Industry Update
Press Release11 May 2020

Choice Hotels International Reports 2020 First Quarter Results

97% of domestic hotels remain open; Choice Hotels' brands experience RevPAR index gains versus competition in Q1 and April

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ROCKVILLE, Md. - Choice Hotels International, Inc. (NYSE: CHH), one of the world's largest lodging franchisors, today reported its results for the three months ended March 31, 2020.

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Towards the latter portion of the first quarter of 2020, the company adopted a number of mitigation measures, including mobilizing its efforts to provide a broad range of support to its franchisees, guests and communities, while preserving the company's financial flexibility by bolstering liquidity and reducing discretionary spending. Highlights of first quarter 2020 results include:

  • Net income was $55.5 million for first quarter 2020, representing diluted earnings per share (EPS) of $0.99.
  • First quarter adjusted net income, excluding certain items described in Exhibit 6, decreased 9% to $42.8 million from first quarter 2019.
  • Adjusted EPS were $0.76, a 10% decrease from first quarter 2019.
  • Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter were $69.2 million, an 8% decrease from first quarter 2019.
  • Domestic systemwide revenue per available room (RevPAR) declined 15% for first quarter 2020 compared to the same period of the prior year, outperforming total industry results by 430 basis points and exceeding growth within the primary chain scale segments in which the company competes, as reported by STR.
  • Awarded 42 new conversion franchise agreements in first quarter 2020 compared to 47 in the same period of the prior year.
  • Recognized a $30.6 million non-cash tax benefit in first quarter 2020 related to a restructuring of the company's foreign operations.

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About Choice Hotels®
Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world. With more than 7,000 hotels, representing over 590,000 rooms, in over 40 countries and territories as of December 31, 2019, the Choice® family of hotel brands provide 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. The award-winning Choice Privileges® loyalty program offers members benefits ranging from everyday rewards to exceptional experiences. For more information, visit www.choicehotels.com.

Forward-Looking Statements

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, our use of words such as "expect," "estimate," "believe," "anticipate," "should," "will," "forecast," "plan," "project," "assume," or similar words of futurity identify such forward-looking statements. These forward-looking statements are based on management's current beliefs, assumptions, and expectations regarding future events, which, in turn, are based on information currently available to management. Such statements may relate to projections of the company's revenue, earnings, and other financial and operational measures, our liquidity, our ability to assist franchisees through relief or other financial measures, our ability to minimize or manage disruptions posed by COVID-19, and the impact of COVID-19 and economic conditions on our future operations, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties, and other factors.

Several factors could cause actual results, performance, or achievements of the company to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, continuation or worsening of COVID-19 pandemic; changes in consumer demand; the impact of COVID-19 on the global hospitality industry, particularly in the U.S. travel market, changes to general, domestic, and foreign economic conditions, including as a result of COVID-19; future global outbreaks of pandemics or contagious diseases or fear of such outbreaks; foreign currency fluctuations; operating risks common in the lodging and franchising industries; impairments or losses relating to acquired businesses, changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees; our ability to keep pace with improvements in technology utilized for marketing and reservations systems and other operating systems; our ability to grow our franchise system; exposure to risks related to our hotel-development, ownership and financing activities; fluctuations in the supply and demand for hotels rooms; our ability to realize anticipated benefits from acquired businesses; the level of acceptance of alternative growth strategies we may implement; operating risks associated with our international operations, especially in areas currently most affected by COVID-19; the outcome of litigation; and our ability to manage our indebtedness. These and other risk factors are discussed in detail in the company's filings with the Securities and Exchange Commission, including our annual report on Form 10-K and our quarterly reports filed on Form 10-Q. Except as may be required by law, we undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

© 2020 Choice Hotels International, Inc. All rights reserved.

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