Our conversion engine remains a key differentiator for Choice Hotels International, Inc., enabling those hotels to open about five times faster than new construction hotels. In the fourth quarter, U.S. conversion franchise agreements increased 12% year over year, and we expect conversion activity to be a core driver of improving U.S. net room growth in 2026. As we indicated on our last call, we have been actively optimizing our U.S. portfolio throughout the year. With developer demand remaining constructive ...

FOURTH QUARTER AND FULL-YEAR 2024 EARNINGS RESULTS PRESENTATION 2 Cambria Hotels, Nashville Midtown, TN FEBRUARY 20, 2025 1 Forward-looking Statements Information set forth herein includes "forward-looking statements." 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 oth ...

Core Insights - Choice Hotels International reported record profitability for 2025, driven by a significant increase in international rooms and strong performance in the extended-stay segment [1][2] Financial Performance - Full-year 2025 net income was $369.9 million, with diluted EPS of $7.90 and adjusted EPS of $6.94 [1][2] - Adjusted EBITDA reached a record $625.6 million for 2025, with fourth-quarter adjusted EBITDA of $140.9 million [1][2] - Total revenues for 2025 were $1.597 billion, a slight increase from $1.585 billion in 2024 [1][2] Growth Metrics - U.S. extended stay net rooms grew by 11.7% compared to December 31, 2024, with a record number of hotel openings increasing by 8% during 2025 [1] - Global franchise agreements awarded increased by 22% in 2025, including a 6% increase in the fourth quarter [1] - International net rooms grew by 12.5% compared to December 31, 2024, with an 82% increase in hotel openings during 2025 [1] Development and Expansion - The U.S. pipeline for conversion rooms increased by 12% sequentially from September 30, 2025, and 7% compared to December 31, 2024 [1] - Key international milestones included the introduction of the Mainstay Suites brand to Australia and onboarding over 8,300 rooms in China [1][2] Shareholder Returns - The company returned $189.3 million to shareholders in 2025, including $53.5 million in dividends and $135.8 million in share repurchases [2] - As of December 31, 2025, the company had 2.8 million shares remaining under its current share repurchase authorization [2] Outlook for 2026 - The company expects net income for 2026 to range between $265 million and $275 million, with adjusted EBITDA projected between $632 million and $647 million [2] - Global RevPAR growth is anticipated to be between -2% and 1%, with U.S. RevPAR growth also expected in the same range [2]

Core Insights - Choice Hotels International, Inc. (CHH) is enhancing its position in the global hospitality market through the expansion of its midscale extended-stay brand, Everhome Suites, with recent openings in Texas, Kentucky, and New Jersey [2][10] Expansion of Everhome Suites - Everhome Suites has reached a national portfolio of 27 properties, establishing itself as a leader among newly launched midscale extended-stay brands, designed for long-term comfort with apartment-style suites [3][10] - The brand's growth is supported by a collaboration with Highside Companies, a Denver-based real estate firm, which has facilitated the rapid expansion [5] Strategic Priorities - Extended stay is a strategic priority for Choice Hotels, with a redesigned hotel prototype that reflects a data-driven and cost-efficient development strategy based on input from stakeholders [4][8] - The company is focusing on high-revenue segments and high-growth international markets, with plans to double international adjusted EBITDA by 2027 [7] Recent Openings and Market Position - New properties include locations in San Antonio, TX, Bowling Green, KY, and Somerset, NJ, strategically located near major employers and healthcare facilities to cater to business and extended-stay travelers [6] - The company is committed to meeting the rising demand for extended-stay accommodations, supported by a growing pipeline of developments [6] Stock Performance and Market Outlook - CHH shares have increased by 11.2% over the past three months, compared to a 16.4% growth in the Zacks Hotels and Motels industry, despite facing near-term challenges such as softness in U.S. RevPAR trends [9]

Core Insights - Everhome Suites, a midscale extended stay brand from Choice Hotels International, continues to expand its national presence with recent openings in Texas, Kentucky, and New Jersey, reaching a total of 27 properties nationwide [1][2] Company Overview - Choice Hotels International, Inc. is one of the largest lodging franchisors globally, with over 7,500 hotels and nearly 650,000 rooms across 46 countries and territories, offering a diverse portfolio of 22 brands [7] Brand Development - The Everhome Suites brand is designed for guests seeking apartment-style accommodations for longer stays, featuring spacious suites with fully equipped kitchens and modern amenities [2][5] - The brand's growth strategy is supported by a redesigned prototype that integrates feedback from developers and operators, enhancing project viability and guest experience [3] Recent Openings - Everhome Suites San Antonio, TX opened in October 2025, strategically located near major employers and attractions [6] - Everhome Suites Bowling Green, KY opened in November 2025, catering to guests connected to local universities and healthcare facilities [6] - Everhome Suites Somerset, NJ opened in late December 2025, positioned near major highways and corporate offices, making it ideal for business travelers [6] Strategic Partnerships - The newly opened hotels were developed in collaboration with Highside Companies, a real estate firm with over $1 billion in active projects [3][8]

Core Insights - Choice Hotels International demonstrated strong development performance in 2025, highlighting the effectiveness of its strategy and global portfolio [1][3] - The company significantly expanded its international presence and achieved record results in the extended stay segment, positioning itself for continued success in 2026 and beyond [1][4] International Growth - Choice Hotels achieved breakthrough international growth, underscoring its commitment to long-term expansion [2][3] - The company acquired the remaining 50% stake in the Choice Hotels Canada joint venture, enhancing its growth potential in the Canadian market [6] - A multi-unit agreement for six new Ascend Collection properties in Québec marks a significant step in the Canadian market [6] - In Europe, the company signed a 50-unit Quality Suites agreement in France, nearly doubling its footprint there [6] - The introduction of MainStay Suites in Australia with seven properties marks the brand's entry into the country [6] - A landmark franchise partnership in China is expected to generate over 100 Comfort and Quality hotels in the next four years [6] - The company expanded its Radisson portfolio in Latin America, entering new markets such as Argentina and Suriname [6] - Agreements for three hotels in Kenya lay the groundwork for future growth in Africa [6] Extended Stay Segment - Choice Hotels' extended stay platform had its strongest year on record, with 66 new domestic extended stay hotels opened in 2025 [4] - The company signed 93 franchise agreements across its four extended stay brands, with WoodSpring Suites leading with 50 contracts [4] - The segment's performance was bolstered by a successful marketing campaign, "Stay in Your Rhythm," which unified the brands under a single value proposition [4] Upscale Portfolio - The upscale brands of Choice Hotels showed steady growth with 27 new domestic hotels opened in 2025 [5] - The domestic upscale pipeline grew to 133 hotels, with expected increases in 2026 [5] - Key initiatives were launched to enhance guest experience and operational efficiency, including a refreshed Ascend Collection identity and new amenities solutions [5] Core Brands Development - The core brands of Choice Hotels awarded 247 U.S. franchise agreements, reflecting strong demand from franchisees [7] - Country Inn & Suites saw a 50% increase in U.S. franchise agreements compared to 2024, while Quality Inn experienced double-digit growth with 57 agreements [7] - Major brand initiatives were advanced, including refreshed identities and a new coffee experience rollout across more than 2,000 hotels expected by mid-2026 [7]

Core Insights - Choice Hotels International, Inc. (CHH) is expanding its global presence in the hospitality sector with plans to open six new upscale properties under the Ascend Collection brand in Québec by early 2026, leading to a 5.3% increase in shares during trading hours following the announcement [1][9]. Expansion Initiatives - The expansion is a significant initiative post-consolidation, demonstrating the company's commitment to enhancing its upscale offerings in high-demand destinations, particularly in Montréal and key resort areas [2]. - This initiative establishes a foundation for further growth across Canada, positioning the region as a long-term growth driver and a source of revenue diversification [3]. Market Performance - The expansion is supported by strong market performance, with a 7% year-over-year increase in revenue per available room (RevPAR) in Canada during Q3 2025, and the new properties will increase the Ascend Collection's footprint in Canada by approximately 20% [4][9]. Property Portfolio - The six new properties will feature a diverse portfolio of around 650 rooms, including urban hotels with luxury amenities, family-oriented resorts, and boutique mountain resorts with extensive recreational facilities [5]. International Growth Strategy - Beyond Canada, Choice Hotels is pursuing aggressive growth in EMEA, the Caribbean, Latin America, and Asia-Pacific, with strong momentum in France, Spain, China, and Australia, aiming to double international adjusted EBITDA by 2027 [6]. - In the U.S., growth is primarily driven by brand conversions, allowing for capital-efficient expansion while minimizing new construction risks, particularly through extended-stay brands [7]. Stock Performance - CHH shares have increased by 23.4% over the past month, outperforming the Zacks Hotels and Motels industry's growth of 9.8%, positioning the company to benefit from ongoing unit expansion and franchising initiatives [8].

Financial Data and Key Metrics Changes - Adjusted EBITDA for the second quarter reached $165 million, a 2% year-over-year increase [24] - Adjusted earnings per share also hit a record of $1.92, marking a 4% year-over-year increase [25] - Global rooms increased by 3% year-over-year, with total worldwide rooms growing by 2.1% [25][28] - Domestic RevPAR declined approximately 1.6% year-over-year, while overall RevPAR decreased by 2.9% [28] Business Line Data and Key Metrics Changes - Domestic extended stay room system size grew by 10% year-over-year, with a 7% increase in domestic openings [25] - The Comfort brand saw a 50% increase in global openings and a 23% year-over-year increase in domestic franchise agreements [26] - The upscale portfolio, including the Send Hotel Collection, reached over 65,000 rooms worldwide, with a 29% year-over-year increase in domestic franchise agreements awarded [27] Market Data and Key Metrics Changes - International business achieved a 10% growth in adjusted EBITDA, with a 5% expansion in the rooms portfolio year-over-year [5] - The EMEA region saw a 7% increase in room count, reaching over 63,000 rooms [9] - In Canada, the lodging market is projected to grow at an average annual rate of over 5% over the next five years, reaching over $50 billion in total revenues by 2030 [8] Company Strategy and Development Direction - The company is focusing on expanding its global footprint through acquisitions and partnerships, including the acquisition of the remaining 50% interest in Choice Hotels Canada [6][32] - The strategy includes transitioning to a fully direct franchising model in Canada, allowing for a broader product offering across 22 brands [7] - The company aims to enhance its portfolio by exiting underperforming hotels and focusing on more revenue-intensive segments [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing growth in international markets and the potential for increased market share [6] - The company anticipates continued growth in the extended stay segment, which has shown resilience during uncertain economic times [11] - Despite macroeconomic challenges, management remains confident in the long-term outlook, driven by strategic investments and a focus on higher revenue-generating hotels [23][34] Other Important Information - The company achieved a record second quarter adjusted EBITDA despite a weaker RevPAR environment [24] - The effective royalty rate increased by eight basis points year-over-year, contributing to revenue growth [30] - The company returned $137 million to shareholders year-to-date, including $27 million in cash dividends and $110 million in share repurchases [32] Q&A Session Summary Question: How does the company decide on direct versus master franchise in different markets? - The decision is based on market fundamentals, including the ability of small business owners to aggregate capital and the regulatory environment [37][40] Question: What is the growth outlook for Canada? - The dynamics around development and hotel openings in Canada are similar to the U.S., with a healthy growth rate of 5% expected [44][46] Question: What is the long-term expectation for international EBITDA? - International EBITDA is currently about 6% of total EBITDA, with significant growth opportunities anticipated [50][53] Question: What current trends are impacting RevPAR expectations? - The company is experiencing softness in international inbound and government travel, affecting RevPAR guidance [60][61] Question: Are there any significant loans to be aware of? - The company clarified that loans made were not to competitive brands and are primarily for launching new brands [67][70] Question: What is the current status of the global net system rooms? - The guidance for global net system rooms is for 1% growth this year, with strategic terminations of underperforming properties factored in [73][75] Question: How is the company managing the balance between occupancy and rate? - The company is focused on maintaining occupancy share gains, which is crucial for future rate increases [84][86]

Core Insights - Choice Hotels International has launched two innovative campaigns, "Stay in Your Rhythm" and "The WoodSpring Way," to promote its extended stay brands, emphasizing the importance of maintaining routines for guests during long-term stays [1][2][5] - The company operates over 550 extended stay locations, with 51 under construction and more than 350 in the pipeline, positioning itself as a leader in the long-term lodging market [1][5] Group 1: Campaign Details - "Stay in Your Rhythm" focuses on the amenities available at all extended stay brands, allowing guests to maintain their daily routines, such as cooking and exercising [2][5] - "The WoodSpring Way" highlights the exceptional hospitality provided by WoodSpring Suites staff, creating a home-like atmosphere for guests [3][5] Group 2: Brand Recognition - WoodSpring Suites was ranked the 1 economy extended stay brand in the J.D. Power 2025 North America Hotel Guest Satisfaction Index Study, achieving top rankings across six evaluated dimensions for four consecutive years [4][5] - The brand's commitment to guest service is reflected in its consistent recognition for guest satisfaction, including being the 1 overall economy hotel brand in 2022 [4] Group 3: Market Positioning - Choice Hotels aims to educate the growing population of extended stay travelers on the value offered by its brands, emphasizing efficiency, cleanliness, good value, and flexibility [5] - The campaigns will be promoted through various channels, including social media and digital platforms, throughout 2025 and into 2026 [5]

Company Overview - WoodSpring Suites has been recognized as the 1 economy extended stay brand for four consecutive years in the J.D. Power North America Hotel Guest Satisfaction Index Study, ranking 1 in 2024 and 2023, and 1 overall economy hotel brand in 2022 [1][4] - The brand focuses on providing a welcoming environment with spacious suites featuring in-room kitchens at affordable weekly and monthly rates [1][4] - As of Q1 2025, WoodSpring Suites operates 265 locations across the U.S. and is one of four extended stay brands under Choice Hotels, which has surpassed 500 extended stay hotel properties [2] Industry Insights - The J.D. Power North America Hotel Guest Satisfaction Index Study measures customer satisfaction based on six factors: communications and connectivity, food and beverage, guest room, hotel facility, staff service, and value for price [3] - The 2025 study evaluated 102 brands across nine market segments, based on responses from 39,219 hotel guests for stays between May 2024 and May 2025 [3] Brand Strategy - WoodSpring Suites recently launched a new marketing campaign titled "The WoodSpring Way," emphasizing the exceptional hospitality provided by its staff [1] - The brand's offerings include fully equipped kitchens, on-site laundry facilities, free Wi-Fi, and flexible payment options, catering to longer-term guests [4] Parent Company Overview - Choice Hotels International, Inc. is one of the largest lodging franchisors globally, with over 7,500 hotels and nearly 650,000 rooms in 46 countries and territories [5] - The company has a diverse portfolio of 22 brands, including full-service, upper upscale, midscale, extended stay, and economy properties, aimed at meeting various traveler needs [5]