Choice Hotels International (CHH) 8 Aug 212021 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to Choice Hotels International Second Quarter 2021 Earnings Call [Operator Instructions]. I will now turn the conference over to Allie Summers, Investor Relations Director for Choice Hotels.

Good morning, and thank you for joining us today.

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

find as and will and second can which our earnings financial Scott section. website of Financial Dom Dragisich, Pat Estate measures referred our joined non-GAAP morning, He'll President, Pacious, our Relations You Real Investor our release, This a speak operating Finance. our results part at reconciliation our to press and the Officer; choicehotels.com is Officer, on in second quarter financial quarter remarks performance. posted Senior Vice our under by be President of and Oaksmith, Executive to Chief XXXX Chief

and Dom's remarks, that, take with And call Pat turn glad be the questions. to I'll your over to Pat. we'll Following

which Choice deliver compete. us. significantly appreciate Thanks, time has join your everyone. we report industry and I'm the Hotels outperformed all strong to that in Allie, pleased across We you continued results segments to that to again and morning, good taking once share gained

respectively. and Our XXXX truly July X% by XX%, achievement. A and June RevPAR exceeded results remarkable approximately levels

compared For XXXX. index gains X.X share against the almost we've to competition as maintained years, RevPAR significant

gives Retaining gains illustrates further the elevated trajectory. in percentage XXXX, us X these index industry index and this and optimism local investments quarter, by our strategic through both points even reported recovers as are our nearly about weekend day revenue compared share working STR. fact, future increased RevPAR as RevPAR to by that as week versus In we our notable broader competitive lift competitors

levels to our simply investments but XXXX not our drive current return rather to levels. to fuel to on performance performance and future new our capitalize and to goal Our is growth long-term

we previously to revenue-intense growth were approach our across prior discussed, the in to As to very drive the more hotel pandemic intentional segments. investing

reduced we pandemic, continue to in key we invest to XXXX in areas. the overall due strategic While spend our

demand importantly, outsized see in growing and each off. positioning, continued role segments, our strategic even to demonstrating. hotel are upscale More paying expanding launching is strengthening today's at greater or We're the of to These while we travel include tools to delivery investments strategic bold continue us that demand. capture in contributed leadership gives an brands our stronger namely the are have and investments What that mid-scale environment, outperformance portfolio. share franchisee opportunity strengthening brands accelerate the a optimism make also enhancing our our to reservation and our systems level, and marketing of rapidly our improving our extended-stay we've guest

I confident demand also in nontraditional to through revenue of will platform as existing can gaming we others. now resorts all-inclusive to segments, come. are continue incremental strategic drive that and us such share that more partnerships We our allowing why portfolio, our our the play we to bolstering the among outline specifically increase travel to are years in capabilities

return and key segments brands First, we to provide investment. in strengthened the that appeal our brands on customer tomorrow existing compelling of launched new to a

portfolio to an seeing in to the high, grew over since The brand in The of recently with pipeline of modern with transformation. similar the of allowed year, our number by new X.X% of by the year-over-year backed quarter. institutional unit provide Everhome versus we domestic extended-stay count quarter the portfolio second Clarion Comfort its the gains second Comfort Suites developers RevPAR with achieving this future on our XXX Our highest best-performing celebrated reach local moved to in portfolio while XXXX, Pointe us interest to and openings brand, its we extended-stay competitors of launched XXX already to newest size five the domestic since the index hotels level this the past year. is of quadruple in rapidly domestic and a capital In segment time, a grew our reinvested than are have upscale same Last hotels. the our strategic the mid-scale investments more for multiunit mid-scale over XXXX, XX we in units segment At the segment, capitalize WoodSpring hotel first over product the experienced portfolio increase of opportunity end its open Suites, segment. the year awaiting industry. franchisees additional fivefold to the has brand. from what U.S. of ending we our conversion with XX hotels half the years

driven Specifically, we've the Cambria and the Collection. by Ascend increased of the growth of upscale end XXXX, by since impressive of number domestic nearly rooms both Hotel XX%

our optimizing tools continue executing to segments. enhance partners brand capabilities in agreements continue following is in value to enhanced These recessions. invest outpacing affiliation strategic these increases high-margin line future our which their resources core to supplement our we drive rate further travel and in pricing rate and significant brand capabilities strategy enable we effectively merchandising prior and delivery, growth drive expanding our recovery rate swiftly platform programs through higher resulted bottom company with new our the proposition by streams. business new to to portfolio to attract currently The guests forward signing average value-added finally, the our gains. we And line daily profitability. also We investments platform franchisees to owners' to Notably, reach and in successful tools, us to propel seen strategic and to results top franchise revenue. fee with and pricing in enabled through expansion strategies achieve the customers further target and levels owners Thanks were of adjacent

consumer calls, a long-term drive anticipating on to prior and As and been we've discussed investments to trends making uptick demographic on them. been significant travel demand, in capitalize our we've

are of revenue of this greater who these trends, also coming business than coming as such they a who the experiencing enabled the made trends, capitalize investments accelerated has us we to the in of but same travel rediscovering longer business as only therefore customers, larger percentage from our on Not demand flexibility quarter The planning in overall average only driving in us domestic our Elite will we're has brands a share brands, trips demand compared Privileges, allowed continue additional segments. contributed Americans capture are stay. as new travel to share an leisure and attract time, that customers from our our outsized and believe retiring affords Diamond At of further benefiting their way and to the our benefiting Choice we've our and who booking to and rise our members, new continued and we destinations travel that year lengths are from key early anywhere, refreshed with from that core in from slightly workers of higher most work for customers, demand see where an to by and propelled in of leisure. for we revenue are when XXXX. which road lengthening historically benefit and windows, pandemic trend to XXXX. revenue the advance, of loyal Specifically, now Americans witnessed increase more the and continued even We know

momentum consumers' runway share wallet larger While trends of to fruition, our to in already coming additional among see capture growth. our continuing a also for expectation travel travelers is with business leisure we

We in recent second existing to brand XXXX. refresh increases only our recover rebounds. family of the with further penetration, not our guest are in as Likewise, have travel well seen month-over-month booking expand and our business to business but customers sequential trends our base and upscale quarter travel quarter-over-quarter positioned we the business Comfort

our system. first long-term close key levels. year to to compared we XXXX. levels in and service a matter update our achieved where reached of of versus confirm our results fact, XXXX in rebounding lead brief of our volumes select The will bookings to half brands their which group fuel as our a As provide XXXX of grow further the rising the steadily focus XX% our strongly segments, now with achieved segments, local our of gains all index segments strategic quarter the RevPAR key I'll on second revenue competitors intensity the in travel

in segment, engine a extended-stay the second expanded over the growth our XX% represents and domestic rooms. hotels of XX year-over-year over quarter now company, Our total by for significant

quarter, second brand's pipeline XXX domestic Suites the the growth. XX% XXXX, And reported WoodSpring to reaching to expand, continues RevPAR hotels. compared For as

expanded hotels portfolio extended-stay open, XX% representing unit year-over-year. domestic nearly Our XX suburban growth to

At percentage index nearly period year-over-year compared XX to continued points experienced Suites, first RevPAR the as growth. in over its local in brand the our year hotels same XX% the to and for levels MainStay time, same unit XX of brand's the of awarded capture domestic portfolio agreements XXXX competitors XXXX. gains in reported brand, extended-stay the exceeded franchise open versus Additionally, half the of mid-scale

advantage. as with especially begins in The a interest projects strategic driving highly and that reaffirm are hotel investments We this in high activity increase rebound. segment pleased to financing cycle-resilient our competitive developer significant interest in and commitment are construction extended-stay a new year-over-year continued developers'

total domestic domestic X/X room portfolio of pipeline. mid-scale total the and Our over transient brands of over half represent our

Comfort the With the to properties to year, the the certainly chain while the family in in future of new for Comfort. refreshed and X construction number the XX% achieved spring, updated percentage identity from agreements hotels than portfolio more the scale by brand conversion highest points Rise quarter a of revealed recently the a as this year-over-year. Specifically, the is second domestic XXXX. & opened In coast, was the coast increasing bright past decade, that upper prototype change new Shine newly brand's half first RevPAR Comfort mid-scale the favorable compared

Collection The the as where half Our brand. including openings properties. industry in the of largest brand XX% the increased by we upscale count The XX%, leads achieved globe. Gaming and domestic National year-over-year to domestic by its year-over-year XXX company, for first open the and grew year impressive Penn the soft record hotels room first growth a count around the for room nearly our quarter, Ascend in marking second domestic expanded portfolio XX the Hotel

segment the upscale for by outperformed RevPAR as addition, Hotels the XX In quarter XXXX. points percentage compared change to Ascend

proof it's our not segment continuing the to about just forward are for Cambria about about improve of brand economics to upscale by active of June across under late their time and to growing I've XX momentum, March hotels with portfolio progress to business our franchise positive the lot since traveling planned the of remainder end with and the franchises. results at the the XX our a us also are unit drive with our Choice's in the open speak projects has And of recovery returning, strengthen owners, to value construction and The outlook additional current continues The prospective These proposition year. country. every units an been our we've I optimistic the recovery Hotels of owners. bond. close always its size for year. XX% the XX pandemic Our opportunity this is its this for upscale had approximately travelers efforts they was been strong, but franchisees relationship

of our we recently that drive we ownership. and reduce competitors helped cost new outperformance with has tool their total top pleased their Specifically, initiatives very that line launched owners pricing several are with versus the introduced

months. strong has of Our value Choice our franchisees contracts. we brands. and by a we first current the half recorded other has of all-time XX% Likewise, new industry-leading in our benefiting Thanks business strong year-over-year. such for powerful and for two awarded booking for over and voluntary With from highest our owners XXX and conversion why our a the enhancements brands period value proposition, it's same by days XX year future throughout increase proprietary channels capabilities, the domestic XX% surprise over delivery. the our proposition to increased seek demand also digital franchise of franchisee and agreements, the are top our XXXX. for our nine we distribution no retention an also continue Aided rate develop of last our new year, experienced the significant In owners, choicehotels.com franchise our demand to franchise half first

and franchise the service that dozen addition, dedicated driving nearly and of our franchise among contracts team the development underrepresented of growing to franchise cultivating and ownership owners. has is in In awarded year diverse number Choice women while owners fully the first hotels minority of half a

extension for platform a our highly which strengthen to revenue-intense Choice. business continued also represents We portfolio,

guests their Our more Privileges increasingly partners earn to at XX our million partners options, opportunity benefit members have booking redeem by on and are points directly travel with engaging than stays with and continuing the Choice to travel travel while our properties our choicehotels.com. additional

are we quarter in loyalty in XXXX seeing our compared to fact, program In as domestic sign-ups increase the an XXXX. second

am proposition that, for We the are named making, our year this to centered for been further continuing position and a will to are Campaign to employers we've by in that growth further equality award-winning to Best to Dom? alike. with our thanks and strategic for one and consecutive closing, a of off than to value over year Place we Rights capitalize is for on our ever work I'm belonging With impressive culture, in the by one diversity, I the performance it Work enhancing shareholders our to for being score stronger hand partnerships. I owners ninth best company outsized a strategic and equity opportunities pay Index strengthening culture places row. committed platform the CFO. earning by our continue that say second term, disabilities, will for Forbes, on the of the to best as a and that diversity the establish investments year, the to Equality the Disability LGBTQ we're long confident people the proud In recognized. now new portfolio This perfect around over Human

quarter your morning, hope Throughout everyone. insights provide families ahead. liquidity and you our results second update the I'd additional and profile allocation all thoughts remarks are Today, share provide the road quarter the and we pandemic. as well. more trends and in by I comparisons on our meaningful to good are to impacted XXXX, financial my you like capital results, Pat, and on performance I'll around year's Thanks, for were outlook believe today, prior the significantly analyzing which RevPAR our

XXXX, to press comparison our please release. refer to For

marketing quarter Adjusted second discipline. excluding by the period compared increased fees, revenues, For and performance X% cost of XXXX million, $XXX.X as improving continued reservation to and same driven million. RevPAR $XXX.X system to EBITDA XXXX, total were

a expanded period XX%, result, earnings EBITDA adjusted quarter, X% $X.XX were to Our X% the margin same adjusted of the as our XXXX. versus for per an second increase. And a share increase

in their look proposition closer The source rate. three provide key significant Let's rate franchise our our revenue proven growth, beginning our brands remains points levers X% compared desire our with the proposition XXXX royalty again X period the our royalty driven provide to once effective the The second growing to royalty now the of owners. which a quarter, continued XXXX, exceeded rate strengthening pipeline. for take revenue basis of the we effective of a a our at be franchisees, company's and consecutive quarter with second to value by continued domestic the affiliated reflection same continued our increases of is for value we attractive to

for while reduce this year seek revenues trajectory XXXX top owners maintain of return expect historical on their of of line them maximize growth We ownership strong full capabilities helping proven investment. and lever Choice to as Hotels' total their to delivering hotels cost the

continue the versus scale to to which segments domestic system-wide XXXX. the exceed industry second nearly by XX Our points the percentage while only compete the as reported same XXXX, percentage XXXX. as of X% by occupancy time, compared outperformed quarter the X XX second STR we quarter basis in RevPAR chain At quarter, for points from increased declining by our by results primary overall points same

quarter. X% increase trends a our approximately X%, proud results improving and nearly June rate XXXX performance daily to into RevPAR exceeded The percentage by average in continued occupancy. report levels X third have a that in by driven point increase We are RevPAR of the

Our July versus of RevPAR growth XXXX average levels by of approximately of and driven levels. XX% performance was XX% stronger increase significantly an XX%, occupancy rate daily with

mid-scale, economy month-over-month for optimism of for continued acceleration across us RevPAR surpassed pre-pandemic all XXXX And levels. of trends July fact, give we upper In upscale, These mid-scale the extended-stay, segments. the our our saw year. in performance segments and remainder all

we've As the across competitors. continue These the discussed made off. the outperformance upscale, strategy to respective focused extended-stay scales and brand revenue-intense, local driving and our industry chain help are us investments we've achieve strategic drove on more in our versus past, long value and mid-scale growth our higher paying segments material change RevPAR segments, against gains and

its RevPAR our portfolio nearly when XX outperformed the index Specifically, XXXX, compared increased relative its quarter points. to upscale industry's by second local to set change percentage competitive RevPAR and

year-over-year, in RevPAR by by in driven upper XX% segments Our of increase for change portfolio change daily outperformed by mid-scale segment extended-stay X% points. finally, X quarter points. grew average XX% And a RevPAR levels XX the rate. the the than exceeded by more second The and RevPAR percentage our and portfolio percentage occupancy industry's mid-scale these

just highlight of the also quarter impressive a in XXXX. our compared brands for as performance me period second Let the same to achievements few

Our rate WoodSpring increase RevPAR and reported an daily rate. average XX% XX% experiencing brand X% occupancy average nearly in a nearly reaching growth, of

rate in mainly by their competitors rate. Ascend grew June increase against by versus daily average their RevPAR grew finally, average percentage rate the Hotels brand's in X%, increase local growth its gains XX share recorded brand percentage X.X% RevPAR drove gains an XX% RevPAR local of the and And points. Hotels nearly competitors, daily RevPAR X% over extended-stay nearly points Cambria our by while a to achieved index to our XX Quality, percentage suburban rate quarter, portfolio, largest franchisees' driven driven increase points, daily grow Across to to the capabilities by were and to overall over XXXX, driven by index daily local we occupancy system, average thanks able by points. our continued the investments rate our X to index as our RevPAR optimization our ability our and improved from specifically, increase and our pricing percentage compared More both X Choice nearly average for franchisees. occupancy competitors prior against gains.

observed we first intense exceeded half conversion of the number quarter continue of and grow overall mid-scale for the Across and respectively, Finally, increasing XXXX by unit of first domestic to in levels our our system the the the increasing and franchise brands the openings year-over-year, growth, X.X% upscale, and through from revenue year. size more hotels and XXXX. X.X% the segments, extended-stay growth of rate we rooms stronger

For Aided full the year and by we the momentum to of and and unit executed in more expect XXXX of our to X%. strong the outperformance, trend unit expect proposition X% value brands gain to domestic with accelerate growth intense X/X month our versus for growth year of the continue. overall continue Furthermore, XXXX, since demand we continue revenue range segments more than our the total of the June. beginning agreements between to

the In fundamentals and exceeded of domestic which contracts, the for long-term extended-stay quarter in quarter nearly XX% lodging half activity first levels our new Nearly time, developers domestic the by increasingly construction fact, agreements our of and XX%, XX% were the increased total throughout industry. franchise of development the year-over-year. second by for franchise about At same awarded second respectively. contracts year the XX% optimistic in over upscale are XXXX the

of June first capital provide like alone. continued executed in a about new In few half than allocation brands liquidity profile of to fact, the with to and more demand update. I'd total say a for now the construction accelerate contracts throughout new words year half our construction our the

million company. capacity the strong for quarter results approximately to have the $XXX end XXXX, the its even stronger and revolving Our had of facility. borrowing second in liquidity through available led company cash an credit position At

XX% million Xx pleased flow report levels second Xx. XXXX. of $XXX.X within quarter the target quarter XXXX, also remain leverage to Today, debt-to-EBITDA versus We from a increase operations our are second gross of for our cash well to of range

form share strong to dividend stock. continued impressive returned the commitment XXXX, and cash These our we to combined and for led back dividends actions reinstate and shareholder in levels Our of our excess returning of with July quarterly pre-pandemic continuing capital generate the value our repurchase long-term repurchases our at our cash the us our the reflect to June results, confidence to and in to common million program. our optimism shareholders and future level over resume In of $XX shareholders. driving

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

thoughts Before like some closing, I'd what on offer lies to ahead.

RevPAR single to While we not high today, mid- we currently to XXXX. grow guidance providing expect in the as are quarter detailed compared digits the to third

the in half to approaching EBITDA Assuming see economic expect RevPAR we trends recovery the of levels, elevated and broader investments our potential consumer XXXX year. remains sentiment and even back the XXXX with continue, incremental adjusted

recent June by investments consumer view our is broader remainder beyond. domestic growth continued performance, July XXXX support and the our RevPAR reinforced financial in and to Our strong results for year-to-date of and macro trends our and

the our call. to will during The make further would We disciplined and answer we earnings with capitalize resilient COVID-XX At impact allocation continue next strategic help of returns business strategy I and we'll Operator? growth will for provide that business, and to made evaluate our approach sheet us balance us years this coupled continue confident come. time, allow ambitious plan. drive to our be our and execute questions. November on in will long-term that updates model to remain strong In investments will any further across happy capital and to the growth and closing, opportunities have Pat we outsized on

first Our of Asad comes America. with Instructions] [Operator Dany from question Bank

portfolio wanted So on I off Choice pretty a about question so the effectively, been right? gaining start were how much -- significant. asking talking you And share, just first, has to it's just by

how us see markets? certain do kind driven certain And they is? sustainable Are that Are help they -- scales? think like in just those the gains. chain of bigger you So big can you by

are to consumer female younger already pickup skews our look -- seeing from XXXX base, coming broad-based well. that XX levels. and We're that is it's it's regions. mean, that all very traveler, a of also guests When Dany, all more as brands a traveler back of a the across traveler at older, I our across we our

region really variety And or single of ways that's really this that's it's It's we look And brand to of why this. single as sort driving so -- in a really a there broad-based. happening. a isn't at

As pricing invested over that helping last driver find tools, I a mentioned, did And that really year out our as those we've there. merchandising in our years, the when of and tools really all customers several and well this us It's promotion are last are significant that. we demand was low.

the are So we're a see investments investments that things we are And our Comfort brand, secondly, refreshing that again in those brand, in are helping. Comfort we made the made and that we lot driving in particular. the in seeing And pickup it. the on brands, quality particular, the of

we it Comfort. you were at cleaning if look up Finally, pre-pandemic,

So as that more the renovation. there commission was lot of going a brand were through out rooms

for forward. So that we as of share again, we're that's giving move to us additional going a the optimism take bigger size

second we of that Dany, gain basis. points speaking, report just a that quarter, in percentage local the X that quantitatively actually RPI achieved we on

it's products like-for-like markets. within So like-for-like

in And you look our had so the material talked prepared every about, and we service take select RPI one gains. when of remarks, brands -- a

And percentage seeing points. the across X entire it averages again, it about to out are we portfolio. that So

with about back XXXX And year. incremental prepared Dom, comments just you levels approaching ended this half investments EBITDA of the even talking in with your

just you that can bit. So unpack little a

of types Is what's you it driving And that? are first your Is then Are technology? investments? what going And these is First, adding or on corporate it of investment? it of on to terms these people development like in in new be expense? all, brands? on the more cadence of teams kind of

strength outperformance the driven a was Obviously, top obviously, RevPAR to outsized take the continuing at it, both results. we're you significant when those So line. look EBITDA by see on

you that call XXXX. at I'd to in when will we continue single So grow, QX the it, take to RevPAR high QX, digits mid- a look guided had versus

look a year-to-date, at take RevPAR get level. XXXX you're within you when starting So to your

a XXXX moderate the to of as So expect see in and expecting RevPAR to see not to QX that half some potentially versus percentage of that versus we we expect QX, outperformance continue. moderate points to it get enter RevPAR or -- strength somewhat. in little you Obviously, begins of bit to gains travel RevPAR We're the see XX cetera. into back year we these et as leisure

do that So that continued the be ballpark obviously, were XX%. XX% in merit XX% down it in an were going take right That was whatnot. to SG&A to perspective, to like things around at expect the had somewhere From at you normalized increase look When the a strength SG&A in a see savings guided previously obviously, we and that line. QX, includes, we top we where apples-to-apples.

certainly we're as So reported well. on guidance previously that basis we an that within apples-to-apples

So stronger the reality is we're environment in now. much a demand

to sacrifice continue margin little half we when And certainly the to growth back we're a of so much to And the during ultimately to those in gains. of bit outsized looking willing we're year, at going leads like if did outsized even the it invest. we're share pandemic,

things when capital those the tools be proposition opportunities, those to then to to in continuing brand continuing it growth invest corporate as with still margin -- we We I or that think those know investments this would you so. SG&A XX% or coupled some year those about more investments, certainly some And corporate and of make means make this about you when continue to to it margin, management types investments. to it pertains functions this would efficient. pre-pandemic value is demand of quarter. that about period revenue the you certainly those to So and continuing the are XX% the at willing required improve do think just levels. if has see investments. reason were operated for always And margin company But higher ultimately, in the that,

with next question comes UBS. from Robin Our Farley

lower or strong I difference EPS versus timing a just wanted and is sure whether then the clarify dynamics Or if great And you what make X% the QX just that to and the EBITDA issue? that just EPS such 'XX growth do of the revenues -- your growth? up system the X%. I I made marketing EBITDA, of the to wonder to something. a could sort understand of had relative with

So and run and reservation. EPS, EBITDA adjusted when we we surpluses and report the Obviously, can deficits. excluding adjusted that the marketing

So just out for comparable numbers. we purposes, competitors of of the much that like several do, adjust our

had Robin, EBITDA So the And would in, a to today margin, outperformance. we're a it with X% we levels, quoting more coupled the I we're in we is were corporate committed in SG&A a tell efficient have and down is we're what EBITDA when line at the that's XX% XX% quarter, again, than higher significant significant reduction those you that for the a coming back XXXX with RevPAR you to, XXXX. when operating business

again, as look versus we through. that continuing see margin RevPAR continue ahead those outsized so and gains you XXXX, into flow to we're QX, And to see the

the taxable Now flows where versus had reason obviously, as to expected. was And the Taxes we that for may line. income EPS on up for the our been bottom that up quarter. the through side, have is slightly well significantly

in unusual EBITDA the In that taxes was else wouldn't the EPS do kind in up. Is other about quarter that mentioned line? what you from was there flow-through -- slightly But that to anything same general, dynamic words, forward expect periods? of create you there

expect reality it's mean, future. EBITDA would to is No, we the from same the clean to and pretty quarter, pretty a in and normalized see the I EPS flow-through

Next comes from Wells with Dori Kesten Fargo. question

return trend current year-over-year to your signings, your when growth versus would in you about pipeline new think openings, to contraction? renewals, expect you If its

the Dori, increase I obviously, of right mean, conversion contracts into when velocity increases. our with our the those in now, at pipeline pipeline, move the conversions we we're doing, look

to our So six months. pipeline the average in stays conversion three from anywhere

were If openings -- quarter. or and XX% about you within we sold of our look actually open in had rather, the at QX, X%

quarter-over-quarter up So they never in even a even view. show

I on at have growth. to sales doing and as to The pipeline contracts our our the normal pandemic look a do we those go been so we other to long-term fuel at planning move as forward. markets and the out And are expect fill do thing not that we've mean those the to we what opportunity that to team the I that owners are can you doing have that to is we what basis as moving we with remove QX been look forward over developers again. projects the reengage developers, going since no financed to little lenders talk and have get sort when X.X and then, longer probably begin taking itself of they a their and to start reverse started, forward. been ago move out years their planning would that's contracts where by

a little particularly are that on lot coming a financing that's But segment. depends hotel in we extended So at. our looking of back, it seeing, the of we're which bit stay assumption

look about of pipeline, construction one you a under conversion of hotel, when our stages advanced is at broadly a -- pipe or XX% is of Just planning. that speaking, planning hotel an that

as and we and about monitor that volumes it's end XX%, our well. the At have net that's good on our growth, pipe move in So changing that sure make in it excited seeing the really for contracts feel a of we contract what that to unit forward. we're closely we and day, new the additional going outlook application we're by uptick we're not

at as So our unit about term. net of it that's how contributes long pipeline looking kind how to growth in it the and we're think the we

growth be historically? consider have net hotels many when think And coming net to been terminations headwind the that about I how you -- going have, X% to relatively a higher-end to or system into I X% there a Is reason this believe level your properties guess, and refreshed historically, rooms lower you unit growth. have versus been forward should

cleanup. Comfort the with finished we're certainly, Well,

back last back of the the get. see comfortable interest of in franchisees levels was PPP lowering our a historical The to moving were the see four financial health those forbearance loans, cost we're with, them franchisee base other helping if cost terminations. But is their areas of really now So P&L. our look savings our they or with very driver feel And on increased we're years, to able forward that right which we're total that a that key you healthy situation. not We and going terminations. over to of five ownership

So above not levels. we anticipate would terminations historical anything

transient a our take vast the trending the terminations right the from take those the at you mean, of Dori, at mark. terminations coming are see a today, exhibits, that closer I X% look you actually reality look are is majority economy you trending around where when when And they're brands. that

roadway but in obviously, extended-stay it's that growth, really hot so economy terms of And very catalog in much and unit particular. red

this to story. And goes so revenue again, intensity back that

and of continuing And add made it pipeline our on segments. -- units. then seeing more the you're So those on up of that vast side we're majority in pipeline is less the you're losing even those to some termination units, side, and more revenue-intense of revenue-intense the revenue-intense the

close focused or are the that So of those XX% again, say revenue-intense I really pipeline to would we is on. segments so

comes Our with Bellisario Michael next from question Baird.

size? And might same during provide can updated in that along What system Just the then sequential went details What came the thoughts net unit out? you occur? lines, more any when inflection decline those on in on the maybe quarter? growth some

trends. So to very certainly when about portfolio-wide. We're domestic see unit growth, look you the take at a optimistic continuing growth Michael, those

is economy the above Excluding segment, transient growth your rooms X%.

line were dealing those in accelerating to broader The that common especially a versus with. driven last that And really where with lot closures net international. was with portfolio where unit more the we has were certainly we and specifically were year. impact So do were in historical growth COVID frankly, disproportionate trends in Obviously, Europe. in the Europe, that hotel of in had decline

necessarily were this marginal in the not at looked that felt term to also profitable. be portfolio We opportunity European terminate an to long the some as products lower-performing from or we going

of a couple multipacks profitability. lower So with

XXXX significant trend to and continue that expect see we internationally so but QX continue into pickup and to in then QX And beyond. this of some speaking, anticipate year

maybe franchisee platform? at the seeing franchisee bigger the new the existing the franchisees base on when What's Or and look are makeup today, And your the least seeing are you hotel then new base more there coming incremental a of new first-time a the signings or the you Choice you at bit maybe to owners join platform? franchisee, little picture, getting concentrated?

I and in sell really our at QX, the we're owners. some seeing in It's segment. to about contracts investors that probably of as of owners. -- existing well, now new true look And extended-stay it's by we driven Historically, our the seeing X/X that's we're -- been QX of X/X Yes. interesting. would I say know being if last in we

capital-backed, I owners. multiunit As mentioned, are institutional these more

So owners, continuing particularly opportunity for we us. means hadn't of who seeing in a have developing, are we our who we're our and to a extended-stay are is higher seen percentage a before think of segment, is category the great It also be again, existing I which customers to tailwind a real back in future. us attracting going for new franchisees, build new are hotels, which come which

would platform? And those for new differently? franchisees, any it existing their been an differently than if asking are they are the joining Or anything they have contracts were franchisee structured

are mean, I contracts fairly franchise market. I think our

offering to we a A new has are the our what owners new offering people franchise start. terms. to are completely. industry fairly the new we're are and So the with new what owners for place been great to owner that existing always consistent Choice regard industry is to who

dealing industry. the are to with teams out Our or to Choice area owners platform used online training in field opening and new our the University directors

the quarters, years, is which a actually into as real that's the I industry. we've it's And we last and of So in couple many always that, helped are a seeing had new muscle people get mentioned positive. so that for

Patrick Our from Truist. next Scholes question with comes

start we in very out figure what hotels, thank how changing -- to you trends information and customer talking off, having at the First is thoughts and about changing for try of the like habits helpful. world as certainly that is

questions at all-time my share by How your either dividends will stock or think of being here? here. in be to on repurchases at -- or balance in much priority is year-end high you do Certainly, of in sheet an pretty pre-COVID light about the the least Moving shape. near

think as and best to goes allocation really its capital our of before, times many mentioned highest Well, we've the use. I

And our pandemic, running We in continue said, as significant invest continue exciting and Dom to a effectively it, our continue talking our the lower opportunity their hotels been to portfolio. and market so as acquisition have one to through amount I to segments invest. prior been internal about. continues proposition. cost of some We're of value these start more our of our up of going investing product go to to invested and we to well. will pricing revenue-intense We've grow in as we for us cost I with always investments opportunities the set owners customer and really, and see to product as help There's we

continue. So those investments to are going

market be a view share repurchases, really repurchases, and our for factor for if a it's and there We're way. brand are in improve our opportunities dislocation in We're grow not if with a when opportunistic of it ability we way. they look the shareholders. to criteria market. our intrinsic going much our economics in our When on dividends share in more will see of for M&A franchisee a the the value, to -- fit we ability the unit from market programmatic around out the we're to Secondly, and they gets in to the

a policy, pre-COVID our to the long-term current of dividend our And the We internal on dividend function is the growth And so really our then at we've that of feel how levels. returned perform our it view capital markets and equity. yield. comfortable

about in business. returning those kind think you about down how X capital think to that's well it our so shareholders it walk the as as of how we as and we And back steps investing

only at within basis, basis, I are a bit fact The sitting we levels look is just net a add well. on to that feel we would a Xx good very leverage still, X.Xx. where the it on are when little of as that on well thing X you're those Obviously, cash given about you we're gross at

we priorities, pull of the look those one do levels. you think or, continue the pay opinion. reality in pre-pandemic to when ability to at that not when each the so every is my those to you're at obviously, of it's dividend an I have either levers, And those going

especially Pat's priority mistake, I the But that point, play think forward. think shareholders to to to make I going offense, no recovery again, back continue period will critical. so ability in returning still capital to this be is a And

questions. X a with I use there. to and what more have Certainly, having choose pick problem high-class to

one ballpark what about RevPAR is, to quarter press was? us is you number think the do I XXXX. fact, can you you digits look I don't comparable $XX, the years first As from a back release that in mid- grow we two press RevPAR the to it of? the, number that in versus have release, third single growing off Can ago, high number talked Or was The in tell use? but comparable

quarter. the third Well, me let talk about and broadly just speak

is As at July quarter start to off XX%. strong mentioned, plus we the in and the was very a

have to We it location fell a July had regards of be we an as of careful, had to and the week. how within extra the July favorable also Xth it, in Saturday

quarter. in and So And the those we And strong lesser the September, look are -- about continued going a August and elevated as business. month. we it's we're as an calendar, -- September, first into August that to impact are in we already you month impacts the slightly of of two to the going saw seeing strength have a than think

your I think Dom number. on is check trying to

number Patrick. is And $XX.XX, the

that perspective, impact And temporary an so of make out on availability did full service. methodology reporting have and given same actually a the to room ensuring full apples-to-apples. COVID sure again, wanted that of that change rooms in we that to were We methodology fact just on room terms availability be

So the number is $XX.

Cambrias to the to subsequently the over going just to about sure of coming year? the drivers that line revenue we're had up few the growth think service. owned quite past And model that, due because ago I I the that then in a out you hotel of in new that last significantly. year want in -- Or the quarter, in the When forward? about was hotels quarter, a way any lastly, make thinking obviously, was of quite right

an it's really airport is location hotel. hotels. the LAX No, five the of

type doing traveler, that who in well obviously, quite was significantly there one the was is and what's those and and flying, of are going on markets. Nashville with impacted. now Orleans there So New out when Houston nobody And

So really it's strong and last were they're really why year. things location-driven, this lower as to why year

Katz from David Our [Operator Instructions] with question next comes Jefferies.

capital how marketplace you are talk And the out putting is? pursuits because peers you've there well? to as hear to conversions conversion, it competitive we which how Can be helpful. the And there? large. Any discussed somewhat color I think about much way I just number, asking strikingly of wanted certainly nice about that's proposition is go people just I suppose would talking back into value a the

are David, certain I competitors -- and to nothing brands. think, conversions to us, new it's it and new some may be

what I and Pointe, So about of with added. standpoint of to all X/X we a And XXX% a and in the construction if And contracts brands. essentially that's new these our significant brand you're build quarter being we new Roadway, not take the over. Quality, conversion with brands. Comfort Inn conversions. amount to X/X going have, would the about and there's start brands are conversions, that hurdles, majority saw other when from the all Clarion of look internal get of case you then you sudden at a say, have That's is

that so individual that aligned engine runs improvement performance those here with those an have -- brand standards. are plans we through that And

are marketplace. chains in we're constrained And a to so We plan. how what when values the know the a we this supply understand what and like know owners, time in for improvement and to what particularly with in property engage guest looking needs be

your complexity regular a there's in brands, into you're So on basis. not of conversion if driving a lot doing it

we is this of conversions. And do during even so during I think more that's we aspect conversions; do times, times, bad one good

on. an of So it. switch always-on turn think we It's to the And it's something process. have that's I not part

to the is it Dom really Pointe as where last discussed, go isn't second and it wasn't where have Clarion thing is back Suburban, accelerating new today. and from MainStay downturn, today. standpoint the are Ascend you contracts. if The of is, I

our additional conversion portfolio So the in that not ago, were XX we years brands now. there of have really part are that

owners, with a one bring and it negotiation to they need over providing with what do strength. their So to into brands us it's it And when of existing hotels to our engage standards. really that up bring we it's

high cost independent value the are that more for in a hotel everything owner high things those Certainly of lower robust weaker is system, to a help also we be success their business can profitability. of is help pay reduction of trying piece delivery an looking X,XXX costs, proposition. improve brand franchisee customer might high them a hotels an platform second to better that labor that from cost a and because can that are for have it a for and engine owner all cost we that training is insurance acquisition, The of then an we independent -- costs,

downturn and drive really the we've that company, for that's So safe XX a had that been for through conversion and our story as a not to up I owners capability, always last profitability showing higher. having but their great harbor, really now the months in can continue looking just think company a are

up David, showing you it's numbers of year. as in well when this first half really look at the the

XXXX the conversion that probably Your are year-over-year, is agreements up XX% best I and not know comp.

So XX% today. even in contracts of when as look you conversion take the a well, approaching XXXX your in that even environment are levels we're

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

you a Have Thank for we'll stay great the safe, and fall. I you you, day. everyone, in all to this stay hope operator, morning. thanks, time your again healthy, again, talk and

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

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