Choice Hotels International Inc. (NYSE:CHH) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 10:00 am ET


Choice Hotels International Inc. (NYSE:CHH) Q3 2019 Earnings Conference Call - Final Transcript


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

Oscar Oliveros

Thank you operator and welcome everyone. Before we begin, we would like to remind you that during this conference, certain predictive or forward-looking statements will be used to assistance you in understanding the Company and its results. Actual results may differ materially from those indicated in forward-looking statements and you should consult the Company's Form 10-K and other SEC filings for information about important risk factors affecting the Company that you should consider. These forward-looking statements speak as of today's date, and we undertake no obligation to publicly update them to reflect subsequent events or circumstances. You can find a reconciliation of our non-GAAP financial measures referred to in our remarks as part of the third quarter 2019 earnings press release, which is posted on our website at under the Investor Relations section.

This morning, Patrick Pacious, our President and Chief Executive Officer, will provide an overview of our third quarter 2019 operating results. Dominic Dragisich, our Chief Financial Officer will then review our third quarter 2019 financial performance and provide an update on expectations for 2019. Following our remarks, we'll be happy to take your questions.

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

Patrick Pacious

Thanks, Oscar. Good morning everyone and thank you for joining our third quarter 2019 earnings call. We're pleased to report another quarter of strong financial performance and remain confident that our long-term growth strategy is working. This morning, we announced earnings per share that exceeded the top end of our previous guidance and raised our full year earnings per share and EBITDA guidance despite a softer RevPAR environment. Dom will share more of our financial results in just a bit.

I'd like to begin this morning by highlighting our long-term strategy to grow in higher value segments and higher value geographic markets. We continue to strengthen our presence in the higher growth and more revenue intense upscale, midscale, and extended stay segments, where our brands, reported a 3.1% increase in domestic unit growth as compared to the third quarter of 2018. Growth in these segments comes even as we transform Comfort, our largest brand. Our other midscale brands grew 4% in the quarter. Simultaneously, we continue to expand our presence in the high value upscale segment with 13% domestic rooms growth for the quarter.

We also grew in the extended stay segment where we drove a 10% increase in open hotels in the third quarter. We are also awarding a greater share of franchise agreements in more revenue intense markets. In fact, the anticipated total rooms revenue of a hotel in our pipeline today is over 40% higher than that of the average hotel in our system today. As we'll share this morning, Choice's upward momentum in high value geographic markets and segments