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

 

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SOURCE Choice Hotels International, Inc.