Choice Hotels International (CHH) 20 Feb 242023 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to Choice Hotels International's Fourth Quarter 2023 Earnings Call. [Operator Instructions] I will now turn the conference over to Allie Summers, Investor Relations Senior 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. information materially should indicated XX-Q, circumstances. reflect you consult other obligation filings update differ statements, the XX-K publicly should may factors to and SEC you risk events we speak subsequent and the for today's consider. These results forward-looking from company to as in those or forward-looking and affecting statements Actual the important of that date, about them company's no Forms undertake

our year non-GAAP fourth at remarks Scott our is performance year of Pat measures press section. This Investor quarter and can referred Oaksmith, our Relations results our Pacious, our President reconciliation You our highlights; choicehotels.com find outlook. Officer, which XXXX and financial in financial as fourth to a Chief website release, the full our Executive will discuss on posted Officer, Financial quarter XXXX while Chief morning, operating of under and part and full will to speak earnings

today Dragisich, Officer. Executive Joining us Operations Dom call Brand President, Global for the of also Chief and Vice is portion Q&A the

we'll remarks, prepared the your Pat. to over glad that, I'll our Following turn questions. And call to answer with be

EBITDA royalties growth created morning, guidance program, our to new with geographic appreciate delivered XXXX, of a quarter significantly EBITDA acceleration growth guidance in XX% a through to superior discussing our everyone. Radisson $XXX.X and completion fourth gives with and our which unlocked platform in adjusted captured projected XXXX, taking adjusted increase led generate of conversion the performance of a our range. I This the rapid hotels by in you capability, confidence to function unit. In momentum, positive expectations, full unit and year the as us value begin XXXX growth adjusted Wyndham time million, acquire that our capabilities, unlock in hotel our increase the it our Hotels we XX% financial ahead record in drove Allie, you, of accelerating proposal drivers impressive supported then higher current Resorts strategy will growth have to Thank current rewards in adding reach, top underpin what the increased expected for discuss and the through today and join of and by of our end EPS we integration. good Americas our successful step combination of that combined expanded our was XXXX and our is $X.XX, guests unit by our significant results per XX% We to with us. the the see shareholders, franchisees We is Wyndham. year & growth. we our year-over-year value business that growth confidence ability we achieving because in exceeded year-over-year

Our consistent of than growth engine, the year adjusted continues growth delivering This after XXXX our our supported higher XXXX. EBITDA than in XX% full distinct strategy, drove year higher year and track by best-in-class prior profitability franchising year. double-digit record XX% business

we XXXX the which fueled of year our of is growth demonstrate to to per made company leveraging the while we guidance on in range. Choice's business franchisees' unit the the million as that grow this positioned we've hotels communicated to key previously outlook, the our We our royalties build In improve franchise higher performance and with have expect the grow successful at adjusted in investments generate $XXX beyond EBITDA profitability. with the business midpoint systems continue XXXX model. versatility our to our strategies, to further execution line our full by of strong

generate distinct our EBITDA advantage portfolio with higher uniquely first, than We and the for through most development in of openings geographic further contribution hotels our ancillary outsized have our that year; driving the new growth the These other of our value second, of finally, velocity growth we royalties Americas. which fourth, our capabilities bolstering doubled opportunities; focus today's multiple than environment; each platform conversion hotel best-in-class to our the Radisson internationally, hotel include average integration following: more through creating increasing and contributing capability, brand is growth strategic recently, where third, partnerships successful revenue through per brand unit; expanding drivers on performance. the businesses, our a

our revenue-intense growth mix of ago, brands. percentage more have hotels of unit distinct and results of and embarked points, comprise revenue-generating years continues strategy we to they portfolio. Since deliver our our now total increased domestic franchise focusing strategy attractiveness enhances higher XX% units by Our on X the business hotel our of X we on our

this our we XXXX in growth revenue-intense future particular, legacy of revenue-intense the we in expect and to year-over-year. evident continue more mix In rooms our new these are unit exceeded to accretive we to positive earnings coming Choice as the Importantly, a more These shift grow franchises key by X.X% guidance. grew driver our across years. number domestic growth. This of trend brands was are

time, XXX per hotels openings added in average, are openings at a franchisee pace. contributed hotels the we hotel impressive executed development core greater year. environment, In move our hotel support, domestic this quarter, franchise we within to conversion and Importantly, brand, than hotels Of we all opened conversion pipeline. XX% week, to openings. In higher we fourth conversion generated speed-to-market same domestic exiting in Through current XXX the with openings At impact. we on has the best-in-class X competency in XX% XXXX, the increase brand. nearly capability the we an a new averaged XXXX quickly agreements and year-over-year, our new superior for even royalty the revenue the same executed hotel an through the a able of in hotel projects process best-in-class

in driver a We XXXX growth core competency as continue brands. our this key choose developers also expect to be to

pipeline we rooms by global year-over-year the Specifically, XX% hotels XX% as fourth for our grew end quarter-over-quarter. and conversion quarter, of the of

In agreements X were the awarded domestic XX% addition, in conversion of XXXX hotels.

that our average, than to value in for Xx ongoing is economy pleased proposition we system. upscale success each our the We franchise provide creating owners, with best-in-class commitment our revenue given on our brand, Radisson conversion a prospects strengthening by success to investments portfolio. royalty more franchisee our Fueling generates, are the significant hotel supported especially

and program program In fact, by growth attractive, portfolio our rewards more the over contribution in rewards alone, exclusive being the the nearly and tripled than franchisees grew XX%. Thanks X% by increased enrollments online the by XX% to of past Radisson Americas to decade, integration. have are XXXX grew more we number direct members our of And rewards those program new organically numbers we year-over-year. our

our existing partnerships. with broader of we are hotels, Additionally, portfolio strategic strengthening our

is owners example, seen annually to franchisee deliver chains with brands AAA's voluntary of choose XX% became North across has increasing partnership preferred franchisees. AAA supplier This network more paid in first America. Existing a XX XX%. attractive, hotel members retention all the recognize decade, For of distribution our given value that added our been we our that business Choice hotel for nights million of remain which in to as industry-leading rate the room particularly in widens account and to

equity of grow returning J.D. X guest with our our as upscale #X in WoodSpring existing brands continue new extended-stay XXXX is satisfaction: Hotels was agreements the Our or economy their Suites Hotels a of category ranked Cambria franchisees year fastest-growing where the construction Power and in in Choice choose with to Furthermore, half to business elevating. brand owners. franchise year awarded the also were last category.

training past this franchisees we our deliver best-in-class year, Additionally, our exceptional our successfully satisfaction guest to scores improved and guest experiences. tools while solutions to leverage continue

companies We additional with years. have Choice's we region. a Turning opportunity footprint we the footprint market our now that Scandinavian leading across gain international company in in as region, multiple term. further most significant In chain. the Spain, coming business. realize global EBITDA fellow extended of share an XX-year growth distribution for unit largest additional pure-play master to the franchiser. we agreement of agreement for And for believe signed expanded secured hotel development with the its rights markets. In double partnership was successful XXXX France, Choice in international its the a will Choice's franchise we international and a Australia, a acquired one franchise one years In the hotel to an

Moving on to our platform business.

brands portfolio its quality exceeded starting only our our who to We cards. account new launch, such and partners, with drives pleased spend. The business and recent Xx revenues to it to card the loyalty Since continue nonrewards our it are efforts as have very is our gives as our past. co-brand stay revenue based with This traction guests brands cards program on our also members often ancillary our is partnership on travel expand resonating brands ability as draw given very evolving encouraged the average, GrubHub. credit with opportunities. new growth with delivers long-term considered is to us gaining to expectations spend. we're current not with base the that has and higher members, blue-chip attract not sign-ups us, customer as and credit rewards a cardholder as on in national tailwind, that partnership in new Tesla by the guests co-brand This but more strategic of we're and example is One the

and brand, faster-than-anticipated existing which successful the outperformed with process integration. integration which is the our In the pleased we now first in the We seamless Radisson hotels, our step Radisson underwritten XXXX, are very Americas meaningfully of The of performance successful enhanced is complete. expectations. any Americas acquisition

costs a franchisees. The over Inn the particularly was performance already growth and brand for Radisson the rates, of digital lowering the of by integration upon results domestic attracting booking Suites development hotel digital XX%. which XX% brand, & since integration year-over-year bookings our new Specifically, is driven turn channels conversion in lift higher through the the over Country in direct business we customer part traffic for This which added year-end, acquisition commitments. had grew strong by benefit in increase drove digital for with in Americas significant

by agreements business were for underlined in XXXX in alone. & is those RevPAR new that further generated were Radisson in the development its for executed Americas brand as domestic agreements over the XX The by December fact, is franchise by pace In years. Country of Inn Radisson awarded And performance. X the excitement unit brand the most half the Suites of accelerating

owners third-party a of time and legacy high operating distribution improved negotiating partner. Americas with costs, rates. interest overall for has same critical the outperforming costs and percentage been For Radisson versus achieving XXXX, the share year-over-year, distribution by approximately full competitors. At costs able index the gains brand RevPAR also RevPAR grew lower the segment upscale franchise labor helped This terms STR upscale in by franchisees year Radisson lower we've a X is Choice key which to time, and points X%

thanks our annual have Additionally, technologies, strategic state-of-the-art we in original our proprietary by X%. expertise achieved and to our exceeding million integration $XX investments over target synergies, in recurring

moving now creating Radisson phase region. in the are acquisition into the growing of from value by the We the Americas Americas second portfolio

franchisee interest across we to that compelling unique is Now success the combined our in franchisee see are and starting in place, momentum model portfolio.

Privileges acquisition now incremental higher expanded our our our have providing franchisees, rewards profile and As which return discussed, earnings the more often our in them more incentives opened the we and across and network function who and This geographic reach XX customer opportunity, revenue options it guests step translates a card more them with acquisition lower Choice of region benefits have program. We our the combination through a giving change Americas with to program, for has book more margins of Americas million franchisees. directly costs extended new nonmembers, than as growth credit meaningfully our business, the size drive co-brand created Choice our membership increased enhanced streams. members our by in Radisson all our

Choice's anticipate unlock combination Radisson have franchisee on the neither hotel our believe of incremental solutions on to enhanced own. profitability target the its would these through ability we up as Americas hotels as Additionally, leverage we to value to XX% level. We accomplished fully drive tools, savings start that proven profitability have

higher for to to ability our hotels per growth. opportunity combination proposal accelerate and acquire capabilities hotel proposed remain additional value driven At to we the our our all this franchisees compelling of in record with Wyndham, X our We improving strategy and Wyndham this generate combination. Wyndham's combination, drive committed for core, achievement combined given pro-competitive stakeholders. an delivery to of by acquiring with the value are synergies to in and we natural fit the the with our of today and that successful is value coming offers creation to with our portfolio demonstrated compelling company's our Wyndham of expertise shareholders great its business replicate regard realize unit. With meaningfully confident direct growing royalties It together companies track a as brands, integrating the to enhance

Importantly, front. given our that can confident complete the regulatory leverage on we balance well-positioned the are and continued sheet we transaction, low progress

our Wyndham's benefits. strategy. shareholders, execution substantial for proposal Choice shareholders provides stand-alone For financial would without premium and value the with Wyndham's a shares associated their strategic receive significant and immediate risk

represents in million the success would a Importantly, This believe run combined that In Both value management. The historically compelling businesses leverage value for to generate is due rate shareholders is expected the balance to part more the of to best-in-class never The profile unlock. and to significant network. prudent incremental COVID proposal of model in than achieved our of that billion Wyndham's has Choice's available synergies our $XXX multiple trades Wyndham by to a expected reduce $X rapidly for annual shareholders. level, generate consideration at in still we growth and would shareholders creation franchisee value cash Choice investing participate asset-light sheet bringing have consistently flow growth. strong sets combination while Choice's be we the Wyndham unlocked disruptions. attractive contrast, opportunity for an absent Wyndham's representing company from would

continuing Regarding as next are progress expected. steps, the we regulatory process to on

that We complete the in approval positioned we a time and customary are well frame. confident transaction can regulatory for are

and it unwilling the shareholders. take interest Board deeply months, that X-plus in actions their are to Wyndham's the last is best become the entrenched that clear Over of has

behavior their realize value to significant fact, Wyndham's the is denying shareholders while customary receiving opportunity In protections. creation

for in that of independent with believe will receive move combined interest Wyndham's result, meeting. negotiations. this Wyndham's we XXXX recently a engaged company. the is which maximize in at to directors pleased elected, Wyndham's transaction potential of urgency created best nominees companies' these want through that a to and both significant see we from We're feedback see Board duties who positive act As committed annual value highly and fiduciary nominated their slate a qualified are to to can shareholders to be continued in the election shareholders, we've upside If

the since have beginning, we mischaracterized to sentiment franchisees. our franchisees. franchisee Importantly, Wyndham actually the from support continued has see who represents and

represent elect these associations to our of are councils, represented know and our their is their and them. brands, by franchisee know They franchisees Our performance and they advisory leaders us. own feedback they the groups to vital

in the the are choice Choice Our ensure and of reliance that that and include always clear I'm its franchisees associations largest franchisees. franchisee plan and our association, working the acquisition. franchisees' combined Choice prioritize are continuing Hotels company as distribution Owners owners, been Council, on access would channels approach which continuously of portfolio, we members there technology. would on in expand XX believe are any deliver operating has existing a thoughtful Choice to benefits costs, believe action, process Wyndham part that Choice our has profitability with represents say over they brand with its Hotels our and franchisee proposed shared less acquisitions, in with These to to maximize lower of for benefits years award-winning needs X,XXX which than to recently Choice's hotel And to combination. We future both hotel prioritized more Choice for to to that that been Choice benefits its pleased multiple franchisee aligning third-party will for

legislative its accomplish to of company, drivers and committed we're conversations we Hotel continue mission, years aligned policy we each forward American Owners leaders at have for Association, with of have organization's looking including to a many topics the Regarding discussed. working and combined good a focused and all matters. In closing, and the time, with variety as with the remain Choice's could same I on industry-related have been that we growth on to AAHOA, Asian executing

and company CFO. We of a we adapting our in the the that proactive is industry evolving confirm this Scott? turn now to call landscape. XXXX to forward-looking results over growth actions effectiveness deliberate demonstrate changing strategy is approach that and working. are I'll environment our our The the takes in achieved

as onetime I would as figures our and reported excludes good and morning, year and Radisson XXXX the balance results. allocation like certain results, costs full discuss and provide and to update our fourth everyone. Radisson I Americas' Pat, items, note pursuit quarter XXXX. today, integration are that capital which all you costs portfolio on Thanks, Today, will inclusive for outlook remarks our Americas sheet transaction of my well including impacted our Throughout

full of of growth, of our businesses legacy XXXX, EBITDA more higher-than-expected successful which growth full effective markets, performance Choice and royalty portfolio the a guidance. full $XXX.X For strong exceeded across procurement and revenue-intense Radisson our robust year combination international integration platform, year the of portfolio year our brands Americas of and the million, rate drove adjusted

increasing full record, EBITDA one adjusted year full was Even pre-pandemic represents eclipsing grew set the which XXXX peak. X% our XXXX, a last compared from Americas, on year XX% of year, to EBITDA XX% period basis a year-over-year. comparable same new Radisson the growing our XXXX the and excluding to compared over Our contribution adjusted

adjusted previously our share, per issued XX% $X.XX also year exceeded EPS guidance, reaching increase a full Our year-over-year. XXXX

share. to XX% our to compared For EBITDA the to $XXX same XXXX, our XX% adjusted fourth increased EPS per quarter and period million, the adjusted of XXXX of grew $X.XX

our key RevPAR unit turn growth, royalty me performance. which include to rate Let and revenue our levers,

in royalties. results strategic In room simultaneously across been accelerate which royalty an outsized in terms our goal ultimately while markets of growth more and to growing brands revenue-intense quality has unit our increase rates, growth, effective

are across hotel brand at the the strategy mix more driving In the our system. and revenue addition broader level for intensity to portfolio, we shift individual

a of added higher revenue royalty hotels within brand. hotels In exiting than we generated fact, an brand nearly new the average XX%

we more across year unit midscale extended-stay reported full upscale, For revenue-intense, and domestic portfolio, XXXX, of year-over-year which X.X% our guidance. growth our exceeded

domestic of the by for for the our X.X% units revenue-intense rooms system our size X% by for portfolio year-over-year. and At for year-over-year. legacy rooms and the brands same grew Choice Importantly, more X.X% units international increased portfolio for X.X% time,

for pleased year. the international by our international We doubling more than grew our outlook the hotels the with as particularly since unit over of number XX% are growth last quarter and pipeline prior

our leveraged XX% X,XXX since expanded hotels over also platform strong report franchisee This During our over for that decisions XXXX, pleased are returns and last quarter-over-quarter, resulting increased quarter strong year-end. capabilities in strategic pipeline company. over pipeline the demonstrate our by serve to as results pipeline we rooms hotels that prior conversion capability global investments for brand conversion will I we the best-in-class a rooms rooms X% XX% and our overall representing year. in portfolio global am future XXX,XXX as deliberate the across platform growth. These at and our tools, reaching

our franchise strengthened we business. upscale First,

rooms full quarter-over-quarter. domestic pipeline our For XXXX, expanded unit we year grew X% by domestic by its X.X% portfolio year-over-year upscale and

Second, our we portfolio. extended-stay across brands the accelerated growth

next an including construction. For across unit extended-stay domestic expect We with same growth system is year-over-year, extended-stay our rate traction at XX% to size X XX highlighted Everhome XX increase openings, the the franchise year. At XX the the of a number our the brand, development time, approximately domestic units projects approximately XX% by community average meaningful full our annual and over new optimistic remain grew years. very record-breaking in year of gaining our newest XXXX, about extended-stay we under Suites, business hotel over by pipeline,

Within of midscale domestic this pipeline X% awarded fourth the X% quarter, our year-over-year. for Third, we franchise domestic upper the midscale category, portfolio. increased invest agreements number continue and by in our by rooms grew quarter-over-quarter, we to

continues attract first and improved in with brand their significant projects Comfort our economy to transient Importantly, hotels domestic benefit to opened value prototype our XXXX, developer demand pipeline. Fourth, the proposition. our continuing from over are XXX new flagship in

quarter-over-quarter, economy royalty revenue generated the new hotels higher As hotels pipeline exiting. transient and by unit X% expanded domestic in than we a result, added we our the XXXX

growth. rate Our effective be of royalty significant revenue a to source also continues

points effective domestic for year-over-year, a of royalty Our for nearly brands. X X year increase rate basis royalties, XXXX incremental X.X% legacy full basis to representing million $X system point increased the including Choice

is revenue third RevPAR lever our performance. I discuss The will

of increased full XXXX year-over-year. RevPAR XX Our XX.X% the points domestic year same and versus basis XXXX period

to growth down quarter RevPAR quarter fourth same Our year-over-year reflecting significantly year-over-year domestic tougher and RevPAR first levels. Choice we the comps from of in pre-pandemic was exceed the legacy from as were the to company XX.X% return including increased XXXX, portfolio. RevPAR X.X% the XX.X% quarter, a hotel

While to on and put the start the year, tougher to at expect the to this favorable year business leisure progresses, face given and tailwinds. increase expect we've as place capitalize of we domestic we RevPAR initiatives in trends the comps long-term these

RevPAR XXXX. of growing strong full and increased with We acquisition our to are same more than year-over-year. the organic in as U.S. year-over-year, of Americas, international the region we XX% pleased international our report that At a XXXX year doubled the XX% our excluding portfolio-wide portfolio from result time the Radisson the Americas EBITDA contribution and growth

We strong continue business. on platform our momentum to build of the

full XXXX, In continues increased our expanded to million. flows annual our generated by debt X.Xx, million Specifically to and platform procurement convention X $XXX fees we increase our we over be continue and in we transaction to guests, X,XXX to offer number expand can vendors partners. I'd of drive totaling ahead to the reach as volume from franchisees this increased low offerings of marked with from that millions which and to our services leverage to by and travel well-positioned for end nearly range revenues EBITDA of below platform as to services and initiatives. of balance qualified low additional benefited cash the now the XXXX, broader our we XX% our operating we hotels, believe years we attendance, like year-over-year revenue targeted We sheet, of growth products $XX.X guests to year higher our of strong and Xx. turn net the other

$XXX we able flows all including cash sheet to shareholders, We capacity, over in creating new balance strong fourth enhanced cash million $XXX generating sheet we impressive underlevered cash the term share With leverage remaining to as we on liquidity our our million million increased to acquisition which $XXX repurchases. continue of of targeted our while a to to further and well approximately support million investing in nearly million also $XX million loan, growth return as $XXX $XXX the balance the ample in strong were our for flow also of integration this profitability We achieved dividends below and common and business, in value are our committed of Wyndham. also stock. In our our debt year-end. further to acquiring to effectively as over and as closed and our Wyndham invest shareholders XXXX, by expand accretively successful utilized business levels. quarter We in

Our capital positioned are priorities to our unchanged, value allocation shareholders. outsized long we well of remain for delivering and track continue our record

our in business drive organic to investing growth. continues be to priority Our

while hotels focused to platform and investments growth continue generate higher the We in our owners' on will targeted make to international proposition business enhance value unit our that further and franchise businesses. expanding per drive royalties

committed balance Secondly, dividend and share as cash all and both a more with a of through been our and by with continued M&A, the greatest coupled Wyndham. Wyndham, both our underlevered to programs. efforts a to improve the than value Clearly, the present stakeholders of of to allowing repurchase have the through value discount as repurchase very current have well shares. for debt our capacity the inorganic creation combined our capital opportunities as to flow growth, transpire, create us in attractive stock, can portfolio. profitability franchisees organic allocate initial of ample we growth existing attractive to our and we and capital to shareholders value shareholder like demonstrated the not confidence is strong focusing intrinsic return success, combination sufficient our the opportunity return trajectory, $X Historically, opportunity realize grow significant we the remain value-creating this billion where to sheet Should on in to over provide

questions, to our what I'd Before lies for opening up turn for to like ahead. expectations

growth into and including we expected from revenue-intense royalty organic and outlook generate Radisson million $X hotels robust does of the anticipate additional driven be our for strong other stock co-branded as markets, to synergies $XXX other million million. well as markets adjusted and XXXX, the international growth, expect from in more not to growth EBITDA contribution repurchase across by We the of business company's factors. cost additional look activities. As $XXX credit we Americas, continued card, effective this rate This range or any of M&A, account capital incremental approximately growth

full We following are and expect our XXXX. diluted share. range per outlook Underlying between $X.XX year to full year assumptions $X.XX XXXX adjusted earnings share per our for the

to range flat return year-over-year. be the project keep We our of RevPAR expect questions. and is on year the this investing between year-over-year grow system the We approximately domestic to X% we Pat XXXX Operator? effective in our would of royalty growth more to testament our accelerate and of our that domestic anticipate highest And to revenue-intense be I full working, mid-single portfolio brands those and finally, results that to any X%. rate generate areas our business answer digits to year-over-year. Today's At we to strategy time, a capital. the are intend will in happy continue

first Bank [Operator comes of Shaun with America. from Kelley Instructions] question Your

until the more about viewpoint, seems Dom, or could and set any that it the could largely work out at help if of some around process? What stable during bit proxy offer Pat, up you contest, just economics more during maybe that for I'm is little if And details remain this around to start not feedback that? chance guess, you around been the us like point proxy I adjust process have could, the more probably here? could bit get time? think that proxy just reach the where free terms at or can mechanics the you an we work the the to you will -- might want how start at in point any Scott, receiving a a to we offer. feedback votes is everybody's mean we just you the by specifically improve wondering, that sufficient opportunity Wyndham offer I do If you little to with from that how point achieve, that offer Are do

Shaun. Thanks, the Sure. appreciate I question.

when continues think refuse today, look unfortunately, at Board we just where Wyndham's I engage. stand really to you to

engage your believe offer said with this And to first And diligence. to in willingness the us. improve the opportunity our is second the point time, Wyndham us. to to constructive dialogue improve there's we That's us open remains if engage offer, some door thing. first to undertake So about multiple due to allow we the they'll with a private

the that So those in here, have think, key always play. been are I factors

engaging Regarding on directly we offer, exchange around then launched news on we've I that They're it's like what X XX, think Wyndham's frustrated where brought public. an proposal what that when good them would great in December the to the is we've your offer. feedback the like They're with we October given answer about did word. feedback, heard speak I them might conversation frustrated. us help our they question opportunity questions. see offer those they improvement Board and about is not around in additional from And feedback an mean, And to a XX we the gotten shareholders. Wyndham's And from

currently expires, during opportunity until with feedback. Wyndham's about been us shareholders versus X. not City fact March let's the They on at look offer, the proxy the think I when the provide great time exchange to to offer, the shares exchange for up Friday, York which a that tender their exchange X:XX is you blueprint the offer New forget have that's

to continue shareholders us them from around on the they the us to also to for offer around that's with the express feedback for opportunity transaction the hear interest view and there's how their table. So

Shaun, slate with add, would And I'd that we've slate independent we of as nominate what negotiate thing the the only process, on you is done think of deal. that an directors want us proxy directors, believe just about the a to

willing can the that's with Board to negotiate So with continue to deal a us. change

in Board dialogue a transaction. for if create vote going voting to slate directors So the we engage see that's for can really this in is of value to a a

there in international. X in And unit the And of here improvements it obviously, like on some fundamentals, acceleration decent on the seems a lot in amount growth. just saw business that you a about hinges but Great. was maybe net

to sort Just what largely could of to the to these deals similar talk and pipeline what and are Are the see running international partnerships about the business? different wondering economics some where some these these may domestic in or these partnerships be little franchise running bit domestic bit able of there. Are in you economics? contract master little you and been a to a the or through if inferior your economics add -- you've place

Yes. mix, know. a healthy And Shaun, as you it's

in franchising. for favorable do we business small We -- markets, aggregate is make that the where some franchising do in We people can environment direct have and investments. regulatory where markets capital

different, at our -- that's the to if so the And of and works, direct master seen master where to those franchise at those we've little to your we as a in opposed then businesses. economics a bit up franchise in extension when are look where sort our of with we've starting growth partner are did of those look particular, you -- agreement agreements, you And franchising direct also usually the markets. And Scandinavia, with franchising of what those pick point. in Spain, are markets more

excited markets bit Australia. in economics particularly the in little So but we're different, in seeing, are about a those direct we're Americas growth the and the franchise really

Yes.

mentioned ones that, the add Spain scripted I remarks, in direct to our markets. think, all France and Shaun, growth just in our are to we

more have master a than economics that in the So similar partner. U.S. we

question Your with from Bellisario comes Michael Baird. next

yet mentioned there? been progress mean, what continued if finalized has you more made? regulatory the what's haven't, timing be specific initial your And on front. I you Have Can progress there? You submission to estimated you the the FTC?

Michael. Thanks, Yes.

when at today, second weeks I ago, began so we are are that X think where we request into the you look about process. well

surprises. very stated cooperatively any our before, ability making uncommon, part that said in We constructively that on as process we FTC we've customary As with confident time front. this the And of frame. is before the see remain to and to a we've don't transaction as in request complete on work progress not a continuing of and lot it. We're that second we're

they've on? of for just And then that types things could answers any the Maybe you follow-up X that or and they're asked provide looking comments examples questions there. for of

supportive with it is of I a they'll learning before, then very, process And part for Yes. narrow they we've I transaction. in what they broad mean, moves start of my information. called sort think the want they're areas view, as But that a what's forward, request as of down into understand said to greater.

makeup The this competitive agencies, is The industry hotels, lot lodging a very of a first competitors. online that is marketplace. of well-capitalized independent a travel large, is

So at looking they're that.

at said as they're Second, not and do we've pricing. Wyndham set looking price. Choice And before,

how They're a regard OTAs reliance and Our as drive our putting industry. on we've running companies said of healthy franchisees issues. third-party the the for cost in before, to And with very that into is reasons one is the of a this to And factor hotel ultimately, distributors. down together play looking X do. regulatory compelling expensive

pricing So doing some spaces of and the they're looking just at competitive we works they're competition at they the not what for competitive of the about specifics evolving. compete. And our the lot quo, of how the are a really status the looking where learning industry, is landscape and also nature how is ultimately, of consumer,

So where new around really a compete questions currently they're the competitors we segments well-capitalized lot are launches asking brand from in the of today.

list substantially narrow they at to It's the we that move broad we we the compliant effort in. through the with and closer process, questions FTC the be down. But of sort as get Choice X would And second expect level to narrowing beginning. And request, would a those of probably we're expect the peak weeks issues that it's will at So with. the of dealt of be would as being Wyndham and effort. discovery

Got quarterly year-over-year 'XX? X negative to RevPAR fundamentals, from about And rate growth when the thinking How just the to growth might flip me you just on then flat outlook. cadence in the And it. the X% are for more positive?

Thanks, Michael.

In long-term for strong. fundamentals terms of RevPAR, we still remains the travel think

expected relatively look still in X%, X% historical lows. supply is GDP, macro at than to unemployment less basis, grow muted growing still we industry, both over to remains growth a and So XXXX, spending, in expected the consumer but at be

planning So most budgets, to on travel increase we're prioritizing still to travel spending XX% the they're year expected Americans travel. their and amount that feeling this confident Americans are with of

still So grow. we terms think the business room pre-pandemic our has We're quite of bit below occupancy, of in levels. to a

So the RevPAR of positive we but growing quarter to against kind we X to where see be, guided we in middle tougher the is second to and the some growth of that comps, should first quarter again, to. will start believe then X%

question comes next Your from Morgan with Stephen Grambling Stanley.

process willingness think FTC And questions. follow-ups you if the the then would that on about does it thought litigating things doesn't path? see FTC the if How Maybe X down go or remedies what's your on way?

think, environment, Stephen, with just legal off start and it's in precedent. regulatory important Well, I the our view to it's based of fact

I so look FTC at what the might speculate And we the with conversations don't where go. that when to might be, on want

transaction. about things those as feel and that I'm But having I to not regulatory on we the that But are impact publicly, where environment. what materially stated really going we how an then said are view what not we've focused speculate on changes we we confident, things seeing said, said, aren't As currently, are to make we've before any go. as I might on we're today. And the willing

you'll January and based, presentation the that in precedent antitrust front. are around at I in put combination. how said, of think on should you different, there confident out XX, will really see be If as environment viewed our view in facts fact how that we The progress for legal this every things it's feel the case we look and I on

the us growth and tie cash your expectations versus term? loop in even on the growth for in EPS maybe then free fundamentals. And takes Great. EBITDA conversion longer perhaps there and Can lower and XXXX and out you help puts flow perhaps just

EBITDA and assume you're the really, Steve, the guidance? I Yes, difference versus QX referring growth between the to

I the EPS midpoint XXXX EBITDA XX% just I growth but outlook, low remember growth. at your single-digit look in if in roughly

rate. there Yes. really difference Really, a interest expense the higher slightly tax and is

is don't leverage tax then few fourth quarter that of the higher up about as So that our our is during in rates levels. items, And we to our get XXXX tax rate incur in $XXX we million on some lowered reserves about combination of kind reversals half debt rate to at incurred of slightly The expect had and level we that. debt year-over-year higher back that a of targeted We XX.X%. discrete XXXX our XXXX. in a average,

going think to think cash results investments, key from flow that? the free then to to that's whether there I like it's of and big any I things fruition coming mean, a some And puts are takes affiliate standpoint, money be through, or

define of be cash terms XXXX. in free to expect flow Yes, to way flow, cash the we we similar free

so should XXXX range XXXX. But slight should consistent increase that and spent key conversion money. flow between money our in XXXX Our free be be same a in generally the cash key we in

comes Farley next Robin Your UBS. from with question

to get wanted I clarification. just a

so to global what change us press segments, Your looked up that really QX. midscale. your, revenue-intense number opening keep that then you It extended-stay in global that like in year, Can 'XX year-over-year? -- sequentially tell release not -- specific increase in just or last not onetime mind to in or is what lot wasn't at an was or of seasonal calculate just or something X% also just that and the pipeline. And there of a mentioned, upscale and there Was something call those pipeline, the just in in sequentially the QX? maybe just the something grouping year-over-year quarter you sequentially. you to was just We looking rooms

Sure, Robin.

In I'll your of your second you the could a You on cut part question. the answer second maybe first out part. -- little part, the first part bit repeat

to flat, rooms. In really, basically XXX,XXX year terms the our that end of XXX,XXX did talked the call, of had the just was we of was on And cleanup have QX the really the that but quarterly global of our during pipeline a down last think we openings pipeline, from I strong pipeline about And the a year. in global of we rooms of early reflection knowing about some hotels, could where into where contracts the existing quickly those strong we're onetime didn't it streams. knowing the that we that at decision we look hotels. We -- coming our to sell and have we terminate where XXXX, out markets new because revenue construction some those a those environment open pandemic, could think to in fill taken made conversion some with a markets realize of was we pipeline, this going

we've global a quarter-over-quarter basis. which we been on up growth, sequential on focused talked was So X% the about

You QX, little the audio a out a cut but about bit. made comment unfortunately,

question? that repeat you could So

I'm the your was QX there -- from that wondering openings extended-stay that something if call in looked QX sort the and or midscale, that openings commentary just QX were groupings. of segments, just the seasonal you of weren't upscale QX in behind sequentially what's were that? it just to those and was QX in -- yes. really just -- Sure, like specific kind about what revenue-intense

actually is quarter-over-quarter. quarter, our openings largest typically It's QX

of brand, all So all XX, extended-stay brands of revenue-intensive WoodSpring the when growth. you we our September strong results into look December at our XX Comfort in had saw growth actually our brand, brands, quarter-over-quarter

our So opening year happy saw growth, full of including you're XX% to we a openings. growth strong but what in offline looking take at

openings. was a X% see QX increase I XXX about year-over-year. Robin, That Yes,

So can it take we offline. said, that

Okay. just at looking sequential. I was

question Greff next Joe comes with JPMorgan. Your from

level. item. If the fees of and the million outlook, I $XXX that EBITDA growth? an you're how Your getting that just to overall for something based things and on drivers Is of royalty management I'm that's under year-over-year X% actually accelerating XXXX in growth reverse-engineer at some maybe grew that XXXX, that royalty, line of drivers your licensing are level looking that given underlying assumption in you've that some fees,

Yes.

our for X.X%. this full year a drivers RevPAR so at you is take that increase our look If was year,

mid-single we the unit grew effective and about digits. our net X.X%, revenue-intensive in rate growth was royalty Our

should the effectively that about of and again. growth So net increasing we slight rate of flat approximately as mid-single growth far X%, at be revenue-intensive the terms digits but with a are RevPAR expecting as X%, royalty year-over-year acceleration our being unit up

So in there acceleration is that. some

a that the did make number as driving credit that's should continue And -- number, card fees that of our number Wells is of small in XXXX. licensing growth the that to the card pace a portion co-branded Fargo. from will in then strong and with lastly, little it continued there bit be that also benefits credit in a we than corporate grow there We faster international piece realize

Got it.

in clip growth and So XXXX? Just X% I'm faster rate fees that grow should for a royalties making sure hearing other at correctly. you

percentages may overall be not there. The

some over rate that [ QX in a only that Radisson QX. royalty ] royalty We little little XXXX, against acquisition bit have had a -- was a the percentage that little number and partial

the year-over-year to a XXXX rate If look again, is, royalty unit grow of it's should at pace. XXXX. kind when of faster portfolio, RevPAR our fundamentals, the you and all X% growth, of Radisson at the the the XXXX August we compared That effective in acquired

higher than XXXX. should have XXXX in would will it that So be -- been be number in

proposal. now Got it. going couple of the And Wyndham on questions a just

was ago have on your months the on close thinking put today you in bone that having Can Pat little could you in time customary regulatory? different after you confidence And deal few a additional it you that I the a bit that or more frame. that prepared with in interactions think think flesh versus is earlier a remarks, comment? referenced

Joe. Sure, Yes.

a now, as I front. actually been tent. anything I to it to And XX months so months. told outcome, the saying yes, from the But from request mean, And we're from we've In expect that, weeks the second fact, X it. say X a have X we're long we're to we the that's the in been pole final on When customary -- to getting X time going we closer that's all be to into regulatory look of months. second frame, we said when request at

just when that actually that's not we as itself want the frame, getting Wyndham's So X X- in around early in the to place put we're but reasons we moving, just to closer. And get the weeks offer shareholders, of did involved environment they time that's regulatory time thing regulatory reason X-month in into to was we the talk to It's process the which or exchange the it. one the also frame understand December.

getting closer and question of We're February. for late in sit clarity the regulatory that we importantly, some having shareholders more around timing here it. So to

and what frame been told of from you're moving X-month second we're to that looking just rapidly path. from these processes request when how if X- sort of But pretty we've precedent take. that sort January expect XX at began, So that's the time to long down

process what more To Stuart of investing your cash X company what last X equity pro -- pro the into To concerns also newly then debt? fund are whether you X X on priority? you equity from a end To Great. of company? on follow-up share Board, extent your you the in issued deal, potential consideration conversations and forma Pat, advisers mitigated Goldman a selling helped buyers kind Wyndham's in working pro work also finding a And regulatory, at on that new perspective. It's Obviously, the say, what forma let's would brought the but is that of and i.e., on that a year. now in extent Wyndham. would recognize hard at of you, at not us of involved a get forma to potentially the what the of point have table later on pursuit are, concerns can then not lower extent in greater the with kills some than be that management,

would here, with at things the you, X pay. engage is matter. just a looking have the be from but quite happy really not negotiate Wyndham going conversations fact, which got is Board we'd been right laid you've if that the price Joe, with with us. would, is we've the in get-go, you I'm Yes, to I out to they say to what price the

said from achieved an multiple implied a before. premium multiple, earnings never Wyndham earnings and we offering As beginning, that the they've we're

feel between the transaction shareholders, they something, to cash the good as we talk we're mix that. The like on and is like we equity. So equity their like and they

at and like second time And an as that good the providing we the There's flow-generating equity opportunity to a mix we free certainly feel that look at So cash can we today. a the given is leverage something think that we're the high with pretty them. engagement into place high, cash get an handle both is characteristics see we businesses here. that certainly,

So look at this. there's to opportunity

get high mix I today, looked at can when X factors you getting you, that offer done, different Wyndham look the the X of right range you on table. those to look I transaction to as good and with think a a gotten that's offer And table the said, level of have at there's So the we engagement a that feedback regard diligence. be we at from if issues. tell we're things: to can But get we've of on we've of shareholders the I due when improved confidence that in that lot the a offer

with from comes question next Your HSBC. Jensen Meredith

time over looking maybe of just a what look goals was bit a chain speak are. I was little I it down and wondering maybe the you about some of if match partnership mentioned back and scale little just that and had and rate, could more was at some a by or a up retention of domestic some And international, discussions, bit, Mexico. And maybe is sort with international breaking then strategic to other I the in I part mentioned of that some wanted growth things last quarter, you if strategies wondering today. the just from

Sure, Meredith.

retention XX% invest when willing are rate, you our to is making retention historically an had looking are to what a I their there into taking constantly sits are we've look and Obviously, the improve very hotel I brands, brand a today. franchisees we high at it our alternative mean, use. are when in times rate, and think XX%, it or either not

that high use lot non-hotel of franchisee is is generally the transient are occurring those conversion occurring, see particularly of churn. And we that a in So drivers economy where segment.

operate other we So a that's the higher churn do you than see that where in. rate you in segments

Yes.

in In say our ring terms brands so the Most we high segment. I have the the to churn brands U.S. of rate similar our are don't is -- have churn would economy that of the international, overseas

churn model revenue-intensive the you that good starting So point. if be our a brands, would rate out as similar

guiding As net units for of our -- we decline growth see And unit overall expect year in to will mentioned, X%. the are revenue-intensive overall to while economy we do have with Pat the positive over we industry, XXXX. growth unit

with and and had ago. burn opportunity on what category an in to we think an their I distribution Bluegreen have question partnership with years Mexico, opportunity through portfolio that have would to loyalty customers that's place and in several an it I we with the regard similar opportunity a And your platform of for AMR the to earn the what have platform program. more really It's our the opportunity our do

Great. And case? had you you that like just on partnership it sale, would should to just as the the Bluegreen be had last it We quarter goes your continues that seems has the mentioned that anticipated change? assume despite point, on after from it the and continue the just comments,

correct. That's

Your next Barclays. Brandt from with question comes Montour

RevPAR. on is X just first The

closer thought bit came Your sort up to QX then was upper guide RevPAR in your to implied had STR's X% scale a year results. what little midscale little below of for also full STR's chain of forecast, midscale, is X%. a flat And which we domestically by below bit

anything fourth any or is on your RevPAR? guess I of if any I'm for sort you U.S., outlook call one, want out. So in a And how particular looking would forward, the do of was outlook have the or loss curious else different there quarter, you which then describe sort -- conservative you or share to if

Yes.

fourth I we of comps. really think tougher terms quarter, really, the In had

As the company to XXXX the that exceed return we levels. remarks first hotel and we said scripted were in our

against the which industry. up when you leader we're XXXX, So XX%, look QX results our the is at in

we different see our the were just there. I comps think than didn't So anything I think industry. tougher

we're XXXX. little probably see, a mentioned STR on a growth expect long-term see We're points basis the I we XXXX. of, as the in against compared that our occupancy do bit mentioned. fundamentals, lot the of XXX I say terms to We I earlier, down full In year, to conservative would in still guidance

we So driven. really just a get And new it's of XXXX. And AAA rate travel room to excited and back here levels just space. with economy we're a mid-scale come coming partnership partner all been we -- one to XX% We of about represents in preferred AAA, the their and expect back business nights. and in do XXXX became XXXX

growth we're line the feel and be for year, we'll could excited the So we about be what like industry. with in

in that of say consider the be, our make than a in-house and Yes. have at other maybe be many some they we and do I to we when to would think we considering. most industry looked of more look look sort industry said, aggressive they little forecasts And appear at the the forecasts, I STR we in it at when appear are and just

forecast when make So at how decisions going our and then put to guidance. around we're own it's do just that we forecasts ultimately out into put we of one the our internal look our

brands amount follow-up those to of growth? makes X sort color brands, I'm start baked those fair decline expectations, the a sense. gave just of on the guidance X and bottom That year did together? And for that the Radisson you on churn. does unit curious net When then have second quarter-over-quarter. a the on, you grow, touch gave But together, guys you what a into And us full

Yes.

which issues. get we Radisson, performance when along, think and all and franchisee got the to and do of fixed. that fixed performance you are do me to you that with -- leads just these Greenstein to Suites look & And I that -- the Country have Inn case growth. acquisitions, let development In leads then and mean, you Radisson, we interest, the at the you we've fact that & Inn a brand when I Country Suites, said that's start as the

year, that saw Inn Country about. talked of highest those the last as XXXX. on We think side, alone. done Suites I already That's in XX December & we we're the brand agreements that since XX momentum seeing had

we the growth & Suites coming in Country confident Inn So feel really about XXXX.

developer likely Now with so interest. The see they really going full-service about function of and coming time they when higher decline new Radisson a are urban still reversal of feel good is that's construction of in continue the flags some just much XXXX. -- the interest more in it's is they up but that's change primarily Radisson boxes growth those a we hotels, And the against the more that generally are take [indiscernible] to lot the that to and larger frame elongated. headwind,

it's think, So rather year returning to function than I XXXX, this on growth then really timing a in back XXXX. of and anything else, when Radisson Country coming

[Operator proceed. this questions Please Instructions] time. at no are There further

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