�The first quarter produced sustained growth, despite the slow start we encountered in January and the overall seasonality of the business,� said Charles A. Ledsinger, Jr., president and chief executive officer. �We remain encouraged by steadily improving room demand, dramatic increases in our Internet bookings, and continued strong growth in our domestic effective royalty rate.�

He continued, �Partner services revenue, which increased 34% in the first quarter, is a growing source of revenue for Choice. In particular, we are pleased with the demand for our ChoiceBuys.com and in-room Internet business initiatives. We also were pleased with the 18% growth in our initial and relicensing fee revenue in the first quarter.  

Continued investment in our core franchising and e-commerce opportunities will help us attain our goals of reaching more consumers, delivering exceptional services and building strong brands.� The company reported royalty revenues of $24.9 million for first quarter 2000, compared to $23.8 million for first quarter 1999, an increase of 4.6%. The system-wide domestic effective royalty rate also increased from 3.61% in first quarter 1999 to 3.75% for the first quarter of 2000. Domestic revenue per available room (RevPAR) increased 0.11% from $26.87 in first quarter 1999 to $26.90 in the quarter just ended.

As of March 31, 2000, the total number of Choice hotels worldwide on-line grew 4.9% to 4,253 from 4,056 as of the same date a year ago. As of the same date, the total number of rooms worldwide increased 4.4% to 339,744 from 325,326 as of the same date a year ago.

As of March 31, 2000, the company had 728 franchised hotels with 60,486 rooms either in design or under construction in its worldwide hotel system.

Choice Investment in Friendly Hotels plc.

Choice holds a common and preferred equity investment of approximately $47 million in Friendly Hotels plc., which currently serves as the master franchisor for the United Kingdom, Ireland and continental Europe.  Friendly recently announced a loss of approximately $27 million, which was generated as a result of significant one-time, non-recurring asset provisions, and also stated a negative balance on its accumulated distributable reserves.  Choice accounts for its common equity in Friendly under the equity method of accounting.  Therefore, Choice recognized an equity loss of $1.725 million in its financial statements for the period ending March 31, 2000, representing Choice�s 5% interest in Friendly�s common shares.

Under English law, Friendly cannot pay preferred or ordinary share dividends as long as the negative distributable reserve balance exists. Accordingly, Choice will cease to accrue dividends for the Friendly preferred shares until such time as Friendly is permitted under English law to declare and pay dividends. Until such dividends are paid, Choice has the right under the Friendly articles of association to vote at Friendly shareholder meetings as if it had exercised its conversion rights into ordinary shares, giving Choice 44% fully diluted voting rights in the shares.  Given Friendly�s current financial condition, Choice�s increased voting rights and the strategic importance of franchising in Europe, Choice is in the process of reviewing its strategic options with respect to its investment in Friendly.

Notable Events

Among the notable company events occurring since the previous earnings report:

• Continuation of the stock repurchase program announced June 25, 1998. The company has purchased 8.2 million shares of common stock at a total cost of $118.1 million, as of April 20, 2000, and has remaining authority to acquire up to 5.6 million shares.
• Release of a redesigned and enhanced consumer web site, www.choicehotels.com, with streamlined reservations booking capability and brand-specific points-of-entry.
• Appointment of Bruce N. Haase as vice president, finance, and treasurer.

Choice Hotels International is the second-largest hotel franchisor in the world with 4,253 hotels open, representing 339,744 rooms, and another 728 hotels under development, representing 60,486 rooms, in 38 countries, as of March 31, 2000. Its Comfort, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn and MainStay Suites brands serve guests worldwide.

Certain matters discussed in this press release may constitute forward- looking statements within the meaning of the federal securities law.