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Choice Hotels' News

Choice Hotels International Reports First Quarter 2023 Results

Company exceeded first quarter net income and adjusted EBITDA guidance and raised full-year expectations

ROCKVILLE, Md., May 9, 2023 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE: CHH), one of the world's largest lodging franchisors, today reported its first quarter 2023 results.

Highlights of first quarter 2023 results include:1 

  • Total revenues reached $332.8 million for first quarter 2023, a first-quarter record and a 29% increase compared to the same period of 2022.

  • Net income exceeded the top end of the company's guidance and reached $52.8 million for first quarter 2023, representing diluted earnings per share (EPS) of $1.02. As a result of one-time items, including Radisson Hotels Americas integration costs, and the timing of net reimbursable expenses, net income and diluted EPS were 22% and 15% lower respectively for first quarter 2023, compared to the same period of 2022.  

  • First quarter 2023 adjusted net income, excluding certain items described in Exhibit 6, reached a first-quarter record of $58.2 million, and the company's adjusted diluted EPS increased 9% to a first-quarter record of $1.12, compared to the same period of 2022.

  • Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for first quarter 2023 reached $106.4 million, a first-quarter record and a 10% increase compared to the same period of 2022, and exceeded the top end of the company's guidance by $1.4 million

  • Domestic revenue per available room (RevPAR) increased 5.9% for first quarter 2023 compared to the same period of 2022, driven by an increase in average daily rate (ADR) of 5.2% and a 34-basis-point increase in occupancy levels.

  • First quarter 2023 domestic effective royalty rate increased 6 basis points to 4.99%, compared to the same period of 2022.

  • During first quarter 2023, the company returned over $173 million to shareholders in the form of cash dividends and share repurchases and announced a 21% increase in its quarterly dividend rate beginning in April 2023.

  • In February 2023, the company signed a multi-year agreement with Wells Fargo and Mastercard to launch a new co-branded credit card, which is expected to drive incremental adjusted EBITDA in 2023 and thereafter.

"Building on our record 2022 earnings results, our distinct growth strategy and best-in-class franchising business engine drove first quarter performance to new levels, with adjusted EBITDA increasing by 10% year-over-year," said Patrick Pacious, president and chief executive officer. "At the same time, we are ahead of plan integrating the Radisson Hotels Americas business unit, which we expect will further accelerate our transformative growth."

Financial Performance 

  • Total revenues, excluding reimbursable revenue from franchised and managed properties, increased 34% to $175 million for first quarter 2023, compared to the same period of 2022.

  • Platform and procurement services fees increased 18% to $13.8 million for first quarter 2023, compared to the same period of 2022.

  • Royalty, licensing, and management fees increased 18% to $107.5 million for first quarter 2023, compared to the same period of 2022.

  • Domestic royalties increased 13% to $98.2 million for first quarter 2023, compared to the same period of 2022.

Development

  • The company's upscale, extended-stay, and midscale segments reported a 9.5% increase in hotels and an 11% increase in rooms since March 31, 2022. The total number of domestic hotels and rooms, as of March 31, 2023, increased 6.5% and 8.2%, respectively, from March 31, 2022.  

  • The total number of international hotels and rooms, as of March 31, 2023, increased 8.2% and 9.6%, respectively, from March 31, 2022.

  • As of March 31, 2023, the domestic system size for the company's upscale and upper-midscale segments grew by approximately 29% and 24%, respectively, since March 31, 2022, driven by an increase in the number of hotels due to the acquisition of Radisson Hotels Americas and the growth of Cambria Hotels and the Comfort family of brands.  

  • Of the total domestic franchise agreements awarded in first quarter 2023, 88% were for the company's upscale, extended-stay, and midscale brands, and 75% were for conversion hotels. The number of domestic franchise agreements awarded for the company's upscale segment for first quarter 2023 increased 13%, compared to the same period of 2022.

  • The company's domestic pipeline as of March 31, 2023 increased 11% to approximately 89,000 rooms, representing 925 hotels, from March 31, 2022. The company's extended-stay domestic pipeline reached 475 hotels as of March 31, 2023, a 28% increase versus March 31, 2022. The company's upscale domestic pipeline as of March 31, 2023 increased 16% from March 31, 2022. The company's global pipeline as of March 31, 2023 increased 14% to over 96,000 rooms, representing 988 hotels, from March 31, 2022.

Shareholder Returns

During the three months ended March 31, 2023, the company paid cash dividends totaling approximately $13 million. During first quarter 2023, the company's board of directors announced a 21% increase in the annual dividend rate to $1.15 per common share outstanding.

During the three months ended March 31, 2023, the company repurchased approximately 1.3 million shares of common stock for over $160 million 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, 2023, the company had 3.4 million shares of common stock remaining under the current share repurchase authorization.

Outlook

The outlook information provided below is inclusive of the Radisson Hotels Americas acquisition unless otherwise noted and includes forward-looking non-GAAP financial measures, which management uses in measuring performance. The adjusted numbers in the company's outlook below exclude the net surplus or deficit generated from reimbursable revenue from franchised and managed properties, due diligence and transition costs, and other items:


Full-Year 2023

Prior Outlook

Net Income

$255 – $265 million

$245 – $265 million

Adjusted Net Income

$292 – $302 million

Adjusted EBITDA

$525 – $540 million

$520 – $540 million

Adjusted Diluted EPS

$5.70 – $5.90

Effective Income Tax Rate

24 %








Full-Year 2023

vs. Full-Year 2022

Prior Outlook

Domestic RevPAR Growth[2]

Approximately 2%

Approximately 2%

Domestic Effective Royalty Rate Growth[3]

Mid-single digits

Mid-single digits

Domestic Net Unit Growth

(upscale, extended-stay, and midscale segments)

Approximately 1%

Approximately 1%

Conference Call

Choice Hotels International will conduct a conference call on May 9, 2023, at 10:00 a.m. Eastern Time to discuss the company's first quarter 2023 earnings results. The dial-in number to listen to the call domestically is (888) 886-7786 and the number for international participants is (416) 764-8658 and use conference ID 35347099. 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 Events and Presentations tab. A replay and transcript of the event will be available on the company's investor relations website within 24 hours at https://investor.choicehotels.com/events-and-presentations/.

About Choice Hotels®

Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world, with more than 7,400 hotels, representing over 625,000 rooms, in 45 countries and territories as of March 31, 2023. A diverse portfolio of 22 brands that run the gamut from full-service, upper upscale properties to midscale, extended stay, and economy enables Choice® to meet travelers' needs in more places and for more occasions while driving more value for franchise owners and shareholders. The award-winning Choice Privileges® loyalty program and co-brand credit card options provide members with a fast and easy way to earn reward nights and personalized perks. 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, and the company's liquidity, 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, changes to general, domestic and foreign economic conditions, including access to liquidity and capital; the company's ability to successfully integrate Radisson Hotels Americas' employees and operations; the ability to realize the anticipated benefits and synergies of the acquisition of Radisson Hotels Americas as rapidly or to the extent anticipated; the resurgence or worsening of the COVID-19 pandemic, including with respect to new strains or variants, and the related impact on the global hospitality industry, particularly but not exclusively the U.S. travel market; changes in consumer demand and confidence, including the potential for long-term adverse changes in consumer sentiment with respect to travel as a result of the pandemic; the timing and amount of future dividends and share repurchases; 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, including with respect to the status of the relationship with employees of our franchisees; 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 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; the impact of inflation; cyber security and data breach risks; climate change and sustainability related concerns; ownership and financing activities; hotel closures or financial difficulties of our franchisees; operating risks associated with our international operations, especially in areas that continue to be affected by the COVID-19 pandemic; labor shortages; the outcome of litigation; and our ability to effectively manage our indebtedness, and secure our indebtedness, including additional indebtedness incurred as a result of the acquisition of Radisson Hotels Americas. 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 and, as applicable, our Quarter Reports on Form 10-Q. 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 and Other Definitions

The company evaluates its operations utilizing the performance metrics of adjusted EBITDA,  adjusted selling, general and administrative (SG&A) expenses, revenues excluding reimbursable revenue from franchised and managed properties, 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 6, 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, acquisition related due diligence, transition and transaction costs, 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: Adjusted SG&A and Adjusted EBITDA  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 reimbursable revenue from franchised and managed properties. 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 reimbursable revenues from franchised and managed properties are excluded, as the company's franchise and management agreements require these revenues to be used exclusively for expenses associated with providing franchise and management services, such as central reservation and property-management systems, hotel employee and operating costs, reservation delivery and national marketing and media advertising. Franchised and managed property owners are required to reimburse the company for any deficits generated from these 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 reimbursable revenue from franchised and managed properties. Surpluses and deficits generated from reimbursable revenue from franchised and managed properties are excluded, as the company's franchise agreements require these revenues to be used exclusively for expenses associated with providing franchised and managed services, such as central reservation and property-management systems, hotel employee and operating costs, reservation delivery and national marketing and media advertising. Franchised and managed property owners are required to reimburse the company for any deficits generated from 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 Reimbursable Revenue from Franchised and Managed Properties: The company reports revenues, excluding reimbursable revenue from franchised and managed properties. These non-GAAP measures we present are commonly used measures of performance in our industry and facilitate comparisons between the company and its competitors. Reimbursable revenues from franchised and managed properties are excluded, as the company's franchise and management agreements require revenues to be used exclusively for expenses associated with providing franchise and management services, such as central reservation and property-management systems, hotel employee and operating costs, reservation delivery and national marketing and media advertising. Franchisees are required to reimburse the company for any deficits generated from these 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.

Occupancy
Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel for a given period. Occupancy measures the utilization of the hotels' available capacity. Management uses occupancy to gauge demand at a specific hotel or group of hotels in a given period. The company calculates occupancy based on information as reported by its franchisees. To accurately reflect occupancy, the company may revise its prior years' operating statistics for the most current information provided.  

Average Daily Rate (ADR)
ADR represents hotel room revenue divided by the total number of room nights sold for a given period. ADR measures the average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in the industry, and management uses ADR to assess pricing levels that the company is able to generate. The company calculates ADR based on information as reported by its franchisees. To accurately reflect ADR, the company may revise its prior years' operating statistics for the most current information provided. 

RevPAR
RevPAR is calculated by dividing hotel room revenue by the total number of room nights available to guests for a given period. Management considers RevPAR to be a meaningful indicator of hotel performance and therefore company royalty and system revenues as it provides a metric correlated to the two key drivers of operations at a hotel: occupancy and ADR. The company calculates RevPAR based on information as reported by its franchisees. To accurately reflect RevPAR, the company may revise its prior years' operating statistics for the most current information provided. RevPAR is also a useful indicator in measuring performance over comparable periods.

Pipeline
Pipeline is defined as hotels awaiting conversion, under construction or approved for development, and master development agreements committing owners to future franchise development.

© 2023 Choice Hotels International, Inc. All rights reserved.










1 All figures are inclusive of Radisson Hotels Americas, except where otherwise noted. For comparative purposes, domestic RevPAR and the effective royalty rate assume the Radisson Hotels Americas brands were acquired on January 1, 2022.

2 For comparative purposes, domestic RevPAR baseline for full-year 2022 is inclusive of the Radisson Hotels Americas acquisition. 

3 For comparative purposes, the domestic effective royalty rate 4.93% baseline for full-year 2022 is inclusive of the Radisson Hotels Americas acquisition. 

 

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



2023


2022


$


%










REVENUES


















Royalty, licensing and management fees


$    107,492


$      90,739


$      16,753


18 %

Initial franchise fees


7,882


8,402


(520)


(6) %

Platform and procurement services fees


13,843


11,683


2,160


18 %

Owned hotels


22,332


12,037


10,295


86 %

Other


10,627


8,229


2,398


29 %

Other revenues from franchised and managed properties


170,616


126,637


43,979


35 %

Total revenues


332,792


257,727


75,065


29 %










OPERATING EXPENSES


















Selling, general and administrative


59,283


30,324


28,959


95 %

Depreciation and amortization


10,023


6,231


3,792


61 %

Owned hotels


17,146


8,154


8,992


110 %

Other expenses from franchised and managed properties


168,489


113,650


54,839


48 %

       Total operating expenses


254,941


158,359


96,582


61 %










Gain on sale of business and assets, net



29


(29)


(100) %










Operating income


77,851


99,397


(21,546)


(22) %










OTHER INCOME AND EXPENSES, NET









Interest expense


14,084


11,470


2,614


23 %

Interest income


(1,883)


(1,280)


(603)


47 %

Other (gain) loss


(1,908)


1,716


(3,624)


(211) %

Equity in net loss (gain) of affiliates


63


(244)


307


(126) %

Total other income and expenses, net


10,356


11,662


(1,306)


(11) %










Income before income taxes


67,495


87,735


(20,240)


(23) %

Income tax expense


14,675


20,344


(5,669)


(28) %

Net income


$      52,820


$      67,391


$    (14,571)


(22) %










Basic earnings per share


$         1.02


$         1.21


$        (0.19)


(16) %










Diluted earnings per share


$         1.02


$         1.20


$        (0.18)


(15) %

 

Choice Hotels International, Inc. and Subsidiaries




Exhibit 2

Condensed Consolidated Balance Sheets





(Unaudited)














(In thousands)


March 31,


December 31,





2023


2022








ASSETS












Cash and cash equivalents


$                          31,679


$                          41,566

Accounts receivable, net


214,103


216,614

Other current assets


95,306


89,742


Total current assets


341,088


347,922








Property and equipment, net


434,282


427,306

Intangible assets, net


750,179


742,190

Goodwill


220,187


218,653

Notes receivable, net of allowances


56,382


55,577

Investments in affiliates


33,216


30,647

Operating lease right-of-use assets


66,398


68,985

Investments, employee benefit plans, at fair value


34,758


31,645

Other assets


169,733


179,250










Total assets

$                     2,106,223


$                     2,102,175








LIABILITIES AND SHAREHOLDERS' EQUITY












Accounts payable


$                          93,135


$                        118,863

Accrued expenses and other current liabilities


78,842


131,410

Deferred revenue


103,599


92,695

Current portion of long-term debt


4,416


2,976

Liability for guest loyalty program


89,582


89,954


 Total current liabilities


369,574


435,898






Long-term debt


1,374,814


1,200,547

Deferred revenue


132,520


134,149

Liability for guest loyalty program


48,420


47,381

Operating lease liabilities


69,708


70,994

Deferred compensation & retirement plan obligations


40,420


36,673

Other liabilities


23,759


21,873








Total liabilities


2,059,215


1,947,515









Total shareholders' equity


47,008


154,660










Total liabilities and shareholders' equity


$                     2,106,223


$                     2,102,175








 

Choice Hotels International, Inc. and Subsidiaries



Exhibit 3

Condensed Consolidated Statements of Cash Flows




(Unaudited)
















(In thousands)

Three Months Ended March 31,






2023


2022

CASH FLOWS FROM OPERATING ACTIVITIES:




Net income

$                       52,820


$                       67,391

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




Depreciation and amortization

10,023


6,231

Depreciation and amortization – marketing and reservation system

9,276


7,154

Gain on sale and disposal of business and assets, net


(29)

Amortization - franchise agreement acquisition cost

4,637


3,784

Non-cash stock compensation and other charges

10,630


7,555

Non-cash interest and investment (income) loss

(1,442)


1,909

Deferred income taxes

7,566


(3,119)

Equity in net loss of affiliates, less distributions received

421


230

Franchise agreement acquisition costs, net of reimbursements

(28,092)


(12,435)

Change in working capital and other

(53,806)


(14,747)

 NET CASH PROVIDED BY OPERATING ACTIVITIES

12,033


63,924





CASH FLOWS FROM INVESTING ACTIVITIES:




Investment in property and equipment

(19,566)


(26,809)

Investment in intangible assets

(1,097)


(1,208)

Contributions to investments in affiliates

(3,620)


(268)

Proceeds from sale of equity method investments

868


Purchases of investments, employee benefit plans

(2,670)


(2,818)

Proceeds from sales of investments, employee benefit plans

716


1,853

Issuance of notes receivable

(3,660)


(1,245)

Collections of notes receivable

337


63

Proceeds from sale of business and assets


8,494

Other items, net

(771)


(529)

 NET CASH USED IN INVESTING ACTIVITIES

(29,463)


(22,467)





CASH FLOWS FROM FINANCING ACTIVITIES:




Net borrowings pursuant to revolving credit facilities

176,000


Purchases of treasury stock

(160,488)


(14,802)

Dividends paid

(12,821)


(13,204)

Debt issuance costs

(755)


Proceeds from exercise of stock options

5,504


2,211

 NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

7,440


(25,795)





Net change in cash and cash equivalents

(9,990)


15,662

Effect of foreign exchange rate changes on cash and cash equivalents

103


(58)

Cash and cash equivalents at beginning of period

41,566


511,605





CASH AND CASH EQUIVALENTS AT END OF PERIOD

$                       31,679


$                      527,209

 

















Exhibit 4

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL OPERATING INFORMATION

DOMESTIC HOTEL SYSTEM

(UNAUDITED)





















For the Three Months Ended March 31, 2023


For the Three Months Ended March 31, 2022


Change





















Average Daily






Average Daily






Average Daily







Rate


Occupancy


RevPAR


Rate


Occupancy


RevPAR


Rate


Occupancy


RevPAR




















Upscale & Above(1)

$       139.86


51.2 %


$        71.59


$         130.68


47.1 %


$         61.57


7.0 %


407

bps


16.3 %

Midscale & Upper Midscale(2)

95.18


52.2 %


49.70


91.65


51.4 %


47.09


3.9 %


83

bps


5.5 %

Extended Stay(3)

62.79


71.3 %


44.74


59.87


73.9 %


44.24


4.9 %


(264)

bps


1.1 %

Economy(4)

67.71


44.8 %


30.34


65.97


45.7 %


30.16


2.6 %


(89)

bps


0.6 %




















Total(5)

$        91.21


52.7 %


$        48.08


$           86.67


52.4 %


$         45.38


5.2 %


34

bps


5.9 %







































Effective Royalty Rate




































For the Three Months Ended

















March 31,
2023


March 31,
2022



































System-wide

4.99 %


4.93 %



































(1) Includes Cambria, Ascend, Radisson Blu, Radisson Red, Park Plaza, Radisson Individuals and Radisson brands.

(2) Includes Country, Comfort, Clarion, Sleep, Quality and Park brands.

(3) Includes WoodSpring, Mainstay, Suburban and Everhome brands.

(4) Includes Econo Lodge and Rodeway brands.

(5) Radisson Hotels Americas was acquired on August 11, 2022. To enhance comparability, ADR, Occupancy, and RevPAR reflect operating performance for the three
months ended March 31, 2022 as if the legacy Radisson brands were acquired on January 1, 2022.

 















Exhibit 5

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA

(UNAUDITED)





































March 31, 2023


March 31, 2022


Variance




















Hotels


Rooms


Hotels


Rooms


Hotels


Rooms


%


%


















Ascend Hotel Collection


198


22,528


201


20,639


(3)


1,889


(1.5) %


9.2 %

Cambria Hotels


66


9,000


58


7,996


8


1,004


13.8 %


12.6 %

Radisson(1)


68


15,887




68


15,887


NM


NM

Comfort(2)


1,684


132,264


1,659


130,644


25


1,620


1.5 %


1.2 %

Country(3)


432


34,494




432


34,494


NM


NM

Clarion(4)


179


19,707


188


21,464


(9)


(1,757)


(4.8) %


(8.2) %

Quality


1,622


120,136


1,641


122,576


(19)


(2,440)


(1.2) %


(2.0) %

Sleep


425


29,968


416


29,332


9


636


2.2 %


2.2 %

Park


4


363




4


363


NM


NM

Everhome


1


98




1


98


NM


NM

MainStay


116


7,956


102


7,072


14


884


13.7 %


12.5 %

WoodSpring


214


25,834


306


36,854


(92)


(11,020)


(30.1) %


(29.9) %

Suburban


75


6,700


70


6,246


5


454


7.1 %


7.3 %

Econo Lodge


690


41,157


726


43,534


(36)


(2,377)


(5.0) %


(5.5) %

Rodeway


494


27,787


521


30,062


(27)


(2,275)


(5.2) %


(7.6) %

Domestic Franchises(5)


6,268


493,879


5,888


456,419


380


37,460


6.5 %


8.2 %


















International Franchises(5)


1,199


132,945


1,108


121,295


91


11,650


8.2 %


9.6 %


















Total Franchises


7,467


626,824


6,996


577,714


471


49,110


6.7 %


8.5 %


















(1) Includes Radisson Blu, Radisson Red, Radisson Individuals and Radisson brands.









(2) Includes Comfort family of brand extensions including Comfort and Comfort Suites.









(3)  Includes Country Inn & Suites and Park Plaza brands.

(4) Includes Clarion family of brand extensions including Clarion and Clarion Pointe.

(5) In 2022, the Company reclassified six properties located in the Caribbean from Domestic Franchises to International Franchises.

 






Exhibit 6

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION

(UNAUDITED)







REVENUES EXCLUDING REIMBURSABLE REVENUE FROM FRANCHISED AND MANAGED PROPERTIES

(dollar amounts in thousands)


Three Months Ended March 31,




2023


2022








Total Revenues


$          332,792


$          257,727


Adjustments:






  Reimbursable revenue from franchised and managed properties


(157,782)


(126,637)


Revenues excluding reimbursable revenue from franchised and managed properties


$          175,010


$          131,090







ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES



(dollar amounts in thousands)


Three Months Ended March 31,




2023


2022








Total Selling, General and Administrative Expenses


$            59,283


$              30,324


Mark to market adjustments on non-qualified retirement plan investments


(1,817)


1,725


Operational restructuring charges


(2,258)



Share-based compensation


(4,606)


(3,594)


Due diligence and transition costs


(8,104)



Adjusted Selling, General and Administrative Expenses


$            42,498


$            28,455


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

(dollar amounts in thousands)


Three Months Ended March 31,




2023


2022







Net income


$              52,820


$              67,391


Income tax expense


14,675


20,344


Interest expense


14,084


11,470


Interest income


(1,883)


(1,280)


Other (gain) loss


(1,908)


1,716


Equity in operating net loss (gain) of affiliates


63


(244)


Gain on sale of business and assets, net



(29)


Depreciation and amortization


10,023


6,231


Mark to market adjustments on non-qualified retirement plan investments


1,817


(1,725)


Operational restructuring charges


2,258



Share-based compensation


4,606


3,594


Due diligence and transition costs


8,104



Net reimbursable surplus from franchised and managed properties


(874)


(12,987)


Franchise agreement acquisition costs amortization


2,661


2,162

Adjusted EBITDA


$          106,446


$            96,643







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

(dollar amounts in thousands, except per share amounts)


Three Months Ended March 31,




2023


2022







Net income


$            52,820


$            67,391

Adjustments:






Gain on sale of business and assets, net



(22)


Operational restructuring charges


1,711



Due diligence and transition costs


6,143



Net reimbursable surplus from franchised and managed properties


(2,500)


(9,701)

Adjusted Net Income


$            58,174


$            57,668







Diluted Earnings Per Share


$               1.02


$               1.20

Adjustments:






Operational restructuring charges


0.03



Due diligence and transition costs


0.12



Net reimbursable surplus from franchised and managed properties


(0.05)


(0.17)

Adjusted Diluted Earnings Per Share (EPS)


$               1.12


$               1.03

 




Exhibit 7

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION - 2023 OUTLOOK

(UNAUDITED)









Guidance represents the midpoint of the company's range of estimated outcomes for the year ended December 31, 2023





ADJUSTED EBITDA FULL YEAR FORECAST



(dollar amounts in thousands)



Midpoint




2023 Guidance





Net income



$           261,700


Income tax expense


82,700


Interest expense


66,900


Interest income


(5,600)


Other gain


(1,300)


Equity in operating net gain of affiliates


(800)


Depreciation and amortization


50,900


Mark to market adjustments on non-qualified retirement plan investments


1,800


Operational restructuring, due diligence and transition costs


39,600


Share-based compensation


18,000


Franchise agreement acquisition costs amortization


10,800


Net reimbursable deficit from franchised and managed properties


7,800

Adjusted EBITDA



$           532,500





ADJUSTED NET INCOME & DILUTED EARNINGS PER SHARE (EPS) FULL YEAR FORECAST



(dollar amounts in thousands, except per share amounts)


Midpoint




2023 Guidance





Net income



$           261,700

Adjustments:





Operational restructuring, due diligence and transition costs


29,400


Net reimbursable deficit from franchised and managed properties


5,900

Adjusted Net Income



$             297,000





Diluted Earnings Per Share



$                  5.10

Adjustments:





Operational restructuring, due diligence and transition costs


0.58


Net reimbursable deficit from franchised and managed properties


0.12

Adjusted Diluted Earnings Per Share (EPS)


$                  5.80





 

SOURCE Choice Hotels International, Inc.

For further information: Contacts: Scott Oaksmith, Senior Vice President, Deputy Chief Financial Officer or Allie Summers, Senior Director, Investor Relations, IR@choicehotels.com

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The Radisson brands, including Park Plaza, Country Inn & Suites, and Park Inn by Radisson, are owned in the Americas regions by Choice Hotels.
Outside of the Americas, the brands are owned by Radisson Hotel Group, an unaffiliated company headquartered in Belgium.