CHH - Earnings call transcript Q4 2020 | Choice Hotels International, Inc.

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Choice Hotels International's Fourth Quarter and Full Year 2020 Earnings Call. At this time, all lines are in a listen-only mode. I'd like to turn the conference call over to Allie Summers, Investor Relations Director for Choice Hotels.

Allie Summers

you us thank and morning for today. joining Good

understanding Company the to that or like future affecting the Forms or them update information factors other Actual during no you there we you statements begin, should in conference results to Company's you as statements would like we'd risk subsequent in important on assist reflect from to uncertainty performance. to of filings predictive we SEC Moreover, that statements undertake about speak Before may this obligation differ its the of those to continues to the remind call, and and be our for you used consider. forward-looking COVID-XX circumstances. events XX-Q, Company pandemic impact consult materially that today's publicly acknowledge XX-K the These and will indicated results. forward-looking we as date forward-looking be certain significant to should and

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Patrick Pacious

who and all our to appreciate good like join had and us morning, on a the all their and the I'd Choice on to you industry of professional Arne impact leader we Sorenson's by and industry condolences everyone. are On who the family well. are Thanks, hope at taking behalf our his Hotels, many lost express to you inspired a industry lives home. people call our week of who travel to Allie, across major and of deepest We the time leadership. This us many personal

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the declining RevPAR XX.X% Since from RevPAR the the of the onset fourth industry points from XX of for pandemic in XX.X% quarter-over-quarter improvement same with quarter declining systemwide our percentage quarter has by domestic the our sequential XXXX. XXXX. change surpassed nearly domestic achieved mid-March, Our year-over-year systemwide performance full year,

and industry Our overall scale the continue to our segments. outpace chain results

index the fourth than outperformance X percentage notable faster in our through in local RevPAR lifts and RevPAR quarter. weekday increasing points our fact, In In index. Hotels XXXX, by Choice RevPAR over weekend competitors, expanded grew

index year-end. rate, proposition value royalty we RevPAR XXXX to effective of Our owners. continue to strengthened in our grow reflection our the franchise the through to deliver improving XXXX, a fourth of we quarter also growth and continued Throughout improve

along key attributes, in decided developer differentiators, in with in Therefore, investments four products the delivery our Consumer initiatives we development the continued is demand, versus new loyalty Company distributed the profile our future. of and including powerful well resilience Choice leisure our of strategy. our for our success and our franchise continued proposition reservations model. quarter, Hotels' highlighted and segments. strategic encouraged the Our to and by proven our our program our strength key prototype business demand system customer outperformance relative reaffirmed brands, capabilities fourth travel focused industry, invest These the in strategic brand certain position product accelerate to in and in success to our us and value portfolio for the confidence and

line reach pricing their target owners We optimization our also to drive their hotels. advanced revenue our merchandising further and enable to and capabilities customers top effectively to

to quarter hotel by the to be continues allowing recognize We like are that affected the Nevertheless, observing we degree XXXX first XXXX, to we expect confidence outperform company, signs current significantly industry a our and high our of us industry the and remains environment. into the Turning in give continue overall, momentum further Hotels beyond. to the Choice for pandemic. uncertainty positive that

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are expect In travel November. our American customers beginning With plan hit continue. fact, positioned of over located of XX% trend will the our and to our in vacationing in of the are urban U.S., by that portfolio dense plus as to welcome noted bookings centers uniquely outside trips domestically further Furthermore, hotels observed advance they since our as travelers domestic we've and in road. road of we their XX-day improvements hotels the open XX% our taking

continued year Federal point checks prospect for a package, and of our high small the core this Relief government Second, aid household savings middle stimulus and to December owners our additional recovery class the from consumers, customers. business

We our to discussed continue and on long-term American's provide Finally virtual likely confident over where strengths continue when the travel believe tactics consumer and core in and the long we as remote deployed response positioned pandemic, as in our call, learning capture our share increase we they well term. and to will for demand have with work last feel leisure. that trends that travel such to the combined of us flexibility to

points, results by performance. the XXX program basis XXX right brands segments to our basis distribution strongest loyalty growing contribution enhancing year revenue our year's the of by our locations full pay the while fourth in our mix, generated continues year increased strategy growth quarter-over-quarter. our contribution we match in in while with right significant specifically, capabilities three contribution long-term XXXX, which our quarter-over-quarter the increased In More proprietary right drove strong months Our prior off. the ending the points website its to quarter, in

continued an even from contributed members, addition, our to quarter percentage In up higher the gains in to by Diamond Privileges versus benefit our most overall as for year. who STR. over These we Elite loyal competitors, full all location drive significantly results prior fourth the revenue RevPAR customers, types as of Choice index compared XXXX have local basis helped XXX share of reported across year points

our on RevPAR future trajectory. weeks brands For through update key the a segments. mid-February, giving competition gains share the about consecutive significant us now against brief I'll further past observed optimism XX we've revenue our provide

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of remain industry. developers our the Additionally, optimistic lodging long-term fundamentals about

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Dom Dragisich

quarter. with liquidity Thanks, hope and balance and results all Pat, provide I'd our updates hello, your system of EBITDA marketing the million, color families our capital and which was million, margin was and the XX%. our at EBITDA which $XXX.X and fourth ahead. revenues close And you fourth the and around look sheet quarter generated healthy. fourth that $XX.X totaled million for our $XX in year Taking the outlook quarter excluding I'll in $XXX.X XXXX regarding year on adjusted full adjusted were like well everyone. to are share and to results, allocation. full our million XXXX, generated and for I road reservation closer full fees for a additional Today, total approach of year thoughts was

for were quarter and the full $X.XX per a our As adjusted share $X.XX XXXX and earnings year respectively. result, fourth

into key now three RevPAR. dive revenue beginning me our levers Let with

XX.X% systemwide prior for the by percentage year, points overall from declining the domestic year. nearly RevPAR full Our outperformed industry the XX

domestic XXX from the points, quarter. quarter systemwide period fourth surpassed XX same prior the and Our XXXX improved basis from points of the by percentage XX.X% by third the declining industry nearly year RevPAR

value the chain brand results driving in across the strategy by growth percentage X by addition, STR, X percentage over for In we focused nearly which compete, exceeded quarter. year primary full our reported the our long segments scale for upscale, points as points made higher outperformance XXXX We've respective on fourth and and drove gains intense material off. industry midscale RevPAR us achieve scales local against versus more investments the In fourth quarter, the segments extended-stay are competitors. revenue year-over-year chain segments strategic and and these helped paying our our and we've

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change grew segments stay competitive the portfolio midscale RevPAR finally, percentage And sets XX percentage Our by change percentage midscale XX versus the an extended upper industry's and portfolio local impressive for by our outperformed and points. RevPAR these points by exceeded points. its XX

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of over unit following family segments our rate key growth increasing The only which return one brands brand's its our the brand completion to recent beyond rate. has growth are believe of these XXX for aided value Comfort We're we year-over-year. hotels transformation, and will the strong by of its domestic fuel Demand which pipeline, hotels growth number by proposition XXXX's in report term. expect conversion in outperformance. in brand of X% We domestic the that to brand units near especially pleased accelerate increased, awaiting to XXXX, the reached conversion the growth quarter our

beyond. In our fact, previously of of in awarded growth executed optimism impact projected additionally, XXXX of trends month when conversion conversion than agreements the opened more continued the a expected. and in number December accounting XXXX favorable than number agreements us and And for previously give the These of pandemic. was we in higher for the we further

our Our and their with remains in quarter X.XX% Company's pipeline. we X growth, significant proposition the brands X grew year. royalty which the XXXX to our year-over-year year value by of compared fourth rate source points rate and continued revenue for effective to our to proven increased attractive royalty to is desire the The be affiliated prior domestic basis basis full provide our points driven franchisees,

lever Throughout the transformed our their pandemic them bolster refinanced improve us to top the which to successfully covenants. resources hotels allowed maintain impact investments. of capital revenues portion debt all the and to having turn markets to historical on reduce and on allocated cash further Choice XXXX, as drive cost trajectory and exercised line to We our capital debt prudent of XXXX allocation liquidity. renegotiate profile we without now capitalized outperformance, cost maturity extend of maximize effectively We our debt structure, expect Hotels' We proven our I'd return while capabilities navigated discipline our in of our borrowings. favorable sheet around of to balance effective helping to significantly top strategy. of seek our credit to the allocation like and the position line to strong delivering growth owners this

quarter pleased by environment. operations over for of approximately we the In of fourth historically to reduced $XX the XXXX, our was debt lower over during despite from report quarter seasonal net in flow and the demand fourth million cash million generated alone million $XXX $XX are fact, which

in strong. cash the At $XXX facility. borrowing Company its cash liquidity Our through be revolving available year, credit profile and the had continued capacity end last and to of approximately million

results as strong in beyond. to chain Company and make cost gave in the XXXX relative scales SG&A the the to to the for XX% our Our compete since the the certain which quarter adjusted of savings investments XXXX confidence position fourth of onset realized well industry throughout and we in as us success pandemic

term managing maintain travel operating on our expenses opportunities the long demand for while will disciplined investing We to recovers. approach capitalizing and as

unchanged, our through we balance offer expect sheet to these will record position meaning our back our capacity In we to has will value to Our objective revenue Based put to other presence been we strengthen proposition in of capital a and and on returns cash always strategically come. of believe We success premium intense stewards shareholders. maximize organic value-added utilize for by in invest demonstrated on particular, attractive take flexibility believe revenue more drive investments top allocation these philosophy opportunities. our to to investing growth and years internal that the and capital to Choice's leverage our track continue strategically be value remains franchisees, programs further for and we in organic enhance our growth, strong travel invest strong continue steps to growth our in and partners. disciplined primary drive allow services our segments, line will franchisee we flows to into us capabilities business. guests increase

and context overall monitor shareholders to in leverage opportunities, returns strategy. capital to of the allocation conditions and capital the our investment other continue market our will evaluate We environment levels,

on largely offer exact recovery. is industry's The the for lies beyond the on to trajectory up our business and of I'd questions, for ahead. our opening thoughts what XXXX like unknown pandemic Before remains of ultimate and as some impact precise

in today, XXXX. change not expect issuing XXXX to quarter-over-quarter see we RevPAR both quarter first currently XXXX guidance improvement we sequential and the While a versus in formal are

based view the is on Our following.

drive First, and of demand we chain we the versus performance to continues leisure RevPAR And Company in and which the scales locations. are stronger year-over-year observing the to industry especially continued compete. experience resilience change

Second, pleased domestic change our continued improvement that despite sequential entering quarter are first historically RevPAR the pattern has through lower season, the we demand of quarterly mid-February.

In fact, year-to-date XXXX has from same approximately declined our period XXXX. the by RevPAR XX% of

fourth we Finally, rising trajectory vaccines change XX-day little is plus along climbing. to date, widely and in that the even cases booking correlation before have quarter distributed, the COVID-XX optimism to seen our with and RevPAR reflected between for by are our company. This sentiment consumer's travel trends, consumer desire signals

business evaluate to the the the positioned next continue XXXX are Hotels further earnings for managing Choice how long and term. optimistic provide across of that updates we closing, in and during Company we well remain in will our impact is In to we'll May succeed the are call. in We COVID-XX and beyond confident

from historically our franchise stable primarily a benefit throughout of asset-light model, degree from and economic to has provided risks. continue market returns business We delivered which resilient, focused cushion cycles

questions. Operator? to we pressures us during come. balance years for to to any immune opportunities will long-term I allocation to by and the returns sheet capitalize and strategy the not are time, outsized would we industry, Pat While disciplined At view, this and strong continue that our to faced drive answer be capital allow happy recovery the on believe

Operator

ahead first Bellisario Please question. comes your our today with from question from Michael Baird. And Instructions] [Operator go

Michael Bellisario

maybe on quarter? accelerated maybe investments were the those me, that you What can spend expand then, much the you there? from made How how And fourth much exactly? you spend? question more First is left during

Patrick Pacious

Sure.

into some me categories it couple put it as into context well. put and So of let just

look the year lot cost of of July we a made our decisions really those lower back we I think demand structure by first our XXXX, readjusting as timeframe. of A environment. really the half was kind spent on for

As conversions. the began further to more to quarter, was on we get the particularly are resiliency the we to around shape. that of the also a seeing began we of we closer of And to new our take business likely sort into our what how fourth the got lot brands, model, see recovery confident and performance year

would And so in categories. of we I decided things. to them put number a maybe accelerate four

is first brand new The prototypes.

reinvesting the our again So product of future portfolio. in back to

around our pricing capabilities. Second merchandising is and

optimization rollout in revenue our the be here tools, of So capability. next so month our or we'll which discussing that probably during

segments our Penn continued that outsized have I an we opportunity stay point the extended segment. be boarded would in them. us. to which exciting of would segment a then new Third especially on front growth investments for in fourth key partner is the in National, and is, upscale travel And

where in areas four came investing of really fourth key all So those is those investments the in quarter.

Dom Dragisich

XX% costs, XX%. Yes, a year, XX% at guide and SG&A were is, four the down versus when of quarter I we you around quantify reality prior those mean down take about adjusted impacts, Michael, the when you look about for full we were

that's year as QX. as takes for full XXXX puts and really the So well

the look so. Last about looking that the talked from or the that expect run of is think when you follow-up we reality I what going think an do would rate about I savings in the SG&A were said XX% And terms we we question we evaluate ahead, is, at of context we be, demand quarter, to in environment. perspective?

in XX% and we able where So be reach I are XX% would environment. certainly or say, somewhere is on up would still to based we the on flex back flex that RevPAR to range within

continue grow as for expect years the that well margin you're seeing that we and margin reality to to year do - that see still we we to this maintain is, come. still So

Michael Bellisario

And new up more, deals you more are or that signing what then agreements in one for today? being flexible terms asking new on you're just the as signing, what franchisees our you're

Patrick Pacious

on depends talking it think I are about. category what brand you

you demand, if stay For are some our products significant other brands Comfort, clubs, interested joining attracting in WoodSpring, those where are we're will. that developers who of in extended

regard there's of any not So to change a discounting like. with or the lot

rate. I what have the foundation to effective power continued also those we Rodeway, of that regard brand Econo royalty sort think more, Lodge, pricing continued brands are with in have - our call category, Quality, to

- I point effective that think reflected overall. increase all it's in royalty in rate X the of it

having concessions, agreements do So with in what's to basis will, on lot you a the contracts. we're a to win of new to year-over-year if not regard

Operator

from comes Our go Katz David next Jefferies. ahead question Please question. from with your

David Katz

I of around And may talk just on helpful. health I But population. know made just be and help large to sort sort really thoughts you of what overall is. that of changes overall get their would much structurally endures? update franchisee that it's of an landscape financial a wanted them? what to the your How sort about that have of all

Patrick Pacious

Sure.

if cost front out that you much at - is of something Housekeeping the total number ownership, cost lower their we've a breakfast, have on they on total time check-in for their them created of daily our of an long-term flexible of in prior engaged which been the accelerated the desk. running The do allowing labor we cost of opportunity the more hotel. for grab-and-go long a things franchisees opt demand option. guest Contactless to them has the have to breakfast of is we've that to period been I a help focused We pandemic. reduce So lowering think trend is for housekeeping.

also each for down doing there's we're underway we apply the drive brands. ownership to So cost there's to brand programs have that that David, things of total to Within that a variety of continue all owners. the of the those category,

going somewhere the in late draw been either likely that's around the portfolio second loan XX% or to say, of first this have that that's relief available, indicated in released in I legislation, the was we the XX% December second back PPP our draw with at a think point, quarter. to XX% to believe and be would apply. they're took Second, third EIDL about the We

needed to that relief then brands finally, very where point of outperforming. that operating fact we our a they occupancy to bridge recovery at ago. a I to look So it's need that similar need our And on If level, are to perspective. they're get at the we many would XX% how hotels of sort the to getting to are year

means And in to a not it's operating So situation. environment. low they're those demand used that that

would certainly XX-day And and on behind to optimism our franchisees going around the we and by say, would well. the franchisee vaccine them. a bookings get sentiment place with I that rollout, see relative pandemic is the with very So once in what our we're to as optimism to large, that consumer positive the begins see what's around expect health us, seeing plus around

for is of end case. light six tunnel And the at that where months so the them ago there a wasn't the

these think era of yet. a But lot difficult as I owners well. we it's still on. of call, a - So sense the area out times be there that's the of we're just as is why and the of planning said in something so driving to around something of focused the strategic optimism that's going to in - There woods long-term we're on that's that through again who pandemic are post not that down are very of focus the for in as focus continue And well. brands, ownership our ours cost a

Dom Dragisich

as metrics look showing David, in And well rates in I where - up that's you feeling very very trending. - collections at I when about feeling is, it's add really a and would the optimistic particular, would strong our thing take only the

of about our XX% franchisees who are have actually We today. paying

that month-over-month. the so showing today is some system increase provide continues in that to really everything and flexibility mentioned of our results and up number tips able just items, other through And so that and themselves. operating and we're franchisees the to of XXX% to open Pat our

Operator

Asad next with go question. Dany comes Bank Our Please question of from from America. your ahead

Dany Asad

your relative look like signings mix like Just how in a developer brands. trying in your your base? interest QX, incremental for sense So get that existing brand the to does to

Patrick Pacious

Well, obviously. conversion skewed more it's

or it as we what more conversions brand. as - Inn for we Rodeway, higher call end trends Comfort well, towards that Lodge, more so do if more conversion But we those well stated, brand, if Quality, well as higher the new relative So Econo all at basis. the construction both extended you look stay the which performance segment, as well are as brand Cambria did the WoodSpring a of on brands, also

construction at look we see the contracts did as any well trends So that portfolio. there's really good did wouldn't contracts that do new we we I if across me to the to there, feel but the about both - as conversion we

Dom Dragisich

transformation, good terms Comfort is we percentage extended of in upscale where of in the the we're was the of talked Pat very extended midscale shining signings. Obviously, that in for form those actually the well. Comfort feel a the and bit has that feeling than - - mentioned the new More of following our where for product. stay about extended XX% strongest And about out as just new of of resurgence a frankly little stay terms we contracts came focused came star add really in and stay those brands, breakouts, just signings Comfort us. the year

Dany Asad

my us possible guess, understand segment? And looking RevPAR I are just maybe offerings? follow-up, brand So a get limiting solutions then or going is franchisees smarter what just bit drives and you little underperform brand back or a it that solutions services to is can ahead business for as about just if just help pulling

Patrick Pacious

procurement our you're I think services So referring to business?

Dany Asad

services, correct, yes. procurement The

Patrick Pacious

Sure. Yes, is volume driven a that business.

towels owners need soaps the like. So and and as sheets up, the and hotels fill and shampoos

fewer So of that driven. there If a amount through people product using a the piece volume that. is a lower is flows significant there of is that breakfast,

that's the There that So as is that flow around for driver into key brand revenue other well program. some items us.

signage the program think you that, been of expectations. doing Comfort a category for another probably we've logo, relative the if slowed as Inn So that's where our items new about pandemic, of result a to

and have think the opportunity an programs brand of Port you Beach. as the in of that's you drive if shot breakfast as country that. the a - But as disruption some seen COVID, that and came well. aerial the of Long product getting some on about of And there's impact result into you've revenue chain shampoos is impact So guys also that's having the - items that on pandemic's supply FF&E, the

the that business are in that, procurement back items those So we a services XXXX. on look key impact at had our

Dom Dragisich

outperformance which very services to for so. closer the to to much we but in see Dany, full we had and closer this occupancy XX% - news just it stat is we when is expected the fact term, over given long about pre-pandemic, a down probably about is those just financially good year, revenue, little the procurement revenues the only RevPAR about and the revenue growth that, talked wide the year, that versus were speaking, Yes, XX% approximating RevPAR The it's enterprise or were related. your

we to revenue perspective, that as were of that well. gaps from we in bounce in to fill able expect terms and stream this So see in some XXXX back of the

Operator

with question. from question ahead Farley Please Robin UBS. your comes Our next from go

Robin Farley

in - year. your unit I don't about about signed think growth hear guided you agreements meaning this flat of year of kind that in up in thinking for think growth but are to down? was Thanks. it this and come I reduction do Or sort unit expect do to year? as didn't specifically, think you conversions how Just should guess, we I agreements XXXX tick you that in? will if the your the growths lower potentially

Patrick Pacious

and think, Yes, flow open Rob, as success to and they the is the more number the contracts opening of speed rapidly. mix much as that's those to the I shift through pipeline rate the key more our far means conversion, the of

extended fourth about - the and really drive growth. mix we that the new shortest of at it we and to look thought of to what time regard if quarter the the I we those amount you - is good then that particularly would feel look also get agreements at So construction I in unit one signed that and conversion stay opportunity of frames. do segment, you with feel the when we to new take our has open. about WoodSpring, exceeded good our contracts brand a That's time,

as unit stay I in XXXX in on that And go-forward also in a be brands so particular seeing the will our as think in growth other our growth basis. brand well the extended segment, adding to

Dom Dragisich

ahead. Go Rob. Yes,

Sorry, Rob.

Robin Farley

Okay. you in it how that's off. growth was do you're just you 'XX. - But ahead. meaning want that just like Go I I expect sorry. concluding. kind don't of - positive cut I sounded to I'm

Dom Dragisich

related to Rob. it's that, No,

comfortable revenue which So that we that in take at are guiding I prepared I would of guidance the we segments, I into reiterate growth the is is remarks growth the we overall. when what giving a accelerate one look to, But fact you that XXXX. talked key of think expect about formal are something that, those things is to the

at revenue segments those So grew about X.X%. intense

termination has the That's the We we're is stay those of less perspective. expect expect comfortable a trends economy in - those seeing and segment in just majority continue very in that that Overall, sticky. our segment, to that where see that's and across more you pickup And see again, pressure But industry the to feel and that the that, bit being XXXX. a where the little a nature our very just segment, extended to similar fact contracts we just well. upscale accelerate in as you're the XXXX. a vast trends company unit been of just about sits as expected midscale, focused growth revenue from

Robin Farley

about X prepared XXXX just the increase over in understood increase, I don't quite that point basis one sounded was Thanks. royalty rate, expecting mean points more - there something that you a just remarks. your know X like comment basis increase increase like remarks what did follow-up, I comment during prepared sort to level? quick or thanks. your meant that than 'XX, great, it on of just similarly Okay, in And expecting if that

Patrick Pacious

Sure. Happy to clarify that, Robin.

for year X in points basis QX. points So XXXX, X basis full

We mid-single expect is and for we expectation XXXX to more beyond with historical do outperform line in which be slightly what that did frankly growth, in was it our We - for XXXX. digits. original the

optimistic rack of contracts those that we're pace rates. these to and drive continue to So closer get we can

historicals. growth, in the is your with think digits line I which again, best modeling assumption So is mid-single

Operator

from Wells Our next your from go Please Kesten question. question ahead Fargo. with comes Dori

Dori Kesten

franchisees that at So XX% you full trough? the fees their it are said What paying your of today. was

Dom Dragisich

months is, were what our quarter you last closer - in overall. Even and it paying. I XX% can franchisees ago, tell excuse was XX%, about were XX% anywhere our to collecting me, two of we trough, between collections So the I XX% - of

And to so we seeing over are increase month. month continue that

well direction XX% fees, again, in over So full some collections our right paying very much franchise which paying want be mark, and very that are fees. clear, the XX% form are necessarily to of are their I of trending they not but their

Dori Kesten

need see or dividend a to to you I that And in to lead would would Okay. you the guess, purchases? business what return share paying

Patrick Pacious

Sure.

with in our merchandising fourth investments really as own particularly the clear, we've our our and the like. quarter and starts and been And So strategy our making mentioned, brand back we've investing in prototypes very been capabilities around pricing business. we

of a period to opportunities we Second, may when go some through through, disruption you going potential seek opportunity. create as want that acquisition we're and

use of our be would capital. So And we will to excess capital, done there return that we've shareholders. is in second past, then the that as

return recovery be make we'll of with do decisions might regard of to what we sort pace to so in of the our monitoring around the capital. And those sort

So first we making that's the kind which of the already the hierarchy business. back that And one as doing mentioned, of decision is investing in we're do. I

Dori Kesten

describe opportunities external you've And date? growth you would to how seen that

Patrick Pacious

around clarity or Yes, holds. said company I the something we a as future think underwrite nobody like when this, go in the until through asset can past, they an you get what

post do pandemic will at and look what of think world they to provide think like arrive around So think of a sort for and it be opportunities I take will that will clarity out there. may more sellers I process that little go through that bit time the

that new brand If portfolio, either you to could look acquisition at continues or in portfolio our our a be sense tuck-in opportunity. a there certainly for space make white

at us is they then - we come have and sense So owners this look beyond price decide kind them lot into selling opportunities like, of along. right to if that pandemic And those off I post the the I provides that for opportunities. franchising will think recovery further can of as evaluate makes going help platform the potential of we growth or, guess, a what we do as get

Operator

Omer from question. comes question with your Please next ahead from JPMorgan. go Sander Our

Omer Sander

Pat, I appreciate you taking the question.

coming for then? most predominantly it maybe Is these the trend Just one on of over pandemic of are you brands? for just from? conversions and one I how for course - And before competitor conversions, just context, where independent that guess the the did question

Dom Dragisich

you the to our conversions further brands chain and scale from from convert of the with competitor independent majority so obviously the up more are brand. the come get, Yes, to in actually you likely

want boutique affiliate coming our independent, from hotels with so but So our are spends are distribution Ascend primarily strong for that vast Hotel the of majority Collection, independent example, a conversions. channel, to those

are chain more brand down total that Now, more scale, wants the can level. get the actually that a drive traffic, you you at a with convert of in to the weaker system reduce affiliated who be can from hotel likely to slightly the further stronger cost ownership

that at impacts the are it, the our majority some given of lot call of speaking, a fact which also really Econo conversions of regionally South are well. the Quality, let's withstand was from pandemic brands. and that able So kind of Lodge coming converting Rodeway from Overall, of the the South to the as

four So again, development fact optimistic XXXX. from before very talked of our conversions, feel heading quarter we about agreements the about with that some that of we XX% just we that based trend things in to can into maintain the on continue coming

Patrick Pacious

from outperformance. our into And of share they index those want that independent gains, a brand I are outstanding from RevPAR should and it's an from things brands, brand or who they one the be and mean, convert owners are are something into looking highlighted brand expecting that another really really we via why hotel a Choice to are - which something

seen. and made brands the all that have that so really what service encouraged And hoteliers our environment of we're by RevPAR share the worst was select index gains XXXX in

optimistic owners again our is proof going for of So I a future brands. to of to real that value and again, development another driver our that's that think is proposition we be something point believe

Operator

next Dany from is America. ahead question Bank with your a Our from of go follow-up Please Instructions] follow-up. Asad [Operator

Dany Asad

going clear, Sorry, just first expecting XXXX be question. XXXX versus improvement the XXXX to the QX - just here, that the a Company quarter-over-quarter is when dollars? you XXXX, Dom, XXXX RevPAR mentioned sequential quarter of than clarification be in XXXX higher is and in RevPAR quick is QX to expectation

Dom Dragisich

one to quarter expect XX.X% the No, RevPAR, continue that versus you we in quarter in four. in to improve saw the change

see month better clear specifically mid-February. so versus that. tough at a just and at through, take that to than overall to tougher, expect XXXX. we down be look and would March still And when We call you expect see down higher And a What be in XXXX, going a to on it, tend XX.X%. year-to-date be we were comp actually to the demand the January that's we say bit XX% look growth us you very still March, for a in quarter I a - so want but to frankly, take when XXXX that for We is do don't be little expect February, would improvements.

Operator

I'd management and turn floor back closing ladies showing no this like gentlemen, time I'm to over the remarks. questions. any at And additional for to

Patrick Pacious

operator. everyone, time. you, thanks, your Thank for And

that today, recent Hotels the beyond. made, well believe significantly you in milestones And Choice to As investments XXXX going are industry. drove heard we position results in us capitalize on I our some outperformed to achieved XXXX opportunities key and growth and

I So all hope and healthy talk a afternoon. you you again in we'll all great stay Have safe and May. to

Operator

conference you that thank attending. gentlemen, conclude and for Ladies does today's We do call.

disconnect You lines. may now your

Choice Hotels International (CHH) 17 Feb 212020 Q4 Earnings call transcript