Choice Hotels International (CHH) 8-K Senior Vice President, Development, and Chief

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Contact: John Hawkins

Vice President

Tel: (301) 592-5075

Fax: (301) 592-6177

john_hawkins@choicehotels.com

Joseph M. Squeri

Senior Vice President, Development, and Chief

Financial Officer

Tel: (301) 592-5006

For Immediate Release

CHOICE HOTELS REPORTS FIRST QUARTER EARNINGS PER SHARE

GAIN OF 30% AND OPERATING INCOME GROWTH OF 7.4%

Company Also Reports Year Over Year Domestic Hotel Unit Growth of 5.1%

SILVER SPRING, Md. (April 22, 2003) – Choice Hotels International, Inc. (NYSE:CHH) today reported first quarter 2003 net income of $9.7 million, or $0.26 diluted earnings per share (EPS), a 30% increase in EPS over the same period of a year ago. These results exceeded consensus estimates by $0.02 per share. At the end of first quarter 2002, the company reported net income of $8.6 million, or $0.20 diluted EPS.

The company also announced that its operating income increased to $17.2 million for first quarter 2003, a 7.4% gain over the $16.0 million reported at the end of first quarter 2002.

“First quarter results were especially gratifying, given the sluggish economy and uncertainty in travel markets,” said Charles A. Ledsinger, Jr., president and chief executive officer. “Choice continues to enjoy very strong unit growth, with this quarter topping 5%. This development pace speaks to the inherent value in our brands and the ongoing demand for them by both hotel owners and consumers.”

First Quarter Performance

The company reported royalty revenues of $27.3 million for first quarter 2003, compared to $26.0 million for the same period in 2002, an increase of 5.0%. Royalty revenues in the first quarter of 2003 include $0.9 million attributable to Flag Choice Hotels, which the company began consolidating in July of 2002.

System-wide domestic revenue per available room (RevPAR) was $25.78 in first quarter 2003, compared to $26.16 for the first quarter of 2002.

The company adopted Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure,” and began expensing the cost of stock options based on their estimated fair value for all awards granted after January 1, 2003. During the first quarter 2003, the company’s net income includes approximately $0.1 million of expense related to stock options. For all of 2003, the expense associated with stock options is expected to be $0.7 million.

2003 Unit Growth

The total number of domestic Choice hotels on-line grew by 5.1% to 3,516 as of March 31, 2003 from 3,344 as of the same period a year ago. Net domestic property additions in the first quarter of 2003 were 34, compared to 17 net domestic additions in the same period of 2002. Choice executed 71 new domestic hotel franchise contracts representing 7,607 rooms in first quarter 2003, compared to 59 new contracts representing 5,208 rooms for the same period a year ago.

In the first quarter 2003, 20 contracts for new construction hotels, representing 1,444 rooms were executed, compared to 10 contracts, representing 639 rooms for the same period a year ago. At the end of first quarter 2003, Choice had 297 hotels under development in its domestic hotel system, representing 24,719 rooms.

As of March 31, 2003, the total number of Choice hotels worldwide grew 3.0% to 4,678 from 4,541 as of the same date a year ago. This growth represents an increase of 3.5% in the number of rooms open to 375,859 from 363,074. At the end of first quarter 2003, Choice had 385 hotels under development worldwide, representing 35,018 rooms.

Second Quarter & Year 2003 Estimates

The company’s second quarter 2003 earnings, which more fully reflect the effect of the war in Iraq, are expected to be in the range of $0.39 to $0.41. Full year 2003 diluted EPS are expected to be between $1.65 and $1.68.

Notable Events

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

• Since Choice announced its stock repurchase program on June 25, 1998, the company has purchased 27.8 million shares of common stock at an average price of $16.75 per share and a total cost of $465.2 million, as of April 22, 2003. During the first quarter of this year, the company purchased 1.3 million shares of common stock. The Company has remaining authorization to purchase up to 3.6 million shares. Total shares outstanding as of March 31, 2003, are 36.0 million.

• The company acquired the remaining 45% interest in Melbourne-based Flag Choice Hotels in Australia, giving it 100% ownership of the subsidiary.

• A Best Choice e-Rate Guarantee was launched on the company’s proprietary Web site, Choicehotels.com, to guarantee consumers the best online rates for stays at Choice brand hotels throughout the United States and the Caribbean.

Choice Hotels International is the second-largest hotel franchisor in the world with 4,678 hotels open, representing 375,859 rooms, in the United States and 42 other countries and territories. As of March 31, 2003, 297 hotels are under development in the United States, representing 24,719 rooms, and an additional 88 hotels, representing 10,299 rooms, are under development in 18 other countries and territories. 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. 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 10-Q for the period ended September 30, 2001.

Additional corporate information may be found on the Choice Hotels’ Internet site, which may be accessed atwww.choicehotels.com

Comfort, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Choice Privileges, EA$Y CHOICE and ChoiceBuys.com are registered trademarks, service marks and trade names of Choice Hotels International, Inc. Choice Hotels also owns and uses common law marks, including Profit Manager.

Exhibit 1

Choice Hotels International, Inc.

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share amounts)	Three Months Ended
	March 31, 2003			March 31, 2002
REVENUES:
Royalty fees	$	27,251		$	25,984
Initial franchise and relicensing fees		2,607			2,141
Partner services		2,306			2,151
Marketing and reservation		47,353			43,494
Hotel operations		837			699
Other		1,202			861
Total revenues		81,556			75,330
OPERATING EXPENSES:
Selling, general and administrative		13,486			12,412
Depreciation and amortization		2,759			2,727
Marketing and reservation expense		47,353			43,494
Hotel operations		726			653
Total operating expenses		64,324			59,286
Operating income		17,232			16,044
OTHER INCOME AND EXPENSES:
Interest and other investment income		(1,291	)		(1,560	)
Interest expense		3,024			3,548
Gain on disposition of property		(63	)		—
Total other income and expenses		1,670			1,988
Income before income taxes		15,562			14,056
Income taxes		5,875			5,482
Net income	$	9,687		$	8,574
Weighted average shares outstanding-basic		36,772			41,276
Weighted average shares outstanding-diluted		37,513			42,012
Basic earnings per share	$	0.26		$	0.21
Diluted earnings per share	$	0.26		$	0.20

Exhibit 2

Choice Hotels International, Inc.

Consolidated Balance Sheets

(In thousands)	March 31, 2003			December 31, 2002
	(Unaudited)
ASSETS
Cash and cash equivalents	$	14,825		$	12,227
Accounts receivable, net		32,961			32,451
Other current assets		2,551			3,349
Total current assets		50,337			48,027
Fixed assets and intangibles, net		160,283			161,606
Note receivable from Sunburst		41,318			41,318
Receivable—marketing and reservation fees		51,029			44,916
Other assets		18,931			18,515
Total assets		321,898			314,382
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current portion of long-term debt		28,354			23,796
Other current liabilities		62,115			61,707
Total current liabilities		90,469			85,503
Long-term debt		300,393			283,995
Deferred income taxes and other liabilities		62,831			58,683
Total liabilities		453,693			428,181
Total shareholders’ deficit		(131,795	)		(113,799	)
Total liabilities and shareholders’ deficit	$	321,898		$	314,382

Exhibit 3

Choice Hotels International, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)	Three Months Ended
	March 31, 2003			March 31, 2002
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	9,687		$	8,574
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,759			2,727
Provision for bad debts		448			198
Non-cash stock compensation and other charges		402			202
Non-cash interest and other investment income		(88	)		(1,111	)
Changes in assets and liabilities, net of acquisitions:
Receivables		(853	)		(762	)
Receivable—marketing and reservation fees, net		(3,067	)		(3,371	)
Current liabilities		4,734			(2,954	)
Income taxes payable/receivable and other assets		(3,141	)		(243	)
Deferred income taxes and other liabilities		4,803			5,534
NET CASH PROVIDED BY OPERATING ACTIVITIES		15,684			8,794
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment		(2,515	)		(2,305	)
Acquisition of Flag		(1,211	)		—
Other items, net		(1,514	)		(101	)
NET CASH UTILIZED IN INVESTING ACTIVITIES		(5,240	)		(2,406	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt		43,200			103,800
Principal payments of long-term debt		(22,260	)		(84,014	)
Purchase of treasury stock		(30,362	)		(30,793	)
Proceeds from exercise of stock options		1,576			3,223
NET CASH UTILIZED IN FINANCING ACTIVITIES		(7,846	)		(7,784	)
Net change in cash and cash equivalents		2,598			(1,396	)
Cash and cash equivalents at beginning of period		12,227			16,871
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	14,825		$	15,475
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash payments during the period for:
Income taxes, net of refunds	$	7,005		$	587
Interest		1,567			2,473
Non-cash financing activities:
Income tax benefit realized from employee stock options exercised	$	387		$	729

Exhibit 4

CHOICE HOTELS INTERNATIONAL

SUPPLEMENTAL OPERATING INFORMATION BY BRAND

DOMESTIC HOTEL SYSTEM

(UNAUDITED)

	Three Months Ended
	March 31, 2003			March 31, 2002
COMFORT INN
Hotels		1,373			1,316
Rooms		108,019			103,147
Avg. Daily Rate (ADR)	$	59.65		$	58.26
Occupancy %		46.3	%		48.0	%
RevPAR	$	27.59		$	27.94
COMFORT SUITES
Hotels		352			313
Rooms		28,019			24,684
Avg. Daily Rate (ADR)	$	70.71		$	69.56
Occupancy %		51.7	%		52.4	%
RevPAR	$	36.55		$	36.46
QUALITY
Hotels		469			438
Rooms		49,406			48,566
Avg. Daily Rate (ADR)	$	59.15		$	59.04
Occupancy %		41.2	%		42.3	%
RevPAR	$	24.35		$	24.96
CLARION
Hotels		134			125
Rooms		20,183			18,849
Avg. Daily Rate (ADR)	$	69.27		$	69.95
Occupancy %		39.7	%		42.9	%
RevPAR	$	27.53		$	29.99
SLEEP
Hotels		301			287
Rooms		23,052			22,126
Avg. Daily Rate (ADR)	$	54.70		$	53.40
Occupancy %		45.8	%		46.3	%
RevPAR	$	25.06		$	24.75
MAINSTAY
Hotels		39			41
Rooms		3,376			3,538
Avg. Daily Rate (ADR)	$	60.33		$	58.66
Occupancy %		54.5	%		60.3	%
RevPAR	$	32.90		$	35.36

ECONO LODGE
Hotels		715			683
Rooms		44,401			42,457
Avg. Daily Rate (ADR)	$	43.10		$	42.84
Occupancy %		38.4	%		39.9	%
RevPAR	$	16.57		$	17.10
RODEWAY
Hotels		133			141
Rooms		8,501			9,135
Avg. Daily Rate (ADR)	$	44.51		$	42.97
Occupancy %		36.8	%		38.0	%
RevPAR	$	16.37		$	16.35
TOTAL CHOICE – DOMESTIC
Hotels		3,516			3,344
Rooms		284,957			272,502
Avg. Daily Rate (ADR)	$	58.47		$	57.46
Occupancy %		44.1	%		45.5	%
RevPAR	$	25.78		$	26.16
Effective Royalty Rate		3.96	%		3.97	%