Choice Hotels International (CHH) 8 Aug 242024 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to Choice Hotels International's Second Quarter 2024 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. 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,

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

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

This our and second President Chief to results. operating will speak morning, Pat quarter Executive Pacious, Officer,

who Financial Oaksmith, While discuss Scott Officer, will financial performance our Chief and outlook. XXXX

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

Thank taking and higher $XXX to quarter, raised you full EBITDA our adjusted everyone. the I'm year year-over-year, our We that adjusted time Choice in you, appreciate pleased good EPS, X% us. second our adjusted guidance. the drove report join Allie, and morning, Hotels million, EPS to to

proven combined Over strategy. of have the several years, a stronger, increased normalize. a versatile to The with with model, projected range past XXXX multiple started unit even for expected drivers us adjusted our domestic and created business the company outlook versatility earnings the more our environment EBITDA confidence has we our growth provides to growth achieve at as acceleration, of growth of midpoint X% RevPAR the

our and significantly network system reach, our relationships future we opportunities. increased size, increasing growth By customer franchisee have of

base grow continue in hotels. X% These domestic a higher to to agreements compared existing our are of premium of portfolio Importantly, with up to revenue-intense year-over-year. pipeline our RevPAR franchise fuel significantly to expected our agreements, we hotels continue

pipeline and rooms a for of quarter approximately set year-over-year. represents second global increase XXX,XXX record the a XX% Our

global XX% openings open quarter. second year-over-year pipeline of hotels We from in more velocity executing also accelerated hotels, our the to moving the

by the by our we rooms international X.X%. same of number time, portfolio At expanded increasing the

anticipated, we both domestic we prior levels. in in As a versus pre-pandemic year quarter the and saw improvement the sequential performance had RevPAR second

the And had outlook remainder In has our the moderated. acceleration for than expected. of previously with industry, was pace we therefore, the slower the slightly line year of

As guidance. the of domestic by to the the when performance travel trends compared approximately first levels, the XXXX midpoint the year points expect normalize the XXXX maintain exceed pace to second and the our levels at months we XX of with of half year X our for RevPAR percentage

business long-term trends favorable. leisure remain Importantly, and

more proactive ability meaningfully remain profile, deliver earnings, I'm quarter. in our strategic versatile strategy we our enhanced second growth to our of Our have progress with the on made and pleased investments drive we The successful key confident each execution have and of growth. business the continues our to sustained during and strong model company's priorities

terms mix This years. shift comprises we domestic to room increase ago, of growth, since more expanded embarked and revenue-generating hotel now X we with portfolio, to In enhancing by points. growth coming franchise have our it the hotels of unit hotels higher revenue-intense continue percentage business distinct in of we strategy on XX% our driving years our of mix valuable X our expect more

These an in to revenue-intense of have accretive upscaling new are resulted franchises and earnings our more portfolio. our

on XX% future over royalty of growth average, driver a higher revenue the hotels key a are brand, generate hotels brand. exiting than as within they Importantly,

pipeline factors: to rates system. in a to value one, hotel per and driven XX% driven current RevPAR be room domestic on the focus and franchisees; our significantly means pipeline by revenue-intense represent hotels higher current average domestic to the they a premium the strategic royalty than hotels portfolio. have three, higher This continues is they than higher revenue hotel than average, XX% more a value effective count portfolio; proposition Our more two, compared of higher that on contribution our have, strengthened existing our than by more our few

positive by new environment, future projects and encouraged a our momentum, existing capability, current hotel which hotel competency In key prospects. the core we agreements. are differentiator a our this pipeline the With conversion best-in-class for very development through rapidly of moves portfolio winning is franchise

franchise period, trailing the over opened XX fact, for domestic In we year. hotels same increase the XXX the the during prior same over months, period a executed of we conversion XX% agreements of the

value our by This competency delivers conversion relaunch brands. Our a peer reception. an allows compelling premium Inn offerings, at evidenced a of conversion ensuring quickly by recent and new launch that innovative had franchisees' relative is value affiliation a lodging Radisson, us initial to With success, also Park and on focus a to we proposition successfully low strong a have option brand the cost.

and Specifically, there we With conversion of coming June. open addressable market of the a brand, more meaningful a XX,XXX have the already than is of the franchise across U.S. Canada for years. are potential as for this in believe XX we offering of executed global opportunity which agreements, end properties total X this

this to core this competency growth conversion throughout continue expect year. to key We a be driver

our quarter-over-quarter. pipeline by In hotels global as of end X% June, fact, for the rooms of grew we conversion

extended-stay momentum to for our brands. continued the and see new to we in pleased construction conversions, increasing are developer mid-scale interest addition In

in brand WoodSpring that ranked guest is as the translating the XX% strong among proud in year-over-year and in hotel economy Power second stay This WoodSpring increased nearly #X second very quarter. brand, extended into our are year unit in developers units interest a Suites reception grew growth brands. We guest the J.D. Suites satisfaction from for attractive row,

of WoodSpring economy rooms fact, Extended all in the segment. construction Suites the brand under over In the represents X/X Stay

stay hotels Everhome now over Additionally, our under domestic we XX construction. the with in open are projects pipeline X traction seeing particularly strong newest extended and with Suites, XX brand, including

the segment construction projects are this driving a Suites number that by brand resistant increased This continued cycle pipeline our belief for mid-scale ongoing the new rooms. investments the In and Inn demand reaffirms strategic competitive of and over commitment our Radisson in X,XXX Country advantage. space, we by our in

XX% new normalize, brand Comfort higher year-over-year the footers hotels construction If grew quarter. With interest construction for pipeline. in starting than return second anticipated, are our we a expect hotels applications expected. While more to the as and new poured future acceleration rate near to for costs robust to cuts occur which development construction to translate will environment, in transaction our in new

to reasons the our Fueling value choose to success portfolio retention This commitment expand by is contributes existing is we is owners enhanced provide industry-leading investments system. their continuing The to franchisee with voluntary to why our our best-in-class Choice our our franchise Hotels continue value our strengthening franchisee success and proposition in enhance hotel deliver proposition the creating and we owners. to our supported rate. ongoing among to

the by the our the of past years, have traffic the and Radisson X% we to first conversion translates And costs customer Over rates, our X higher Americas we half for higher acquisition lower which franchisees and over contribution drive continue hotels, online in for grown to year. franchisees. direct to margins

have the strong of the with XX% year our digital direct drove through through June in which the positioned offer value and for to results of an this and grown we increase we integration country XX%. year-over-year the we Radisson program. better our grew to channels Specifically, particularly year, now domestic brand, Radisson being by by more back reservations guests, our for meaningfully August online over over in rewards Suites portfolio compelling last brand the size Thanks Americas since our

$XX reaching million over nearly X we XX Privileges Over million in added the quarter at members, Choice years, past end. total

us enabled program, Specifically, Americas portfolio realize growth which subsequent organic our acquisition, higher to the elevated has of Radisson X% this to quarter. hotel incremental was our rewards

offerings. to continued also rewards programs We enhance our redemption

time, Hotels Air members we're properties. and and is the first our hotel now KLM rewards their their providing world's partnership preferred at international to loyalty Turkish miles a Choice France, and our brand, number largest airline Also, Privileges rewards airlines, Our with Virgin members expanded for resorts, international key with to luxury exchange including hotels of offering points ability several points redeem the independent for Airlines. the for opportunities domestic

broader strategic portfolio that attract of allows to national and travel benefit it brands, hotels higher-quality partnerships. Another more blue-chip it existing our and our is us strengthens

last partnership membership base reward members now with Choice the about automatically AAA In most opportunity earn announced expands to excited our we we particular, are have a of travelers. our AAA. As which our with prospects the long-term Privileges status loyal quarter, gold

vacations a a and from member Additionally, the more its to of X to with than affinity Canadian X,XXX Hotels X highway, within CAA minutes positioned exposure we ideally AAA Drive for counterpart base. the and million $XX ongoing Choice are benefit

relaunch the the XX% in have booked to of Another June allows revamped better of with last the this year tailwind partnership our is of through AARP rate. represents sevenfold September demographic in tap our which that the AARP, wealth all over we States. us with increase United partnership year, in into Since an attractive a end driven stays recently

I'd increase strong another a international doubled growth a our quarter highlighted like increase by where a in our X.X% with international in portfolio to same We RevPAR international At X% delivered have we more now in the year-over-year, rooms to the twofold performance year-over-year, than business, EBITDA X region. the turn time, past over by including expanded years. X% EMEA openings. our we

to by pipeline, a years we significant more which international rooms further to market tripled gain compared in has coming the prior opportunity year. the see than And to continue evidenced share as our

are than We franchise making residential in with the hotels. more our agreement Xenitude X,XXX rooms under France onboarding progress in

This time footprint converted In over pleased in property our hotel at recently brand Airport. DeGaulle executed agreement for opened double an fact, have for Japan strategic Comfort Paris rooms the country. XXX-plus be flagship portfolio. room in to X,XXX Charles agreement will We're we also just our to a to in the Olympics,

all we deliver onboarded in in in even the is normalizing create closing, as We positioned to multiple demand Japan domestic an to long-term all-time next with our high. believe sustained X value. have expect months earnings we inbound RevPAR of and the environment choice levers, In them growth at be

annually, growth. growth free excess in to this to of driving attractive is to directly cash and returning capital our while generate brand portfolio particularly initiatives organic in reinvest use revenue flow to continue We tied priority of intense our the cash our shareholders.

all rebuilding the travel, which pool number retirees, infrastructure, of of the have company increasing the of the of American expand capitalize including arrangements, manufacturing and Pelling on for long-term our continuation the work flexible We and travelers. target trends positioned to of favorable

that Scott? the long-term attract confident us of and share call enable are even I'll brands future. now growth will well trends business opportunities demand travel an and and into CFO, our larger leisure maximize these capture our the to that over allow turn to to favor We us

of Today, and comment XXXX. on our capital you morning, update quarter everyone. Thanks, sheet on will Pat, remainder and and for I our balance outlook results, of our second good the discuss allocation

XXXX quarter a to million. second of to reimbursable and managed and from $XXX.X adjusted our revenue revenues, record same period increased For excluding X% franchised million, compared properties EBITDA the XX% XXXX, to $XXX.X grew

driven was non-RevPAR-dependent segments of combination growth the in robust successful Radisson integration and the and royalty a our performance Americas of by intense portfolio, effective markets, the strong revenue of organic more rate This growth programs.

share $X.XX quarter adjusted second record Our year-over-year. increase share, X% per also per reporting reached a a earnings

first key Let growth, franchise and unit our discuss levers performance. our royalty include me RevPAR for fee rate which growth,

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

mid-scale revenue year second year-over-year, for growth remainder unit to acceleration of intense, we of reported domestic more we Supported our X%. approximately our and an quarter, by anticipate full has target expect to achieving year portfolio. X% growth the our increased the of which year-over-year and XX% domestic the For upscale, expanded see continue growth extended-stay of pipeline, our across

agreements revenue time, prior At second quarter we the the by domestic awarded franchise number same X% for in of intense brands increased over the the our year.

hotel openings the with in we over pace. at openings a domestic June, year-over-year hotel per Through new impressive XXX This X executed U.S. in XX% week an also in openings. resulted openings We averaged increase

our across and are our franchisee tools, investments capabilities strategic portfolio decisions platform delivering deliberate solid Our brand company. results in and

franchise business. we our strengthened First, upscale

second doubled pipeline domestic year-over-year. rooms the quarter, upscale For we our nearly

continued to see expect this coming the segment our by brands. strategic investments We in years, strength in over transforming fueled upscale

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

a third, For And portfolio. average to on our grew extended-stay the XX%. system of remain in achieve size growth quarter, XX% to year-over-year invest our continue we domestic unit second and track we we long-term mid-scale annual by

number mid-scale by of for the awarded For the XX% second we quarter, increased and franchise our agreements domestic year-over-year hotels. XX opened new brands mid-scale domestic

Our overall pipeline rooms X% XX,XXX reaching domestic mid-scale increased rooms. quarter-over-quarter, over

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

quarter second on representing incremental for effective royalties million an increased over royalty system $X basis. annual domestic Our year-over-year, to XXXX X% X rate basis of points approximately

to mid-single driving continue significant in overall rate to increase our growth full effective year royalty in EBITDA. expect the We our adjusted digits,

impact drive enhanced of and value strategy This our performance portfolio proposition positive our brand of owners. to our franchise intense to demonstrates the the revenue growth

royalty basis We of than that average, are rate in our optimistic our point of higher trajectory years pipeline our the have, contracts rate about in current given the for a XX effective to those continued on portfolio come domestic royalty effective open hotels. upward

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

Our in the domestic exceeded RevPAR portfolio meaningfully the improving our has points growth levels. for prepandemic XXX accelerated quarter, second and sequentially basis

domestic improving levels rates RevPAR In of fact, increased compared occupancy performance. XX.X% average pre-pandemic company a by XX%, the of to and XXXX, XX% daily achieving by

And pace acceleration a first XX our increase daily points basis quarter, from average occupancy anticipated. While was basis our down result, our a a was XX by point basis RevPAR second XX in than accelerated quarter year-over-year, point as levels, rates. offset in domestic the decline slower RevPAR of reflecting

second upscale percentage the quarter, brand upscale For X achieved growth outperformed by index led and XX.X% versus Radisson points RevPAR Radisson our RevPAR upscale by increasing our share gains STR's brand overall Notably, upscale portfolio year-over-year. delivered our segment competitors. domestic

and in trends recent X.X%. domestic of on we the are RevPAR lowering Based X.X% to negative U.S. in the with now range line industry, RevPAR and negative guidance domestic normalizing be our to year full of anticipate travel the

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

volume transaction qualified and our vendors offer franchisees Our this ahead. growth our second our key years increase to the the and reach doubled ancillary initiatives. than our one to increased we number platform revenue is our more expanded expand drive business strong offerings the guests, and fees can products the These broader year-over-year of initiatives, believe of with fees Continuing of that in services and benefit we from and in quarter. we

while In prioritize also in to investing to terms growth our of capital will continue capital allocation, shareholders. we returning

well-positioned coupled provide with sheet opportunity retractive and growth discount, us return shares. Our balance significant through trajectory, reasons the valuation very the a of

months profitable of the cash flow XX, costs, provide providing cash nearly opportunities ended returns both XXXX, agreement shareholders. to operating and in $XXX X acquisition franchise in we substantial During flow, million June significant growth generated inclusive to invest

$XXX July. count over in X.X million we and approximately Year-to-date as million returned dividends share of and through million We share July, outstanding approximately the in million $XXX cash to we our repurchases. including of shareholders, repurchased shares X.X over had representing end remaining X% $XX authorization of shares, million in our

generated on and down loan our In of senior addition year $XXX that of effective the a million XX-year at term significant borrowings. flows which notes July, to maturing $XXX allowed the reducing to facility, cash our end revolving offering, operating in our credit cost the the million on closed us pay the a unsecured portion model, borrowings was of by we our

and endorsement from X.X $XXX upsizing to of further history in by company's a the performance. business XXXX. by of its billion the our $X upside and achieved was model to million. times, The million offering We $XXX date revolving our our extended to spread maturity our oversubscribed enhanced liquidity credit and powerful we Importantly, facility credit our tightest offering

total our second long further quarter, capital build a divested position a Hotels business. of Subsequent our to also holding With intend in to value outsized approximately $XXX unchanged. strong at cash to accretively fully the of Resorts. available the and quarter investing end delivering the of end, Wyndham by our remain and on million priorities remainder the we of liquidity record allocation We our expand

to remainder of our the turn year. the expectations for like to I'd now

maintaining expectations, revenues. lowering XXXX, guidance year from better-than-expected RevPAR full we as reflecting while investment disciplined EBITDA are ancillary primarily For our discretionary well adjusted as spend the performance our

activity to In expense. our share X% earnings range interest and and repurchase growth addition, our guidance which $X.XX adjusted to $X.XX increased raising is the are a reflect lower-than-expected per we per share, between at year-over-year share midpoint

of any Our our does of the repurchase the markets stock deliver capital M&A the environment continued account outlook light July organic We earnings XX Adison increased our from incremental in hotels of activity. in co-branded model. of ability after normalizing or Americas, remain to growth other other demonstrates more stream RevPAR growth confident revenue-intense This our earnings continue across business factors. royalty not for company's effective to contribution from and long-term the the business versatility attractive continued growth with markets, international rate franchise credit card, robust and expansion growth,

enhanced guests. executing to and growth answer Operator? compelling of to a over Pat of ability for in made our profile, strategic our and and versatile scale, with remain we time, At plan happy and all proposition model notable stakeholders creating be have this confident your expanded this With franchisees progress value We for a time. would our value on questions. a company in deliver I an any

[Operator Bank Instructions] from Dany Asad Your first question is of from America.

start the wanted just with I outlook to change. like

just if based a at of RevPAR we implies guide, on downtick the So QX. kind growth half from RevPAR we sequential in implied new back your look the saw

we of can puts walking what you got just new and maybe through the takes start to outlook, So please? this by

this in by XXXX, behaviors what to be we're first looking When year, year, year Thanks, that second the QX. we pretty are second our Sure. from sequential pattern. first influenced half QX seeing look improvement half the Danny. the We're at see going the the going half. we similar expectations for it But you to effectively of very the it's in saw looks travel much our of because similar to to into of pretty half

normalization to country in like looked an since the average, saw historical what we yearly we of step area last with performance different last has similar really to back The XXXX, and talked at it, remarks. that X%. we're the about the reversion we that's market over was that we're X% under our the seeing that a kind the look of portfolio and of growth sort back an a XXXX. call The has of when of back week pandemic sort of of long-term of couple that's of years travel that with urban outperformed right that locations RevPAR it factor indexes. in has seeing day where that And really So really line our we what come of we're seeing window in and where trend trend in just long-term booking reverted the like to come also XXXX. some We're of closer And is normalization significantly. that in the looked And we -- back, under index. regions between

normalization And like to described back we've So over of year travel as driven similarities saw of the and that's that half prior see sort ups a more it why it's we we of the pandemic years. to first it XXXX a patterns back and the sort seen is subsequent what what of were we to the consumers the -- this lot of by downs in looked the then. the exhibiting and

prepared when your you been look Got unit you're agreements in to about contracts it. on conversion remarks existing maybe talking And dig how international Can your And signing. contracts like you've that do relative economics the you have? these there? just like that the -- the

Yes.

changed acquisition. Radisson So direct franchise to think market as you're really we X has a since well with which I business, the models, aware, go

Americas We region. have footprint new in larger much a capability the a and

adding that really that now Latin We the of rest franchise well. mentioned business France, more robust then partnership Canada, direct well. partnership, then the the which long-standing unit for seeing and The have are have MFAs, didn't in some as franchise as which seeing direct And that direct Japanese a we in a mentioned venture. growth growth. these a and unit much units a America. there have and joint has we that we're Caribbean have there are the over just also before. us in that our We're driving the of markets we years, It business was been still we growth successful We

of the direct in coming in the coming weight say of But really is the flavors. both I would that it's vast So majority markets.

your one And last it. build us conversion? remind today, your can just what's But Got one mix new you -- of follow-up. the just pipeline of in current versus

pipeline we if really interest driver about I look that's the the you is elevated. Yes, where during story. a are been XX% sold conversions, time at XX% remarkable for key And mean at of conversion. pipeline, pretty were openings that's QX particular, year-to-date. XX% mid-scale really think you a rates look when the agreements XX% up this year-to-date have year are those conversion current in been our I of domestic conversion. in And agreements our of agreements the in

we because lot really it's for with pretty And these the park remarks because when and the seeing have exciting open pipeline, It's quarter, capability other why driver. a So way. by pipeline we that the May. the the to they open and open mentioned relaunched in in the about might pretty that's the of of the good a new hotels, X we a new months agreements in remainder, ultimately the in of construction then X% significant quick there. can stay importance time. that The want we in in understand Radisson, period of through speed the in of reflection also -- pipeline into X velocity investors thing a already by getting of as is. velocity conversion we It's the push our very that's very, effectively X We're really of a the

into is said in interest contracts. of is place function a seeing financing, We're coming rates some new seeing shoots. which We're to moderate. costs piece seeing hotel that down. to last starting in construction needs And we As getting are the interest we construction fall our green remarks,

do new we'll we've do months, more start than rapidly coming construction that we to expect see XX move the months. if last pipeline So in seen over see we that the

Grambling Stephen Stanley. from from is question next Morgan Your

how first about color flow that that is in it and you I really investors factors little be of thinking then expectation have affiliate guess sold? be the a to or the in some maybe more have I'd for it's is bit should impacting the half. free guess should unrelated sales might related to -- an half And I discrete cash or there on And love there come that that to capital still can the that's I recycled is fruition? think comment, I or your that second in any outstanding just be guess, be a around,

I'll Thanks, one. Stephen. take that

terms we we really of flow, In free the pleased with what in quarter. second were saw cash

So our operating cash about flow on our We that target for the full year second free was flow about we're $XXX delivering talked quarter, we on our general million feel cash and a that. strong last conversion on call. still

Excluding The that still cash the couple targeting CapEx. our the year is we've years, about XXXX. been way and key for less flows, it, we're measure about maintenance of which full money, XX%, operating last of we

supporting some we're capital, did investments when recycle of we the hotel recyclable terms just $XX during those the of and $XX we the JV our quarter do of the of million in development the investments million look venture mezzanine terms financing. under you of that Cambria And in In Currently, numbers, you interest. doing, at one we about sale program. about gross and had joint Everhome as both mentioned, for

since We active have programs, billion mix we as of owned recyclers $X.X And outstanding of started are ventures doing have been assets, about that and those capital. a we loans. in we joint

$XXX over million. In we we've program, fact, since the recycled started

that in recycling. opportunistic we're So

our real is of not programs that the brands. those long-term growth of idea to are accelerate of estate. the holders Really, We

recycle those to X that. our hold as come opportunities are we so look And available, will to X years. periods Typically,

shoots little environment. And seeing, some financing Pat are mentioned, environment. Some financing more that find we if of have impacts to a capital. bit given elongated opportunities of of the them that pandemic as been and the green But we'll some the recycle from occurs, the

just on a this of I as think we little guess, even the key throughout into And money, key cash free term what money, longer expectation as and a terms conversion clear, excluding you you forward you're what's follow-up, next deals? I bit, development since to new be but seeing both maybe are And touched year and year? this go in looking for flow,

Yes.

year-over-year, money As of up are. a we've but more where slightly talked, key really openings reflection is our it's

So similar our and pretty are key money that. year-to-date is to our up up XX% openings about

a about will in reflection year, being $XX of talked $XXX our this money year. calls million. slightly our We be it's over were where year. Last We million were accelerating. it slightly higher previous So last key really think openings we we than about

We are seeing opportunities environment to as talk as the more we developers improves. more development

with guidance to are opportunities year, point extent this still previously we're in up. But that could the half So time, of in in that back the there at go the line the we gave.

Your question next is Katz from Jefferies. from David

could becoming growing important bit with wanted around more. back to domestic split. more just international you the a versus in growth of I to continually a more bit just international go the fee domestic And revenue sort little if color intensity or international intensity of

the we've have area internationally. that revenue of generally we room we're think it's differentiator the and focus what are the domestic hotels. the key international an -- I David, larger just in one post-Radisson renewed is would It's thing size that's Yes. acquisition, a versus I of hotels say These our -- intensity

intensity, pipeline, we've So talk on business, we domestic about of before as and definitely front mentioned XX% that in our well. we're seeing revenue versus sort the as the what's system in the higher base. current international domestic that rooms

MFA. our it's is the versus I sort currently depends master of effective or at... on franchise royalty larger Scott, And direct mix, direct those whether market think markets really rate are hotels our generally So hotels the markets,

-- rate markets, when you When the are it's the think where about about of about it -- a about the you is X/X MFA below direct is of those about effect royalty think on and or so X/X rate Yes. MFA for versus us. U.S. now and direct percentage we it's effective in direct royalty

portfolio point out of when revenue brands. mix the the where chain weighted terms to of we at thing other you is our I'll is much think I intense the segments, in are portfolio look heavier scale international

is of about XX% really and above. portfolio mid-scale in So the the

from is Bird. question next Daniel Your Hogan from

XXXX, about. there controllables into early the besides the where what Lyft, it looking could controllables know looking in changes drivers just that be be RevPAR I where So there? Radisson terms talk guess are in it's But fees, of out, to card credit tailwinds? further whether growth I

the Yes. X-month of off RevPAR a I just here our GDP in weeks. But -- process did see We early. when planning it's kind we a on I macro quarter of usually bit coming of mentioned, and growth has kind mean, as the look last in at you -- reflect the that. kicked U.S. lag

generally environment. into in quarter the a positive second So result healthy a translates GDP RevPAR

think positive it's of participation interesting week's force support. so there focused news secondly, labor was and on last up. a went lot I in because really The rate job people

is consumers, lift. again, to this leisure travel. business, our travel consumers of They for correlated When drives And confidence the reverting travel. X have we to at regard most they So norm. have at definitely tend sometimes look to travel, labor a look more force when job the rate RevPAR participation with is they highly but back we factors to that

supported. travel as trends we going about So thinking and XXXX, long continue, see you're RevPAR I as to continue to continue to environment those be are think the as do the

Any looks the like just that? there quarter in higher And G&A. any for adjusted Was then the Great. follow-up XQ, there? in then G&A quickly onetime it was on drivers

Yes.

terms our for still up of about mid-single on track In of being full digits. target year SG&A, we're our

the year have the which little SG&A in comps, year-over-year quarter, did recoveries credit some look In a quarter-over-quarter. elevated terms made we of prior

our on offset a the bit elevated Costs that, were but quarter were franchisee convention. by little annual they the during have quarter. also additional during revenues We second

year on really just for comp full track remain a issue. We our SG&A. So targets still for

is from from UBS next Your Securities. Farley question Robin

with little a to just in RevPAR understand better EBITDA guided unchanged. the I bit down wanted

some mentioned drivers. You non-RevPAR

color If a little you bit more could that. on give

then fill can the dependent non-RevPAR I performance performance on about its growth lot are brands talked robust effectively, Sure, that Scott revenue ability and programs. created above effective On integration. realizing that of a start this things model rate embedded of Robin. our mean, intense the or a the are have growth. we're the those of synergies driver the put top is from The the this versatility Radisson unit seeing to drive now the just you company. then really I'll here effectively color. business revenue key of seeing And we that, more that reflection we And really kind in accelerating. effectively, outperformance and in is we're of that the expectation growth royalty the across that the we of is

showing So in they're partnerships They're some as our our strategic co-brand card. up well. showing credit up in of

hotels, RevPAR effective we've a less royalty or to from that's The still system -- it's a it's the only. sort key of reliant count mix larger has rate the is on continuing really company So of financial hotels the effectively been that's support standpoint factor less performance factor, created the factor a it's room RevPAR, higher U.S. past. business in U.S. of making as a a of business but as as it and to the sensitive business us large not

Yes.

of we our to to got RevPAR we've to add that, as really growth. intact, Pat that with before being mentioned. our everything X% midpoint how acceleration, the around blocks seen we has guidance And and remained than of building Just mentioned, other as Pat shared

core on mid-single royalty digits the unit royalty fees, growth we effective still -- X%. are So our growing of and our rate

of EBITDA driving growth. effectively about that's X% So

businesses our That's perform about this procurement and credit includes EBITDA. continue platform Our X% in co-branded core growth card continue, our which business on producing well. to a

provide -- million thought guidance, would accretive $XX by growth lift, X%. about that EBITDA initial which acquisition be to portfolio outperformance the significant that, with is to really, we owned where aligned it of Our a original to targets are And international our is be of continues the and in about we've had our RevPARs really seen about Radisson our X%. EBITDA offset our growth the to to continues hotel

in some we're up to Given our about of revising synergies, those success revenue now unlocking X% that EBITDA. estimate contributing

So that outperformance side. RevPAR anything is the on there offsetting

That's And quick Great. one just then follow-up. very helpful.

year. made at it Is about costs looking money? like out to Is is last you'd anything your than acquisition -- adjusted to franchise key the Just agreement call said you like you get there what EBITDA. there to different there looks compared -- adjustments more

is we pandemic, a seeing opening our key since of it's money about No, prepandemic reflection, to really levels just talked more openings hotels. tied as as to the return

the issued fee gets that see as match stream. the to So increase, key money we

going So that that's the he amortization just out. been flow cash flow follows of

is question Joe next from JPMorgan. Your from Greff

EBITDA I going and EBITDA amount spend the of You'd next mentioned mentioned lower benefit sustainable incremental generation? how then into was revenues. sustainable the its And that quantify you on ancillary discretionary I fee investment How that from in you X those items. reduction hoping ancillary year? better those they offset, think of are impact in growth and are less levels can investments RevPAR guidance was and

Yes.

that's what saying growth X% credit taking I so the services card. to of really overall was to piece, with think flow-through and plug to franchisees into about there just up question, about being $X better seeing EBITDA we're Radisson as when able our $X like X%, Robin's Radion growing the things you co-branded from on So that, million our million about

should revenue we able portfolio. the streams the continue So really, to those as grow to be we continue size to grow of

those going with So RevPAR and kind forward. of unit to line growth I expect both would grow in

investments, the of minor digits. I In track as mid-single on is investments, it mentioned, terms discretionary a still we're of amount the for discretionary

So given Radisson better really, we've we're returns, the those back. a the market trimmed we had on better majority softer was bit But if little synergies add can in discretionary few the seeing the of gets RevPAR performance the we it a the from investments environment, integration.

Scholes next from Securities. Your from is question Patrick Truist

growth, with believe, about expectations comfortable the possibly single expectation? Still digits beyond. know feel past, and EBITDA high I in that I for year talked next you've

kind early point, Yes, Patrick, too XXXX. to I it's think of start at talking this about

some that's But level rates the think knows, STR the eventually in kind really the and financing. like. particularly lot we'll the everybody more want that read forecasters, end to sort between from uncertainties be next and of hotel uncertainties of I think development, into will and drivers the forecasting see clarity the a the the in more I that as at of the year get I to how both mentioned of a you back to will of months economy it's the look lead third of interest kind and macro we going get when economic the key half out. is factors that at quarter. play now the we new question, of X key

mean, I a understand I ago. that some that, hesitation guess forecast mean that quarters you several I Okay. a was I bit gave maintaining but little that mean, pushback. there's of in I do sense that? I

investment in just have the been trends, the of kind at growth accelerate coming growth in strategy our time been about taken if past, as that say couple we double-digit which plan, we've in expect we've years the years. high single strategic of our of of that I do But -- of sort has we growth single EBITDA before. as not I'm we've and percentage expected EBITDA we at digits. No, the to digits when look to well. kind There we've over XXXX years long-term the in years deliver the of given years had high would last where look long-term sort you But that like and drive done it's to past, EBITDA long-term to spoken growth delivered sure you haven't continue type that we've

Montour is Your next from Brandt from Mark question

at reservation million for good actual last the a then in the million there that look quarter. expenses, you we clarification and see and $XX one the If quarter, at and and report. EBITDA the adjusted revenue and marketing XQ it system guy So walk, look like $XX line delta the had applies

step I'm So improved. is out that the is what calling of terms better you're which ancillary, in assuming what up,

I that that were for of million else is question just ancillary you system? for year and specific because is, is the Radisson? of revenue rest is to $XX higher is my that $XX that -- -- about tell Or that quarterly So for line all services your is million for that that you guess the line. Anything can us than for to looking that I think all

But would hotels the growth reflective that. of Yes. plugging the into say It's the is seeing that I entire Radisson system. we're

where we Our system has outperformed had thought.

in able that streams. revenue of fourth to we about and previous talked Radisson of as integrate some We unlock opportunity incremental calls, to platforms quarter So the the the the XXXX. had at ancillary Choice beginning being

we kind and we as in take look roll been how those revenue have able work more we expected. And at so than a drive those of to out,

the to the -- quarter. and $XX higher are is last of quite that, million where have it's couple of You on $XX $X we but a it There than guidance we puts when gave slightly takes to million. not to thought million

start quarter closer would in quarter, comps we in that. of the $XX we to so this something year, And expect we'll this and then third lapping did fourth program start probably So last change similar we the quarter. the on in about then were QX. million

that should think immediately super Okay. that after a And read in reflection go as or into like number what share M&A that you available we accelerated large there then the on something to M&A isn't the repurchases just helpful. pretty you a is out to can front? that's -- XQ. you and/or That's meaningful your signal of a sort -- Can we of

sheet, I first from an our I that to then X go at look say, start shares ability either in leverage. years, year. purchase there acquisitions puts perspective, in the and us do in dislocation. I'd with comes very mean X health could believe scratch at the in been in returned is And be certainly, to would to that's effectively to financed actually there out we it balance more do regard We in which look everybody gotten gives acquisitions. something think of kind I we them we're as and be of remarks, done our X it's X to repurchases. way of a everything a mentioned lot and lower to it on the healthy what's transformational last times, we've sheet end powder Scott the to something his reflection the not grow. balance policy. we the and and both. But if M&A not EBITDA, are with out things as at attractive X are the the lot Historically, that There's us very or have that in share significant do market continues look of for of mostly we've prices, so you its we to look see the shareholders the We've case size, when been of to this acquisitions measured attractiveness of at buy a we've opportunistic the in a significant our certainly and dry months shares. out in very we a a of walked place result a from growth looking through

that more Anything entering infrastructure, RevPAR different we're So like kind end normalized think with about from your to a to X% standpoint, up here as term guys positioning, that industry X% revenue competitive question just the we your cycle drivers, think U.S. where maybe this mix or you intermediate-term to within intense should positive might intermediate an of about... about X% otherwise that historically. maybe headwinds, growth X% of range,

Yes.

RevPAR. beyond the think hotels royalty you result. drivers that of positive look I reflected higher sort effective of royalties the of driving room when rate and brands and the the as one the a we're that's really are revenue intensity counts selling, in at it's these in It's

imbalance of going. the demand amount It's supply shift under numbers is kind excited Scott there through Gap] and significantly is extended stay think be mix I demand the why for thoughtful nights. Audio about and a to segment. walked where room the is extended of stay have you super There where the we're So purpose-built supply about huge

the brand new extended-stay in construction across XX% going of the that's segment. on economy effectively is industry that

we So have exit model, there, there, performance proven value we we and the prototype, proven proven the operating a prop feel proven really good about developer. is for have which a brand

sought pipeline for development trends the continues real are trend both extended-stay. long-term see those in I upscale us, the in then brands our And to are the secondly, Radisson that line think are we're upscale really above. be growth fuel our And we after because help in positive continuing those that to and acquisition that things that to and in fuel So going segment openings growth seeing. is

confidence X those X as give demand our perspective sort that of core growth lot of in from the segment, to us going in we're So years. grow addition consumer growth, at the areas X the are years look into really a -- next a that we're to traditional we next of vectors playing

is from question Alex Brignall next Redburn. Your from

Just X pieces.

Japan on the talked business comments, or another And spends rates special talk expect thing cost doing help the and you to to you that about are deal. different year protect EBITDA. the there's doing that yet. this not royalty you Could your broader some costs if about international content get then about in not Firstly, it. discretionary Discretionary the

they what are about being them base and that talk for just next cost year the you sort of we could So of whether then about being should part think back. pushed

Japan our franchise agreement. on are of deal, master the part those And

So there we master brands do when is deals then sublicense them. grow franchise -- were we the those local and partnership have works our to partners

see to and are slightly market, it. you there cost no U.S. direct royalty lower the both where the than be will franchising but support in rates would the So

So the quite EBITDA flow-through was higher.

So those thinking those. as the I of EBITDA royalty straight so But to X% on for mentioned, flow-through hotels. the on cost, rates to range an kind no X%

to material environment earlier, the SG&A of up in. piece, had On from SG&A, a the really the I some the as we initiatives that really, matching mentioned just we're wasn't, it

we and come in than As bit do construction probably new we shoots back on see Pat mentioned, that's That's green a thought little earlier year. think some longer up. I to coming the

are hotels our some pared to going spending just when we So open. of related to

more sell to deals. are opportunities Our

future would by revenues. So be say in offset incremental I coming SG&A there are still period the more if

margins SG&A were the any year. for the But affect incremental where overall of shouldn't targets our line largely, with remain we spend. in So in

a net expect number end Radisson obviously should of I as reported follow-up, of not up where focus and know have that? part that any idea the kind drop model existing? of then for what unit how do little. basis yours. quarter-on-quarter might of is or a should down that again of you and Maybe that's total the was we And growth a just Okay. But where runs we

growth speak to start I'll Radisson Yes, the Scott net then broader can trends. with unit

terminate said and What underwrote or don't looked either in we've with on Radisson, we the ones of past already hotels at as path calls continue said calls, You said a fit brand that stick into look that to we prior we number they and were guidance. on that at to we anymore. to acquisition, the a

to the a story. and in seeing interest Suites, year applications be in the Radisson expect improvement, return the we the the prop interest. XXXX remarks, Country primarily developer value is to to brand GreenSign which mentioned -- a the brand unit growth our attracting construction and brand next new growth to We We're unit and as

and pretty the acquired, application brand. and rates we frames what in to And early good as also of I putting Park side feel picture when we both kind guidance we stick at to those pipeline to look we out that's which from what Inn, brand I for Adison on is get time a start what's there, and growth. we'll it and have include unit SuiteBison of just and perspective brand can stages. in the seeing think country would So Green we're an XXXX that clearer its a and contribution deliver our

unit of the In we're back expected the plan year. openings growth, the had more net We of had terms year. for to come of half pace the we of the our right that in overall along

$X.X revenue about about. million of those growth reminder, us. we're to those And we approximately royalties that X% brands is every So feeling of our very revenue confident still talked as or X% intense brands a on intense incremental

was where back-end with always throughout pleased in we're line seeing the thought. year. we're a more weighted what we So But there those openings with of it

the call further the now remarks. Pat no questions to Pacious I hand back will are closing this time. at There for

Thanks to results. quarter announce in everyone, time talk operator. we third day. when a of you, We'll rest for our Have again, great your again you your Thank this morning. November

gentlemen, all has Thank conference now for joining. Thank and Ladies ended. you you. the

your Goodbye. You all disconnect lines. may