CHH - Earnings call transcript Q2 2019 | Choice Hotels International, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Choice Hotels International Second Quarter 2019 Earnings Call. [Operator Instructions]. Please note this call is being recorded. I would now like to turn the conference call over to Mr. Director Hotels. Relations Investor Oliveros, for Choice Oscar Mr. Oliveros, is yours, sir. the floor

Oscar Oliveros

operator, Thank welcome, everyone. you, and

other that SEC factors should used begin, materially should filings you update information we during predictive obligation events will Actual statements. XX-K understanding call, consult subsequent that like And the its statements risk and indicated this company company's certain you to results. be in the statements forward-looking company or reflect forward-looking about may today's we forward-looking affecting These and the of Before or date you Form would consider. those important publicly as undertake conference we to circumstances. differ to results for assist speak in from to them and remind you the no

can choicehotels.com the is of a our press as non-GAAP part referred XXXX measures on the posted Section. reconciliation our release, remarks financial under earnings to second Investor at quarter Relations in of which find You our website

This results. performance will of on XXXX quarter review financial provide second quarter Chief an our provide Chief second morning, an operating Executive Officer, our President expectations Pacious, Dragisich, Officer, will for overview our XXXX Financial then Patrick update XXXX. and Dominic and our

happy take their remarks, Following we'll be to your questions.

turn Pat. I'll the to that, call over With

Patrick Pacious

earnings Oscar. you, call. XXXX joining Good quarter Thank morning, second everyone, for and you our thank

to strengthen the brands, increase pleased again substantial our in both making and for the business and second midweek quarter mid-scale we the full strong progress year and and remainder are diluted adjusted our very With our per adjusted EBITDA with both outlook year, revenue for strategy hotel. are Comfort earnings are share. positive our segment our our We Inn, to we guidance particularly of the upscale presence grow increasing once delivery travel in performance

complete progress hotels we the is their off. made the post-renovation program the quarter, Inn have this hotels to performance the of year done of significant the scheduled in renovation these end already program. of and in X/X Comfort In renovations our second so, brand-wide paying by

completed basis that of first brand also hotels reinvestment on XX segment's XXXX second by points. the impact of having the Comfort a end the RevPAR This growth. renovations in outperformed quarter is unit in positive quarter their the the by

During for Comfort and the across XX%, agreement country approximately new awarded half first increased Comfort period. of franchise XXXX, the over new openings hotels XX% prior increased year same the

upscale also continued in the We our segment. expansion

XXX X.X%, their Ascend and industry the room count by and XXX the domestic upscale scale basis chain outpacing Cambria's by Cambria basis brands points. RevPAR Our grew points over grew XX%. And by

to continue business maximize points night our we from their proposition corporate value XX%. maintaining our basis the system-wide hotel travel. in And second proprietary increased leisure improve we our while more travel of by them account strength helping XXX our for grew as quarter franchisees, XXXX, In to profitability. still the contribution And captured to over room

XXXX. making of hotel construction first best period since new construction XXXX by openings in for the new the quarter, our second the Finally, half openings XX% increased

new to long-term greater these hotels construction growth. expect We drive RevPAR

a Travel in capture our and the franchisees share I which trillion $X.X to success performance brand. one Association. projected to Last shareholders, travel strong growing especially areas, Choice's our This Global Comfort strategic on segments, like quarter, build brands our are delivering all highlights both to of is to in of morning, X across greater our years focus corporate leisure the I'd strategic investments our which in share is market, of Business the according which space just and to reach previewed

our in competitive multi-platform business terms campaign Business defined expansion our leverages segment You. can insight campaign broadly of mid-scale is our our target strategic adapted featuring largest the the investments the The These campaign capitalizes advertising of brand is brands leisure to Our business attracting multimedia on are be easily nationwide and The our revenue upscale in travel. investments that to our proven travelers. launched we brands consumer June, years designed the In in tagline, and business attract and of business is in most one in travel more paying brand portfolio off. Comfort generated. or

has stages. fact, the In system. of Comfort initiative the revenue Only only undergoing with the of our system to inside. will guests Modern Comfort our its installed of XX% renovation of Modern of be in the something's hotels signage Comfort brand on transformation our new are identity, X/X year, system already nearly Move that on our contribute and to is outside domestic for brand the the strategic Comfort royalty the XX% second The yet the in new around exterior the final hotel half of X/X signaling

basis paying RevPAR We're their that As seeing completed points. lift by the increased basis have XX for to XX that believe brand's I and investment by completed mentioned, new RevPAR Comforts continue renovations will this the this points first also outperformed segment's also strengthen is XXXX and end Comfort the hotels have the index by and overall off. for of renovations quarter the RevPAR we positive branding, year. of

growth Xx that their Comfort their compete that to than their have upgrade. hotels Comfort travel renovations Additionally, faster have completed yet business increased hotels revenue

a this peak season an that greater wider as campaign. have reintroduce of even Comfort investment performance before their peers the Comfort new transformed launched believe that to campaign, the timed is to is new strategy travel We strategically the effect was audience. message validating on Comfort's as media arrives. even hotels which the initial Further campaign outperformed should consumers Comfort the reaches our we refreshed focus

demand also development in created new has community. Comfort the The

pipeline new These The travelers, XX% should Comfort the location. by franchise the allow result among compared in the period, our agreements the to and of have RevPAR year, contract year For expected higher RevPAR generate improve experience year-over-year. come. throughout agreements number the half even pipeline the XX% increased overall franchise the of life first to same updated guest revenues business of gain construction of largely over the to and higher Comfort for are to years Comfort ever prior higher driven brand greater traction increasing hotels

brand In addition to our entire mid-scale performing portfolio is well. Comfort,

During the strong brand, we our to Clarion unit we Sleep hotels growth per over expect Quality, drove Inn mid-scale in X open second and in and quarter, week XXXX.

We're also with brand, mid-scale Clarion newest Pointe. pleased our

is to opening for been quarter. Clarion XX, are pipeline addition by which this In XX expected Pointe Pointe Pointe hotel quarter, second of through Clarion feedback the and initial open agreements Clarion were brings to XX strong appetite the second awarded the Pointe had to franchise This Developer year-end. promising. Clarion guest

Pointe stellar likelihood guest its highest-rated market. the recommend already on reporting to one is scores hotels and Clarion The is first of in TripAdvisor

XXXX, of proprietary point proprietary Our Choice-generated revenue stronger the XXXX. by quarter Comfort growth to from the are also our are from XXX In This second the points to brand. basis contribution benefiting in franchisees channels X,XXX strong the second business for increased delivery. contributes contribution over of even basis Choice's system-wide quarter numbers XX%. since These

quarter, the revenue. second Choice Comfort's X/X delivered of over In

to XX program loyalty for the XX% strong than across Our points business up its the continued of more growth. franchisees. basis our delivered contribution system accounts and Loyalty is

been XXXX, added In now strong. members members million than program more the half X XX is of have which Privileges to million program, first the Choice loyalty

increasing our line addition top work their growth, In to profitability. franchisees' maximize we to

our content helped spanning wide range operations and systems, on X,XXX program. to run a platform franchisees training University Choice over businesses, their lessons award-winning of hotel proprietary brand Our with

provide franchisees also to use, P&L. our help expenses scale analyze help consistently services our reduce of procurement franchisees which better product their resources costs We services manage we and the our organization, leverages franchisees through cost their our benchmark to and and

franchisees' on return the both delivering for to and expenses manage providing proposition our brands. all business core their to focus investment Our resources by on is value

XX%. value retention why an Choice no rate upscale benefiting. retention franchisees. both are near-perfect surprise travel With is franchisee such a and on business, proposition, of has specifically, corporate industry-leading our rate And Choice mid-scale is voluntary a focused it midweek voluntary also and brands and Comfort has among over powerful

of doubling more XX%, corporate quarter groups grew the accounts our by XXXX, corporate business. of second number we the a of total by than driven During

Hotel a on the traveler appeals we're upscale among for brands. tier satisfaction X brand of to are modern focused XXXX earned was only we the success. highest-rating brands Satisfaction Cambria Cambria, seeing With Power's customer Guest X that and In that J.D. building business Index,

XX this that was opened openings are to expected coast-to-coast. construction. included really in XX validation already for the hotels these in that more with a the which study, locations our markets In direct hotels, XX the additional Cambria a and top-tier bring are Cambria year in pipeline, to upscale pipeline XXXX as year was system. to Cambria grew under And first pace Cambria Out record-breaking rooms hotels approaching it XX As currently we're fast to from. the the traveler. business of we quarter, is in the on nearly resonate travelers see second choose from is hotels those giving XX,XXX

In X these of an which upscale this openings are summer, rooms. together expected X,XXX represent additional fact,

continued past across by pipeline this the extended-stay We and portfolio as for the extended-stay overall entire demand X% country. We in is several demand quarter. years. our second there robust developers segment, for from growth will the our extended-stay in both has Finally, industry which continue believe outperformed lodging the by hotels untapped extended-stay the grew significant and consumers XX%

brand one of quarter, In of net growth extended-stay period. brand, brand. to the first largest WoodSpring been the the than in Our unit second hotels have WoodSpring XX there was X% dozen added hotels currently construction. XXXX, versus under and continues are be a for another WoodSpring year prior More Suites, our the fastest-growing half

end impressive XXX basis year. higher anticipate the an overall in delivered than than across hotels opened WoodSpring the X.X% States the having RevPAR United next increase XXX industry. by second the brand the Finally, We quarter, points of more

MainStay, an prior quarter pipeline X% growth the XX% our and in saw year portfolio mid-scale brand, versus second growth period. extended-stay the

extended-stay portfolio brand, our X% in saw year period. also and versus prior suburban, quarter the conversion growth the economy While pipeline second XX% growth

the in Additionally, the suburban quarter, overall X.X% higher by RevPAR than basis XXX second industry. grew points

have portfolio come. Taken continued is years to our extended-stay together, for to growth expected

the strong highlight maximizing the our our development of our deliver amount strategy. proposition. results large we value to and closing, our results of through our In growth brands, halfway across progress and against year all franchisees significant We're business are our long-term proof pipeline

strength are remaining Additionally, our investing leisure capture brands travel. in long-term by in travel more corporate while to strong building we

continue our to model, asset-light with well the business future. performance strong investments, Our shareholders well to position deliver into combined us to strategic financial

financial turn now more Dragisich, Dom our our CFO, specifics of share who it I'd will to like to results. Dom? over

Dominic Dragisich

Thanks, Pat, morning, everyone. and good

excited We quarter are results, to second quarter which first strong performance. built up our report our

growth franchise drive key the our leverage metrics as continued business results. Our power of financial model and to we improve

nearly to second EBITDA point increase margin X.X% XXX increase quarter a highlighted XX.%. total revenues, our adjusted the in X% basis in increase a was adjusted Specifically, of by an and operating

disciplined in The and of in our a diluted earnings expectations. adjusted strong per combination X% revenue our growth increase management cost exceeding resulted share

$X.XX of adjusted earnings EBITDA adjusted share year, the outlook remainder by on per top year results performance for Our strong increasing diluted adjusted earnings our end per the and our these again Based full share. forecast share. for per diluted of are exceeded and our we the guidance

programs expand It's franchised Overall, a excluding marketing partners. platform in our XX% the of reinforce of continues more of these X,XXX combination pricing domestic the rate. effort. hotels to million. and continuing to and levers line for increased at over operations addition Strong nearly quarter franchise represent of revenues, franchise These to to revenues growth. to of XXX value-added with XX Domestic point our profitability second system, million, number procurement by in travel hotels improving services our a $XXX.X in system levers contracts franchisee highlighted of our core that increase in increasing important revenue of multiple the our fees hotels other basis RevPAR, reservation and system our to the be extending X% drive provide $XXX effective royalty nearly increase include royalties top these X% to the and our resulted and results net

our into revenue dive levers RevPAR. with me beginning Let

XX of versus flat Pat RevPAR expectations second the quarter Move basis result second Comfort our system-wide quarter points. mentioned, in domestic by which with XXXX. to and pleased with our remained outperformed We Our were mid-scale upper particularly were the the hotels, essentially for Modern line segment as

Modern half the Move complete are second year, to expect index renovating. this the already X/X these to more early to Based of we the half of those, on the results Comfort to year. Comfort and Of progress continue system strengthen RevPAR expected approximately In of our than is renovation. the RevPAR renovation,

help construction believe to of new into drive and hotels new system RevPAR Additionally, the grow XX% we our continue the which renovated pipeline, Comfort growth of future. will construction. is this mix We well

increasing RevPAR segment one Ascend In deployment. addition, presence initiatives organizational capital of extensible continued the our The and been of in strategic brand Cambria most focus expansion and through upscale our is RevPAR has our basis long-term quarter, by points. basis outpacing In X.X%, over XXX hotels second points expected Cambria XXX upscale to industry the the and by drive growth. for our chain grew scale

plan high that and in we than mentioned, believe to RevPAR Cambria X which all performance. this of development company's in represent Pat to brand's As continue summer, investment overall new more the rooms our accelerate X,XXX financial Cambria upscale We hotels will market. portfolio open drive strong the

our RevPAR flat and our are Comfort transformation X%. year XXXX for and to full maintaining between and our on second range domestic quarter we Based results guidance progress, growth expected

We expect domestic RevPAR quarter range to X%. our and flat third between

our our second to in domestic X,XXX We segments, WoodSpring hotels. the In side. system approximately Quality grew experienced and is upscale growth units hotels its extended-stay nearly its grew of reach which growth. brand, increased brand, number our lever revenue mid-scale next brand, across double-digit our X% key by system the by by rooms Our X%; hotels quarter, which which X%; highlighted by experienced

nearly count XX%. count XX%, grew room its grew its by Cambria room Ascend while by

to In open the implement over international rooms prior year. X.X% same addition, successfully our are of and that the pleased units respectively, the by report X.X%, strategy and and continue we of period increased to number

with Our to continues focus overall on fueling our profitability development relentless of growth the franchisee pipeline. resonate developers,

and reported domestic agreements. strong During result awarded second franchise quarter, the we new XXX again development

number in June agreement any highest of company. public Additionally, franchise we the a as awarded in June,

increase development Comfort franchise Our by second the number in agreement. performance quarter XX% was of a driven awarded

As XXXX year Pat first mentioned, prior Comfort half increased the period. franchise agreements awarded same in of over XX% the

domestic At hotels, quarter of XXX end, conversion, a hotels awaiting year-over-year construction increase. X% pipeline development overall under for was or our approved

system. XX,XXX pipeline or grew hotels of construction year-over-year. XX% our rooms current of domestic pipeline new in nearly room development count X% the Our The by represent our

approved units trajectory pipeline the forward brings this This its the which Our to or hotels XX currently awaiting the portfolio, growth net development XXX. under addition to for strong to trend these X,XXX continued conversion, to welcoming look strong. year. international expect full hotels domestic X%, also we hotels. for of grew international quarter total continue We nearly hotels first XXXX, is of construction our and with Through the this

continuous rate, and our royalty is the Our by price third lever, of agreement driven franchise decline.

the second grew Our domestic basis effective by royalty XX rate for quarter points.

franchisee properties are the drive providing remain value effective growth year-over-year stay to profitability rate, incremental delivering and X basis focus basis maximizing points between and full in and hotel royalty which brands our our our Our We XXXX. on proposition rate. to demand business owners our resources with expect better helps effective their will for confident XX we for and manage increase continued year in our anticipate royalty points in

the prior can procurement products and Furthermore, partners. to to that and quarter, In second we're growth $XX.X outsized Another drive services key revenue X,XXX revenue travel several to compared to over our platform next continue of driver to hotels provide the the the is value-added million procurement optimistic continue we revenues services other our over ability of year. to XX% period same increased years. services our

of shareholder the closing, I'd flow investments drive year. for and on comment to cash return to business earnings the making commitment In the our like outlook and remainder our long-term returns to in excess

our returned $XX During in These in XXXX, cash form the $XX million came the and back we million dividends first share million half shareholders. approximately to of $XX repurchases. in of returns

grow us and well the flows debt shareholders continue well capacity cash and to into strong excess to business flow the cash future. return to position Our

that joint hotels. a July, we redeemed equity helped remaining In party's venture third the Cambria X key stake late in

not this earnings. generate of XXXX and outlook remainder third for will reflect $X the does financial Our to redemption redemption stake the currently and of its associated that quarter incremental XXXX. We $X the million approximately estimate consolidation million of EBITDA reporting

to guidance. and $X range year million full previous midpoint an adjusted of we $XXX XXXX the $XXX increase versus million million, at Excluding our expect this EBITDA representing redemption, between our

$X.XX, expect increase between $X.XX midpoint per We an previous to versus guidance. earnings our share at and our of adjusted $X.XX representing range now diluted the

we per continue earnings and $X.XX of and the performance that our optimistic half Lastly, expect of diluted remain strong XXXX, between focus. share as XXXX, share. we for first quarter will to per $X.XX had Choice adjusted we this third a drive through results range long-term

time, questions. this Pat would to At and happy be I any answer Operator?

Operator

come Instructions]. of the from Bank of question Shaun America. [Operator we first have will And Kelley

Shaun Kelley

delta Dom. start, you a probably and finished financial are the I out on find some the little purchase planning a it's here. -- guys to about the to on impact numbers assets? very $XXX what's And so long-term Cambria is but to here, owned little around you then a to opportunistic, bit amount extend buy that like Since bit intention Maybe gave, million X JV home just partners? Can roughly understand talk to of more you you the these color just and for trying hotels. specific exactly ultimately those the going you long-term Are

Patrick Pacious

let They're really with, an of didn't Cambrias in Shaun, own high-barrier-to-entry hotels it us start that strategic those we for also was that equity to opportunity redeem in ramping. me still are stake Yes, market. the four

once have an an we saw hotels at So investment they make to future financial looking well. Dom, also, the those long term, as piece not fully of standpoint got address a to but in to they're the strategically, the us it. to financial for performance going and this ramped of be opportunity a from what return the as nice worth level, only

Dominic Dragisich

return the head financial The going hit $XXX I mentioned, brand. up million, here, it's anticipate think $XXX recycle still the joint And interest you venture from Cambria really was that $XXX to the the find there. so it will a this a ramping as when we return the authorized perspective, million a the we capital $XXX return ultimately really, that recycle that also that part the It that the delta we But are to at of the number for home. financial long-term well capital. opportunity to as million that Shaun, out in -- to in that returns hotels does the way outlays we see, that we buy saw do million the right nail you as structure see in Yes, have a of the structured. $XXX for capital so capital as nice Pat a provide plus include on million X/X us,

Shaun Kelley

Great.

question just year. high this unit on end of looks trimmed is Second growth. that for like It expectation you the

So think little led growth And as well on at on domestic to your additions as kind probably that on XXXX us you of more least have pipeline? might side could side? the about as then you you're color net attrition potential importantly, development the for more seeing give a what the that, and both outlook from what's unit

Patrick Pacious

I you're new brands our longer think conversion seeing growing is significantly. was pipeline you little bit obviously, that the here growth which a is The in more construction as, a pipeline brands, though what occurring than, we're seeing takes know, do.

going terminations key to to fresh. their is this other the our to invest brands wherewithal piece incremental today in back assets. to do to Owners have The keep strategic continue we're

back investments, to exit we that, and the if we significant sense, make for the then from makes for our to those the not market. amount either hotels. rights our of brand that we owners strategically relevant an brand to And going But brands they're keep right can long portfolio, do so them willing term. now, investments exercising to the if are And down shift those them have in available lot open willing that into we have in brands aren't a our of

Dominic Dragisich

factors both Shaun, growth and X.X%. overall within the the that, add as our that blend the comes well about a in of to at our growth Pat construction would growth open, guidance, the range these beyond. as as obviously the I but take the still you and expect to previously take we've units whittle XXXX XXXX, away. fact obviously, unit the thing mentioned we only revenue X% that The these accelerate is typically to just closer international international higher not of well look that we're little longer and domestic growth, as reported if hotels continue growth the bit got enter significantly issuing transformation, be new the intensity do and of guidance, but to unit the are impact a Comfort to we see you going And unit

think thing In take particular, that a in opening you're significant the forecast. you the when provides look on range. I call, is talking a that somewhere optimism X% it, other

acceleration pipeline for and So we're in seeing you're seeing grow our open of terms units year. an both our the

And very this so is the year Pat's to to portfolio. on side the you're why really growth reason are the that termination point, strategic the seeing muted

Operator

with we next Katz And have Jefferies. David

David Katz

a Can you the bit. talk about just extended-stay segment

it's that so consider area that growth growth its any going is think possibility might you've amount there's an further whether you in I acquisitions WoodSpring and since bolstering with well? talked about fair that

Patrick Pacious

we're, segment pretty Yes, particularly a on of extended-stay brands. mentioned segment before, we the the the bullish of whole, set as economy as we're

the both form have the another product end do, and that I acquisition is MainStay effect by think demand just markets that an could either in country, consumers our or a of and lot brand. and we've Suburban where the then end today, a there? for XXX as of in We're new Do a the in opportunity at developers additional potentially opened we brand XX spillover mentioned both branding We look across that our brand's of see launch. come we had seeing it's to expect pace. a and year significant so growing by XXXX, the about when and from those of of you WoodSpring at

play do that in in that drive deliver strengthening in see of and type long additional return term. own opportunity to segment capabilities for So the other see white for today. think that developer, to we we do space given on I But investment the consumer type we our the of that the extended-stay of don't

David Katz

make right the And with from that take net stretching sure we going to that I to just unit and growth, forward? derived be trend Is a I'm want impacting new respect prospects construction, may Should capturing all little the be cycle bit? there the to it. might just of way. construction sort commentary for out Got away the any be that

Dominic Dragisich

between the to opens of amount referring a time a execution around when contract You're and hotel construction? new

David Katz

Yes.

Dominic Dragisich

in this have and One country, I lot look underpenetrated, just seeing, we as increased have in sort up There had it's growth. are note well. the and seeing months that of think impacts it A taking, is some of that area has to year little relative will we what at that the today. particularly bit. significant are we our of the out creep that California, It's we're do area impacted pipeline, we're labor and thing and to competitors construction our to where has sort with access industry, an I significantly. an is pipeline new where weather the entitlements

is is as more just from general, that us contract open bit hotel. a executed to well. little So challenging timeline impacting Coast, West The in development a from

Operator

of have Robin And next we UBS. Farley

Robin Farley

quantify you questions. growth average, for two quantify that's you that? that. can little termination What after question you And I making versus then a can year it expect I XXXX a One have bit in reasonable mentioned, the Got was unit if do rate -- is, rates you lower. guess

Dominic Dragisich

so involuntary so. termination, basically X% typically or execute, around a I you think going point from that the we terminations best right forward, data is that have,

which actually implying basis figures, talking had about X% on rate on XX to increased I probably openings about accelerate an we're point that mentioned so that house, a termination the again, unit been that expect unit when the year-over-year, growth so another X.X%. gets X% strategic overall the And would the you side of to growth. X% impact to growth X% XXXX. And we It about domestic have you're into

Robin Farley

million Great. the to helpful. JV In million on the EBITDA $XXX that then for acquiring $X Okay. bringing the release, just the you remainder line. you're talked of into And That's the the million. math for $X about the year the

if wonder that. give EBITDA actually And new that bottom sort is also so right? I quantify ramping? you've But your to I it's are if I right, that of that, could thinking know quite if mean $XXX of to line your really is of the math that we line? that right And I how that's multiple and I double just a you in significant XX annualize the half maybe bottom guess, some it's to JV you -- only on line. they'll if properties but of multiple. new million of is half much such be could mentioned around help XXx half color I or your talk don't know ramping, the I am

Dominic Dragisich

those that perspective. full the a correct, math, really headline think probably high about But at it $X hotels a year So you closer absolutely the look million, when is look that million higher that little end I doubling the think just you impact multiple, think probably a a When multiple. the $X conservative. take But from to doing again, particular. just we of to take of from full in at year perspective, I you're a probably ramp

do to the generating explore intoXXXX potential higher time of so anticipate disposition EBITDA beyond and a another And we we much at would franchisee. those which assets

Robin Farley

this And so now you do other you in get at think to but... future of, how think what words, when multiple about I a there's flow? EBITDA -- don't about can -- way I help XXx arrived guess, the whatever, paying you're what us that multiple you're or at where cash know sort think If you to, paying

Dominic Dragisich

Frankly, I bit lower think we're paying a a a than that. very fair price as for is where little our today company. multiple

Operator

Morgan we Allen Stanley. next And have Thomas of

Thomas Allen

question. broader broader How I'd a say, a, just lodging So demand you the currently? are viewing

Patrick Pacious

you first trends, we broader the remainder headwind record a that into our the in for Modern expect health at low. of the the of year. at hold look at our Move them confidence given have a actually expect occupancy is the consumer, look high, the demand We the at year. I half to think to up rate the of the do unemployment consumer and of renovations That's to accelerate, we sort baked RevPAR If guidance. record if created

I mentioned that a expect, as that, tailwind. We turn in last will call, the into

I And at look But the in the especially trends where historic the we're we first half. fairly demand expecting be to look they're we the even of second are, into think half on year, basis. similar so I a as positive, mean

Thomas Allen

on the softer have you and up guidance cut mean their few bit quarter bucking the about I think do trend? past a for commentary if think lodging I companies, guess other just I than little mean, quarters. RevPAR why they've following that. you're I had the all they've this

Patrick Pacious

I particular. Modern in a Comfort the to will the doing, three at be #X. material so is is very think really that tailwind back that's there's biggest half in you have how I versus year, look the us not, take for those of a factor when renovated Obviously, that those think Move have the factors, portfolio

of back of our the in and then, back who for trends just an really year easier And more all those hotels well had XXXX. think I just that certainly in in much upper upscale the of is I appear which revenue the at macroeconomic you as with the intensity Pat terms is a to favorable what the certainly, mid-scale the as is, half when in would us the second to look the the entering of mentioned, comp mix properties, half terms The be RevPAR. year, lift well growth. the starting combined as mentioned unit take of skew open consumer of

Operator

have Jared of Shojaian we Research. Next Wolfe

Jared Shojaian

understand for I have RevPAR the the point you versus frame renovations. XX not kind index might renovations Can undergone have that hotels I'm bit the Comfort have trying help better. you And maybe gain that directionally me appreciate absolute hotels index exact of a what is that maybe little basis RevPAR the those numbers, but the level undergone speaking. to not just

Patrick Pacious

Jared, positive. Yes, number, the directionally, is

hotels the get when at bit. competitive we've of have our it. more that concept segment. little in when number more around seen ones you index, brands against sort to have look on gone what's you against upper positive, to the focus moves that lift index of the think than local RevPAR market, index through particularly probably do the the yet other I renovations so it's We their in a back for that generally the RevPAR hotels can and But mid-scale

Dominic Dragisich

Yes, best take points, the line so. I your Jared, down the look a when the or item, when a overall release, look take the you at was at Inn basis press points XX think Comfort and data about itself you exhibits portfolio

talking basis that you're that basis points points XXX it's are hotels XXX renovations in than completed more about because those number. actually even swing, but also have So

we year, lift the half see that sustain, the you expect call or if of the RevPAR it, extend XX So index points of so half to trend that in year. into basis back the second

Jared Shojaian

Got it.

assuming little you already And can are feels the I would that that the I'm I that continue of surprised bit that I here are RevPAR also hotels RevPAR know only early I RevPAR? index is seems be have why part step-up And going to to here. points yielded the an brands quarter little mean I gains? renovated appreciate a of speak outlook this assumption I like Comfort reason it a that little and like steam the gain environment gains, bullish these mean, is share because of you it on Okay. a where and some might But in guess renovations XX on it longer-term a particularly maybe fourth gaining the you're to asked share, about basis pretty bit? in share is

Patrick Pacious

the that commission. of the corporate one and think that base may those back had to had which probably they back business They out build rooms go prior of to I they've a the win is is point completed their impact, renovation Yes, accounts once have for from when those of while is takes your biggest hotels it renovations, things. initial types has

So the renovation of finished before March. the that points, that XX those end basis hotels basically

more performance only is sort performing prior had that which a we able bit period post-renovation months' measure, renovations X against. measured done higher. they've So the with are hotels to of we've we're those What of that to have those them seen worth have

is, index in to, the on RevPAR we're sense lift RevPAR for is signage as new But new hotels. and both they've you signage, other another give going that's of what the next positive adding. The those added the a probably call,

Jared Shojaian

longer-term rate. brands quite these has sort there what you involuntary longer-term we've do Okay, about that some involuntary for the me. it strategic I because broader any a like What right right and terminations time Comfort refresh asked And maybe been rate? So the now. need then I one get similar this Are is of more initiative, the in for is? And you undergone? a rate think feels like what just X% question, but talking portfolio your termination voluntary may is think

Patrick Pacious

don't type investment X% call brand probably it's that the through Yes, have go X%. that in would we another Comfort. made to We of, it,

dollar that, we on last That's cleanup that investment near that nowhere Comfort number hotels that our undergoing brand. Modern remember, as to of back in the the we key those is than of of a owners the we brand And at Move the a next into you for we renovation. exited significant. the Quality The amount much on what Quality If basis is brand. it's significant call strategic relative was Comfort largest Inn hotels terminations, the and is the in but do type mentioned went as needed required the smaller brand per on part the to

Operator

Instructions]. [Operator

Morningstar. Next we have Dan of Wasiolek

Dan Wasiolek

that. combination power what's your pricing clearly just if on driving So continue to strengthen? maybe little I or as clarity is that provide mix, mostly in Wondering to that a can wanted bit mix of platform some strength dive higher. trending royalty effective -- the you branded brand rate, and Is

Patrick Pacious

in mix. on lot new a significant any it don't primarily that is of Yes, brands think of construction, it do A it's lot is discounting the way. we I

of downturn either to if of that's that to or has we've flatten pipeline you calls, the as done accelerate, as don't continue prior so And trends on was The has moderate during impacting last number And which sort indicated is off those that the it. discounting out us. expected helped both well, as aspects burning been will.

So couple of effective quarters been rate, I think the moderate, royalty over what we've will guided to royalty has strong but over in time. last effective rate the growth the

Dan Wasiolek

if reminder. Okay, very good. And I a for could ask just then

off talked initiatives you highway. drive mix business? your about of that. is What a to exposure bit have to business I recall some guys guys little You that a try decent

Dominic Dragisich

the X/X house business, on the is business of when with et portfolio years. the heading, that next increase of several leisure. and where think about the the to X/X cetera, Comfort, over course But Cambria just you we expect mix side do

Operator

I like questions conclude and question-and-answer further ahead now closing Pacious to go no this turn Sir? Patrick conference time. back for session. our We'll showing remarks. to the at would back We're call Mr. any

Patrick Pacious

have hope of Thank Thank today. rest you you, in we a talk to your will you, us Operator. summer, fall. you great all, for and joining I the

Operator

also to conference team time, of ended. again, the Thank today. this your Sir, you, day. a the may care disconnect you is rest thank have Take your we At time Again, you, management for And and and great lines. now the everyone. call

Choice Hotels International (CHH) 6 Aug 192019 Q2 Earnings call transcript