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ROCKVILLE, Md., Feb. 15, 2017  -- Choice Hotels International, Inc. (NYSE: CHH) today reported its results for the three months and year ended December 31, 2016. Net income for the fourth quarter of 2016 was $31.8 million or $0.56 per diluted share, compared with $29.2 million or $0.51 per diluted share for the fourth quarter of 2015.  Fourth quarter adjusted earnings before income taxes, depreciation and amortization (EBITDA) was $56.0 million, compared with $50.6 million in the prior year, an increase of 11 percent.

"We are pleased to report another record year of revenue, operating income and net income performance. 2016 was a strong year for Choice Hotels highlighted by our domestic RevPAR growth which continues to outpace industry performance and strong development results," said Stephen P. Joyce, chief executive officer of Choice Hotels. "There are many contributing factors to our success highlighted by our efforts to deliver new strategic programs and tools designed to increase reservation delivery to our franchisees, the acceleration of our growth and performance in the upscale category, and our strong development momentum. We are optimistic that our expanded programs and services will result in continued strong RevPAR performance and developer interest in 2017 and beyond."

Highlights of the company's fourth quarter and full-year 2016 results are as follows:

Overall Results

  • Diluted earnings per share (EPS) for the fourth quarter totaled $0.56, an increase of 10 percent from the comparable period of the prior year, and increased 11 percent for the full year to $2.46; excluding executive termination benefits, full year adjusted diluted EPS increased 12 percent over the prior year.
  • Net income totaled $31.8 million for the fourth quarter and $139.4 million for the full year.
  • Adjusted EBITDA from hotel franchising activities for the fourth quarter increased 8 percent from the prior year fourth quarter to $61.4 million and increased 7 percent to $273.3 million for the full year.
  • Adjusted hotel franchising margins for the fourth quarter increased 110 basis points from the prior year fourth quarter to 64.4 percent, and increased 90 basis points to 68.2 percent for the full year.


  • Domestic royalty fees for fourth quarter totaled $68.4 million, an increase of 8.4 percent from the comparable period of the prior year; full year domestic royalties increased 6.9 percent to $300.7 million from the same period of 2015.
  • Domestic system-wide revenue per available room (RevPAR) increased 5 percent and 3.9 percent for the fourth quarter and full year, respectively. Occupancy and average daily rates increased 150 basis points and 2.3 percent, respectively in the fourth quarter from the same period of 2015.
  • Domestic RevPAR performance for the fourth quarter of 2016 exceeded total industry results by 180 basis points, and also exceeded growth reported by Smith Travel Research for the primary chain scale segments in which the company competes.
  • Comfort family of brands and Sleep recorded 27 and 31 consecutive months of RevPAR index gains compared to its competition, respectively.
  • Cambria hotel & suites achieved full year RevPAR of over $100.
  • Effective royalty rate increased 13 basis points and 11 basis points for the fourth quarter and full year 2016, respectively.
  • Domestic hotels as of December 31, 2016, increased 1.6 percent from December 31, 2015.


  • Approved 267 new franchised hotels for development in the fourth quarter, bringing full year new franchise agreements to 645 hotels. New construction franchise agreements increased 23 percent in the fourth quarter of 2016 from the comparable period of 2015.
  • Cambria hotel & suites continued to enter major markets with groundbreakings and openings in Philadelphia, two projects in Chicago, Nashville and New York's Times Square.
  • The company's domestic pipeline of hotels awaiting conversion, under construction or approved for development as of December 31, 2016, increased 19 percent from December 31, 2015.
  • The domestic new construction pipeline for Cambria hotel & suites as of December 31, 2016, totaled 66 hotels, a 53 percent increase from December 31, 2015.

"We continue to have great success in executing and opening new construction hotels in top markets, as developers have taken note of our strong RevPAR performance and the brand strategies that we have implemented to improve hotel performance," said Patrick Pacious, president and chief operating officer, Choice Hotels. "We are particularly pleased that Cambria hotel & suites and the Comfort brands continue to draw attention from top hotel developers, resulting in an increase in new construction projects in prime urban locations.  We expect to see continued interest and development of these brands in highly desirable markets."

Special Item

During the year ended December 31, 2016, the company recorded an executive termination benefit charge of approximately $2.2 million. This special item impacted diluted EPS by $0.03 per share for the year ended December 31, 2016. The company uses non-GAAP measures that exclude executive termination benefits because those non-GAAP measures allow for period-over-period comparison of on-going core operations before the impact of these charges. These non-GAAP measures, which are reconciled to the comparable GAAP measures in Exhibit 8, include adjusted net income, adjusted diluted EPS, adjusted hotel franchising selling, general and administrative expenses, adjusted EBITDA and adjusted hotel franchising margins.

Use of Cash Flows

During the fourth quarter of 2016, the company's board of directors announced a 5 percent increase, effective the first quarter of 2017, of the current quarterly dividend rate per common share to $0.215 per share.  During the year ended December 31, 2016, the company paid cash dividends totaling approximately $46 million.

Share Repurchases
The company repurchased 0.6 million shares of common stock under its share repurchase program during the year ended December 31, 2016, at a total cost of approximately $30 million. During the fourth quarter, the company's board of directors approved increasing the number of shares authorized under its long-standing share repurchase program by 3 million shares. Thus, the company currently has authorization to purchase up to 4.0 million additional shares under this program.

Hotel Development & Financing
Pursuant to its program to encourage acceleration of the growth of our upscale select-service Cambria hotels & suites brand, the company advanced approximately $104 million in support of the brand's development during the year ended December 31, 2016. The company also recycled approximately $28 million of investments in support of Cambria development projects resulting in net advances of $76 million for the current year.  These advances are primarily in the form of joint venture investments, forgivable key money loans, senior and mezzanine lending and site acquisitions.  On December 31, 2016, the company had approximately $204 million reflected in its consolidated balance sheet pursuant to these financial support activities. With respect to lending and joint venture investments, the company generally expects to recycle these loans and investments within a five-year period.


The company's consolidated 2017 outlook reflects the following assumptions:

Consolidated Outlook

  • Net income for full year 2017 is expected to range between $157 million and $160 million.
  • Adjusted EBITDA for full year 2017 is expected to range between $292 million and $297 million.
  • The company's first quarter 2017 diluted EPS is expected to be at least $0.49.
  • The company expects full year 2017 diluted EPS to range between $2.78 and $2.84.
  • The recurring effective tax rate is expected to be approximately 33.5% for the first quarter and full year 2017.
  • Diluted EPS estimates are based on the current number of shares outstanding and thus do not factor in any changes that may occur due to new equity grants or any further repurchases of common stock under the company's share repurchase program.
  • The EPS and consolidated EBITDA estimates assume that we incur net reductions in EBITDA related to non-hotel franchising activities at the midpoint of the range for these investments.

Hotel Franchising

  • Adjusted EBITDA from hotel franchising activities for full year 2017 are expected to range between $297 million and $302 million.
  • Net domestic unit growth for 2017 is expected to range between approximately 2% and 3%.
  • RevPAR is expected to increase between 3.5% and 4.5% for the first quarter and range between 3.0% and 4.0% for full year 2017.
  • The effective royalty rate is expected to increase between 12 and 14 basis points for full year 2017 as compared to full year 2016.

Non-Hotel Franchising Activities

  • Net reductions in full year 2017 EBITDA relating to our non-hotel franchising operations, which primarily relate to SkyTouch and vacation rental activities are expected to range between approximately $4 million and $6 million.

To view full financial release and corresponding tables please click the PDF icon or visit:

About Choice Hotels

Choice Hotels International, Inc. (NYSE: CHH) is one of the world's largest lodging companies. With more than 6,500 hotels franchised in more than 40 countries and territories, Choice Hotels International represents more than 500,000 rooms around the globe.  As of December 31, 2016, 775 hotels were in our development pipeline. Our company's Ascend Hotel Collection®, Cambria® hotels & suites, Comfort Inn®, Comfort Suites®, Sleep Inn®, Quality®, Clarion®, MainStay Suites®, Suburban Extended Stay Hotel®, Econo Lodge®, Rodeway Inn®, and Vacation Rentals by Choice Hotels™ brands provide a spectrum of lodging choices to meet guests' needs. With more than 30 million members and counting, our Choice Privileges® rewards program enhances every trip a guest takes, with benefits ranging from instant, every day rewards to exceptional experiences, starting right when they join.  All hotels and vacation rentals are independently owned and operated. Visit us at for more information.

SkyTouch Technology® is a business division of Choice Hotels that develops and markets cloud-based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company.

Contact: Scott Oaksmith, Senior Vice President, Finance & Chief Accounting Officer

(301) 592-6659

Contact: Scott Carman, Director, Public Relations

(301) 592-6361

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