Choice Hotels International, Inc. (NYSE: CHH) today reported its second quarter 2023 results.

Highlights of second quarter 2023 results include:

  • Total revenues reached $427.4 million for second quarter 2023, a quarterly record and a 16% increase compared to the same period of 2022.
  • Net income reached $84.7 million for second quarter 2023, representing diluted earnings per share (EPS) of $1.65. 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 20% and 13% lower, respectively, for second quarter 2023 compared to the same period of 2022.
  • Second quarter 2023 adjusted net income, excluding certain items described in Exhibit 6, increased 12% to $89.1 million compared to the same period of 2022 and the company's adjusted diluted EPS increased 22% to $1.75 compared to the same period of 2022.
  • Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for second quarter 2023 reached $153.1 million, a quarterly record and an 18% increase compared to the same period of 2022.
  • The company further refined its financial guidance for full-year 2023, as described in the outlook section below.
  • The company's domestic effective royalty rate for both the three-month and six-month periods ended June 30, 2023 increased 6 basis points to 4.99% compared to the respective 2022 periods.
  • The company's Cambria Hotels and WoodSpring Suites brands were ranked number one in guest satisfaction among upscale and economy extended stay hotel brands, respectively, in the J.D. Power 2023 North America Hotel Guest Satisfaction Index Study.2
  • The company's global pipeline as of June 30, 2023 increased 10% to over 93,000 rooms. The company's global rooms pipeline for conversion hotels as of June 30, 2023 increased 14% from June 30, 2022 and 25% from March 31, 2023. The company's domestic rooms pipeline for conversion hotels as of June 30, 2023 increased 10% from June 30, 2022 and 28% from March 31, 2023.
  • The company achieved $80 million of annual recurring synergies through the Radisson Hotels Americas integration, exceeding the company's original synergy target ahead of schedule. In July 2023, the company onboarded the nearly 600 Radisson Hotels Americas hotels onto its world-class reservation delivery engine and integrated the two award-winning loyalty programs.
  • During the first six months of 2023, the company returned approximately $264 million to shareholders in the form of cash dividends and share repurchases. Over the trailing twelve months ended June 30, 2023, the company repurchased 5.6 million shares of common stock totaling over $655 million, representing 10% of the shares outstanding as of June 30, 2022.

"Choice Hotels generated record revenues, fueled by our best-in-class hotel conversion and reservation-delivery capabilities as well as our success in integrating Radisson Hotels Americas ahead of schedule," said Patrick Pacious, president and chief executive officer. "The exceptional speed with which we are able to move conversion projects through the pipeline has driven impressive revenue-intense hotel openings in the first half of 2023 and further strengthened our award-winning brand portfolio, reinforcing our confidence in the company's ability to drive significant growth in 2023 and beyond."

Financial Performance 

  • Total revenues, excluding reimbursable revenue from franchised and managed properties, increased 28% to $227.8 million for second quarter 2023 compared to the same period of 2022.
  • Platform and procurement services fees increased 32% to $28.8 million for second quarter 2023 compared to the same period of 2022.
  • Royalty, licensing, and management fees increased 16% to $140.5 million for second quarter 2023 compared to the same period of 2022.
  • Domestic royalties increased 7% to $125.1 million for second quarter 2023 compared to the same period of 2022.
  • Domestic revenue per available room (RevPAR) increased 50 basis points for second quarter 2023 compared to the same period of 2022, driven by a 2.8% increase in average daily rate. The company's second quarter 2023 occupancy levels exceeded 60%.

Development

  • The company's upscale, extended-stay, and midscale segments reported a 10.0% increase in hotels and an 11.7% increase in rooms since June 30, 2022. The company's total number of domestic hotels and rooms as of June 30, 2023 increased 6.9% and 8.8%, respectively, from June 30, 2022.
  • The total number of international hotels and rooms, as of June 30, 2023 increased 9.0% and 11.8%, respectively, from June 30, 2022.
  • As of June 30, 2023, the domestic system size for the company's upscale and upper-midscale segments grew by approximately 32% and 24%, respectively, since June 30, 2022, driven by an increase in the number of Radisson Hotels Americas units and the growth of the Ascend Hotel Collection, Cambria Hotels, and the Comfort family of brands.
  • The company executed an average of more than four hotel openings per week, for a total of 107 hotel openings year-to-date through June 30, 2023, a 39% increase compared to the same period of 2022. For the first half of 2023, the company grew hotel openings across all segments, increasing openings in the upscale segment by 83%, the midscale segment by 42%, the extended stay segment by 50%, and the economy segment by 11% compared to the same period of 2022.
  • Of the total domestic franchise agreements awarded in the six months ended June 30, 2023, 85% were for the company's upscale, extended-stay, and midscale brands and 77% were for conversion hotels. Of the 126 franchise agreements awarded for conversion hotels in the six months ended June 30, 2023, 65% have already opened or are expected to open by December 31, 2023.
  • The company's domestic pipeline increased 9% to over 87,000 rooms, representing 899 hotels, and the international pipeline increased 29% to over 6,300 rooms, representing 61 hotels. The company's extended stay and upscale domestic pipelines increased 17% to 450 hotels and 27% to 127 hotels, respectively.

Shareholder Returns

During the six months ended June 30, 2023, the company paid cash dividends totaling approximately $28 million. 

During the six months ended June 30, 2023, the company repurchased 1.8 million shares of common stock for $236.3 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. Over the trailing twelve months ended June 30, 2023, the company repurchased 5.6 million shares of common stock totaling over $655 million, representing 10% of the shares outstanding as of June 30, 2022.

As of June 30, 2023, the company had 2.8 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

$251 – $259 million

$255 – $265 million

Adjusted Net Income

$298 – $306 million

$292 – $302 million

Adjusted EBITDA

$530 – $540 million

$525 – $540 million

Adjusted Diluted EPS

$5.86 – $6.01

$5.70 – $5.90

Effective Income Tax Rate

24 %

24 %

Full-Year 2023

Prior Outlook

vs. Full-Year 2022

Domestic RevPAR Growth3

Approximately 2%

Approximately 2%

Domestic Effective Royalty Rate Growth4

Mid-single digits

Mid-single digits

Domestic Net Unit Growth

Approximately 1%

Approximately 1%

(upscale, extended-stay, and midscale segments)

About Choice Hotels

Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world, with approximately 7,500 hotels, representing nearly 630,000 rooms, in 46 countries and territories as of June 30, 2023.

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 WoodSpring Suites received the highest score among economy extended stay hotels in the J.D. Power 2023 North America Hotel Guest Satisfaction Index Study of customers' satisfaction with their hotel stay. Visit jdpower.com/awards for more details. Cambria Hotels & Suites received the highest score among upscale hotels in the J.D. Power 2023 North America Hotel Guest Satisfaction Index Study of customers' satisfaction with their hotel stay. Visit jdpower.com/awards for more details.

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

4 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 June 30,

Six Months Ended June 30,

Variance

Variance

2023

2022

$

%

2023

2022

$

%

REVENUES

Royalty, licensing and management fees

$    140,499

$    121,449

$      19,050

16 %

$    247,991

$    212,188

$      35,803

17 %

Initial franchise fees

7,164

6,222

942

15 %

15,046

14,624

422

3 %

Platform and procurement services fees

28,801

21,803

6,998

32 %

42,644

33,486

9,158

27 %

Owned hotels

25,504

17,191

8,313

48 %

47,836

29,228

18,608

64 %

Other

11,148

11,927

(779)

(7) %

21,775

20,156

1,619

8 %

Other revenues from franchised and managed properties

214,304

189,382

24,922

13 %

384,920

316,019

68,901

22 %

Total revenues

427,420

367,974

59,446

16 %

760,212

625,701

255,307

21 %

OPERATING EXPENSES

Selling, general and administrative

67,804

43,888

23,916

54 %

127,087

74,212

52,875

71 %

Depreciation and amortization

9,812

5,479

4,333

79 %

19,835

11,710

8,125

69 %

Owned hotels

18,150

10,692

7,458

70 %

35,296

18,846

16,450

87 %

Other expenses from franchised and managed properties

207,265

153,846

53,419

35 %

375,754

267,496

108,258

40 %

       Total operating expenses

303,031

213,905

89,126

42 %

557,972

372,264

185,708

50 %

Gain on sale of business and assets, net

—

3,280

(3,280)

(100) %

—

3,309

(3,309)

(100) %

Operating income

124,389

157,349

(32,960)

(21) %

202,240

256,746

66,290

(21) %

OTHER INCOME AND EXPENSES, NET

Interest expense

16,270

11,252

5,018

45 %

30,354

22,722

7,632

34 %

Interest income

(2,056)

(1,628)

(428)

26 %

(3,939)

(2,908)

(1,031)

35 %

Other (gain) loss

(2,187)

5,559

(7,746)

(139) %

(4,095)

7,275

(11,370)

(156) %

Equity in net (gain) loss of affiliates

(185)

40

(225)

(563) %

(122)

(204)

82

(40) %

Total other income and expenses, net

11,842

15,223

(3,381)

(22) %

22,198

26,885

(4,687)

(17) %

Income before income taxes

112,547

142,126

(29,579)

(21) %

180,042

229,861

(49,819)

(22) %

Income tax expense

27,837

35,958

(8,121)

(23) %

42,512

56,302

(13,790)

(24) %

Net income

$      84,710

$    106,168

$    (21,458)

(20) %

$    137,530

$    173,559

$    (36,029)

(21) %

Basic earnings per share

$         1.66

$         1.90

$        (0.24)

(13) %

$         2.68

$         3.11

$        (0.43)

(14) %

Diluted earnings per share

$         1.65

$         1.89

$        (0.24)

(13) %

$         2.66

$         3.08

$        (0.42)

(14) %

Choice Hotels International, Inc. and Subsidiaries

Exhibit 2

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands)

June 30,

December 31,

2023

2022

ASSETS

Cash and cash equivalents

$                             36,167

$                             41,566

Accounts receivable, net

220,100

216,614

Other current assets

91,867

89,742

Total current assets

348,134

347,922

Property and equipment, net

449,313

427,306

Intangible assets, net

764,377

742,190

Goodwill

220,187

218,653

Notes receivable, net of allowances

50,022

55,577

Investments in affiliates

44,946

30,647

Operating lease right-of-use assets

63,902

68,985

Investments, employee benefit plans, at fair value

36,278

31,645

Other assets

173,164

179,250

Total assets

$                        2,150,323

$                        2,102,175

LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable

$                           120,977

$                           118,863

Accrued expenses and other current liabilities

98,791

131,410

Deferred revenue

95,658

92,695

Current portion of long-term debt

4,416

2,976

Liability for guest loyalty program

86,844

89,954

 Total current liabilities

406,686

435,898

Long-term debt

1,384,293

1,200,547

Deferred revenue

131,873

134,149

Liability for guest loyalty program

46,316

47,381

Operating lease liabilities

68,785

70,994

Deferred compensation & retirement plan obligations

41,283

36,673

Other liabilities

16,396

21,873

Total liabilities

2,095,632

1,947,515

Total shareholders' equity

54,691

154,660

Total liabilities and shareholders' equity

$                        2,150,323

$                        2,102,175

Choice Hotels International, Inc. and Subsidiaries

Exhibit 3

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

Six Months Ended June 30,

2023

2022

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$                        137,530

$                        173,559

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

Depreciation and amortization

19,835

11,710

Depreciation and amortization – marketing and reservation system

18,581

14,608

Gain on sale and disposal of business and assets, net

—

(3,309)

Franchise agreement acquisition cost amortization

9,380

7,623

Non-cash stock compensation and other charges

23,689

17,770

Non-cash interest, investment, and affiliate (income) loss, net

(3,098)

7,459

Deferred income taxes

2,157

(5,493)

Equity in net gain of affiliates, less distributions received

637

745

Franchise agreement acquisition costs, net of reimbursements

(46,150)

(27,016)

Change in working capital and other

(36,822)

(38,307)

 NET CASH PROVIDED BY OPERATING ACTIVITIES

125,739

159,349

CASH FLOWS FROM INVESTING ACTIVITIES:

Investment in property and equipment

(45,684)

(49,866)

Investment in intangible assets

(1,385)

(1,824)

Proceeds from sale of assets and business

—

32,893

Asset acquisition, net of cash acquired

—

(856)

Contributions to investments in affiliates

(15,328)

(669)

Proceeds from sale of equity method investments

868

—

Purchases of investments, employee benefit plans

(3,206)

(3,294)

Proceeds from sales of investments, employee benefit plans

1,099

1,854

Issuance of notes receivable

(4,284)

(1,987)

Collections of notes receivable

9,296

63

Other items, net

(526)

(305)

 NET CASH USED IN INVESTING ACTIVITIES

(59,150)

(23,991)

CASH FLOWS FROM FINANCING ACTIVITIES:

Net borrowings pursuant to revolving credit facilities

185,000

—

Debt issuance costs

(755)

(24)

Purchases of treasury stock

(234,455)

(15,140)

Proceeds from exercise of stock options

5,616

2,359

Dividends paid

(27,534)

(26,453)

 NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

(72,128)

(39,258)

Net change in cash and cash equivalents

(5,539)

96,100

Effect of foreign exchange rate changes on cash and cash equivalents

140

(520)

Cash and cash equivalents at beginning of period

41,566

511,605

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$                          36,167

$                        607,185

Exhibit 4

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL OPERATING INFORMATION

DOMESTIC HOTEL SYSTEM

(UNAUDITED)

For the Three Months Ended June 30, 2023

For the Three Months Ended June 30, 2022

Change

Average Daily

Average Daily

Average Daily

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Upscale & Above(1)

$       155.07

59.9 %

$        92.94

$       149.60

58.0 %

$         86.84

3.7 %

190

bps

7.0 %

Midscale & Upper Midscale(2)

104.50

60.5 %

63.18

103.42

61.2 %

63.33

1.0 %

(70)

bps

(0.2) %

Extended Stay(3)

65.24

74.6 %

48.64

62.44

78.8 %

49.23

4.5 %

(420)

bps

(1.2) %

Economy(4)

72.72

50.5 %

36.74

72.94

53.0 %

38.67

(0.3) %

(250)

bps

(5.0) %

Total(5)

$       100.10

60.3 %

$        60.32

$        97.42

61.6 %

$         60.04

2.8 %

(130)

bps

0.5 %

For the Six Months Ended June 30, 2023

For the Six Months Ended June 30, 2022

Change

Average Daily

Average Daily

Average Daily

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Upscale & Above(1)

$       148.02

55.6 %

$        82.34

$       141.20

52.6 %

$         74.32

4.8 %

300

bps

10.8 %

Midscale & Upper Midscale(2)

100.19

56.4 %

56.46

98.06

56.3 %

55.24

2.2 %

10

bps

2.2 %

Extended Stay(3)

64.07

72.9 %

46.73

60.88

76.7 %

46.67

5.2 %

(380)

bps

0.1 %

Economy(4)

70.35

47.7 %

33.53

69.69

49.4 %

34.40

0.9 %

(170)

bps

(2.5) %

Total(5)

$        95.97

56.5 %

$        54.22

$        92.30

57.1 %

$         52.73

4.0 %

(60)

bps

2.8 %

Effective Royalty Rate

For the Three Months Ended

For the Six Months Ended

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

System-wide(5)

4.99 %

4.93 %

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, RevPAR, and effective royalty rate reflect operating performance for the three and six months ended June 30, 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)

June 30, 2023

June 30, 2022

Variance

Hotels

Rooms

Hotels

Rooms

Hotels

Rooms

%

%

Ascend Hotel Collection

200

22,665

197

20,381

3

2,284

1.5 %

11.2 %

Cambria Hotels

69

9,399

60

8,303

9

1,096

15.0 %

13.2 %

Radisson(1)

68

15,887

—

—

68

15,887

NM

NM

Comfort(2)

1,688

132,572

1,659

130,637

29

1,935

1.7 %

1.5 %

Country(3)

430

34,326

—

—

430

34,326

NM

NM

Clarion(4)

176

19,329

188

21,100

(12)

(1,771)

(6.4) %

(8.4) %

Quality

1,618

119,590

1,630

121,149

(12)

(1,559)

(0.7) %

(1.3) %

Sleep

427

30,149

418

29,419

9

730

2.2 %

2.5 %

Park

4

363

—

—

4

363

NM

NM

Everhome

1

98

—

—

1

98

NM

NM

MainStay

119

8,152

107

7,549

12

603

11.2 %

8.0 %

WoodSpring

224

27,005

312

37,586

(88)

(10,581)

(28.2) %

(28.2) %

Suburban

83

7,408

70

6,246

13

1,162

18.6 %

18.6 %

Econo Lodge

676

39,906

718

43,161

(42)

(3,255)

(5.8) %

(7.5) %

Rodeway

484

27,286

505

28,783

(21)

(1,497)

(4.2) %

(5.2) %

Domestic Franchises(5)

6,267

494,135

5,864

454,314

403

39,821

6.9 %

8.8 %

International Franchises(5)

1,205

134,766

1,106

120,574

99

14,192

9.0 %

11.8 %

Total Franchises

7,472

628,901

6,970

574,888

502

54,013

7.2 %

9.4 %

(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) The Company reclassified six properties located in the Caribbean from Domestic Franchises to International Franchises as of June 30, 2022 to conform to current year presentation. 

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 June 30,

Six Months Ended June 30,

2023

2022

2023

2022

Total Revenues

$          427,420

$          367,974

$         760,212

$         625,701

Adjustments:

  Reimbursable revenue from franchised and managed properties

(199,645)

(189,382)

(357,427)

(316,019)

Revenues excluding reimbursable revenue from franchised and managed properties

$          227,775

$          178,592

$         402,785

$         309,682

ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

(dollar amounts in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2023

2022

2023

2022

Total Selling, General and Administrative Expenses

$            67,804

$              43,888

$           127,087

74,212

Mark to market adjustments on non-qualified retirement plan investments

(2,051)

4,835

(3,868)

6,560

Operational restructuring charges

(3,082)

—

(5,340)

—

Share-based compensation

(6,007)

(4,613)

(10,613)

(8,207)

Due diligence and transition costs

(7,867)

(3,569)

(15,971)

(3,970)

Limited payment guarantee charge

(1,551)

—

(1,551)

—

Adjusted Selling, General and Administrative Expenses

$            47,246

$            40,541

$           89,744

$           68,595

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

(dollar amounts in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2023

2022

2023

2022

Net income

$              84,710

$            106,168

$           137,530

$           173,559

Income tax expense

27,837

35,958

42,512

56,302

Interest expense

16,270

11,252

30,354

22,722

Interest income

(2,056)

(1,628)

(3,939)

(2,908)

Other (gain) loss

(2,187)

5,559

(4,095)

7,275

Equity in net (gain) loss of affiliates

(185)

40

(122)

(204)

Gain on sale of business and assets, net

—

(3,280)

—

(3,309)

Depreciation and amortization

9,812

5,479

19,835

11,710

Mark to market adjustments on non-qualified retirement plan investments

2,051

(4,835)

3,868

(6,560)

Operational restructuring charges

3,082

—

5,340

—

Share-based compensation

6,007

4,613

10,613

8,207

Due diligence and transition costs

7,867

3,569

15,971

3,970

Limited payment guarantee charge

1,551

—

1,551

—

Net reimbursable surplus from franchised and managed properties

(4,388)

(35,536)

(5,262)

(48,523)

Franchise agreement acquisition costs amortization

2,736

2,196

5,397

4,358

Adjusted EBITDA

$          153,107

$          129,555

$         259,553

$         226,599

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

(dollar amounts in thousands, except per share amounts)

Three Months Ended June 30,

Six Months Ended June 30,

2023

2022

2023

2022

Net income

$            84,710

$          106,168

$         137,530

$         173,559

Adjustments:

Gain on sale of business and assets, net

—

(2,473)

—

(2,495)

Operational restructuring charges

2,331

—

4,042

—

Due diligence and transition costs

5,947

2,691

12,090

2,993

Limited payment guarantee charge

1,174

—

1,174

—

Net reimbursable surplus from franchised and managed properties

(5,050)

(26,510)

(7,550)

(36,198)

Adjusted Net Income

$            89,112

$            79,876

$         147,286

$         137,859

Diluted Earnings Per Share

$               1.65

$               1.89

$              2.66

$              3.08

Adjustments:

Gain on sale of business and assets, net

—

(0.04)

—

(0.04)

Operational restructuring charges

0.05

—

0.08

—

Due diligence and transition costs

0.12

0.05

0.24

0.05

Limited payment guarantee charge

0.02

—

0.02

—

Net reimbursable surplus from franchised and managed properties

(0.09)

(0.47)

(0.13)

(0.64)

Adjusted Diluted Earnings Per Share (EPS)

$               1.75

$               1.43

$              2.87

$              2.45

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

$           254,800

Income tax expense

81,800

Interest expense

64,200

Interest income

(7,100)

Other gain

(3,700)

Equity in net gain of affiliates

(1,600)

Limited payment guarantee charge

1,600

Depreciation and amortization

49,200

Mark to market adjustments on non-qualified retirement plan investments

3,900

Operational restructuring, due diligence and transition costs

42,100

Share-based compensation

20,400

Franchise agreement acquisition costs amortization

10,800

Net reimbursable deficit from franchised and managed properties

18,600

Adjusted EBITDA

$           535,000

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

(dollar amounts in thousands, except per share amounts)

Midpoint

2023 Guidance

Net income

$           254,800

Adjustments:

Operational restructuring, due diligence and transition costs

31,900

Limited payment guarantee charge

1,200

Net reimbursable deficit from franchised and managed properties

13,900

Adjusted Net Income

$             301,800

Diluted Earnings Per Share

$                  5.01

Adjustments:

Operational restructuring, due diligence and transition costs

0.63

Limited payment guarantee charge

0.02

Net reimbursable deficit from franchised and managed properties

0.28

Adjusted Diluted Earnings Per Share (EPS)

$                  5.94

SOURCE Choice Hotels International, Inc.