Choice Hotels International Reports 2021 Second Quarter Results

Awarded 111 new domestic franchise agreements in the quarter, a nearly 20% increase from the same period of 2020; second quarter domestic RevPAR 1.1% below 2019 levels, with June RevPAR increasing 4.5% versus 2019

Choice Hotels International, Inc. (NYSE: CHH) today reported its results for the three months ended June 30, 2021.

“The strategic investments we have made in launching and enhancing our brands, strengthening our marketing and reservation systems, and bolstering our platform capabilities drove impressive second quarter results that further positioned the company to increase our share of travel demand in the years to come,” said Patrick Pacious, president and chief executive officer, Choice Hotels. “Our goal is not to return to our 2019 performance levels, but rather capitalize on current and future investments to fuel our long-term growth in key strategic segments and drive our performance to new levels.”

Highlights of second quarter and year-to-date 2021 results include (note that RevPAR and financial metrics are compared to 20191):

  • Domestic systemwide revenue per available room (RevPAR) change outperformed the total industry by 20 percentage points, declining 1.1% for second quarter 2021 compared to the same period of 2019, while occupancy levels increased by 20 basis points from second quarter 2019.
  • The company’s June 2021 domestic systemwide RevPAR increased 4.5% from June 2019.
  • The trend of monthly improvement continued in July, with July 2021 RevPAR increasing approximately 15% from July 2019, driven by occupancy levels of 70% and average daily rate (ADR) growth of 10%.
  • From May through July 2021, the company surpassed its all-time single day revenue record on four separate days and recorded 14 of the highest revenue performing days in the company’s history. In addition, the company achieved the strongest revenue performing Memorial Day and Independence Day weekend in its history, and set the record for the single highest revenue, ADR and RevPAR performing day ever for the company on July 24, 2021.
  • The company awarded 200 domestic franchise agreements year-to-date through June 30, 2021, a 32% increase compared to the same period of 2020. The company’s domestic franchise agreements for conversion hotels increased by 43% year-to-date through June 30, 2021, compared to the same period of 2020. The company awarded 111 domestic franchise agreements in second quarter 2021, a nearly 20% increase compared to the same period of the prior year.
  • Second quarter net income increased 15% to $85.9 million from second quarter 2019, representing diluted earnings per share (EPS) of $1.53.
  • Second quarter adjusted net income, excluding certain items described in Exhibit 7, increased 2% to $68.3 million from second quarter 2019, and adjusted diluted EPS were $1.22, an increase of 3% from second quarter 2019.
  • Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter were $111.8 million, a 9% increase from second quarter 2019.
  • The company’s Board of Directors reinstated the dividend and share repurchase program in May 2021. In June and July 2021, the company returned over $14 million back to shareholders through a combination of cash dividends and share repurchases.

Performance Trends

  • Domestic systemwide RevPAR for second quarter 2021 outperformed the respective chain scales in which the company competes by 660 basis points, compared to the same period of 2019.
  • All of Choice Hotels’ select-service brands achieved domestic systemwide RevPAR index gains versus their local competitors with portfolio average share gains of 488 basis points for second quarter 2021, compared to the same period of 2019.
  • The company’s extended-stay portfolio achieved domestic systemwide RevPAR growth of 9.9% in second quarter 2021, compared to the same period of 2019, driven by occupancy levels of 82% and an increase in ADR of 2.0%. Specifically, the WoodSpring Suites brand achieved RevPAR growth of 16% in second quarter 2021, compared to the same period of 2019, driven by occupancy levels of nearly 86% and an increase in ADR of 5.6%.
  • The company’s midscale portfolio exceeded 2019 RevPAR levels in June, achieving domestic systemwide RevPAR growth of 6.2% versus June 2019, driven by an increase in ADR of 3.8% and an increase in occupancy levels of 220 basis points. In second quarter 2021, the Comfort brand family’s domestic systemwide RevPAR change outperformed the upper-midscale chain scale by 870 basis points, and the Quality Inn brand achieved RevPAR growth of 1.7%, driven predominantly by an increase in ADR of 1.3%, compared to the same period of 2019.
  • The company’s upscale portfolio continued to achieve domestic systemwide RevPAR share gains versus its competitors for second quarter 2021, compared to second quarter 2019, with the Cambria Hotels brand achieving gains of 14 percentage points. In addition, the Ascend Hotel Collection achieved June RevPAR growth of 4.7%, driven by an increase in ADR of 12.2%, compared to the same period of 2019.

Additional details for the company’s second quarter and year-to-date 2021 results are as follows:

Revenues 

  • Total revenues decreased 12% to $278.3 million for second quarter 2021, compared to the same period of 2019.
  • Total revenues excluding marketing and reservation system fees decreased 2% to $142.4 million for second quarter 2021, compared to the same period of 2019.
  • Second quarter 2021 domestic royalties totaled $102.8 million, a 2% increase from the same period of 2019.
  • The company’s domestic effective royalty rate for second quarter 2021 increased 7 basis points over the prior year second quarter to 5.01%.

Development

  • The company’s domestic franchise agreements for new construction hotels increased by 21% in second quarter 2021, compared to the same period of 2020. In addition, half of the company’s brands have exceeded 2019 levels for the number of domestic franchise agreements awarded in the first half of 2021.
  • As of June 30, 2021, the number of domestic rooms in the company’s upscale portfolio expanded by 24% since June 30, 2020, driven by an 11% increase in room count for the Cambria Hotels brand and a 28% increase in room count for the Ascend Hotel Collection. For the first six months of 2021, the upscale portfolio set a record for the highest number of upscale hotel openings in the company’s history, including 22 properties added as part of the company’s strategic alliance with Penn National Gaming.
  • The company’s extended-stay portfolio continued its rapid expansion, reaching 460 domestic hotels as of June 30, 2021, an 11% increase since June 30, 2020, with the domestic extended-stay pipeline reaching over 300 hotels awaiting conversion, under construction or approved for development. Since June 30, 2020, the WoodSpring Suites, MainStay Suites and Suburban brands grew the number of open domestic hotels by 6%, 27% and 15%, respectively. In addition, the company’s domestic franchise agreements for WoodSpring Suites increased by 18% in the first half of the year, compared to the same period of 2019.
  • The company continued its leadership in the midscale segment by increasing the number of domestic hotels within the Comfort brand family by 2.5% from June 30, 2020. The brand’s domestic franchise agreements for new construction hotels increased by 43% in second quarter 2021, compared to the same period of 2020. For the first half of 2021, the Comfort brand family executed the highest number of openings since 2014.
  • The number of domestic hotels and rooms, as of June 30, 2021, increased 0.6% and 1.6%, respectively, from June 30, 2020. The company’s domestic upscale, midscale and extended-stay segments reported a 2.5% and 3.1% aggregate increase in units and rooms, respectively, since June 30, 2020.
  • The company’s total domestic pipeline of hotels awaiting conversion, under construction or approved for development, as of June 30, 2021, reached 884 hotels representing over 72,000 rooms.

Balance Sheet and Liquidity

The company improved its strong balance sheet and liquidity position in second quarter 2021 and continues to benefit from its primarily franchise-only business model, which has historically provided a relatively stable earnings stream, low capital expenditure requirements and significant free cash flow. As of June 30, 2021, the company’s total available liquidity consisting of cash and available borrowing capacity through the revolving credit facility was approximately $908 million. The company generated cash flow from operations of $102.3 million for second quarter 2021, a 28% increase from the same period of 2019.

Shareholder Returns

In May 2021, the company declared cash dividends totaling $12.5 million, which were paid in July 2021. Based on the current quarterly dividend rate of $0.225 per share of common stock, the company expects to pay dividends totaling approximately $25 million during 2021.

During the six months ended June 30, 2021, the company repurchased less than 0.1 million shares of common stock for $5.4 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. As of July 2021, the company had 3.4 million shares remaining under the current share repurchase authorization.

In July 2021, the company returned $14 million back to shareholders in the form of cash dividends and share repurchases.

Outlook

The company is not at this time providing detailed guidance for third quarter or full year 2021 given that the precise impact of COVID-19 on the company’s future results is still unknown.

For the month of July 2021, the company’s RevPAR increased by approximately 15% versus July 2019, driven by occupancy levels of 70% and ADR growth of 10%. The company currently expects RevPAR for third quarter 2021 to grow in the mid- to high-single digits, as compared to 2019.

Assuming continuation of current consumer sentiment, as well as broader RevPAR and economy recovery trends, the company currently expects adjusted EBITDA for the full-year 2021 to approach 2019 levels.

The company will continue to evaluate the impact of COVID-19 across its business and will provide further updates in the next earnings report based on the best information then available.

About Choice Hotels

Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world, with more than 7,100 hotels, representing over 600,000 rooms, in nearly 40 countries and territories as of June 30, 2021.

Choice Hotels International, Inc. and Subsidiaries

Exhibit 1

Condensed Consolidated Statements of Income

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

Variance

Variance

2021

2020

$

%

2021

2020

$

%

(In thousands, except per share amounts)

REVENUES

Royalty fees

$

106,242

$

50,152

$

56,090

112

%

$

172,289

$

120,491

$

51,798

43

%

Initial franchise and relicensing fees

7,328

6,676

652

10

%

12,755

13,960

(1,205)

(9)

%

Procurement services

12,092

10,697

1,395

13

%

23,283

24,494

(1,211)

(5)

%

Marketing and reservation system

135,988

79,677

56,311

71

%

227,509

190,062

37,447

20

%

Owned hotels

8,993

2,108

6,885

327

%

13,347

11,530

1,817

16

%

Other

7,701

2,423

5,278

218

%

12,108

9,371

2,737

29

%

Total revenues

278,344

151,733

126,611

83

%

461,291

369,908

91,383

25

%

OPERATING EXPENSES

Selling, general and administrative

34,470

43,935

(9,465)

(22)

%

64,737

72,318

(7,581)

(10)

%

Depreciation and amortization

6,232

6,398

(166)

(3)

%

12,594

12,927

(333)

(3)

%

Marketing and reservation system

113,285

89,309

23,976

27

%

211,458

219,756

(8,298)

(4)

%

Owned hotels

5,333

2,976

2,357

79

%

9,480

9,010

470

5

%

Total operating expenses

159,320

142,618

16,702

12

%

298,269

314,011

(15,742)

(5)

%

Loss on impairment of assets

(1,226)

1,226

(100)

%

(1,226)

1,226

(100)

%

Operating income

119,024

7,889

111,135

1409

%

163,022

54,671

108,351

198

%

OTHER INCOME AND EXPENSES, NET

Interest expense

11,691

13,082

(1,391)

(11)

%

23,468

24,462

(994)

(4)

%

Interest income

(1,234)

(2,245)

1,011

(45)

%

(2,515)

(4,533)

2,018

(45)

%

Loss on extinguishment of debt

NM

607

(607)

(100)

%

Other (gains) losses

(2,108)

(3,556)

1,448

(41)

%

(3,313)

1,173

(4,486)

382

%

Equity in net (gain) loss of affiliates

(1,179)

3,486

(4,665)

134

%

4,818

5,441

(623)

(11)

%

Total other income and expenses, net

7,170

10,767

(3,597)

(33)

%

22,458

27,150

(4,692)

(17)

%

Income (loss) before income taxes

111,854

(2,878)

114,732

3987

%

140,564

27,521

113,043

411

%

Income tax expense (benefit)

25,972

(437)

26,409

6043

%

32,345

(25,501)

57,846

227

%

Net income (loss)

$

85,882

$

(2,441)

$

88,323

3618

%

$

108,219

$

53,022

$

55,197

104

%

Basic earnings (losses) per share

$

1.54

$

(0.04)

$

1.58

3604

%

$

1.95

$

0.96

$

0.99

104

%

Diluted earnings (losses) per share

$

1.53

$

(0.04)

$

1.57

3579

%

$

1.93

$

0.95

$

0.98

103

%

Choice Hotels International, Inc. and Subsidiaries

Exhibit 2

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except per share amounts)

June 30,

December 31,

2021

2020

ASSETS

Cash and cash equivalents

$

307,975

$

234,779

Accounts receivable, net

201,038

149,921

Other current assets

98,527

48,214

Total current assets

607,540

432,914

Property and equipment, net

342,121

334,901

Intangible assets, net

307,559

303,725

Goodwill

159,196

159,196

Notes receivable, net of allowances

67,922

95,785

Investments in unconsolidated entities

42,793

57,879

Operating lease right-of-use assets

13,163

17,688

Investments, employee benefit plans, at fair value

31,484

29,104

Other assets

157,016

156,141

Total assets

$

1,728,794

$

1,587,333

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

Accounts payable

$

90,407

$

83,329

Accrued expenses and other current liabilities

103,160

78,920

Deferred revenue

63,394

50,290

Liability for guest loyalty program

59,014

43,308

 Total current liabilities

315,975

255,847

Long-term debt

1,059,602

1,058,738

Deferred revenue

113,392

122,406

Liability for guest loyalty program

60,591

77,071

Operating lease liabilities

7,822

12,739

Deferred compensation & retirement plan obligations

36,010

33,756

Other liabilities

30,469

32,528

Total liabilities

1,623,861

1,593,085

Total shareholders’ equity (deficit)

104,933

(5,752)

Total liabilities and shareholders’ equity (deficit)

$

1,728,794

$

1,587,333

Choice Hotels International, Inc. and Subsidiaries

Exhibit 3

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

Six Months Ended June 30,

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

108,219

$

53,022

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

Depreciation and amortization

12,594

12,927

Depreciation and amortization – marketing and reservation system

12,076

9,585

Franchise agreement acquisition cost amortization

6,294

5,558

Loss on asset disposition and impairments

1,226

Loss on debt extinguishment

607

Non-cash stock compensation and other charges

16,295

458

Non-cash interest and other investment (income) loss

(6,824)

1,097

Deferred income taxes

(3,465)

(27,098)

Equity in net losses from unconsolidated joint ventures, less distributions received

7,398

5,588

Franchise agreement acquisition costs, net of reimbursements

(18,078)

(12,567)

Change in working capital and other

(32,102)

(48,951)

 NET CASH PROVIDED BY OPERATING ACTIVITIES

102,407

1,452

CASH FLOWS FROM INVESTING ACTIVITIES:

Investment in property and equipment

(23,393)

(21,094)

Investment in intangible assets

(2,976)

(830)

Contributions to equity method investments

(1,136)

(2,997)

Distributions from equity method investments

3,113

Proceeds from sale of equity method investments

11,830

Purchases of investments, employee benefit plans

(931)

(1,932)

Proceeds from sales of investments, employee benefit plans

1,994

1,901

Purchase/issuance of notes receivable

(17,918)

(7,730)

Collections of notes receivable

63

63

Other items, net

(486)

(27)

 NET CASH USED IN INVESTING ACTIVITIES

(32,953)

(29,533)

CASH FLOWS FROM FINANCING ACTIVITIES:

Net borrowings pursuant to revolving credit facilities

170,300

Net borrowings pursuant to term loan

249,500

Principal payments on long-term debt

(33,369)

Purchases of treasury stock

(5,362)

(54,536)

Dividends paid

(25,228)

Debt issuance costs

(492)

Proceeds from exercise of stock options

9,115

2,768

 NET CASH PROVIDED BY FINANCING ACTIVITIES

3,753

308,943

Net change in cash and cash equivalents

73,207

280,862

Effect of foreign exchange rate changes on cash and cash equivalents

(11)

(489)

Cash and cash equivalents at beginning of period

234,779

33,766

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

307,975

$

314,139

Exhibit 4

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL OPERATING INFORMATION

DOMESTIC HOTEL SYSTEM

(UNAUDITED)

For the Six Months Ended June 30, 2021

For the Six Months Ended June 30, 2020

Change

Average Daily

Average Daily

Average Daily

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Comfort(1)

$

89.83

57.2

%

$

51.36

$

84.20

42.6

%

$

35.85

6.7

%

1,460

bps

43.3

%

Sleep

80.68

56.0

%

45.20

76.92

43.5

%

33.46

4.9

%

1,250

bps

35.1

%

Quality

77.41

50.7

%

39.21

71.07

38.7

%

27.49

8.9

%

1,200

bps

42.6

%

Clarion(2)

79.03

39.7

%

31.37

72.51

31.4

%

22.75

9.0

%

830

bps

37.9

%

Econo Lodge

63.54

48.2

%

30.61

57.15

38.1

%

21.79

11.2

%

1,010

bps

40.5

%

Rodeway

63.53

49.6

%

31.49

58.39

40.9

%

23.87

8.8

%

870

bps

31.9

%

WoodSpring Suites

49.03

80.1

%

39.26

45.99

69.7

%

32.07

6.6

%

1,040

bps

22.4

%

MainStay

75.34

59.5

%

44.83

76.21

51.3

%

39.07

(1.1)

%

820

bps

14.7

%

Suburban

51.97

70.5

%

36.62

52.52

61.4

%

32.24

(1.0)

%

910

bps

13.6

%

Cambria Hotels

116.93

50.8

%

59.40

120.89

36.7

%

44.41

(3.3)

%

1,410

bps

33.8

%

Ascend Hotel Collection

123.91

50.1

%

62.04

115.48

39.7

%

45.89

7.3

%

1,040

bps

35.2

%

Total

$

77.09

54.8

%

$

42.23

$

71.08

42.7

%

$

30.33

8.5

%

1,210

bps

39.2

%

For the Three Months Ended June 30, 2021

For the Three Months Ended June 30, 2020

Change

Average Daily

Average Daily

Average Daily

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Comfort(1)

$

96.67

65.3

%

$

63.11

$

79.57

36.6

%

$

29.10

21.5

%

2,870

bps

116.9

%

Sleep

86.47

64.2

%

55.54

74.38

37.9

%

28.18

16.3

%

2,630

bps

97.1

%

Quality

82.72

59.0

%

48.80

68.97

35.5

%

24.51

19.9

%

2,350

bps

99.1

%

Clarion(2)

85.75

46.2

%

39.62

69.24

25.6

%

17.71

23.8

%

2,060

bps

123.7

%

Econo Lodge

67.47

54.9

%

37.04

57.05

37.9

%

21.64

18.3

%

1,700

bps

71.2

%

Rodeway

67.15

55.4

%

37.18

57.10

40.9

%

23.36

17.6

%

1,450

bps

59.2

%

WoodSpring Suites

50.49

85.8

%

43.31

44.96

69.2

%

31.09

12.3

%

1,660

bps

39.3

%

MainStay

79.01

67.6

%

53.38

73.82

48.6

%

35.86

7.0

%

1,900

bps

48.9

%

Suburban

54.03

75.3

%

40.67

50.79

60.9

%

30.95

6.4

%

1,440

bps

31.4

%

Cambria Hotels

127.76

58.6

%

74.82

96.82

24.2

%

23.46

32.0

%

3,440

bps

218.9

%

Ascend Hotel Collection

133.07

56.9

%

75.68

109.46

32.2

%

35.24

21.6

%

2,470

bps

114.8

%

Total

$

82.72

62.3

%

$

51.54

$

67.21

39.1

%

$

26.27

23.1

%

2,320

bps

96.2

%

Effective Royalty Rate

For the Quarter Ended

For the Six Months Ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

System-wide(3)

5.01

%

4.94

%

5.01

%

4.94

%

(1) Includes Comfort family of brand extensions including Comfort and Comfort Suites

(2) Includes Clarion family of brand extensions including Clarion and Clarion Pointe

(3) Includes United States and Caribbean countries and territories

Exhibit 5

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL OPERATING INFORMATION

DOMESTIC HOTEL SYSTEM

(UNAUDITED)

For the Six Months Ended June 30, 2021

For the Six Months Ended June 30, 2019

Change

Average Daily

Average Daily

Average Daily

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Comfort(1)

$

89.83

57.2

%

$

51.36

$

95.08

61.6

%

$

58.62

(5.5)

%

(440)

bps

(12.4)

%

Sleep

80.68

56.0

%

45.20

85.49

61.3

%

52.37

(5.6)

%

(530)

bps

(13.7)

%

Quality

77.41

50.7

%

39.21

79.12

53.4

%

42.28

(2.2)

%

(270)

bps

(7.3)

%

Clarion(2)

79.03

39.7

%

31.37

83.13

49.1

%

40.82

(4.9)

%

(940)

bps

(23.2)

%

Econo Lodge

63.54

48.2

%

30.61

62.51

46.9

%

29.34

1.6

%

130

bps

4.3

%

Rodeway

63.53

49.6

%

31.49

63.16

48.4

%

30.55

0.6

%

120

bps

3.1

%

WoodSpring Suites

49.03

80.1

%

39.26

46.63

76.6

%

35.73

5.1

%

350

bps

9.9

%

MainStay

75.34

59.5

%

44.83

85.39

63.4

%

54.10

(11.8)

%

(390)

bps

(17.1)

%

Suburban

51.97

70.5

%

36.62

58.77

69.3

%

40.74

(11.6)

%

120

bps

(10.1)

%

Cambria Hotels

116.93

50.8

%

59.40

144.68

68.2

%

98.88

(19.2)

%

(1,740)

bps

(39.9)

%

Ascend Hotel Collection

123.91

50.1

%

62.04

121.41

60.0

%

72.84

2.1

%

(990)

bps

(14.8)

%

Total

$

77.09

54.8

%

$

42.23

$

80.85

57.2

%

$

46.26

(4.7)

%

(240)

bps

(8.7)

%

For the Three Months Ended June 30, 2021

For the Three Months Ended June 30, 2019

Change

Average Daily

Average Daily

Average Daily

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Rate

Occupancy

RevPAR

Comfort(1)

$

96.67

65.3

%

$

63.11

$

98.60

67.3

%

$

66.34

(2.0)

%

-200

bps

(4.9)

%

Sleep

86.47

64.2

%

55.54

88.08

66.7

%

58.75

(1.8)

%

-250

bps

(5.5)

%

Quality

82.72

59.0

%

48.80

81.69

58.7

%

47.98

1.3

%

30

bps

1.7

%

Clarion(2)

85.75

46.2

%

39.62

86.78

54.9

%

47.67

(1.2)

%

-870

bps

(16.9)

%

Econo Lodge

67.47

54.9

%

37.04

64.93

51.6

%

33.51

3.9

%

330

bps

10.5

%

Rodeway

67.15

55.4

%

37.18

65.20

52.2

%

34.02

3.0

%

320

bps

9.3

%

WoodSpring Suites

50.49

85.8

%

43.31

47.79

78.2

%

37.35

5.6

%

760

bps

16.0

%

MainStay

79.01

67.6

%

53.38

87.83

67.9

%

59.62

(10.0)

%

-30

bps

(10.5)

%

Suburban

54.03

75.3

%

40.67

59.15

71.0

%

41.96

(8.7)

%

430

bps

(3.1)

%

Cambria Hotels

127.76

58.6

%

74.82

152.89

74.8

%

114.43

(16.4)

%

-1,620

bps

(34.6)

%

Ascend Hotel Collection

133.07

56.9

%

75.68

125.87

63.3

%

79.70

5.7

%

-640

bps

(5.0)

%

Total

$

82.72

62.3

%

$

51.54

$

83.88

62.1

%

$

52.11

(1.4)

%

20

bps

(1.1)

%

Effective Royalty Rate

For the Quarter Ended

For the Six Months Ended

June 30, 2021

June 30, 2019

June 30, 2021

June 30, 2019

System-wide(3)

5.01

%

4.84

%

5.02

%

4.84

%

(1) Includes Comfort family of brand extensions including Comfort and Comfort Suites

(2) Includes Clarion family of brand extensions including Clarion and Clarion Pointe

(3) Includes United States and Caribbean countries and territories

Exhibit 6

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA

(UNAUDITED)

June 30, 2021

June 30, 2020

Variance

Hotels

Rooms

Hotels

Rooms

Hotels

Rooms

%

%

Comfort(1)

1,661

130,762

1,620

127,583

41

3,179

2.5

%

2.5

%

Sleep

411

29,027

399

28,251

12

776

3.0

%

2.7

%

Quality

1,681

126,603

1,690

128,909

(9)

(2,306)

(0.5)

%

(1.8)

%

Clarion(2)

180

21,702

179

22,651

1

(949)

0.6

%

(4.2)

%

Econo Lodge

747

45,096

779

46,992

(32)

(1,896)

(4.1)

%

(4.0)

%

Rodeway

532

30,683

578

33,107

(46)

(2,424)

(8.0)

%

(7.3)

%

WoodSpring Suites

298

35,876

281

33,797

17

2,079

6.0

%

6.2

%

MainStay

93

6,559

73

4,629

20

1,930

27.4

%

41.7

%

Suburban

69

6,349

60

6,082

9

267

15.0

%

4.4

%

Cambria Hotels

58

8,166

51

7,347

7

819

13.7

%

11.1

%

Ascend Hotel Collection

225

28,258

207

22,136

18

6,122

8.7

%

27.7

%

Domestic Franchises(3)

5,955

469,081

5,917

461,484

38

7,597

0.6

%

1.6

%

International Franchises

1,156

132,164

1,201

135,534

(45)

(3,370)

(3.7)

%

(2.5)

%

Total Franchises

7,111

601,245

7,118

597,018

(7)

4,227

(0.1)

%

0.7

%

(1) Includes Comfort family of brand extensions including Comfort and Comfort Suites

(2) Includes Clarion family of brand extensions including Clarion and Clarion Pointe

(3) Includes United States and Caribbean countries and territories

Exhibit 7

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION

(UNAUDITED)

REVENUES, EXCLUDING MARKETING AND RESERVATION ACTIVITIES

(dollar amounts in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Revenues, Excluding Marketing and Reservation Activities

Total Revenues

$

278,344

$

151,733

$

461,291

$

369,908

Adjustments:

     Marketing and reservation system revenues

(135,988)

(79,677)

(227,509)

(190,062)

Revenues, excluding marketing and reservation activities

$

142,356

$

72,056

$

233,782

$

179,846

ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

(dollar amounts in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Total Selling, General and Administrative Expenses

$

34,470

$

43,935

$

64,737

$

72,318

Mark to market adjustments on non-qualified retirement plan investments

(2,037)

(3,553)

(3,462)

781

Operational restructuring charges

(379)

(7,154)

(724)

(8,518)

Share-based compensation

(3,032)

(1,016)

(5,383)

141

Exceptional allowances attributable to COVID-19

(1,964)

(2,678)

(2,097)

(2,678)

Adjusted Selling, General and Administrative Expenses

$

27,058

$

29,534

$

53,071

$

62,044

ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”) AND ADJUSTED EBITDA MARGINS

(dollar amounts in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Net income

$

85,882

$

(2,441)

$

108,219

$

53,022

Income tax expense (benefit)

25,972

(437)

32,345

(25,501)

Interest expense

11,691

13,082

23,468

24,462

Interest income

(1,234)

(2,245)

(2,515)

(4,533)

Other (gains) losses

(2,108)

(3,556)

(3,313)

1,173

Loss on extinguishment of debt

607

Equity in operating net loss of affiliates, net of impairments

1,398

3,486

2,590

5,441

Loss on impairment of unconsolidated joint venture

4,805

Gain on sale of unconsolidated joint venture

(2,577)

(2,577)

Depreciation and amortization

6,232

6,398

12,594

12,927

Loss on impairment of assets

1,226

1,226

Mark to market adjustments on non-qualified retirement plan investments

2,037

3,553

3,462

(781)

Operational restructuring charges

379

7,154

724

8,518

Share-based compensation

3,032

1,016

5,383

(141)

Exceptional allowances attributable to COVID-19

1,964

2,678

2,097

2,678

Marketing and reservation system reimbursable (surplus) deficit

(22,703)

9,632

(16,051)

29,694

Franchise agreement acquisition costs amortization

1,847

1,579

3,573

3,177

Adjusted EBITDA

$

111,812

$

41,125

$

174,804

$

111,969

Revenues, excluding marketing and reservation activities

$

142,356

$

72,056

$

233,782

$

179,846

Adjusted EBITDA margins

78.5%

57.1%

74.8%

62.3%

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,

2021

2020

2021

2020

Net income

$

85,882

$

(2,441)

$

108,219

$

53,022

Adjustments:

Loss on impairment of assets

539

1,037

Loss on impairment of unconsolidated joint venture

3,694

Loss on extinguishment of debt

513

Gain on sale of interest in unconsolidated joint venture

(1,976)

(1,981)

Operational restructuring costs

283

3,196

542

7,229

Exceptional allowances attributable to COVID-19

1,506

1,176

1,613

2,264

Marketing and reservation system reimbursable (surplus) deficit

(17,406)

4,231

(12,341)

25,106

Foreign tax benefit on international restructuring

(30,572)

Adjusted Net Income

$

68,289

$

6,701

$

99,746

$

58,599

Diluted Earnings Per Share

$

1.53

$

(0.04)

$

1.93

$

0.95

Adjustments:

Loss on impairment of assets

0.01

0.02

Loss on impairment of unconsolidated joint venture

0.07

Loss on extinguishment of debt

0.01

Gain on sale of interest in unconsolidated joint venture

(0.04)

(0.04)

Operational restructuring costs

0.01

0.06

0.01

0.13

Exceptional allowances attributable to COVID-19

0.03

0.02

0.03

0.04

Marketing and reservation system reimbursable (surplus) deficit

(0.31)

0.08

(0.22)

0.45

Foreign tax benefit on international restructuring

(0.55)

Adjusted Diluted Earnings Per Share (EPS)

$

1.22

$

0.13

$

1.78

$

1.05

SOURCE Choice Hotels International, Inc.