Choice Hotels International Inc CHH
Q1 2013 Earnings Call Transcript

Transcript Call Date 04/29/2013

Operator: Ladies and gentlemen, thank you for standing by. Good morning, and welcome to the Choice Hotels International Frist Quarter 2013 Earnings Conference Call. At this time all lines are in a listen-only mode. Later there will be a question-and-answer session and further instructions will be given at that time. As a reminder, today's call is being recorded.

During the course of this conference call, certain predictive or forward-looking statements will be used to assist you in understanding the Company and its results, which constitute forward-looking statements under the Safe Harbor provision of the Securities Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as choice or as management believes, expects, anticipates, foresees, forecasts, estimates or other words or phrases of similar import.

Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

Please consult the Company's Form 10-K for the year ended December 31, 2012, and other SEC filings for information about important risk factors affecting the Company that you should consider. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results levels of activity performance or achievements. We caution you, do not place undue reliance on forward-looking statements which reflect our analysis only and speak only as of today's date.

We undertake no obligation to publicly update our forward-looking statements to reflect subsequent events or circumstances. You can find the reconciliation of our non-GAAP financial measures referred to in our remarks as part of our first quarter 2013 earnings press release which is posted on our website at under the Investors Information section.

With that being said, I would now like to introduce Steve Joyce, President and Chief Executive Officer of Choice Hotels International Incorporated. Please go ahead, sir.

Stephen P. Joyce - President and CEO: Thank you very much. Good morning and welcome to Choice Hotels First quarter 2013 earnings conference call. Joining me as always is Dave White, our Chief Financial Officer.

I'm pleased to report that we had a very good first quarter. We are excited to give you an update on our results and on a number of new initiatives for the company including the recently announced launch of a new business unit called SkyTouch Technology and our continued progress on our strategic alliance with Bluegreen Vacations. We are very pleased with our performance for the quarter for core lodging business especially when you consider that the first quarter is typically not the strongest quarter in the industry or for our company.

Overall, our core hotel franchising business continues to perform in line with the expectations that we communicated in February in conjunction with our yearend earnings release. Our current outlook for full year unit growth, RevPAR and effective royalty rate all remain consistent with the outlook we expected and published in February. Several factors contributing to a strong first quarter is reflected in the key indicators we used to measure the performance of our lodging business include; franchising revenues increased 4% and total revenues increased 6%; domestic royalties increased 5%; domestic system-wide revenue per available room, RevPAR, increased 4.6%; domestic unit and room growth increased 1.7% and the Company enjoyed a 30% increase in new domestic hotel franchise contracts resulting in total of 83 new domestic hotel contracts.

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