Third quarter domestic RevPAR exceeded guidance and grew 11.4% above 2019 levels; awarded 89 new domestic franchise agreements in the quarter, a 10% increase from the same period of 2020

Choice Hotels;

Choice Hotels International, Inc. (NYSE: CHH) today reported its results for the three months ended September 30, 2021.

"Our impressive third quarter results are a testament to the success of our long-term growth strategy and the investments we have made to position us to further increase our share of travel demand and benefit from trends that favor leisure travel, limited-service hotels and longer stay occasions," said Patrick Pacious, president and chief executive officer, Choice Hotels. "Today, we are in an even stronger position to capitalize on growth opportunities to create added value and drive our performance to new levels in the years to come."

Highlights of third quarter and year-to-date 2021 results include (note that RevPAR and financial metrics are compared to 20191):

  • Domestic systemwide revenue per available room (RevPAR) growth exceeded third quarter guidance and outperformed the total industry by 16 percentage points, increasing 11.4% for third quarter 2021, compared to the same period of 2019. RevPAR growth was driven by an increase in average daily rate (ADR) of 8.8% and a 150-basis-point increase in occupancy levels versus third quarter 2019. These RevPAR trends have continued into the fourth quarter.
  • The company's domestic effective royalty rate for third quarter 2021 increased 8 basis points over the prior year third quarter to 4.99%.
  • The company awarded 289 domestic franchise agreements year-to-date through September 30, 2021, a 25% increase compared to the same period of 2020. The company's domestic franchise agreements for conversion hotels increased by 25% year-to-date through September 30, 2021, compared to the same period of 2020. The company awarded 89 domestic franchise agreements in third quarter 2021, a 10% increase compared to the same period of the prior year.
  • Third quarter net income increased 53% to $116.7 million from third quarter 2019, representing diluted earnings per share (EPS) of $2.08.
  • Third quarter adjusted net income, excluding certain items described in Exhibit 7, increased 11% to $85.1 million from third quarter 2019, and adjusted diluted EPS were $1.51, an increase of 10% from third quarter 2019.
  • Third quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $133.2 million, a 18% increase from third quarter 2019.
  • Adjusted EBITDA margin for third quarter 2021 was 80%, a 650-basis-point increase from third quarter 2019.
  • In August 2021, the company's award-winning loyalty program, Choice Privileges, surpassed 50 million members.
  • During the first nine months of 2021, the company returned $22.5 million to shareholders in the form of cash dividends and share repurchases. In October 2021, the company returned an additional $12.5 million to shareholders through cash dividends.

    • Performance Trends

  • Domestic systemwide RevPAR for third quarter 2021 outperformed the respective chain scales in which the company competes by 600 basis points, compared to the same period of 2019.
  • Choice Hotels' overall portfolio achieved RevPAR index gains versus local competitors of 370 basis points for third quarter 2021 compared to the same period of 2019, driven by both ADR and occupancy index gains.
  • The company's extended-stay portfolio achieved domestic systemwide RevPAR growth of 18.2% in third quarter 2021 compared to the same period of 2019, driven by occupancy levels of 82% and a 9% increase in ADR. The WoodSpring Suites brand achieved RevPAR growth of 22.8% in third quarter 2021 compared to the same period of 2019, driven by occupancy levels of nearly 86% and an 11.1% increase in ADR.
  • The company's midscale portfolio achieved domestic systemwide RevPAR growth of 9.7% in third quarter 2021 compared to the same period of 2019, driven primarily by a 9.3% increase in ADR. In third quarter 2021, the Comfort brand family's domestic systemwide RevPAR change outperformed the upper-midscale chain scale by 730 basis points compared to the same period of 2019, and the Quality Inn brand achieved RevPAR growth of 13.3%, driven predominantly by a 10.4% increase in ADR, compared to the same period of 2019.
  • The company's portfolio continued to achieve domestic systemwide RevPAR share gains versus its competitors for third quarter 2021, compared to third quarter 2019, with the Cambria Hotels brand achieving gains of 12 percentage points. In third quarter 2021, the Ascend Hotel Collection achieved RevPAR growth of 7.9%, driven by a 17.2% increase in ADR, compared to the same period of 2019.

    • Additional details for the company's third quarter and year-to-date 2021 results are as follows:

    Revenues 

  • Total revenues increased 4% to $323.4 million for third quarter 2021, compared to the same period of 2019.
  • Total revenues excluding marketing and reservation system fees increased 8% to $166.5 million for third quarter 2021, compared to the same period of 2019.
  • Third quarter 2021 domestic royalties totaled $123 million, a 14% increase from the same period of 2019.

    • Development

  • The company's domestic franchise agreements for new construction hotels increased by 52% in third quarter 2021, compared to the same period of 2020.
  • As of September 30, 2021, the number of domestic rooms in the company's upscale portfolio expanded by nearly 22% since September 30, 2020, driven by a 6% increase in room count for the Cambria Hotels brand and a 27% increase in room count for the Ascend Hotel Collection.
  • For the first nine months of 2021, the upscale portfolio set a record for the highest number of upscale hotel openings in the company's history, including 22 properties added as part of the company's strategic alliance with Penn National Gaming. In September 2021, the company launched a new Cambria hotel prototype designed for secondary and leisure markets to position the brand for continued system growth while maximizing developers' return on investment.
  • The company's extended-stay portfolio continued its rapid expansion, reaching 467 domestic hotels as of September 30, 2021, an 11% increase since September 30, 2020, with the domestic extended-stay pipeline reaching nearly 310 hotels awaiting conversion, under construction or approved for development. In third quarter 2021, the company's extended stay domestic franchise agreements increased by 85%, compared to the same period in 2020, and grew by 20%, compared to the same period in 2019.
  • The company continued its leadership in the midscale segment by increasing the number of domestic hotels within the Comfort brand family by 2.2% from September 30, 2020. The brand's domestic franchise agreements for new construction hotels increased three-fold in third quarter 2021, compared to the same period of 2020. For the first nine months of 2021, the Comfort brand family executed the highest number of conversion hotel openings since 2014.
  • The number of domestic hotels and rooms, as of September 30, 2021, increased 0.1% and 1.2%, respectively, from September 30, 2020. The company's domestic upscale, midscale and extended-stay segments reported a 2.0% and 2.6% aggregate increase in units and rooms, respectively, since September 30, 2020.
  • The company's total domestic pipeline of hotels awaiting conversion, under construction or approved for development, as of September 30, 2021, reached nearly 860 hotels representing over 71,000 rooms.

    • Balance Sheet and Liquidity

    The company improved its strong balance sheet and liquidity position in third quarter 2021 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 September 30, 2021, the company's total available liquidity consisting of cash and available borrowing capacity through the revolving credit facility was over $1 billion. The company generated cash flow from operations of $142.8 million for third quarter 2021, a 53% increase from the same period of 2019.

    Shareholder Returns

    During the nine months ended September 30, 2021, the company paid cash dividends totaling $12.5 million. Based on the current quarterly dividend rate of $0.225 per share of common stock, the company expects to pay dividends totaling approximately $25 million during 2021.

    During the nine months ended September 30, 2021, the company repurchased approximately 0.1 million shares of common stock for $10 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 October 31, 2021, the company had 3.4 million shares remaining under the current share repurchase authorization.

    In October 2021, the company returned $12.5 million to shareholders in the form of cash dividends.

    Outlook

    COVID-19 continues to impact the company's business and the outlook reflects the company's estimates based on the best information available at this time. The adjusted numbers in the company's outlook exclude the net surplus or deficit generated from the company's marketing and reservation system activities, as well as other items. See Exhibit 8 for the calculation of adjusted forecasted results and the reconciliation to the comparable GAAP measures.

  • Domestic RevPAR for full-year 2021 is expected to surpass 2019 levels and grow at approximately 1%, as compared to full-year 2019.
  • Adjusted EBITDA for full-year 2021 is expected to exceed 2019 levels and range between $382 million and $387 million.
  • The company's outlook for adjusted EBITDA is based on the current number of shares of common stock outstanding and, therefore, does not reflect any subsequent changes that may occur due to new equity grants or further repurchases of common stock under the company's stock repurchase program.

    • About Choice Hotels

    Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world. With more than 7,100 hotels, representing over 600,000 rooms, in nearly 40 countries and territories as of September 30, 2021, 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.

    _________________________

    1 2019 comparison data is shown in some cases for comparable prior year periods for context in light of the onset of the COVID-19 pandemic toward the end of the first quarter of 2020.

    Choice Hotels International, Inc. and Subsidiaries

    Exhibit 1

    Condensed Consolidated Statements of Income

    (Unaudited)

    Three Months Ended September 30,

    Nine Months Ended September 30,

    Variance

    Variance

    2021

    2020

    $

    %

    2021

    2020

    $

    %

    (In thousands, except per share amounts)

    REVENUES

    Royalty fees

    $

    127,317

    $

    79,666

    $

    47,651

    60%

    $

    299,606

    $

    200,157

    $

    99,449

    50%

    Initial franchise and relicensing fees

    6,149

    6,071

    78

    1%

    18,904

    20,031

    (1,127)

    (6)%

    Procurement services

    13,010

    10,115

    2,895

    29%

    36,293

    34,609

    1,684

    5%

    Marketing and reservation system

    156,871

    107,141

    49,730

    46%

    384,380

    297,203

    87,177

    29%

    Owned hotels

    11,377

    4,201

    7,176

    171%

    24,724

    15,731

    8,993

    57%

    Other

    8,645

    3,577

    5,068

    142%

    20,753

    12,948

    7,805

    60%

    Total revenues

    323,369

    210,771

    112,598

    53%

    784,660

    580,679

    203,981

    35%

    OPERATING EXPENSES

    Selling, general and administrative

    35,110

    31,779

    3,331

    10%

    99,847

    104,098

    (4,251)

    (4)%

    Depreciation and amortization

    5,883

    6,382

    (499)

    (8)%

    18,477

    19,309

    (832)

    (4)%

    Marketing and reservation system

    116,216

    113,808

    2,408

    2%

    327,674

    333,564

    (5,890)

    (2)%

    Owned hotels

    7,054

    3,812

    3,242

    85%

    16,534

    12,822

    3,712

    29%

           Total operating expenses

    164,263

    155,781

    8,482

    5%

    462,532

    469,793

    (7,261)

    (2)%

    Loss on impairment of assets

    —

    (4,290)

    4,290

    100%

    —

    (5,516)

    5,516

    100%

    Operating income

    159,106

    50,700

    108,406

    214%

    322,128

    105,370

    216,758

    206%

    OTHER INCOME AND EXPENSES, NET

    Interest expense

    11,638

    12,691

    (1,053)

    (8)%

    35,106

    37,153

    (2,047)

    (6)%

    Interest income

    (1,202)

    (1,744)

    542

    (31)%

    (3,717)

    (6,277)

    2,560

    (41)%

    Loss on extinguishment of debt

    —

    15,958

    (15,958)

    (100)%

    —

    16,565

    (16,565)

    (100)%

    Other (gains) losses

    407

    (2,030)

    2,437

    (120)%

    (2,906)

    (858)

    (2,048)

    (239)%

    Equity in net (gain) loss of affiliates

    (3,326)

    1,731

    (5,057)

    292%

    1,492

    7,172

    (5,680)

    (79)%

    Total other income and expenses, net

    7,517

    26,606

    (19,089)

    (72)%

    29,975

    53,755

    (23,780)

    (44)%

    Income before income taxes

    151,589

    24,094

    127,495

    529%

    292,153

    51,615

    240,538

    466%

    Income tax expense (benefit)

    34,934

    9,594

    25,340

    264%

    67,279

    (15,907)

    83,186

    523%

    Net income

    $

    116,655

    $

    14,500

    $

    102,155

    705%

    $

    224,874

    $

    67,522

    $

    157,352

    233%

    Basic earnings per share

    $

    2.10

    $

    0.26

    $

    1.84

    708%

    $

    4.05

    $

    1.22

    $

    2.83

    232%

    Diluted earnings per share

    $

    2.08

    $

    0.26

    $

    1.82

    700%

    $

    4.01

    $

    1.21

    $

    2.80

    231%

    Choice Hotels International, Inc. and Subsidiaries

    Exhibit 2

    Condensed Consolidated Balance Sheets

    (Unaudited)

    (In thousands, except per share amounts)

    September 30,

    December 31,

    2021

    2020

    ASSETS

    Cash and cash equivalents

    $

    415,116

    $

    234,779

    Accounts receivable, net

    197,999

    149,921

    Other current assets

    97,854

    48,214

    Total current assets

    710,969

    432,914

    Property and equipment, net

    351,768

    334,901

    Intangible assets, net

    306,008

    303,725

    Goodwill

    159,196

    159,196

    Notes receivable, net of allowances

    67,755

    95,785

    Investments in unconsolidated entities

    42,961

    57,879

    Operating lease right-of-use assets

    10,655

    17,688

    Investments, employee benefit plans, at fair value

    31,285

    29,104

    Other assets

    185,337

    156,141

    Total assets

    $

    1,865,934

    $

    1,587,333

    LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

    Accounts payable

    $

    88,056

    $

    83,329

    Accrued expenses and other current liabilities

    129,173

    78,920

    Deferred revenue

    80,607

    50,290

    Current portion of long-term debt

    216,217

    —

    Liability for guest loyalty program

    76,541

    43,308

     Total current liabilities

    590,594

    255,847

    Long-term debt

    843,820

    1,058,738

    Deferred revenue

    106,410

    122,406

    Liability for guest loyalty program

    40,236

    77,071

    Operating lease liabilities

    5,666

    12,739

    Deferred compensation & retirement plan obligations

    35,958

    33,756

    Other liabilities

    31,104

    32,528

    Total liabilities

    1,653,788

    1,593,085

    Total shareholders' equity (deficit)

    212,146

    (5,752)

    Total liabilities and shareholders' equity (deficit)

    $

    1,865,934

    $

    1,587,333

    Choice Hotels International, Inc. and Subsidiaries

    Exhibit 3

    Condensed Consolidated Statements of Cash Flows

    (Unaudited)

    (In thousands)

    Nine Months Ended Sept 30,

    2021

    2020

    CASH FLOWS FROM OPERATING ACTIVITIES:

    Net income

    $

    224,874

    $

    67,522

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

    Depreciation and amortization

    18,477

    19,309

    Depreciation and amortization – marketing and reservation system

    18,364

    14,994

    Franchise agreement acquisition cost amortization

    9,734

    8,343

    Loss on impairment of assets

    —

    5,516

    Loss on extinguishment of debt

    —

    16,565

    Non-cash stock compensation and other charges

    24,277

    4,748

    Non-cash interest and other investment income

    (11,039)

    (465)

    Deferred income taxes

    (34,285)

    (31,411)

    Equity in net losses from unconsolidated joint ventures, less distributions received

    8,421

    7,320

    Franchise agreement acquisition costs, net of reimbursements

    (28,466)

    (16,960)

    Change in working capital and other

    14,887

    (25,801)

     NET CASH PROVIDED BY OPERATING ACTIVITIES

    245,244

    69,680

    CASH FLOWS FROM INVESTING ACTIVITIES:

    Investment in property and equipment

    (46,098)

    (32,176)

    Investment in intangible assets

    (3,113)

    (1,212)

    Contributions to equity method investments

    (2,150)

    (4,620)

    Distributions and sale proceeds from equity method investments

    15,554

    3,362

    Purchases of investments, employee benefit plans

    (1,279)

    (2,254)

    Proceeds from sales of investments, employee benefit plans

    2,487

    2,372

    Purchase/issuance of notes receivable

    (17,918)

    (9,845)

    Collection of notes receivable

    63

    5,113

    Proceeds from sale of tax credits

    —

    9,197

    Other items, net

    (115)

    (473)

     NET CASH USED IN INVESTING ACTIVITIES

    (52,569)

    (30,536)

    CASH FLOWS FROM FINANCING ACTIVITIES:

    Net borrowings pursuant to revolving credit facilities

    —

    (18,200)

    Proceeds from issuance of term loan

    —

    249,500

    Proceeds from issuance of 2020 senior notes

    —

    447,723

    Principal payments on long-term debt

    —

    (466,915)

    Purchases of treasury stock

    (10,039)

    (55,158)

    Dividends paid

    (12,528)

    (25,274)

    Payments to extinguish long-term debt

    —

    (14,347)

    Debt issuance costs

    (365)

    (4,620)

    Proceeds from exercise of stock options

    10,817

    6,615

     NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

    (12,115)

    119,324

    Net change in cash and cash equivalents

    180,560

    158,468

    Effect of foreign exchange rate changes on cash and cash equivalents

    (223)

    (267)

    Cash and cash equivalents at beginning of period

    234,779

    33,766

    CASH AND CASH EQUIVALENTS AT END OF PERIOD

    $

    415,116

    $

    191,967

    Exhibit 4

    CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

    SUPPLEMENTAL OPERATING INFORMATION

    DOMESTIC HOTEL SYSTEM

    (UNAUDITED)

    For the Nine Months Ended September 30,

    2021

    For the Nine Months Ended September 30,

    2020

    Change

    Average Daily

    Average Daily

    Average Daily

    Rate

    Occupancy

    RevPAR

    Rate

    Occupancy

    RevPAR

    Rate

    Occupancy

    RevPAR

    Comfort(1)

    $

    97.74

    60.8%

    $

    59.40

    $

    85.22

    46.2%

    $

    39.40

    14.7%

    1,460

    bps

    50.8%

    Sleep

    86.39

    59.6%

    51.45

    77.36

    46.5%

    35.98

    11.7%

    1,310

    bps

    43.0%

    Quality

    83.94

    54.5%

    45.77

    73.23

    42.1%

    30.81

    14.6%

    1,240

    bps

    48.6%

    Clarion(2)

    87.91

    43.8%

    38.52

    74.79

    33.3%

    24.93

    17.5%

    1,050

    bps

    54.5%

    Econo Lodge

    68.35

    51.1%

    34.94

    59.66

    41.2%

    24.56

    14.6%

    990

    bps

    42.3%

    Rodeway

    68.20

    52.0%

    35.48

    60.15

    44.0%

    26.45

    13.4%

    800

    bps

    34.1%

    WoodSpring Suites

    50.83

    81.9%

    41.63

    46.14

    72.0%

    33.24

    10.2%

    990

    bps

    25.2%

    MainStay

    79.84

    62.8%

    50.15

    77.38

    55.1%

    42.61

    3.2%

    770

    bps

    17.7%

    Suburban

    54.49

    71.5%

    38.95

    52.14

    63.7%

    33.21

    4.5%

    780

    bps

    17.3%

    Cambria Hotels

    129.62

    55.1%

    71.44

    116.78

    38.3%

    44.78

    11.0%

    1,680

    bps

    59.5%

    Ascend Hotel Collection

    138.31

    54.4%

    75.28

    120.21

    43.9%

    52.72

    15.1%

    1,050

    bps

    42.8%

    Total

    $

    83.70

    58.2%

    $

    48.71

    $

    72.71

    45.9%

    $

    33.36

    15.1%

    1,230

    bps

    46.0%

    For the Three Months Ended September 30,

    2021

    For the Three Months Ended September 30,

    2020

    Change

    Average Daily

    Average Daily

    Average Daily

    Rate

    Occupancy

    RevPAR

    Rate

    Occupancy

    RevPAR

    Rate

    Occupancy

    RevPAR

    Comfort(1)

    $

    110.72

    67.8%

    $

    75.03

    $

    86.80

    53.3%

    $

    46.24

    27.6%

    1,450

    bps

    62.3%

    Sleep

    95.70

    66.4%

    63.55

    78.07

    52.4%

    40.89

    22.6%

    1,400

    bps

    55.4%

    Quality

    94.48

    62.2%

    58.76

    76.57

    48.7%

    37.25

    23.4%

    1,350

    bps

    57.7%

    Clarion(2)

    101.17

    51.9%

    52.47

    78.58

    37.3%

    29.29

    28.7%

    1,460

    bps

    79.1%

    Econo Lodge

    76.51

    57.1%

    43.66

    63.66

    47.2%

    30.03

    20.2%

    990

    bps

    45.4%

    Rodeway

    76.21

    56.9%

    43.37

    63.02

    50.2%

    31.62

    20.9%

    670

    bps

    37.2%

    WoodSpring Suites

    54.11

    85.5%

    46.26

    46.41

    76.5%

    35.50

    16.6%

    900

    bps

    30.3%

    MainStay

    87.15

    69.1%

    60.18

    79.23

    62.4%

    49.43

    10.0%

    670

    bps

    21.7%

    Suburban

    59.26

    73.5%

    43.54

    51.46

    68.3%

    35.14

    15.2%

    520

    bps

    23.9%

    Cambria Hotels

    148.85

    62.2%

    94.15

    110.04

    41.3%

    45.44

    35.3%

    2,090

    bps

    107.2%

    Ascend Hotel Collection

    158.37

    63.3%

    98.50

    126.71

    51.1%

    64.80

    25.0%

    1,220

    bps

    52.0%

    Total

    $

    94.59

    64.9%

    $

    61.37

    $

    75.29

    52.1%

    $

    39.24

    25.6%

    1,280

    bps

    56.4%

    Effective Royalty Rate

    For the Quarter Ended

    For the Nine Months Ended

    September 30,

    2021

    September 30,

    2020

    September 30,

    2021

    September 30,

    2020

    System-wide(3)

    4.99%

    4.91%

    5.00%

    4.93%

    (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 Nine Months Ended September 30,

    2021

    For the Nine Months Ended September 30,

    2019

    Change

    Average Daily

    Average Daily

    Average Daily

    Rate

    Occupancy

    RevPAR

    Rate

    Occupancy

    RevPAR

    Rate

    Occupancy

    RevPAR

    Comfort(1)

    $

    97.74

    60.8%

    $

    59.40

    $

    97.39

    63.9%

    $

    62.25

    0.4%

    (310)

    bps

    (4.6)%

    Sleep

    86.39

    59.6%

    51.45

    86.50

    63.0%

    54.48

    (0.1)%

    (340)

    bps

    (5.6)%

    Quality

    83.94

    54.5%

    45.77

    81.51

    55.9%

    45.55

    3.0%

    (140)

    bps

    0.5%

    Clarion(2)

    87.91

    43.8%

    38.52

    86.31

    51.3%

    44.32

    1.9%

    (750)

    bps

    (13.1)%

    Econo Lodge

    68.35

    51.1%

    34.94

    64.75

    49.1%

    31.77

    5.6%

    200

    bps

    10.0%

    Rodeway

    68.20

    52.0%

    35.48

    65.29

    50.4%

    32.89

    4.5%

    160

    bps

    7.9%

    WoodSpring Suites

    50.83

    81.9%

    41.63

    47.34

    76.9%

    36.40

    7.4%

    500

    bps

    14.4%

    MainStay

    79.84

    62.8%

    50.15

    86.38

    65.8%

    56.86

    (7.6)%

    (300)

    bps

    (11.8)%

    Suburban

    54.49

    71.5%

    38.95

    58.36

    68.9%

    40.18

    (6.6)%

    260

    bps

    (3.1)%

    Cambria Hotels

    129.62

    55.1%

    71.44

    145.08

    69.5%

    100.88

    (10.7)%

    (1,440)

    bps

    (29.2)%

    Ascend Hotel Collection

    138.31

    54.4%

    75.28

    126.66

    62.7%

    79.41

    9.2%

    (830)

    bps

    (5.2)%

    Total

    $

    83.70

    58.2%

    $

    48.71

    $

    83.07

    59.3%

    $

    49.26

    0.8%

    (110)

    bps

    (1.1)%

    For the Three Months Ended September 30,

    2021

    For the Three Months Ended September 30,

    2019

    Change

    Average Daily

    Average Daily

    Average Daily

    Rate

    Occupancy

    RevPAR

    Rate

    Occupancy

    RevPAR

    Rate

    Occupancy

    RevPAR

    Comfort(1)

    $

    110.72

    67.8%

    $

    75.03

    $

    101.48

    68.4%

    $

    69.38

    9.1%

    (60)

    bps

    8.1%

    Sleep

    95.70

    66.4%

    63.55

    88.32

    66.4%

    58.62

    8.4%

    bps

    8.4%

    Quality

    94.48

    62.2%

    58.76

    85.60

    60.6%

    51.87

    10.4%

    160

    bps

    13.3%

    Clarion(2)

    101.17

    51.9%

    52.47

    91.80

    55.7%

    51.16

    10.2%

    (380)

    bps

    2.6%

    Econo Lodge

    76.51

    57.1%

    43.66

    68.67

    53.3%

    36.60

    11.4%

    380

    bps

    19.3%

    Rodeway

    76.21

    56.9%

    43.37

    68.98

    54.3%

    37.45

    10.5%

    260

    bps

    15.8%

    WoodSpring Suites

    54.11

    85.5%

    46.26

    48.69

    77.4%

    37.67

    11.1%

    810

    bps

    22.8%

    MainStay

    87.15

    69.1%

    60.18

    88.05

    70.5%

    62.07

    (1.0)%

    (140)

    bps

    (3.0)%

    Suburban

    59.26

    73.5%

    43.54

    57.55

    67.9%

    39.11

    3.0%

    560

    bps

    11.3%

    Cambria Hotels

    148.85

    62.2%

    94.15

    145.78

    72.0%

    104.95

    2.1%

    (980)

    bps

    (10.3)%

    Ascend Hotel Collection

    158.37

    63.3%

    98.50

    135.09

    67.6%

    91.29

    17.2%

    (430)

    bps

    7.9%

    Total

    $

    94.59

    64.9%

    $

    61.37

    $

    86.95

    63.4%

    $

    55.10

    8.8%

    150

    bps

    11.4%

    Effective Royalty Rate

    For the Quarter Ended

    For the Nine Months Ended

    September 30,

    2021

    September 30,

    2019

    September 30,

    2021

    September 30,

    2019

    System-wide(3)

    4.99%

    4.84%

    5.00%

    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)

    September 30, 2021

    September 30, 2020

    Variance

    Hotels

    Rooms

    Hotels

    Rooms

    Hotels

    Rooms

    %

    %

    Comfort(1)

    1,665

    131,066

    1,629

    128,213

    36

    2,853

    2.2%

    2.2%

    Sleep

    414

    29,167

    403

    28,534

    11

    633

    2.7%

    2.2%

    Quality

    1,666

    125,061

    1,688

    128,751

    (22)

    (3,690)

    (1.3)%

    (2.9)%

    Clarion(2)

    183

    21,917

    179

    22,364

    4

    (447)

    2.2%

    (2.0)%

    Econo Lodge

    734

    44,112

    781

    47,036

    (47)

    (2,924)

    (6.0)%

    (6.2)%

    Rodeway

    531

    30,657

    567

    32,251

    (36)

    (1,594)

    (6.3)%

    (4.9)%

    WoodSpring Suites

    300

    36,112

    285

    34,290

    15

    1,822

    5.3%

    5.3%

    MainStay

    97

    6,780

    74

    4,673

    23

    2,107

    31.1%

    45.1%

    Suburban

    70

    6,366

    62

    6,236

    8

    130

    12.9%

    2.1%

    Cambria Hotels

    58

    8,060

    53

    7,599

    5

    461

    9.4%

    6.1%

    Ascend Hotel Collection

    224

    28,175

    213

    22,192

    11

    5,983

    5.2%

    27.0%

    Domestic Franchises(3)

    5,942

    467,473

    5,934

    462,139

    8

    5,334

    0.1%

    1.2%

    International Franchises

    1,160

    134,303

    1,192

    134,316

    (32)

    (13)

    (2.7)%

    —%

    Total Franchises

    7,102

    601,776

    7,126

    596,455

    (24)

    5,321

    (0.3)%

    0.9%

    (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 September 30,

    Nine Months Ended September 30,

    2021

    2020

    2021

    2020

    Revenues, Excluding Marketing and Reservation Activities

    Total Revenues

    $

    323,369

    $

    210,771

    $

    784,660

    $

    580,679

    Adjustments:

         Marketing and reservation system revenues

    (156,871)

    (107,141)

    (384,380)

    (297,203)

    Revenues, excluding marketing and reservation activities

    $

    166,498

    $

    103,630

    $

    400,280

    $

    283,476

    ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

    (dollar amounts in thousands)

    Three Months Ended September 30,

    Nine Months Ended September 30,

    2021

    2020

    2021

    2020

    Total Selling, General and Administrative Expenses

    $

    35,110

    $

    31,779

    $

    99,847

    $

    104,098

    Mark to market adjustments on non-qualified retirement plan investments

    61

    (1,709)

    (3,402)

    (928)

    Operational restructuring charges

    —

    (128)

    (724)

    (8,646)

    Share-based compensation

    (3,016)

    (1,765)

    (8,399)

    (1,624)

    Exceptional allowances attributable to COVID-19

    (989)

    (1,285)

    (3,087)

    (3,963)

    Expenses associated with legal claims

    (3,000)

    —

    (3,000)

    —

    Adjusted Selling, General and Administrative Expenses

    $

    28,166

    $

    26,892

    $

    81,235

    $

    88,937

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

    (dollar amounts in thousands)

    Three Months Ended September 30,

    Nine Months Ended September 30,

    2021

    2020

    2021

    2020

    Net income

    $

    116,655

    $

    14,500

    $

    224,874

    $

    67,522

    Income tax expense (benefit)

    34,934

    9,594

    67,279

    (15,907)

    Interest expense

    11,638

    12,691

    35,106

    37,153

    Interest income

    (1,202)

    (1,744)

    (3,717)

    (6,277)

    Other (gains) losses

    407

    (2,030)

    (2,906)

    (858)

    Loss on extinguishment of debt

    —

    15,958

    —

    16,565

    Equity in operating net loss of affiliates, net of impairments

    957

    1,731

    3,547

    7,172

    Loss on impairment of unconsolidated joint venture

    —

    —

    4,805

    —

    Gain on sale of unconsolidated joint venture

    (4,283)

    —

    (6,860)

    —

    Depreciation and amortization

    5,883

    6,382

    18,477

    19,309

    Loss on impairment of assets

    —

    4,290

    —

    5,516

    Mark to market adjustments on non-qualified retirement plan investments

    (61)

    1,709

    3,402

    928

    Operational restructuring charges

    —

    128

    724

    8,646

    Share-based compensation

    3,016

    1,765

    8,399

    1,624

    Exceptional allowances attributable to COVID-19

    989

    1,285

    3,087

    3,963

    Expenses associated with legal claims

    3,000

    —

    3,000

    —

    Marketing and reservation system reimbursable (surplus) deficit

    (40,655)

    6,667

    (56,706)

    36,361

    Franchise agreement acquisition costs amortization

    1,961

    1,582

    5,534

    4,759

    Adjusted EBITDA

    $

    133,239

    $

    74,508

    $

    308,045

    $

    186,476

    Revenues, excluding marketing and reservation activities

    $

    166,498

    $

    103,630

    $

    400,280

    $

    283,476

    Adjusted EBITDA margins

    80.0%

    71.9%

    77.0%

    65.8%

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

    (dollar amounts in thousands, except per share amounts)

    Three Months Ended September 30,

    Nine Months Ended September 30,

    2021

    2020

    2021

    2020

    Net income

    $

    116,655

    $

    14,500

    $

    224,874

    $

    67,522

    Adjustments:

    Loss on sale and disposition & impairment of assets, net

    —

    3,123

    —

    4,087

    Loss on impairment of unconsolidated joint venture

    —

    —

    3,647

    —

    Loss on extinguishment of debt

    —

    11,617

    —

    12,275

    Gain on sale of unconsolidated joint venture

    (3,276)

    —

    (5,207)

    —

    Operational restructuring costs

    —

    97

    550

    6,392

    Exceptional allowances attributable to COVID-19

    757

    651

    2,343

    2,937

    Expenses associated with legal claims

    2,295

    —

    2,277

    —

    Sale of tax credits on historic building

    —

    (1,688)

    —

    (1,857)

    Marketing and reservation system reimbursable (surplus) deficit

    (31,286)

    3,376

    (43,635)

    28,431

    Foreign tax benefit on international restructuring

    —

    5,118

    —

    (25,454)

    Adjusted Net Income

    $

    85,145

    $

    36,794

    $

    184,849

    $

    94,333

    Diluted Earnings Per Share

    $

    2.08

    $

    0.26

    $

    4.01

    $

    1.21

    Adjustments:

    Loss on sale and disposition & impairment of assets, net

    —

    0.06

    —

    0.07

    Loss on impairment of unconsolidated joint venture

    —

    —

    0.07

    —

    Loss on extinguishment of debt

    —

    0.21

    —

    0.22

    Gain on sale of unconsolidated joint venture

    (0.06)

    —

    (0.09)

    —

    Operational restructuring costs

    —

    —

    0.01

    0.12

    Exceptional allowances attributable to COVID-19

    0.01

    0.01

    0.04

    0.05

    Expenses associated with legal claims

    0.04

    —

    0.04

    —

    Sale of tax credits on historic building

    —

    (0.03)

    —

    (0.03)

    Marketing and reservation system reimbursable (surplus) deficit

    (0.56)

    0.06

    (0.78)

    0.51

    Foreign tax benefit on international restructuring

    —

    0.09

    —

    (0.46)

    Adjusted Diluted Earnings Per Share (EPS)

    $

    1.51

    $

    0.66

    $

    3.30

    $

    1.69

    Exhibit 8

    CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

    SUPPLEMENTAL INFORMATION - 2021 OUTLOOK

    (UNAUDITED)

    Guidance represents the midpoint of the company's range of estimated outcomes for the year ended December 31, 2021

    ADJUSTED EBITDA FULL YEAR FORECAST

    (dollar amounts in thousands)

    Midpoint

    2021 Guidance

    Net income

    $

    255,600

    Income tax (benefit) expense

    76,900

    Interest expense

    46,400

    Interest income

    (4,900)

    Other losses (gains)

    (2,600)

    Equity in operating net loss of affiliates, net of impairments

    4,300

    Gain on sale of unconsolidated joint venture

    (6,900)

    Loss on impairment of unconsolidated joint venture

    4,800

    Depreciation and amortization

    24,600

    Mark to market adjustments on non-qualified retirement plan investments

    3,400

    Operational restructuring charges

    700

    Share-based compensation

    11,400

    Exceptional allowances attributable to COVID-19

    3,100

    Expenses associated with legal claims

    3,000

    Marketing and reservation system reimbursable surplus

    (42,600)

    Franchise agreement acquisition costs amortization

    7,300

    Adjusted EBITDA

    $

    384,500

    SOURCE Choice Hotels International, Inc.