CHH - Earnings call transcript Q3 2019 | Choice Hotels International, Inc.

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Operator

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

Oscar Oliveros

and operator, Thank welcome, you, everyone.

company begin, you remind we be to differ about forward-looking and important understanding you like affecting may Actual forward-looking to company consult during indicated risk you other SEC should in XX-K this used the that company's in factors Form you would that assist and its conference, those will consider. results. results filings materially Before should statements we from and certain or statements the for information the predictive

These and forward-looking subsequent to them today's statements events speak as reflect we publicly of date to obligation undertake no or circumstances. update

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

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

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

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

Patrick Pacious

report the environment. just financial XXXX of of per our previous our bit. results end our Thanks, everyone, our guidance quarter Don quarter a exceeded financial more you pleased our softer top EBITDA share and earnings strategy in and is share earnings growth long-term full performance we strong guidance another raised will that year earnings despite to call. per morning, for and Oscar. third of a share announced and remain We're that joining thank morning, Good confident This working. RevPAR

higher in segments by this long-term highlighting begin strategy and to to higher grow geographic our like markets. morning value value I'd

unit these comes mid-scale to strengthen domestic we where extended-stay even Growth X.X% in transform segments Comfort, of the and brands upscale, and brand. the continue revenue-intense our segments increase reported growth as in third our quarter growth compared XXXX. largest a our We more to higher in presence as

brands midscale other the quarter. Our grew X% in

expand XX% presence the to growth continue with in we for upscale segment high-value rooms Simultaneously, our the quarter. domestic

we We the open also grew a quarter. hotels segment, XX% in the in drove third extended-stay increase in where

a markets. agreements of also franchise greater share more revenue-intense awarding in are We

fact, rooms hotel over today. today of XX% revenue In total system anticipated our our the the pipeline a than hotel in of higher in is average that

owners this upward high-value in share paying geographic we'll is As segments momentum hotel markets morning, and alike. Choice's off for and shareholders our

increase we growing we upscale, a XX% with nationwide. successfully year-over-year room begin major count by the business brand. expanding drove where Cambria in I'll third hubs Hotels the the in Cambria's quarter, are In brand

its I'm For such hotels markets, brand is with XXXX, welcome these high-value Milwaukee. will and break to in hotel opened Through Cambria of the together Boston, already today, pleased which rooms. have Houston, nine full XXth just the a record system to of we represent Thanksgiving. as also nearly share opening expected dozen upscale before X,XXX that year its the Dallas hotels, Cambria expect to

groups. recognition three received recently brand important The from

for guest tier among North in The XXXX J.D. first the satisfaction Satisfaction Power Guest highest Cambria Hotel in upscale ranked is all who Index. the guests, brands America

by Business second the XX buyers, Cambria of for the X is The surveys. the Notably, travel rated first each a placement year Cambria's In third XX% is Cambria's revenue notable, in high the corporate most these Travel quarter, of resonating any first grew included top travelers recently of year-over-year. it is brand's placed Cambria who was considering business business travel in group brand Cambria in categories, with upscale brand. News.

beat of Hotel of share from maintaining corporate nights the the In travel local the growing, construction XX RevPAR robust are to X/X projects, Cambria the was business one while Top by for in by These recognized performing is We capturing developers. quarter also pipeline hotel is showing quarter, basis of recognition by brand's top open in News. to index third grew strength year-over-year. travel. active third points year-over-year, are also Cambria solid its Cambria by Choice's points. top more accolades their hotel our RevPAR of as X% RevPAR same-store under the of have group a XXX our in brand only America same-store also Cambria grew upscale grow The now it's nearly competitors XX room still of Cambria's set Not rapidly leisure enthusiasm in accounts, XXX or hotels, hotels ability which for Thanks markets. owners. XX which basis hotels competitive Cambria versus brands welcome development expanding North the

industry's brand, surpassed XXX hotels in largest Collection XX helping This remains by system. brand also upscale in is Year-to-date, the the means soft nearly global and seeing Our international Ascend growth. opened we our far. drive Ascend soft Ascend success have brand's hotels the

now over hotels which we upscale can fuel it into is well pipeline development XXX the global Ascend's strong, growth future. expect our to means rooms

upscale, our which stronger with progressing its is we Comfort is than system-wide transformation. flagship will be undergoing our midscale the This core system X/X brand, expand remains into Comfort Only ever. brand As led ahead XXX domestic of new a year identity, or remainder the exterior modern of the than X/X signage renovation the of with Comfort the has deadline. and hotels, year more installed system, through our already of by

is outside owners Our on on hotel the inside. eager something the guests to new the that are of to signal

in by midscale Hotels that the also their their the completed second of new quarter chain Comfort end highest and third Comfort RevPAR openings already that the scale hotels local saw of are in competition the XX of five increased points. markets. quarter, completed by construction the basis their growth outpaced RevPAR points XX comparable share renovations against upper Through basis any period their years. renovations the last

quarter, hotel to average. expect During on we fourth construction one Comfort open week the new per

the to rooms are higher than XX% generate this Taken year together, expected the revenue Comfort hotels average. opening total brand

nearly value proposition. with of More of is delivered pipeline strong, Comfort XX% of the new of Comfort which Comfort proven our what's Developer for XXX revenue domestic comes demand from hotels. hotels a than for construction to XX% driving is the choice-generated channels. quarter also rooms third in Part hotels, demand for remains

Further, Comfort midscale only isn't success. seeing our brand

in one the or Salt anniversary Kentucky, have This celebrated brand's hotel satisfaction Clarion with like quarter, the Charleston, to Clarion Pointe we of Pointe reporting awaiting XX South year XX its Year-to-date, bringing Carolina awarded debut Clarion hotels Lake Louisville, stellar Pointe franchise guest agreements, ratings. City. conversion and hotels cities open number

the size saw by midscale grew brand total XXX hotel. Inn Sleep pipeline a Inn growth, system X.X% domestic its We opened bringing brand, domestic recently are In its XX% Sleep with and hotels. pleased XXXth which Inn third our to quarter, the the pipeline Sleep

to the nearly turn continue the quarter, open the total we growth. we I'd to extended-stay, where domestic third across now extended-stay to a number XX% drove hotels of In number like drive XXX the bringing increase to segment. in hotels

We the grew also hotels. to extended-stay XXX development XX% by over pipeline

our WoodSpring than room Like important due Cambria revenue Choice's another revenue future accelerate each hotel. to occupancy commands average and is Comfort, lever higher brand construction WoodSpring rates, the higher counts Choice-branded new growth, and to

by our robust We brands proven segment alike. strong growth and X% seeing cycle-resistant quarter. this developers Suites domestic pipelines MainStay investment. in attribute third and as attracting guests is for respectively, extended-stay whose only a development also and several development The to and seen We're increased both WoodSpring development extended-stay are the factors. demand smart XX%, Not

Western our we States, a growth is has believe of options markets which our hidden stay both and of fueled brands for growth RevPAR leisure and United growth where Finally, WoodSpring extended-stay the in the significant proof demand long-term a is business concentration has Choice have dense geographic region in opportunity. markets. high

This led by grew California, our by quarter our the XXXX, was pipeline XX%. Western For year-over-year. XX% growth hotel of third increased pipeline where total by

franchisees. is hotel like Choice's business for words and and to strong Overall, to royalty now off say continues value that future growth deliver rate I'd owners. about few development Choice a pipeline our signs current strong engine powerful proposition a paying delivery are to our how

growth hotels amount program. XXX-basis-point our growth boost has Privileges delivered average, line million by stays and and important Privileges via non-members. revenue quarter. way On spend several Choice more for Choice year helping loyalty more over the award-winning for in in loyalty One reasons. our our we're long-term over This increasing loyalty book the hotels business members a Choice contribution than drove third who bottom to suggests their of members their for increase is XX now the

Choice closing, In strategy. results led continue future. on the This our for to we well third to has strong positions and successfully quarter execute

continue to growing we look our One long-term and goal a view the is we're proposition owners. of way and value to owners in driving our As XXXX segments committed beyond, for shareholders. this to by and we hotel and as maintaining markets key value achieve the for we'll improve remainder

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

Dominic Dragisich

good and morning, Pat, Thanks, everyone.

to We which report year-to-date. have third made progress results, we are happy off built the quarter our great

tax adjusted financial share, to Strong implementation guidance top in revenue of in disciplined resulted $X.XX be solid business share. Our our X% management our the our which across with rate, our diluted the combination per growth earnings power that our cost XX% of operational a and exceeded of value segments, the brands. in a markets by and driven income coupled resulted a per higher strategies tax model performance, adjusted lowered continues franchise increase growth of performance EBITDA. end effective increase Overall, by in and

in excluding of over and model partners. line Our by the revenue procurement our marketing revenues growth. XX%, hotels franchise the programs pricing platform million. hotels increasing revenue number by other These our our intensity to expand our drive contracts grew to franchise include top and multiple to quarter to improving third $XXX.X and of more reservation Overall, travel system, providing the and services continuing revenue fees business value-added system expanding provides levers of RevPAR, X,XXX

expectations. demand our drill with RevPAR. with me during quarter Overall revenue the Let softer levers down industry third travel beginning than into four

expectations, generally our basis a third our As quarter result, set, XXXX. in the was for but XX our fell competitive system-wide declining the quarter with third of versus line below RevPAR domestic points results

we RevPAR gains which our their pleased are experience to competitors. environment, and our that the hotels we initiatives softer to true hotels, provide franchisees the working. share renovated revenues line is implemented maximize experienced have to our top the our the from especially at guest This for we Despite improve Comfort are tools

the our XX segment positive mentioned, basis Pat of upper the XX renovated point points. RevPAR outperformed basis Comfort As hotels mid-scale by growth

future guests RevPAR robust As as portfolio and the growth we pipeline, long and the will continue to in brand's by our for brand that confident performance term. Comfort fueled Comfort the are the strengthen is Choice experience construction to the continue new

grew we Another increasing our growth by quarter, expansion Cambria RevPAR upscale segment, which set Cambria long-term higher its In by RevPAR presence competitive driver in same-store XXX the of our exceeded X%, continued basis performance of the brand. led is by the third points.

the We This also quarter by the third XXXX. summer to was rooms by five of the XX% number impressive new performance hotels Cambria over Cambria XXXX of driven of opening in increased compared the of RevPAR to top Even catalyst be that for alone. the impressive expansion, markets, is term. and we continued in in which grow RevPAR long both will more the Cambria Choice, brand continue for overall, a

in will our the the investment intensity financial performance. brand's drive to believe Cambria revenue We and development, portfolio increase of accelerate strong continue our that

X.X% In extended-stay, WoodSpring's year-over-year RevPAR a with performance strong increase. quarter third was

Suites, Suburban, brands: year-to-date. positive In extended-stay recorded RevPAR three MainStay our of WoodSpring have and fact, Suites gains all

XX the of revenue which our is system XXX Through to size intensity in compared property rooms. hotels system, absolute lever of of This XX,XXX our revenue of only current benefits its an representing the over end our of rooms from also rooms. XX new system third size, domestic opened second Our portfolio, hotels. average but not the the we average per quarter, is

system. the of of on our size growth through with counts upscale segments, expect and its higher segment at midscale the our continue will than a We focus larger our in pace growth RevPAR franchise our accelerate the extended-stay the that to and locations our average revenue room portfolio faster expansion

and upscale grew the as brand, reach nearly midscale and In brands, overall number extended-stay investments. the system in specifically, have by for brand, focus hotels. domestic Furthermore, X.X% WoodSpring across extended-stay increased upscale, intense its our over our Pat X.X% our domestic in a X,XXX increase hotels which third which brands, mentioned, to units our rooms are more we reported our by grew which the our of of our hotels quarter, approximately X%; hotels was revenue by by double-digit segments growth More growth. been experienced quality X%; highlighted its key which and midscale

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

we units addition, of strategy of and X.X% the rooms successfully opened to and by against report U.S. year. respectively, the prior X.X%, to over continue the and In of are execute increased outside pleased that period our number the same international

development is and domestic profitability at our of their by fueled the growth pipeline is our recognize who of The core existing developers, that both operations. new,

agreements, quarter During the XXX awaiting construction hotels end. new domestic third for increasing pipeline development quarter, we our or of overall franchise hotels at awarded XXX approved to conversion, domestic under

pleased are development pipeline, We which X% over XXX of that hotels. total X/X new represents our increased construction pipeline year-over-year our to

system. The our XX,XXX with success example the is count room a new hotels pipeline our of construction. represent great over Cambria of in or domestic XX% rooms we're current the of seeing

have ground broken in now eight progress new projects. hotels. You active projects. about starting beginning Cambria construction Since properties opening our year-to-date different heard XXXX, greater even and XX seeing have success the of new Cambria on we We're

Another parallel to properties open efforts refresh is story hotels. to our construction in to success development drive our existing Comfort new

our As also construction driven as as hotels higher new revenue improved agreement intense. is Pat terms. more mentioned, are RevPAR well properties largely by franchise in This locations

Cambria the the quality of growth the our on with and our of expansion. can unit are impact revenue. in We're have the our pipeline composition leading way future high-quality pleased Comfort system and overall

such, unit As we're full year for growth our of guidance X% maintaining net XXXX. domestic approximately

franchise the be continues agreements, of third our our driver Our revenue a price growth. significant lever, of to

our points quarter XX has rate the royalty increased in In by fact, grew basis basis points XX year-to-date. and

rate, proof while our the to increasing focus maximizing the increase of demand enter is on to ability system, profitability. Our Choice franchisee royalty effective simultaneously

can the of confident remain for the in believe continue size value to and simultaneously increase foreseeable our system proposition we We pricing of that franchise both franchise and our future. agreements our

we and full to year-to-date, for X performance our it anticipate points year and guidance XX our between XXXX. raised basis of point the by on rate lower effective Based X have end now increase basis royalty

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

shareholder outlook $XX These Year-to-date, year. dividends In on of long-term commitment and closing, and comment to the excess and our returns remainder the in came form in return million investments share making back to the in to I'd like earnings business returns our to $XX flow for shareholders. drive returned of million the cash $XX million our repurchases. cash we in

of recently our Additionally, the of million XX, X.X bringing authorized shares, increase an X as program repurchase million Board in to our share approximately Directors total September XXXX. shares by approved authorization

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

of the minute a spend the will remainder for I earnings Finally, year. on our outlook

As quarter. with includes discussed last a hotel reminder, we our guidance operations the now you owned

domestic range quarter X% a decline full and and of flat. between year to and flat of to domestic fourth range our assumes X% outlook RevPAr RevPAR a decline Our between

quarter For share. $X.XX we range earnings XXXX, share per the share between to $X.XX diluted adjusted fourth and per per expect

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

as an XXXX $XXX guidance. continue that increase million previous now results between focus. and optimistic adjusted representing this Lastly, long-term and million, position, million through versus strong will our drive expect our we at $XXX full in we a EBITDA we midpoint the is remain to performance year range our $X Choice of

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

Operator

Instructions]. [Operator

from today Stanley. Thomas Morgan first The question Allen with comes

Thomas Allen

in a results tough Good market.

What's It upscale than economy the quarter, about upscale, do in to talking there, has market, really chain the focused which this overall. more scales, So felt quarters. you're underperformed like, think? on in it largely on, just upper much going you prior

Patrick Pacious

look what ability has been brands, But that is softening business. that which our upper Cambrias when Thomas, think account or the across to on that's hopeful the focused really What's necessarily corporate we're in it's positive. that segment, is as you we're both in X/X think of past segment upscale. environment. leisure, not other industry, we've the capturing in in somewhat. corporate we But I been a corporate really in not Cambria our we've the and a for feel impressive upscale more a depends travel, where where, of I Where I X/X we're historically, on business, been at seeing us our themselves, you look sort softened accounts travel think, corporate lot win has some focused Cambria which

taking we're strength. softening, actually for time is which a about at strong the growing, things us when it is not share while So are a indicator brand's

Dominic Dragisich

one of ahead, - go other - think I the I one think things Thomas. the of please. things sorry, But

Thomas Allen

clarify. No, economy I this was just to saying I had through upscale.

calling to it saying, implying. wasn't in - of the I out So data what was right Is now kind a that's just mid-tier market. the the that higher upscale, specifically. tier underperforming the seems I like is lower

Patrick Pacious

would That gas those and in going Yes, I you the on when I somewhat. oil flat perspective and you're in so think geographically back look of have markets. a of Louisiana. RevPAR seeing been of a broader area itself Oklahoma, and I markets, particular, and on the Texas, into the light what's think sort leisure trend softest we side our really, segment - softening the yes, is from oil out system, in both on mean, if we the gas think is itself, industry corporate,

of some the country that I to rather a adding is is part is in - there that softening think So softening. the of driver

Thomas Allen

follow-up. my just then Helpful. And

driving to drive you over there? optimism years. remind made the several Can just really your statement procurement that and to what's continue outsized revenues growth us a driving what's next them guys You expect you

Patrick Pacious

think One I number everything rooms, sheets types it's the a growth from What's and the are in of when - hotels our of our of soaps, across in number system. buy Yes, is those to obviously, things. things. there towels

The like that really discounted other added and cyber access thing rates. things is things owners our that insurance to some other for we've

So there's hotel bring we a can, our organization owners, of scale an very that's lot we that things purchasing can the attractive. to individual that as through

to well. added that's it So as

a system them also our So asking it's are then bring we're both rate. things discounted growth owners that and to at size new for that the able programmatic to

Operator

from question Shaun The comes America. next with of Kelley Bank

Unidentified Analyst

Danny on question Sean. for This is your is [ph] My actually SG&A. first on

come little for a than if running were And or looking at it what in sub-X% you were year-on-year. did lighter bit So look the we for year-to-date, modeling quarter. it's we of kind third in it

ex seen all is stuff, Is if so we've normal? like what the that forward? like trajectory out something that going So that we but onetime Is sustainable far?

Dominic Dragisich

Absolutely.

about the So that X% making guiding result to to of much so. we year, right historically, our we the call around, of grown to it, X% of digits found we've a some well. a a SG&A as growth lot talked higher implications mid-single SG&A do the some beginning or those At investments a of timing in there's investments What is Obviously, cost. lower able we we're as at were the business.

anticipate well. run a probably a normal up year, terms about growth rate tick as X% the full year. of our for We spend. expect year-over-year we we when take looking that our SG&A we still QX future progress look into at we're slight the full being do the But as a So in at in

Unidentified Analyst

just there, chain side. And meaningful difference level, walk maybe you're international how between year? to you Just the any about think the - big And able minuses actually royalty domestic helpful. up rates since further on impact? able extent there's would my - or rate the high to through - are really moving maybe scales, this is like pieces then whether new us too? looking to to then give color, is there more the royalty construction next guys at moving for a then between how and some pluses and of follow-up, That's Maybe Yes. traction international any is the a

Patrick Pacious

Yes.

It's first, international about question, just to we half. to the your second what relative answer think do I domestically.

franchise in A is countries a do things. So really a of we then as agreements. it's And from Xs also, direct perspective. domestically do, internationally. result in the will, of the lot in franchising, two of business master not that the model there robust, a Xs the delivery and lot One, is if franchise where you

is marketplace. a royalty rate So effective it lower

One we in As construction what of look it far - doing, is amount got royalty as things. future, where the drive I you will what we're rate. to the think at effective discounting not are the two new

look construction rates they're new Cambria WoodSpring, Comfort, owners a value pay are lot that Those you If and of those. brands. for, to full like looking brands are at willing the our proposition for

front. ramp to full drive downturn And think So burn to having we're during that had done back rates, as had do off those on that the discounting I not years to to discount way those growth unit to some be X discounting that ago. X, hotels the the of be of done back seeing you're

Dominic Dragisich

issued an analysis our points potential for over the run actually line is one at if if you long-term basically XX term, probably royalty And think of just rate we contracts effective the every say item, rate. that rack about long course basis there's that about the so of or we've Yes. internally,

when We that mid-single historical being sustainable of, next averages do see, over course take digits. you still we at of so And call a our years. several the look the see it,

Operator

Jefferies. next The question Katz comes with David from

David Katz

thought. one was plus I Nice text just it's still small. thing versus around X% to wanted know that the I were the quite Was back or it to it what quarter. from go I about seeing - RevPAR. minus X%, - sure we wasn't comments we relatively Cambria's

Patrick Pacious

it's look came the which segment, same-store points XXX it's in, when plus it where the in. a basis On at we bare segment competes basis, No. X%, of

to we that hotels look at that So because apples-to-apples. an got ramping, same-store to we've are - wanted provide

Dominic Dragisich

end the been in as of well. that properties It's a terms math we've of towards successful properties tail equation, last new how open and with those David, year opening

basis RevPAR a those ramp hotels the issue a we versus are in that portfolio on stats basis. so are same-store of All

David Katz

here you're solid And out we And our Right. just putting ask getting more always up - trained someone ourselves or How board. ourselves strong just lose? question, here. given we at add matter? companies think have? But the has broadly continue see perspective, speaking, growth to or win pretty we about where, should the across some momentum everyone rate to from there, growth obviously ask question Can can that unit the landscape unit public everyone that to they the the

Patrick Pacious

It's interesting, and David, I've XX-year of got capita the a U.S., of nights couple at of slides data that came talk a room to about couple that conference number that ago, hotel continues consumed just trajectory I months out that per look across the accelerate. the of

if So who boomers longer, have trends or spending it long-term baby at the long-term greater the you are look discretionary growth, more on living population look travel, trends, the you at for retiring spend are demand.

companies when so in lot a of in opportunity to at an or segment we this environment, that participate look this for is there And industry.

segments. that unit segment looking that or the think to build at and really higher on consumers, upscale be we're are developers for particular, limited I they demand Millennials boomers, in and want us, those segments growth where strategic service is want focused GenXers The to stay. we're the

our trends are not we for and at look for supply just those so industry. And those but positive the others in when trends, brands, demand

itself pie feel us segments. about successful those as share, confident to pretty also is we bigger to for our getting So on ability be the take but

Operator

with question Robin Farley from next comes UBS. The

Robin Farley

Great.

increase, unit risk Kind on about ask delays implies to there's other if that which unchanged any wanted companies shortages. labor that, growth. of in I And biggest given quarter of year. growth, your talked for wondering fourth sequentially, just some because the have the is construction to be would First, the unit

Just you how full get year will sort number? of that comfortable you QX are to the

Dominic Dragisich

that at take both So we strongest at conversions look openings. it's when in pipeline, guidance. as of are new the of our X% a new in terms terms constructions, well When you as quarter confident a obviously in take we the approximately QX, look

or could X way. hotel XX into January a basis XX that Now points push shift either

that pretty And expect X% so we from that to number. growth be perspective, to close unit

is we counts, goes our to year, The of only higher in and particular, the expect thing our revenue the comments on look a growth segments, you larger would back take the other rooms our growth, this unit add at house. prepared I to side room outpace in this especially actually extended-stay if where growth growing rooms

And room's probably so coming from X% above perspective, is range. do we but right in X%, - approximately units, best a slightly that guess that anticipate we now

Robin Farley

considering? look and Okay, And like then other units. just you're the that's taking situations great. that, brands, When those No, in there are if bought X there sort to the you other JV ownership any of helpful. ownership like that wondering you are that out you're measures temporary grow situations

Patrick Pacious

development perspective, call handful So similar hotels that - the a our anything have, was don't have to joint it, a ventures. that. We venture actually from largest from of standpoint of open joint and assets. We

money doing obviously, are We key some also and lending. put, out

a standpoint to from we joint grow strategy. But continue that So is vehicles brand, don't similar the of that the have from using we're going of multiple to partner size. venture anything

Dominic Dragisich

that's - And money, gotten million we've or of really that so, hundred if couple When question, of money it it. owned it and key couple $XX about million tagged because got Cambria. Yes, everything is important Couple so, is are loans, we that that it's to million look million you towards take on questions a think in those $XXX then JV this, all about. in call and million so at that there, assets take $XXX hundred look terms a that's we've a else, and recyclable, the of key form because a I you or a of that's of share not that's Robin. talked decomposition out

Robin Farley

last just point. on thing then that And

should it or to amount full the to months, left that a think put the of up there's you Is you'll million $XXX to in time sort about I willing that bit XX being a Is to there to next you're is think so term? a put work go. you - have we work frame longer described, little that $XXX by? million, way like commit under

Patrick Pacious

think at, reach Yes, the the would expect is years looking on at pace another to there recycle. probably keep current in we're ceiling. we opportunity is But that mind, you're two I where to

it's that This in buy-and-hold so the capital order to this is there, a focused in is on. recycle a - ceiling to brand continue the the a markets strategic grow And is a not strategy. there we're while

Dominic Dragisich

we've So recouped out of in We've Robin, made a investments. at what million investments. you of back look from $XX worth previous $XX actually we what we've and if recycled year-to-date, take terms in, put capital about million

that, showing recycling - dividends, hotel already that through it's efforts franchise fee. we're paying actually those recycling a monetizing So and open asset-light, are

Operator

question with Alton Longbow next from comes The Research. Stump

Alton Stump

just two questions. I have

were your be your versus have years look travel, probably as what gas point is mix look kind Could a us in quarter. versus where you you off, row, oil about X what secondly, between and those at you to out would mix ballpark as leisure it it not your in gas, and two been kind and X as of a First remind ideal breakout of And the high properties in corporate just now? flat of markets? mentioned, percentage to if oil for you are

Patrick Pacious

really oil of X.X% and looking the And segment about a more it in perspective. our markets. sitting the It's we're travel, on business inventory leisure gas at is from

be So and grow Ascend, would as that X/X expect business, Cambria brands, X/X the I to leisure. both upscale

be really more brand were of XX-XX. Comfort Our a targeted to

- those our those that's from that skew about we're in heaviness what - a segments towards business perspective. brands internal our think brands, on But particular those in you the at when sort more of those are three will targets brand travel. of So looking particular,

Operator

from Research. with next The Wolfe Jared question Shojaian comes

Jared Shojaian

us you color some growth, time, and of year on royalty this rate. at in the RevPAR terms year, gave last net forward unit So

fair unit rate the on RevPAR? low share year, next how net on you in touched seeing year thoughts can you're year? extrapolation kind the but on RevPAR? guess, I Q&A, for growth, about this flattish are of trends that into in of earlier you're next in royalty that You is single-digit Is for And thinking that down terms units the of early anything net to a kind XXXX

Patrick Pacious

- But I us. our to of for to that a and the at factors mean, I when brands performance, of our couple soften. industry continue a couple is obviously, there's think itself I there's look on Yes, trend positives

as first to tailwind. Comfort on about from the headwind really renovations we that The talked moving, a is a are script

And to system, that across expect we've XXXX. our against into segments. continue been We the then closing our accelerate gap just to

revenue So markets. from of share as fair quarter, mentioned. we up the opening that That's travel, and a each higher in those driven also gap the we're hotels by being standpoint closed that to of of catching to our continue. I has trend then greater of that share expect potential And RevPAR really business there's segments,

we So in to there's I do think where opportunity on move as headed is for or, minimum, meet RevPAR. a exceed industry us the at

Jared Shojaian

that What's need Comfort I Pat, then, the flip And give can remarks mentioned time on for to is where you renovations, to outperform prepared a if just in I What of a you renovations? side. stand which just year, quarter the industry you that think still you you renovated? line you may had the on gave that RevPAR And next Okay. RevPAR? on think to update pinpoint be on tailwind hotels the those have headwind the the where you you to expect stats but What to from in some us missed, percent start an then transformation?

Patrick Pacious

in QX. That occurred Jared. Yes,

that the quarter, at was year. expectation of the occurred our which beginning this So

that. increase The we first in would quarter industry, demonstrated that the headwind finished a the second flip of XX-basis-point so in QX it and Those tailwind year, above second good the about two in that. really to quarters be half the a RevPAR feel would the hotels a so had renovation

many left remain to about really to that question do, done XX% about fourth quarter. the in other are how be there's The

of you of If business run, the we seasonality type remember, a lot here.

So summer, owners to their through waited to peak season. is want during summer. the get renovate They the which don't

to some the So quarter. quarter there in late the begin their who schedule third are and fourth into renovations

And get then summer seeing place, as of what the campaign overall longer kicked So the bulk is to the RevPAR having the we at level the well. but introduce we do of index local RevPAR, this both customer, more off impact, those a that positive really importantly, all to we're are this that expect on, goes brand year. the sign those the done the and ad that once renovations in folks to work on

accelerating a our owners the brand, And as are benefit are So the investment. hotel really through of advertising. seeing that we, additional the

Jared Shojaian

Okay.

you you just that, comment. in the RevPAR the number X.X% So think out you contraction I that in industry share called But index growth, know the saying I in outperformed your Like then that quarter. clarify renovation, to RevPAR entire the outperformed bps. minus XX on the gained third quarter? the that under RevPAR portfolio hotels overall, Are third basis points XX industry the by

Dominic Dragisich

industry. think I for terms purposes, we gains in set it, call segments those compete, portfolio, we was I the or close comp Comfort, saying of which specifically, the terms the share gap the index pretty in track what against intents it's, RevPAR for were and there of to industry all XX-basis-point and for in entire was

progress made you net in I a purposes, it more the all intents for at when was neutral think, a look renovations the we've that take importantly, portfolio, QX. Comfort for and overall the and

You were the for Comfort brand. seeing a tailwind

As we for expect portfolio. year, it tailwind and the next overall a the become head broader even accelerate to we tailwind for to into

Patrick Pacious

impact. our such XX% is which an Yes, about it's of it has brand, why that is outsized revenue

Operator

Joe question comes Next JPMorgan. from with Greff

Richard Sunderland

Rick for I'm Joe. Sunderland

a please? pipeline color basis, both a basis, year-over-year Just basis, one question grew a a of give domestic the sequential hotels growth on you can the on pipeline. but year-over-year and on rooms The on of

Dominic Dragisich

you take it's in point So when at averages I a terms don't think take off Cambria, look hand, when like when portfolio you so around look data higher looks it you have take of look right the I WoodSpring, of rate. than growth a XX% historical our at but the room - overall or a

terms are XX average in XX, at additional that our those we're size units Now, room versus it's rooms. - of in XX about so seven pipeline, the

back on data So that probably think but can point. could we premium, about a you you the exact to XX% get take I

Operator

comes question next from with Baird. Bellisario The Michael

Michael Bellisario

the year going your franchisees signings that they're chain change new down about on RevPAR new you slow from forward might are scales, pace the growth or with thinking this investments? Just sharing way of anything differently today

Patrick Pacious

Yes.

side. two your are sign Those who agreement today, going I construction an to at are think the three you're looking on owners it's stories, hotel really you be new if years now. opening from Michael,

are the and most existing investors, owners. we to long-term new to owners, sales do our franchise about are agreements of X/X of these that existing So we are sell

are long-term are - and many them these So holders, multi-unitholders well. of as there

where for to environment of and those And looking join of think, really conversion look But to bit it, look bit call think happened proposition. what's going month somewhat. little That's will. environment hotels individual value owners I more in want I a our been spikes, I you you're would think get - do softens, where as if June. have If this brands I as of on at record at has house, are independent little we've a - lumpiness. year, more a the development to kind that's the system. you to see going weaker historically softened more you're you the I had of, our side owners a the see had We in

those pick So of times conversion brands softening. up share - during generally ours the of

Michael Bellisario

one just And of question. Got kind then housekeeping That's helpful. it.

weakness market impact do oil the in have September that from meaningful affected you guys hurricane growth? and Aside the any that you from your referenced, RevPAR gas

Patrick Pacious

wasn't that The was meaningful But here hit it the may some it didn't been it the of hard Day have in out weekend, because minimal. demand States. was any was really there United that It impact did timing there during domestic to Labor up. show good measure so

Operator

question-and-answer our to like for concludes Pacious now turn I the session. over to Patrick would conference remarks. any closing This back

Patrick Pacious

Thanks, new time have a this great Have wish great talk day. you for your Operator. season, We to the we will you, year. Thank morning. you a everyone, holiday and again in

Operator

for Thank today's has now attending conference presentation. This you concluded.

disconnect. You now may

Choice Hotels International (CHH) 5 Nov 192019 Q3 Earnings call transcript