Choice Hotels International (CHH) investor relations material

Leadership transition and strategic focus

• Newly appointed CEO brings extensive experience in finance, operations, and strategy, with a background in both hospitality and telecom sectors.

• Emphasis on a return to core franchising roots, maintaining an asset-light model and prioritizing franchisee success.

• Top priorities for the first 100 days include culture, execution, and long-term strategy, with a transparent and urgent leadership style.

• Net rooms growth, especially in the U.S., is the primary metric, supported by improved unit-level economics and capital-light operations.

• Commercial investments in technology and loyalty programs aim to drive consumer-centric, AI-enabled growth.

Growth strategy and operational performance

• Net rooms growth is the central focus, with sequential improvements and a 30% increase in U.S. hotel openings in Q2.

• The revenue intense unit growth strategy has shifted the portfolio toward higher-value segments, reducing lower-quality terminations.

• Conversion engine and extended stay new construction drive 90% of openings, while terminations have declined by 50% year-over-year.

• Retention rates are expected to improve by 250 basis points, returning to historical norms.

• Medium-term net rooms growth guidance is 1.5%, with aspirations to return to historical 2–4% rates as momentum builds.

Franchisee economics and support

• Franchisee profitability is addressed through top-line revenue growth, cost reduction, and operational tools.

• Initiatives have reduced prototype and FF&E costs by 25% and 20%, respectively, and accelerated franchise opening timelines.

• Fee relief is tied to guest review and likelihood-to-recommend scores, especially benefiting lower chain scale franchisees.

• Franchisee fees now represent a smaller share of total costs, with focus shifting to reducing other operating expenses.