Choice Hotels International Provides COVID-19 Business Update - March 8th

Choice Hotels International, Inc. provided an update on the impact of the coronavirus (COVID-19) pandemic on its business.

"Today, as it has been for more than 80 years, their primary focus remains on the health and well-being of our guests, franchisees and associates

It has been through challenging times before and, each time, the company has always emerged stronger given its long-term focus, proven brands, high-caliber associates and broad franchisee base."   

Balance Sheet, Liquidity and Mitigation Plans 

The company continues to benefit from its primarily franchise-only business model, which has historically provided a relatively stable earnings stream and low capital expenditure requirements. 

In addition, management and the Board of Directors have taken steps to adjust the company's cost structure and increase its financial flexibility, which include, but are not limited to, the following actions:

• Reduced the compensation of the Board of Directors, chief executive officer and other executive officers for the remainder of 2020.

• Implemented a hiring freeze except with respect to certain critical positions, suspended associates' 401(k) match and implemented a temporary furlough for certain positions in Europe, where government-mandated and other closures have been more prevalent.

• Eliminated, reduced or deferred non-essential expenditures, discretionary capital expenditures and investments.

• Suspended the company's share repurchase plan.

• Determined to suspend future, undeclared dividends for the remainder of 2020.

  March Performance

  Domestic occupancy levels were below 50% for the month of March and softened in the last ten days of the month to trend in a range between 26% and 33% daily occupancy. These occupancy trends have continued in early April with over 90% of the company's domestic branded hotels continuing to operate at this time.

  While the company believes that the long-term fundamentals of the business remain strong, it will continue to adjust business contingency plans as the COVID-19 crisis evolves. The company continues to monitor the situation closely and intends to provide further commentary during the first quarter 2020 earnings call.