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 - CIM Group has finalized a loan of $167.67 million to affiliates of Concord Hospitality and Whitman Peterson to recapitalize a portfolio of 15 WoodSpring Suites extended-stay hotels across multiple states [1][2] - The loan includes an initial funding of $117.67 million, with an additional $50 million available for earn-out opportunities and potential expansion of the hotel portfolio [2] - This transaction aligns with CIM Group's strategy to focus on the hospitality industry, particularly in select-service and extended-stay hotels [3] Company Overview - CIM Group has completed over $60 billion in real estate and infrastructure projects across the Americas since its founding in 1994 [4] - The company engages in various lending activities, including mortgage and mezzanine loans, as well as bridge and construction financing for commercial real estate owners and developers [4] - In 2023, CIM Group has executed similar transactions, including a $75 million loan for a select-service hotel property in San Diego [3] Recent Transactions - In September 2023, CIM Group closed two loans for hotels in Florida, including a $34.97 million senior loan for a dual-branded Aloft/Element hotel in Orlando and a $28.9 million whole loan for an Aloft hotel in Tampa [5]

Core Insights - Choice Hotels International reported Q2 2025 adjusted EPS of $1.92, exceeding estimates of $1.90, while adjusted EBITDA reached a quarterly record of $165 million [1][2][5] - Revenue (GAAP) was $426 million, falling short of the consensus estimate of $429.84 million, leading to a downward revision of full-year 2025 guidance for net income and diluted EPS [1][12] Financial Performance - Adjusted EPS increased by 4.3% year-over-year from $1.84 in Q2 2024 [2] - Revenue (GAAP) decreased by 2.1% year-over-year from $435 million in Q2 2024 [2] - Adjusted EBITDA rose by 1.9% year-over-year from $162 million in Q2 2024 [2] - Effective royalty rate improved to 5.12%, up by 0.08 percentage points from the previous year [2][8] Company Overview - Choice Hotels operates over 7,400 hotels with more than 644,000 rooms globally, focusing on various market segments including economy, midscale, upscale, and extended stay [3] - The company generates most of its revenue from hotel franchising, supplemented by partnerships and hotel ownership [3] Strategic Focus - The company aims to expand its franchise system, enhance brand awareness, and optimize digital reservations while managing costs [4] - Key growth drivers include revenue per available room (RevPAR) growth, expansion of higher-revenue segments, and international growth [4] Market Trends - Domestic RevPAR declined by 2.9% compared to Q2 2024, attributed to macroeconomic uncertainty and challenging comparisons due to calendar events [6] - The extended stay segment showed strong performance, with a 10.5% year-over-year expansion in the domestic extended stay portfolio [7] Future Outlook - Management revised FY2025 net income guidance to $261–$276 million, down from $275–$290 million, and diluted EPS guidance to $5.54–$5.86, down from $5.86–$6.18 [12] - The company expects a decline of 3% or flat performance in domestic RevPAR for FY2025, compared to previous expectations of flat to slight growth [12][13]

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]

Financial Data and Key Metrics Changes - Adjusted EBITDA reached $165 million, a 2% year-over-year increase, while adjusted earnings per share rose 4% year-over-year to $1.92 [4][24] - Global rooms increased by 2% year-over-year, with a 3% net increase in more revenue-intensive rooms [4][24] - Domestic RevPAR declined approximately 1.6% year-over-year, while overall RevPAR decreased by 2.9% due to reduced government and international travel [27][32] Business Line Data and Key Metrics Changes - The domestic extended stay room system size grew by 10% year-over-year, with a 7% increase in domestic openings [24][25] - The Comfort brand saw a 50% increase in global openings and a 23% year-over-year rise in domestic franchise agreements awarded [25] - The upscale segment expanded by 15% year-over-year, with nearly 29,000 upscale global rooms in the pipeline, a 7% increase over the prior quarter [13][25] Market Data and Key Metrics Changes - International business achieved a 10% growth in adjusted EBITDA, with a 5% year-over-year expansion in the rooms portfolio [4][6] - The Canadian 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 [6] - The EMEA region saw a 7% increase in room count year-over-year, with approximately 4,000 rooms onboarded under direct franchise agreements [7] Company Strategy and Development Direction - The company is transitioning to a fully direct franchising model in Canada, expanding its product offering from eight hotel brands to a full portfolio of 22 [6] - Strategic acquisitions and partnerships are being pursued to enhance international market share, including a recent acquisition of the remaining 50% interest in Choice Hotels Canada [5][30] - The focus on revenue-intensive segments is expected to drive long-term growth, with 98% of the rooms in the pipeline belonging to these segments [14][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the domestic consumer's resilience, citing increased disposable income and a favorable travel environment [17][56] - The company anticipates continued growth in the extended stay segment, which has shown resilience during uncertain economic times [10][18] - Adjusted domestic RevPAR expectations have been revised to a range of -3% to flat for the remainder of the year, reflecting a more cautious outlook [32] Other Important Information - The rewards program expanded to nearly 72 million members, an 8% year-over-year increase, and was recognized as the top hotel rewards program by U.S. News and World Report [19][20] - The company returned $137 million to shareholders year-to-date, including $27 million in cash dividends and $110 million in share repurchases [30] 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 [35][36] Question: What is the growth outlook for Canada? - The company expects healthy growth in Canada, with a strong existing base of franchisees and a focus on both new construction and conversions [41][44] Question: What are the long-term expectations for international EBITDA? - International EBITDA is currently about 6% of total EBITDA, with significant growth opportunities anticipated in the coming years [47][50] Question: What are the current trends affecting RevPAR guidance? - The company noted softness in international inbound and government travel as key headwinds impacting RevPAR expectations [55][56] Question: Can you clarify the operating profit guarantee and its impact on EBITDA? - The operating profit guarantee is evaluated annually, with a total potential payment of $20 million over the life of the agreement [70][71] Question: How is the company managing occupancy and rate in the current environment? - The company is focused on maintaining occupancy while managing costs, particularly in the extended stay segment, which has lower costs per occupied room [76][78]

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]