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Choice Revenue Increases 13% in Second Quarter

ROCKVILLE, MD—Choice Hotels International Inc. reported that total revenues for the second quarter of 2018 increased 13% from the second quarter of 2017 to $295.4 million.

“Choice Hotels’ long-term strategy of investing in our brands is paying off, as demonstrated by our strong financials, robust development pipeline, and powerful franchisee base,” said Patrick Pacious, president/CEO of Choice Hotels. “We are pleased with our first-half development results, which exceeded our 2017 performance by 10%. In addition, the continued growth in lodging demand and Choice’s strong performance resulted in a 20% increase in adjusted EBITDA. We’re optimistic that our performance will continue through year-end and into 2019.”

Domestic systemwide RevPAR increased 2.7% compared to the same period of the prior year, while average daily rates and occupancy rates increased 2.4% and 20 basis points, respectively, for the second quarter of 2018 compared to the same period of the prior year.

Total hotel franchising revenues for the second quarter increased 14% from the second quarter of the prior year to $134.8 million. Adjusted EBITDA from hotel franchising activities for the second quarter increased 18% from the second quarter of the prior year to $95.8 million. Adjusted hotel franchising margins for the second quarter increased 90 basis points to 68.2% from the second quarter of the prior year.

Domestic royalty fees for the second quarter totaled $97.6 million, a 13% increase from the second quarter of the prior year. The effective domestic royalty rate increased 15 basis points for the second quarter compared to the same period of the prior year. The number of domestic franchised hotels and rooms, as of June 30, 2018, increased 6.5% and 8.8%, respectively, from June 30, 2017.

The company reported 188 new executed domestic franchise agreements in the second quarter of 2018, an increase of 7% from the same period of the prior year. Thirty-four new domestic extended-stay franchise agreements, including 13 WoodSpring franchise agreements, were awarded in the quarter, an increase of 143% over the same period of the prior year. New construction domestic franchise agreements increased 36% in the second quarter of 2018 from the comparable period of 2017.

The company’s total domestic pipeline of hotels awaiting conversion, under construction, or approved for development increased 32% to 950 hotels. The new-construction domestic pipeline totaled 701 hotels, a 34% increase, and the conversion pipeline increased 26% to 249 hotels.

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