"Choice Hotels continues to register very strong earnings because of solid unit growth and hotel performance," said Charles A. Ledsinger, Jr., president and chief executive officer. He continued, "We are very pleased that the fundamentals of the business continue to be strong, as we achieve a higher effective royalty rate through a shift in product mix that matches our overall brand strategy." The company reported franchise-related revenues of $28.8 million for first quarter 1999, compared to $26.7 million for first quarter 1998.

Franchise-related revenues exclude product sales and European hotel operations revenue, both of which are classified as non-strategic operations. The company sold its European hotel operations to Friendly Hotels PLC in January 1998. In the fourth quarter of 1998, the company discontinued the group purchasing program as previously operated.

Royalty revenues for first quarter 1999 increased 15% to $23.8 million from $20.6 million for the same period a year ago, with the system-wide domestic effective royalty rate also increasing from 3.46% in first quarter 1998 to 3.61% for the first quarter of 1999. Domestic revenue per available room (RevPAR) increased 2.0% from $26.34 in first quarter 1998 to $26.87 in the quarter just ended.

As of March 31, 1999, the total number of Choice hotels on-line worldwide grew 15% to 4,056 from 3,522 as of the same date a year ago. As of March 31, 1999, the total number of rooms worldwide increased 10% to 325,326 from 294,937 as of the same date a year ago. As of March 31, 1999, the company had 778 franchised hotels with 63,427 rooms either in design or under construction in its worldwide hotel system.

During the first quarter of 1999, the company introduced its revolutionary Internet purchasing system -- Choicebuys.com. Choicebuys.com allows hotel owners to purchase goods and services for their hotels at discounted prices. By virtue of its ease of usage and its preferred pricing, the system may potentially drive annual expenditures of $1.5 billion in goods and services by Choice franchisees.

"Choicebuys.com is just the first step for Choice in maximizing the value of the Internet to our hotels and our guests," said Ledsinger. "Choice is aggressively exploring ways to bring technology to our guests through in-room Internet service, a strategy that will bring significant value to our franchisees, guests and shareholders."

Notable Events

Among the notable company events occurring since the first of the year:

• Continuation of the stock repurchase program announced June 25, 1998. The company has purchased 5.9 million shares of common stock at a total cost of $80.6 million as of April 21, 1999, and has remaining authority to acquire up to 2.8 million additional shares. As of April 21, 1999, 54.9 million shares are outstanding.

• Opening of the 200th Sleep Inn hotel in the Buckhead section of Atlanta by Summit Management Corporation.

• Creation of new development incentives for: the MainStay Suites hotel brand to spur growth of the extended-stay brand in target markets; the Clarion brand to gain distribution in key gateway markets; and the Sleep Inn brand to assist franchisees with new hotel marketing.

• Announcement of a new development plan for the Caribbean, with the goal of adding 25 new hotels in the Comfort, Quality, Clarion and Sleep Inn brands within the next four years.

• Signing of a development agreement for the Middle East and Africa with Windsor Hotels of Cairo, Egypt, that will add 17 properties in the Clarion and Quality brands within three years.

• Revision of the basic franchise agreement to reflect a reduction in the cap on liquidated damages from 60 to 36 months for franchisees leaving the system.

CHOICE HOTELS INTERNATIONAL
SUPPLEMENTAL OPERATING INFORMATION BY BRAND
Domestic Hotel System

                                                  Three Months Ended
                                             March 31,         March 31,
                                              1999              1998

    COMFORT INN
      Hotels                                 1,214               1,167
      Rooms                                 95,397              94,005
      Avg. Daily Rate (ADR)                 $54.44              $52.59
      Occupancy %                            52.3%               53.2%
      RevPAR                                $28.46              $27.96
      Effective Royalty Rate                 4.10%               3.93%

    COMFORT SUITES
      Hotels                                   192                 157
      Rooms                                 15,768              12,670
      Avg. Daily Rate (ADR)                 $67.24              $65.11
      Occupancy %                            58.3%               59.1%
      RevPAR                                $39.18              $38.47
      Effective Royalty Rate                 4.40%               4.24%

    QUALITY
      Hotels                                   425                 425
      Rooms                                 49,312              50,584
      Avg. Daily Rate (ADR)                 $57.64              $54.80
      Occupancy %                            47.3%               49.2%
      RevPAR                                $27.26              $26.95
      Effective Royalty Rate                 3.23%               2.98%

    CLARION
      Hotels                                   109                  93
      Rooms                                 18,784              15,689
      Avg. Daily Rate (ADR)                 $70.49              $71.16
      Occupancy %                            51.0%               51.6%
      RevPAR                                $35.97              $36.73
      Effective Royalty Rate                 2.03%               2.12%

    SLEEP
      Hotels                                   205                 164
      Rooms                                 15,641              12,198
      Avg. Daily Rate (ADR)                 $50.47              $48.14
      Occupancy %                            49.2%               50.6%
      RevPAR                                $24.83              $24.35
      Effective Royalty Rate                 3.70%               3.38%

    MAINSTAY
      Hotels                                    23                  11
      Rooms                                  2,142               1,018
      Avg. Daily Rate (ADR)                 $55.12              $56.91
      Occupancy %                            52.0%               30.4%
      RevPAR                                $28.64              $17.30
      Effective Royalty Rate                 2.96%               2.57%

    ECONO LODGE
      Hotels                                   695                 695
      Rooms                                 44,266              45,123
      Avg. Daily Rate (ADR)                 $40.90              $39.35
      Occupancy %                            43.0%               44.1%
      RevPAR                                $17.61              $17.34
      Effective Royalty Rate                 3.59%               3.50%

    RODEWAY
      Hotels                                   190                 202
      Rooms                                 11,796              12,621
      Avg. Daily Rate (ADR)                 $40.92              $39.64
      Occupancy %                            42.4%               42.1%
      RevPAR                                $17.36              $16.69
      Effective Royalty Rate                 2.37%               2.49%

    TOTAL CHOICE - DOMESTIC
      Hotels                                 3,053               2,914
      Rooms                                253,106             243,908
      Avg. Daily Rate (ADR)                 $54.35              $52.35
      Occupancy %                            49.4%               50.3%
      RevPAR                                $26.87              $26.34
      Effective Royalty Rate                 3.61%               3.46%

Certain matters discussed in this press release may constitute forward- looking statements within the meaning of the federal securities law. Such statements are based on management's beliefs, assumptions and expectations, which in turn are based on information currently available to management. Actual performance and results could differ from those expressed in or contemplated by the forward-looking statements due to a number of risks, uncertainties and other factors, many of which are beyond Choice's ability to predict or control. For further information on factors that could impact Choice and the statements contained therein, we refer you to the filings made by Choice with the Securities and Exchange Commission, including its registration statement on Form S-4 and report on Form 8-K.