital as a result of COVID-19; future domestic or global outbreaks of epidemics, pandemics or contagious diseases, or fear of such outbreaks; changes in law and regulation applicable to the travel, lodging or franchising industries; foreign currency fluctuations; impairments or declines in the value of the company's assets; operating risks common in the travel, lodging or franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees and our relationships with our franchisees; our ability to keep pace with improvements in technology utilized for marketing and reservations systems and other operating systems; the commercial acceptance of our Software-as-a-Service ("SaaS") technology solutions division's products and services; our ability to grow our franchise system; exposure to risks related to our hotel development, financing and ownership activities; exposures to risks associated with our investments in new businesses; fluctuations in the supply and demand for hotel rooms; our ability to realize anticipated benefits from acquired businesses; impairments or losses relating to acquired businesses; the level of acceptance of alternative growth strategies we may implement; cyber security and data breach risks; ownership and financing activities; hotel closures or financial difficulties of our franchisees; operating risks associated with our international operations, especially in areas currently most affected by COVID-19; the outcome of litigation; and our ability to effectively manage our indebtedness and secure our indebtedness. These and other risk factors are discussed in detail in the company's filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measurements

The company evaluates its operations utilizing the performance metrics of adjusted EBITDA, adjusted EBITDA margins, adjusted selling, general and administrative (SG&A) expenses, revenues excluding marketing and reservation system activities, adjusted net income and adjusted EPS, which are all non-GAAP financial measurements. These measures, which are reconciled to the comparable GAAP measures in Exhibit 7, should not be considered as an alternative to any measure of performance or liquidity as promulgated under or authorized by GAAP, such as net income, SG&A, EPS and total revenues. The company's calculation of these measurements may be different from the calculations used by other companies and comparability may therefore be limited. We discuss management's reasons for reporting these non-GAAP measures and how each non-GAAP measure is calculated below.

In addition to the specific adjustments noted below with respect to each measure, the non-GAAP measures presented herein also exclude restructuring of the company's operations including employee severance benefit, income taxes and legal costs, exceptional allowances recorded as a result of COVID-19's impact on the collectability of receivables, and gains/losses on sale/disposal and impairment of assets primarily related to hotel ownership and development activities to allow for period-over-period comparison of ongoing core operations before the impact of these discrete and infrequent charges.

Adjusted SG&A, Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization and Margin: Adjusted SG&A, Adjusted EBITDA and Adjusted EBITDA Margin reflects net income excluding the impact of interest expense, interest income, provision for income taxes, depreciation and amortization, franchise-agreement acquisition cost amortization, other (gains) and losses, equity in net income (loss) of unconsolidated affiliates, mark-to-market adjustments on non-qualified retirement plan investments, share based compensation expense (benefit) and surplus or deficits generated by marketing and reservation system activities. We consider adjusted EBITDA and adjusted EBITDA margins to be an indicator of operating performance because it measures our ability to service debt, fund capital expenditures and expand our business. We also use these measures, as do analysts, lenders, investors and others, to evaluate companies because it excludes certain items that can vary widely across industries or among companies within the same industry. For example, interest expense can be dependent on a company's capital structure, debt levels and credit ratings, and share based compensation expense (benefit) is dependent on the design of compensation plans in place and the usage of them. Accordingly, the impact of interest expense and share based compensation expense (benefit) on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. These measures also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets or amortizing franchise-agreement acquisition costs. These differences can result in considerable variability in the relative asset costs and estimated lives and, therefore, the depreciation and amortization expense among companies. Mark-to-market adjustments on non-qualified retirement-plan investments recorded in SG&A are excluded from EBITDA, as the company accounts for these investments in accordance with accounting for deferred-compensation arrangements when investments are held in a rabbi trust and invested. Changes in the fair value of the investments are recognized as both compensation expense in SG&A and other gains and losses. As a result, the changes in the fair value of the investments do not have a material impact on the company's net income. Surpluses and deficits generated from marketing and reservation activities are excluded, as the company's franchise agreements require the marketing and reservation system revenues to be used exclusively for expenses associated with providing franchise services, such as central reservation and property-management systems, reservation delivery and national marketing and media advertising. Franchisees are required to reimburse the company for any deficits generated from these marketing and reservation system activities and the company is required to spend any surpluses generated in future periods. Since these activities will be managed to break-even over time, quarterly or annual surpluses and deficits have been excluded from the measurements utilized to assess the company's operating performance.

Adjusted Net Income and Adjusted Earnings Per Share: Adjusted net income and EPS exclude the impact of surpluses or deficits generated from marketing and reservation system activities. Surpluses and deficits generated from marketing and reservation activities are excluded, as the company's franchise agreements require the marketing and reservation system revenues to be used exclusively for expenses associated with providing franchise services, such as central reservation and property-management systems, reservation delivery and national marketing and media advertising. Franchisees are required to reimburse the company for any deficits generated from these marketing and reservation system activities and the company is required to spend any surpluses generated in future periods. Since these activities will be managed to break-even over time, quarterly or annual surpluses and deficits have been excluded from the measurements utilized to assess the company's operating performance. We consider adjusted net income and adjusted EPS to be indicators of operating performance because excluding these items allow for period-over-period comparisons of our ongoing operations.

Revenues, Excluding Marketing and Reservation System Activities: The company reports revenues, excluding marketing and reservation system activities. These non-GAAP measures we present are commonly used measures of performance in our industry and facilitate comparisons between the company and its competitors. Marketing and reservation system activities are excluded, as the company's franchise agreements require the marketing and reservation system revenues to be used exclusively for expenses associated with providing franchise services, such as central reservation and property-management systems, reservation delivery and national marketing and media advertising. Franchisees are required to reimburse the company for any deficits generated from these marketing and reservation system activities and the company is required to spend any surpluses generated in future periods. Since these activities will be managed to break-even over time, quarterly or annual surpluses and deficits have been excluded from the measurements utilized to assess the company's operating performance.

 

© 2022 Choice Hotels International, Inc. All rights reserved.

1 2019 comparison data is shown for comparable prior year periods for context in light of the pandemic's impact on industry performance in 2021.

 

 

 

Choice Hotels International, Inc. and Subsidiaries

             

Exhibit 1

Condensed Consolidated Statements of Income

               

(Unaudited)

               
                 
                 

(In thousands, except per share amounts)

 

Three Months Ended March 31,

           

Variance

   

2022

 

2021

 

$

 

%

                 

REVENUES

               
                 

     Royalty fees

 

$      90,739

 

$      66,047

 

$      24,692

 

37%

     Initial franchise and relicensing fees

 

8,402

 

5,427

 

2,975

 

55%

     Procurement services

 

11,683

 

11,191

 

492

 

4%

     Marketing and reservation system

 

126,637

 

91,521

 

35,116

 

38%

     Owned hotels

 

12,037

 

4,354

 

7,683

 

176%

     Other

 

8,229

 

4,407

 

3,822

 

87%

        Total revenues

 

257,727

 

182,947

 

74,780

 

41%

                 

OPERATING EXPENSES

               
                 

     Selling, general and administrative

 

30,324

 

30,267

 

57

 

0%

     Depreciation and amortization

 

6,231

 

6,362

 

(131)

 

(2)%

     Marketing and reservation system

 

113,650

 

98,173

 

15,477

 

16%

     Owned hotels

 

8,154

 

4,147

 

4,007

 

97%

       Total operating expenses

 

158,359

 

138,949

 

19,410

 

14%

                 

Gain on sale of asset

 

29

 

 

29

 

NM

                 

Operating income

 

99,397

 

43,998

 

55,399

 

126%

                 

OTHER INCOME AND EXPENSES, NET

               

     Interest expense

 

11,470

 

11,777

 

(307)

 

(3)%

     Interest income

 

(1,280)

 

(1,281)

 

1

 

0%

     Other (gains) losses

 

1,716

 

(1,205)

 

2,921

 

(242)%

     Equity in net (gain) loss of affiliates

 

(244)

 

5,997

 

(6,241)

 

(104)%

Total other income and expenses, net

 

11,662

 

15,288

 

(3,626)

 

(24)%

                 

Income before income taxes

 

87,735

 

28,710

 

59,025

 

206%

Income tax expense

 

20,344

 

6,373

 

13,971

 

219%

Net income

 

$      67,391

 

$      22,337

 

$      45,054

 

202%

                 

Basic earnings per share

 

$          1.21

 

$          0.40

 

$          0.81

 

203%

                 

Diluted earnings per share

 

$          1.20

 

$         0.40

 

$         0.80

 

200%

 

Choice Hotels International, Inc. and Subsidiaries

     

Exhibit 2

Condensed Consolidated Balance Sheets

       

(Unaudited)

           
             

(In thousands, except per share amounts)

 

March 31,

 

December 31,

       

2022

 

2021

             

ASSETS

       
             

Cash and cash equivalents

 

$                        527,209

 

$                        511,605

Accounts receivable, net

 

175,051

 

153,147

Other current assets

 

85,758

 

96,909

 

Total current assets

 

788,018

 

761,661

             

Property and equipment, net

 

394,950

 

377,367

Intangible assets, net

 

311,079

 

312,389

Goodwill

 

159,196

 

159,196

Notes receivable, net of allowances

 

67,649

 

66,451

Investments in affiliates

 

28,126

 

27,967

Operating lease right-of-use assets

 

31,869

 

34,183

Investments, employee benefit plans, at fair value

 

34,173

 

33,946

Other assets

 

156,968

 

158,664

             
   

Total assets

$                     1,972,028

 

$                     1,931,824

             
             
             

LIABILITIES AND SHAREHOLDERS' EQUITY

       
             

Accounts payable

 

$                          89,826

 

$                          81,169

Accrued expenses and other current liabilities

 

81,265

 

104,472

Deferred revenue

 

89,724

 

81,538

Current portion of long-term debt

 

216,486

 

216,351

Liability for guest loyalty program

 

86,212

 

86,765

 

 Total current liabilities

 

563,513

 

570,295

         

Long-term debt

 

844,426

 

844,123

Deferred revenue

 

108,165

 

105,785

Liability for guest loyalty program

 

42,350

 

41,785

Operating lease liabilities

 

32,549

 

35,492

Deferred compensation & retirement plan obligations

 

38,893

 

38,690

Other liabilities

 

27,487

 

29,772

           
 

Total liabilities

 

1,657,383

 

1,665,942

             
 

Total shareholders' equity

 

314,645

 

265,882

             
   

     Total liabilities and shareholders' equity

 

$                     1,972,028

 

$                     1,931,824

             

 

Choice Hotels International, Inc. and Subsidiaries

   

Exhibit 3

Condensed Consolidated Statements of Cash Flows

     

(Unaudited)

     
       
       
       

(In thousands)

Three months ended March 31,

       
 

2022

 

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

     

Net income

$                        67,391

 

$                        22,337

Adjustments to reconcile net income to net cash provided by operating activities:

     

     Depreciation and amortization

6,231

 

6,362

     Depreciation and amortization – marketing and reservation system

7,154

 

5,815

     Gain on sale of asset

(29)

 

     Franchise agreement acquisition cost amortization

3,784

 

3,044

     Stock compensation and other charges

7,555

 

5,026

     Interest and investment loss (income)

1,909

 

(2,059)

     Deferred income taxes

(3,119)

 

(1,378)

     Equity in net loss of affiliates, less distributions received

230

 

5,997

     Franchise agreement acquisition costs, net of reimbursements

(12,435)

 

(6,770)

     Change in working capital and other

(14,747)

 

(38,254)

 NET CASH PROVIDED BY OPERATING ACTIVITIES

63,924

 

120

       

CASH FLOWS FROM INVESTING ACTIVITIES:

     

Investment in property and equipment

(26,809)

 

(9,364)

Investment in intangible assets

(1,208)

 

(885)

Contributions to investments in affiliates

(268)

 

(968)

Purchases of investments, employee benefit plans

(2,818)

 

(551)

Proceeds from sales of investments, employee benefit plans

1,853

 

1,992

Issuance of notes receivable

(1,245)

 

Collections of notes receivable

63

 

63

Proceeds from sale of asset

8,494

 

Other items, net

(529)

 

   NET CASH USED IN INVESTING ACTIVITIES

(22,467)

 

(9,713)

       

CASH FLOWS FROM FINANCING ACTIVITIES:

     

Purchases of treasury stock

(14,802)

 

(5,046)

Dividends paid

(13,204)

 

Proceeds from exercise of stock options

2,211

 

2,845

   NET CASH USED IN FINANCING ACTIVITIES

(25,795)

 

(2,201)

       

Net change in cash and cash equivalents

15,662

 

(11,794)

Effect of foreign exchange rate changes on cash and cash equivalents

(58)

 

(24)

Cash and cash equivalents at beginning of period

511,605

 

234,779

       

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$                      527,209

 

$                      222,961

 

                               

Exhibit 4

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL OPERATING INFORMATION

DOMESTIC HOTEL SYSTEM

(UNAUDITED)

                                     
 

For the Three Months Ended March 31, 2022

 

For the Three Months Ended March 31, 2021

 

Change

                                     
 

Average Daily

         

Average Daily

         

Average Daily

         
 

Rate

 

Occupancy

 

RevPAR

 

Rate

 

Occupancy

 

RevPAR

 

Rate

 

Occupancy

 

RevPAR

                                     

Comfort(1)

$        98.88

 

55.6%

 

$        55.00

 

$           80.50

 

48.9%

 

$        39.34

 

22.8%

 

670

bps

 

39.8%

Sleep

87.04

 

54.8%

 

47.67

 

72.72

 

47.6%

 

34.65

 

19.7%

 

720

bps

 

37.6%

Quality

82.75

 

47.7%

 

39.47

 

69.90

 

42.2%

 

29.51

 

18.4%

 

550

bps

 

33.8%

Clarion(2)

85.56

 

38.3%

 

32.76

 

69.39

 

33.0%

 

22.91

 

23.3%

 

530

bps

 

43.0%

Econo Lodge

65.17

 

44.8%

 

29.17

 

58.26

 

41.4%

 

24.09

 

11.9%

 

340

bps

 

21.1%

Rodeway

67.66

 

47.1%

 

31.88

 

58.85

 

43.7%

 

25.69

 

15.0%

 

340

bps

 

24.1%

WoodSpring Suites

56.23

 

77.0%

 

43.29

 

47.31

 

74.3%

 

35.13

 

18.9%

 

270

bps

 

23.2%

MainStay

80.50

 

57.7%

 

46.46

 

70.48

 

51.4%

 

36.21

 

14.2%

 

630

bps

 

28.3%

Suburban

60.99

 

67.7%

 

41.32

 

50.34

 

65.4%

 

32.94

 

21.2%

 

230

bps

 

25.4%

Cambria Hotels

142.76

 

55.2%

 

78.77

 

100.76

 

42.4%

 

42.73

 

41.7%

 

1,280

bps

 

84.3%

Ascend Hotel Collection

131.71

 

49.1%

 

64.66

 

110.30

 

42.5%

 

46.88

 

19.4%

 

660

bps

 

37.9%

                                     

Total

$        84.31

 

52.8%

 

$        44.50

 

$           69.54

 

47.1%

 

$        32.74

 

21.2%

 

570

bps

 

35.9%

                                     
                                     

Effective Royalty Rate

                                   
                                     
 

For the Quarter Ended

                             
 

March 31,
2022

 

March 31,
2021

                             
                                     

System-wide(3)

5.05%

 

5.02%

                             
                                     

(1) Includes Comfort family of brand extensions including Comfort and Comfort Suites

     

(2) Includes Clarion family of brand extensions including Clarion and Clarion Pointe

     

(3) Includes United States and Caribbean countries and territories

     

 

                                 

Exhibit 5

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL OPERATING INFORMATION

DOMESTIC HOTEL SYSTEM

(UNAUDITED)

                                       
   

For the Three Months Ended March 31, 2022

 

For the Three Months Ended March 31, 2019

 

Change

                                       
   

Average Daily

         

Average Daily

         

Average Daily

         
   

Rate

 

Occupancy

 

RevPAR

 

Rate

 

Occupancy

 

RevPAR

 

Rate

 

Occupancy

 

RevPAR

                                       

Comfort(1)

 

$        98.88

 

55.6%

 

$        55.00

 

$           90.78

 

55.9%

 

$        50.77

 

8.9%

 

(30)

bps

 

8.3%

Sleep

 

87.04

 

54.8%

 

47.67

 

82.35

 

55.7%

 

45.89

 

5.7%

 

(90)

bps

 

3.9%

Quality

 

82.75

 

47.7%

 

39.47

 

75.87

 

48.0%

 

36.41

 

9.1%

 

(30)

bps

 

8.4%

Clarion(2)

 

85.56

 

38.3%

 

32.76

 

78.39

 

43.2%

 

33.83

 

9.1%

 

(490)

bps

 

(3.2)%

Econo Lodge

 

65.17

 

44.8%

 

29.17

 

59.50

 

42.2%

 

25.10

 

9.5%

 

260

bps

 

16.2%

Rodeway

 

67.66

 

47.1%

 

31.88

 

60.70

 

44.4%

 

26.98

 

11.5%

 

270

bps

 

18.2%

WoodSpring Suites

 

56.23

 

77.0%

 

43.29

 

45.36

 

75.0%

 

34.04

 

24.0%

 

200

bps

 

27.2%

MainStay

 

80.50

 

57.7%

 

46.46

 

82.51

 

58.7%

 

48.46

 

(2.4)%

 

(100)

bps

 

(4.1)%

Suburban

 

60.99

 

67.7%

 

41.32

 

58.67

 

69.6%

 

40.86

 

4.0%

 

(190)

bps

 

1.1%

Cambria Hotels

 

142.76

 

55.2%

 

78.77

 

134.26

 

61.3%

 

82.26

 

6.3%

 

(610)

bps

 

(4.2)%

Ascend Hotel Collection

 

131.71

 

49.1%

 

64.66

 

115.97

 

56.4%

 

65.40

 

13.6%

 

(730)

bps

 

(1.1)%

                                       

Total

 

$        84.31

 

52.8%

 

$        44.50

 

$           77.17

 

52.2%

 

$        40.29

 

9.3%

 

60

bps

 

10.4%

                                       

Effective Royalty Rate

                                     
                                       
   

For the Quarter Ended

                         
   

March 31,
2022

 

March 31,
2019

                             
                                       

System-wide(3)

 

5.05%

 

4.84%

                             
                                       

(1) Includes Comfort family of brand extensions including Comfort and Comfort Suites

     

(2) Includes Clarion family of brand extensions including Clarion and Clarion Pointe

     

(3) Includes United States and Caribbean countries and territories

     

 

                           

Exhibit 6

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA

(UNAUDITED)

                                 
                                 
   

March 31, 2022

 

March 31, 2021

 

Variance

                                 
   

Hotels

 

Rooms

 

Hotels

 

Rooms

 

Hotels

 

Rooms

 

%

 

%

                                 

Comfort(1)

 

1,662

 

130,983

 

1,648

 

129,785

 

14

 

1,198

 

0.8%

 

0.9%

Sleep

 

416

 

29,332

 

409

 

28,831

 

7

 

501

 

1.7%

 

1.7%

Quality

 

1,641

 

122,576

 

1,691

 

128,093

 

(50)

 

(5,517)

 

(3.0)%

 

(4.3)%

Clarion(2)

 

188

 

21,464

 

183

 

21,951

 

5

 

(487)

 

2.7%

 

(2.2)%

Econo Lodge

 

726

 

43,534

 

762

 

46,258

 

(36)

 

(2,724)

 

(4.7)%

 

(5.9)%

Rodeway

 

521

 

30,062

 

544

 

31,212

 

(23)

 

(1,150)

 

(4.2)%

 

(3.7)%

WoodSpring Suites

 

306

 

36,854

 

296

 

35,631

 

10

 

1,223

 

3.4%

 

3.4%

MainStay

 

102

 

7,072

 

92

 

6,504

 

10

 

568

 

10.9%

 

8.7%

Suburban

 

70

 

6,246

 

66

 

6,365

 

4

 

(119)

 

6.1%

 

(1.9)%

Cambria Hotels

 

58

 

7,996

 

57

 

8,058

 

1

 

(62)

 

1.8%

 

(0.8)%

Ascend Hotel Collection

 

204

 

21,427

 

219

 

27,864

 

(15)

 

(6,437)

 

(6.8)%

 

(23.1)%

                                 

Domestic Franchises(3)

 

5,894

 

457,546

 

5,967

 

470,552

 

(73)

 

(13,006)

 

(1.2)%

 

(2.8)%

                                 

International Franchises

 

1,102

 

120,168

 

1,171

 

133,215

 

(69)

 

(13,047)

 

(5.9)%

 

(9.8)%

                                 

Total Franchises

 

6,996

 

577,714

 

7,138

 

603,767

 

(142)

 

(26,053)

 

(2.0)%

 

(4.3)%

                                 

(1) Includes Comfort family of brand extensions including Comfort and Comfort Suites

               

(2) Includes Clarion family of brand extensions including Clarion and Clarion Pointe

               

(3) Includes United States and Caribbean countries and territories

               
                                 

 

           

Exhibit 7

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION

(UNAUDITED)

             

REVENUES EXCLUDING MARKETING AND RESERVATION ACTIVITIES

       

(dollar amounts in thousands)

   

Three Months Ended March 31,

             
       

2022

 

2021

             
 

Total Revenues

   

$         257,727

 

$         182,947

 

Adjustments:

         
 

     Marketing and reservation system revenues

   

(126,637)

 

(91,521)

 

Revenues excluding marketing and reservation system activities

   

$         131,090

 

$           91,426

             

ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

       

(dollar amounts in thousands)

   

Three Months Ended March 31,

             
       

2022

 

2021

             
 

Total Selling, General and Administrative Expenses

   

$           30,324

 

$           30,267

 

Mark to market adjustments on non-qualified retirement plan investments

   

1,725

 

(1,425)

 

Operational restructuring charges

   

 

(447)

 

Share-based compensation

   

(3,594)

 

(2,351)

 

Exceptional allowances attributable to COVID-19

   

 

(133)

 

Adjusted Selling, General and Administrative Expenses

   

$           28,455

 

$           25,911

 

ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") AND ADJUSTED EBITDA MARGINS

(dollar amounts in thousands)

   

Three Months Ended March 31,

             
       

2022

 

2021

             

Net income

   

$          67,391

 

$          22,337

 

Income tax expense

   

20,344

 

6,373

 

Interest expense

   

11,470

 

11,777

 

Interest income

   

(1,280)

 

(1,281)

 

Other (gains) losses

   

1,716

 

(1,205)

 

Equity in operating net (gain) loss of affiliates, net of impairments

   

(244)

 

1,192

 

Loss on impairment of affiliate

   

 

4,805

 

Gain on sale of asset

   

(29)

 

 

Depreciation and amortization

   

6,231

 

6,362

 

Mark to market adjustments on non-qualified retirement plan investments

   

(1,725)

 

1,425

 

Operational restructuring charges

   

 

447

 

Share-based compensation

   

3,594

 

2,351

 

Exceptional allowances attributable to COVID-19

   

 

133

 

Marketing and reservation system reimbursable (surplus) deficit

   

(12,987)

 

6,652

 

Franchise agreement acquisition costs amortization

   

2,162

 

1,726

Adjusted EBITDA

   

$           96,643

 

$           63,094

             
 

Revenues excluding marketing and reservation system activities

   

$         131,090

 

$           91,426

             
 

Adjusted EBITDA margins

   

73.7%

 

69.0%

             
             
             
             

ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS)

   

(dollar amounts in thousands, except per share amounts)

   

Three Months Ended March 31,

             
       

2022

 

2021

             

Net income

   

$          67,391

 

$          22,337

Adjustments:

         
 

Loss on impairment of affiliate

   

 

3,719

 

Gain on sale of asset

   

(22)

 

 

Operational restructuring costs

   

 

336

 

Exceptional allowances attributable to COVID-19

   

 

103

 

Marketing and reservation system reimbursable (surplus) deficit

   

(9,701)

 

5,149

Adjusted Net Income

   

$          57,668

 

$          31,644

             

Diluted Earnings Per Share

   

$              1.20

 

$              0.40

Adjustments:

         
 

Loss on impairment of affiliate

   

 

0.07

 

Gain on sale of asset

   

 

 

Operational restructuring costs

   

 

0.01

 

Exceptional allowances attributable to COVID-19

   

 

 

Marketing and reservation system reimbursable (surplus) deficit

   

(0.17)

 

0.09

Adjusted Diluted Earnings Per Share (EPS)

   

$              1.03

 

$              0.57

 

 

 

SOURCE Choice Hotels International, Inc.

For further information: Scott Oaksmith, Senior Vice President, Real Estate and Finance; Allie Summers, Director, Executive Reporting and Investor Relations; IR@choicehotels.com