10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 _____________________________________________ 

FORM 10-Q

 _____________________________________________ 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NO. 001-13393

 _____________________________________________ 

CHOICE HOTELS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

_____________________________________________ 

Delaware		52-1209792
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)
1 Choice Hotels Circle		20850
Suite 400
Rockville,	Maryland
(Address of Principal Executive Offices)		(Zip Code)

(Registrant’s telephone number, including area code): (301) 592-5000

(Former name, former address and former fiscal year, if changed since last report): N/A

 ________________________________________________________ 

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, Par Value $0.01 per share	CHH	New York Stock Exchange

_____________________________________________  

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒     No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐ No  ☒

The number of shares of common stock outstanding on July 29, 2022 was 55,779,959.

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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

INDEX

	PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1—Financial Statements (Unaudited)	3
Consolidated Statements of Income -- For the three and six months ended June 30, 2022 and 2021	3
Consolidated Statements of Comprehensive Income -- For the three and six months ended June 30, 2022 and 2021	4
Consolidated Balance Sheets -- As of June 30, 2022 and December 31, 2021	5
Consolidated Statements of Cash Flows -- For the six months ended June 30, 2022 and 2021	6
Consolidated Statements of Shareholders' Equity -- For the three and six months ended June 30, 2022 and 2021	7
Notes to Consolidated Financial Statements	8
Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3—Quantitative and Qualitative Disclosures About Market Risk	33
Item 4—Controls and Procedures	33
PART II. OTHER INFORMATION
Item 1—Legal Proceedings	34
Item 1A—Risk Factors	34
Item 2—Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3—Defaults Upon Senior Securities	35
Item 4—Mine Safety Disclosures	35
Item 5—Other Information	35
Item 6—Exhibits	36
SIGNATURES	37

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PART I. FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(UNAUDITED)

        

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
REVENUES
Royalty fees	$	121,449	$	106,242	$	212,188	$	172,289
Initial franchise and relicensing fees	6,222		7,328		14,624		12,755
Procurement services	21,803		12,092		33,486		23,283
Marketing and reservation system	189,382		135,988		316,019		227,509
Owned hotels	17,191		8,993		29,228		13,347
Other	11,927		7,701		20,156		12,108
Total revenues	367,974		278,344		625,701		461,291
OPERATING EXPENSES
Selling, general and administrative	43,888		34,470		74,212		64,737
Depreciation and amortization	5,479		6,232		11,710		12,594
Marketing and reservation system	153,846		113,285		267,496		211,458
Owned hotels	10,692		5,333		18,846		9,480
Total operating expenses	213,905		159,320		372,264		298,269
Gain on sale of business and assets, net	3,280		—		3,309		—
Operating income	157,349		119,024		256,746		163,022
OTHER INCOME AND EXPENSES, NET
Interest expense	11,252		11,691		22,722		23,468
Interest income	(1,628)		(1,234)		(2,908)		(2,515)
Other loss (gain)	5,559		(2,108)		7,275		(3,313)
Equity in net loss (gain) of affiliates	40		(1,179)		(204)		4,818
Total other income and expenses, net	15,223		7,170		26,885		22,458
Income before income taxes	142,126		111,854		229,861		140,564
Income tax expense	35,958		25,972		56,302		32,345
Net income	$	106,168	$	85,882	$	173,559	$	108,219
Basic earnings per share	$	1.90	$	1.54	$	3.11	$	1.95
Diluted earnings per share	$	1.89	$	1.53	$	3.08	$	1.93
Cash dividends declared per share	$	0.2375	$	0.225	$	0.4750	$	0.225

The accompanying notes are an integral part of these consolidated financial statements.

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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(IN THOUSANDS)

(UNAUDITED)

        

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Net income	$	106,168	$	85,882	$	173,559	$	108,219
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(103)		71		(237)		123
Other comprehensive income (loss), net of tax	(103)		71		(237)		123
Comprehensive income	$	106,065	$	85,953	$	173,322	$	108,342

The accompanying notes are an integral part of these consolidated financial statements.

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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

(UNAUDITED)

	June 30, 2022		December 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	607,185	$	511,605
Accounts receivable (net of allowance for credit losses of $21,822 and $34,149, respectively)	203,890		153,147
Income taxes receivable	3,123		12,511
Notes receivable (net of allowance for credit losses of $4,483 and $4,318, respectively)	53,760		54,453
Prepaid expenses and other current assets	115,651		29,945
Total current assets	983,609		761,661
Property and equipment, at cost (net of accumulated depreciation and amortization of $236,191 and $232,492, respectively)	319,161		377,367
Operating lease right-of-use assets	29,669		34,183
Goodwill	159,196		159,196
Intangible assets (net of accumulated amortization of $213,000 and $195,909, respectively)	319,922		312,389
Notes receivable (net of allowance for credit losses of $7,048 and $12,461, respectively)	48,649		66,451
Investments, employee benefit plans, at fair value	29,821		33,946
Investments in affiliates	27,789		27,967
Deferred income taxes	74,049		68,643
Other assets	84,976		90,021
Total assets	$	2,076,841	$	1,931,824
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	106,427	$	81,169
Accrued expenses and other current liabilities	100,631		104,472
Deferred revenue	79,767		81,538
Current portion of long-term debt	216,571		216,351
Liability for guest loyalty program	78,955		86,765
Total current liabilities	582,351		570,295
Long-term debt	844,729		844,123
Long-term deferred revenue	107,690		105,785
Deferred compensation and retirement plan obligations	34,468		38,690
Income taxes payable	15,482		20,642
Operating lease liabilities	30,355		35,492
Liability for guest loyalty program	37,684		41,785
Other liabilities	7,357		9,130
Total liabilities	1,660,116		1,665,942
Commitments and Contingencies
Common stock, $0.01 par value; 160,000,000 shares authorized; 95,065,638 shares issued at June 30, 2022 and December 31, 2021; 55,780,322 and 55,609,226 shares outstanding at June 30, 2022 and December 31, 2021, respectively	951		951
Additional paid-in-capital	274,384		259,317
Accumulated other comprehensive loss	(4,811)		(4,574)
Treasury stock, at cost; 39,285,316 and 39,456,412 shares at June 30, 2022 and December 31, 2021, respectively	(1,276,090)		(1,265,032)
Retained earnings	1,422,291		1,275,220
Total shareholders’ equity	416,725		265,882
Total liabilities and shareholders’ equity	$	2,076,841	$	1,931,824

The accompanying notes are an integral part of these consolidated financial statements.

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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

	Six Months Ended
	June 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	173,559	$	108,219
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	11,710		12,594
Depreciation and amortization – marketing and reservation system	14,608		12,076
Gain on sale and disposal of business and assets, net	(3,309)		—
Franchise agreement acquisition cost amortization	7,623		6,294
Stock compensation and other charges	17,770		16,295
Interest and investment loss (income)	7,459		(6,824)
Deferred income taxes	(5,493)		(3,465)
Equity in net loss of affiliates, less distributions received	745		7,398
Franchise agreement acquisition costs, net of reimbursements	(27,016)		(18,078)
Change in working capital and other	(38,307)		(32,102)
Net cash provided by operating activities	159,349		102,407
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in property and equipment	(49,866)		(23,393)
Investment in intangible assets	(1,824)		(2,976)
Asset acquisitions, net of cash paid	(856)		—
Proceeds from sale of business and assets	32,893		—
Contributions to investments in affiliates	(669)		(1,136)
Proceeds from sale of equity method investments	—		11,830
Purchases of investments, employee benefit plans	(3,294)		(931)
Proceeds from sales of investments, employee benefit plans	1,854		1,994
Issuance of notes receivable	(1,987)		(17,918)
Collections of notes receivable	63		63
Other items, net	(305)		(486)
Net cash used in investing activities	(23,991)		(32,953)
CASH FLOWS FROM FINANCING ACTIVITIES
Debt issuance costs	(24)		—
Purchase of treasury stock	(15,140)		(5,362)
Dividends paid	(26,453)		—
Proceeds from exercise of stock options	2,359		9,115
Net cash (used in) provided by financing activities	(39,258)		3,753
Net change in cash and cash equivalents	96,100		73,207
Effect of foreign exchange rate changes on cash and cash equivalents	(520)		(11)
Cash and cash equivalents at beginning of period	511,605		234,779
Cash and cash equivalents at end of period	$	607,185	$	307,975
Supplemental disclosure of cash flow information:
Cash payments during the period for
Income taxes, net of refunds	$	40,144	$	17,108
Interest, net of capitalized interest	$	21,614	$	21,885
Non-cash investing and financing activities
Dividends declared but not paid	$	13,249	$	12,521
Investment in property, equipment and intangibles acquired in accounts payable and accrued liabilities	$	5,715	$	4,085
Asset acquisition from extinguishment of note receivable	$	20,446	$	—

The accompanying notes are an integral part of these consolidated financial statements.

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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

(UNAUDITED)

	Common Stock - Shares Outstanding	Common Stock - Par Value		Additional Paid-in- Capital		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Retained Earnings		Total
Balance as of December 31, 2020	55,535,554	$	951	$	233,921	$	(4,646)	$	(1,260,478)	$	1,024,500	$	(5,752)
Net income	—	—		—		—		—		22,337		22,337
Other comprehensive income (loss), net of tax	—	—		—		52		—		—		52
Share-based payment activity(1)	48,781	—		3,617		—		4,030		(3)		7,644
Dividends declared(1)	—	—		—		—		—		—		—
Treasury purchases	(46,499)	—		—		—		(5,046)		—		(5,046)
Balance as of March 31, 2021	55,537,836	$	951	$	237,538	$	(4,594)	$	(1,261,494)	$	1,046,834	$	19,235
Net income	—	—		—		—		—		85,882		85,882
Other comprehensive income (loss)	—	—		—		71		—		—		71
Share based payment activity(1)	111,895	—		9,066		—		3,516		1		12,583
Dividends declared ($0.225 per share)(1)	—	—		—		—		—		(12,521)		(12,521)
Treasury purchases	(2,738)	—		—		—		(317)		—		(317)
Balance as of June 30, 2021	55,646,993	$	951	$	246,604	$	(4,523)	$	(1,258,295)	$	1,120,196	$	104,933

	Common Stock - Shares Outstanding	Common Stock - Par Value		Additional Paid-in- Capital		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Retained Earnings		Total
Balance as of December 31, 2021	55,609,226	$	951	$	259,317	$	(4,574)	$	(1,265,032)	$	1,275,220	$	265,882
Net income	—	—		—		—		—		67,391		67,391
Other comprehensive income (loss), net of tax	—	—		—		(134)		—		—		(134)
Share-based payment activity(1)	262,008	—		6,068		—		3,486		4		9,558
Dividends declared ($0.2375 per share)(1)	—	—		—		—		—		(13,250)		(13,250)
Treasury purchases	(100,912)	—		—		—		(14,802)		—		(14,802)
Balance as of March 31, 2022	55,770,322	$	951	$	265,385	$	(4,708)	$	(1,276,348)	$	1,329,365	$	314,645
Net income	—	—		—		—		—		106,168		106,168
Other comprehensive income (loss), net of tax	—	—		—		(103)		—		—		(103)
Share based payment activity(1)	12,422	—		8,999		—		596		—		9,595
Dividends declared ($0.2375 per share)(1)	—	—		—		—		—		(13,242)		(13,242)
Treasury purchases	(2,422)	—		—		—		(338)		—		(338)
Balance as of June 30, 2022	55,780,322	$	951	$	274,384	$	(4,811)	$	(1,276,090)	$	1,422,291	$	416,725

(1) In April 2020, in light of uncertainty resulting from the COVID-19 pandemic, we suspended future, undeclared dividends. In May 2021, the Company resumed the payment of quarterly dividends, subject to future declarations by our board of directors, and declared a quarterly cash dividend of $0.225 per share of common stock. On December 6, 2021, the Company's board of directors approved a 6% increase in the quarterly cash dividend and declared a quarterly cash dividend of $0.2375 per share of common stock. During certain periods presented, accumulated dividends were paid to certain shareholders upon vesting of performance vested restricted stock units ("PVRSU") which are captured in Share-based payment activity.

The accompanying notes are an integral part of these consolidated financial statements.

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CHOICE HOTELS INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.    Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements of Choice Hotels International, Inc. and its subsidiaries (together the "Company") have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("GAAP") pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated in consolidation.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments that are necessary to fairly present the Company's financial position and results of operations. Except as otherwise disclosed, all adjustments are of a normal recurring nature.

Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP have been omitted. Although we believe the disclosures made are adequate to prevent the information presented from being misleading, these financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2021 and notes thereto included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 24, 2022. Interim results are not necessarily indicative of the entire year results.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are detailed in the “Summary of Significant Accounting Policies” section of Note 1 in the Annual Report on Form 10-K for the year ended December 31, 2021.

Recently Adopted Accounting Standards

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Topic 606, as opposed to at fair value. ASU 2021-08 is effective for annual reporting periods beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted.

The Company has elected to early adopt ASU 2021-08 in the second quarter of 2022. The adoption has no present impact on the Company's consolidated financial statements, but will impact the accounting for contract assets and contract liabilities acquired in future business combinations.

Recently Issued Accounting Standards

In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses ("ASU 2022-02"). ASU 2022-02 eliminates the recognition and measurement guidance on troubled debt restructuring for creditors that have adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) ("Topic 326"), requires enhanced disclosures about loan modifications for borrowers experiencing financial difficulty, and includes new guidance on current-period gross write-offs presentation. ASU 2022-02 is effective for annual reporting periods beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the potential impact that ASU 2022-02 will have on the consolidated financial statements and disclosures.

2.    Revenue

Contract Liabilities

Contract liabilities relate to (i) advance consideration received, such as initial franchise and relicensing fees paid when a franchise agreement is executed and system implementation fees paid at time of installation, for services considered to be part of the brand intellectual property performance obligation and (ii) amounts received when Choice Privileges points are issued, but for which revenue is not yet recognized since the related points have not been redeemed.

Deferred revenues from initial and relicensing fees and system implementation fees are typically recognized over a five- to ten-year period, unless the franchise agreement is terminated and the hotel exits the franchise system whereby remaining deferred amounts are recognized to revenue in the period of termination. Loyalty points are typically redeemed within three years of issuance.

Significant changes in the contract liabilities balances during the period December 31, 2021 to June 30, 2022 are as follows:

(in thousands)
Balance as of December 31, 2021	$	175,425
Increases to the contract liability balance due to cash received	56,392
Revenue recognized in the period	(57,127)
Balance as of June 30, 2022	$	174,690

Remaining Performance Obligations

The aggregate amount of transaction price allocated to unsatisfied or partially unsatisfied performance obligations is $174.7 million as of June 30, 2022. This amount represents fixed transaction price that will be recognized as revenue in future periods, which is captured in the consolidated balance sheet as current and non-current deferred revenue.

Based on practical expedient elections permitted by ASU 2014-09, Revenue From Contracts with Customers (Topic 606) and subsequent amendments ("Topic 606"), the Company does not disclose the value of unsatisfied performance obligations for (i) variable consideration subject to the sales or usage-based royalty constraint or comprising a component of a series (including franchise, partnership, qualified vendor, and software as a service ("SaaS") agreements), (ii) variable consideration for which we recognize revenue at the amount to which we have the right to invoice for services performed, or (iii) contracts with an expected original duration of one year or less.

Disaggregation of Revenue

	Three Months Ended						Three Months Ended
	June 30, 2022						June 30, 2021
(in thousands)	Over time		Point in time		Total		Over time		Point in time		Total
Royalty fees	$	121,449	$	—	$	121,449	$	106,242	$	—	$	106,242
Initial franchise and relicensing fees	6,222		—		6,222		7,328		—		7,328
Procurement services	20,744		1,059		21,803		11,502		590		12,092
Marketing and reservation system	148,126		41,256		189,382		121,944		14,044		135,988
Owned hotels	14,694		2,388		17,082		7,550		1,336		8,886
Other	11,927		—		11,927		7,701		—		7,701
Total Topic 606 revenues	$	323,162	$	44,703	367,865		$	262,267	$	15,970	278,237
Non-Topic 606 revenues					109						107
Total revenues					$	367,974					$	278,344
	Six Months Ended						Six Months Ended
	June 30, 2022						June 30, 2021
(in thousands)	Over time		Point in time		Total		Over time		Point in time		Total
Royalty fees	$	212,188	$	—	$	212,188	$	172,289	$	—	$	172,289
Initial franchise and relicensing fees	14,624		—		14,624		12,755		—		12,755
Procurement services	31,876		1,610		33,486		22,241		1,042		23,283
Marketing and reservation system	260,382		55,637		316,019		200,995		26,514		227,509
Owned hotels	24,635		4,385		29,020		11,068		2,058		13,126
Other	20,156		—		20,156		12,108		—		12,108
Total Topic 606 revenues	$	563,861	$	61,632	625,493		$	431,456	$	29,614	461,070
Non-Topic 606 revenues					208						221
Total revenues					$	625,701					$	461,291

Marketing and reservation system and Procurement services point in time revenues represent loyalty points redeemed by members for benefits (with both franchisees and third-party partners), net of the cost of redemptions.

As presented in Note 11, the Corporate & Other segment amounts represent $19.4 million and $10.9 million for the three months ended June 30, 2022 and 2021, respectively, and $33.7 million and $17.0 million for the six months ended June 30, 2022 and 2021, respectively, and are included in the Over time column of Other revenues and the Owned hotels and Non-Topic 606 revenues rows. The remaining revenues relate to the Hotel Franchising segment.

Royalty fees and Marketing and reservation system revenues are presented net of intersegment revenues of $1.3 million and $0.7 million for the three months ended June 30, 2022 and 2021, respectively, and $2.2 million and $1.0 million for the six months ended June 30, 2022 and 2021, respectively.

3.    Receivables and Allowance for Credit Losses

Notes Receivable

The Company has provided financing in the form of notes receivable loans to franchisees to support the development of properties in strategic markets. The Company's credit quality indicator is the level of security in the note receivable.

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The composition of notes receivable balances by credit quality indicator and the allowance for credit losses is as follows:

(in thousands)	June 30, 2022		December 31, 2021
Senior	$	91,981	$	108,370
Subordinated	20,506		27,801
Unsecured	1,453		1,512
Total notes receivable	113,940		137,683
Total allowance for notes receivable credit losses	11,531		16,779
Total notes receivable, net of allowance	$	102,409	$	120,904
Current portion, net of allowance	$	53,760	$	54,453
Long-term portion, net of allowance	$	48,649	$	66,451

Amortized cost basis by year of origination and credit quality indicator are as follows:

(in thousands)	2022		2021		2020		Prior		Total
Senior	$	—	$	4,211	$	—	$	87,770	$	91,981
Subordinated	—		—		—		20,506		20,506
Unsecured	—		—		—		1,453		1,453
Total notes receivable	$	—	$	4,211	$	—	$	109,729	$	113,940

The following table summarizes the activity related to the Company’s notes receivable allowance for credit losses:

(in thousands)	June 30, 2022		December 31, 2021
Beginning balance	$	16,779	$	19,484
Provision for credit losses	230		709
Write-offs	(5,478)		(3,414)
Ending balance	$	11,531	$	16,779

As of June 30, 2022 and December 31, 2021, one loan and two loans, respectively, with senior and/or subordinated tranches met the definition of collateral-dependent and are collateralized by membership interests in the borrowing entities and either the associated land parcels or an operating hotel. The Company used a discounted cash flow ("DCF") technique to project cash flows or a market approach via quoted market prices to value the underlying collateral. The Company reviewed the borrower's financial statements, economic trends, industry projections for the market, and comparable sales capitalization rates, which represent significant inputs to the cash flow projections. These nonrecurring fair value measurements are classified as level three of the fair value measurement hierarchy, as there are unobservable inputs which are significant to the overall fair value. Based on these analyses, the fair value of collateral secures the carrying value of each loan to a significant extent. Allowances for credit losses attributable to collateral-dependent loans are $0.9 million and $6.3 million as of June 30, 2022 and December 31, 2021, respectively.

The write-offs for the year ended June 30, 2022 and December 31, 2021 are associated with loans previously classified as collateral-dependent that were settled in exchange for an operating hotel on April 14, 2022 and October 1, 2021, respectively. Refer to Note 15 regarding the second quarter 2022 asset acquisition accounting.

As a result of the COVID-19 pandemic, the Company extended interest deferral terms on certain notes receivable. The Company considers loans past due and in default when payments are not made when due in accordance with then current loan provisions or terms extended to borrowers, including loans with concessions or interest deferral. The Company suspends the accrual of interest when payments on loans are more than 30 days past due or upon a loan being classified as collateral-dependent. The Company applies payments received for loans on non-accrual status first to interest and then to principal. The Company does not resume interest accrual until all delinquent payments are received based on then current loan provisions. The amortized cost basis of notes receivable on non-accrual status was $18.2 million and $44.1 million at June 30, 2022 and December 31, 2021, respectively.

The Company has identified loans totaling approximately $7.5 million as of both June 30, 2022 and December 31, 2021, respectively, with stated interest rates that are less than market rate, representing a total unamortized discount of $0.2 million and $0.3 million as of June 30, 2022 and December 31, 2021, respectively. These discounts are reflected as a reduction of the outstanding loan amounts and are amortized over the life of the related loan.

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The past due balances by credit quality indicator of notes receivable are as follows:

(in thousands)	1- 30 days Past Due		31-89 days Past Due		> 90 days Past Due		Total Past Due		Current		Total  Notes Receivable
As of June 30, 2022
Senior	$	—	$	—	$	15,200	$	15,200	$	76,781	$	91,981
Subordinated	—		—		2,209		2,209		18,297		20,506
Unsecured	—		—		—		—		1,453		1,453
	$	—	$	—	$	17,409	$	17,409	$	96,531	$	113,940
As of December 31, 2021
Senior	$	—	$	—	$	—	$	—	$	108,370	$	108,370
Subordinated	—		—		2,209		2,209		25,592		27,801
Unsecured	—		—		—		—		1,512		1,512
	$	—	$	—	$	2,209	$	2,209	$	135,474	$	137,683

The Company evaluated its off-balance-sheet credit exposure for loan commitments and determined the likelihood of having to perform is remote as of June 30, 2022. Refer to Note 12.

Variable Interest through Notes Issued

The Company has issued notes receivables to certain entities that have created variable interests in these borrowers totaling $101.7 million and $120.2 million as of June 30, 2022 and December 31, 2021, respectively. The Company has determined that it is not the primary beneficiary of these variable interest entities ("VIEs"). These loans have stated fixed and/or variable interest amounts.

Accounts Receivable

Accounts receivable consist primarily of franchise and related fees due from hotel franchisees and are recorded at the invoiced amount.

During six months ended June 30, 2022, the Company recorded reversals of provisions for credit losses on accounts receivable of $1.1 million in SG&A expenses and $0.3 million in marketing and reservation system expenses. During the six months ended June 30, 2021, the Company recorded reversal of provisions for credit losses on accounts receivable of $0.1 million in SG&A expenses and provisions of $0.2 million in marketing and reservation system expenses. During the six months ended June 30, 2022 and 2021, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $11.2 million and $2.4 million, respectively.

4.    Investments in Affiliates

The Company maintains equity method investments in affiliates related to the Company's program to offer equity support to qualified franchisees to develop and operate Cambria Hotels in strategic markets. The Company has investments in affiliates that represent VIEs totaling $24.1 million and $25.2 million on the consolidated balance sheets at June 30, 2022 and December 31, 2021, respectively. The Company has determined that it is not the primary beneficiary of any of these VIEs, however it does exercise significant influence through its equity ownership and as a result the investment in these affiliates is accounted for under the equity method. For the three months ended June 30, 2022 and 2021, the Company recognized losses (gains) totaling $0.9 million and $(0.9) million, respectively, from these investments that represent VIEs. For the six months ended June 30, 2022 and 2021, the Company recognized losses totaling $1.7 million and $5.5 million, respectively, from these investments that represent VIEs. The Company's maximum exposure to losses related to its investments in VIEs is limited to its equity investments as well as certain limited payment guaranties described in Note 12 of these financial statements.

The Company recognized no impairment charges related to equity method investments during the six months ended June 30, 2022. During the first quarter of 2021, the Company recognized an other-than-temporary impairment of $4.8 million related to an equity method investment. The Company assessed the estimated fair value of the investment from comparable market transactions of the investment, which was a key judgment in the fair value determination. This nonrecurring fair value measurement was classified as level three of the fair value measurement hierarchy, as the Company utilized unobservable inputs which are significant to the overall fair value. Based on this analysis, the Company determined that the fair market value declined below the carrying value and the decline is other-than-temporary. As a result, the Company recorded an other-than-temporary impairment from the carrying value to the estimated fair value for the investment. The other-than-temporary impairment is classified as equity in net loss of affiliates in the consolidated statements of income and captured in the Hotel Franchising reportable segment in Note 11.

During the second quarter of 2021, the Company sold its ownership interest in three separate equity method investments. The Company recognized a cumulative gain of $2.6 million on the sales of these investments, which is recorded in equity in net loss (gain) of affiliates.

5.    Debt

Debt consists of the following:

	June 30, 2022		December 31, 2021
	(in thousands)
$450 million senior unsecured notes due 2031 ("2020 Senior Notes") with an effective interest rate of 3.86%, less a discount and deferred issuance costs of $5.2 million and $5.5 million at June 30, 2022 and December 31, 2021, respectively	$	444,775	$	444,470
$400 million senior unsecured notes due 2029 ("2019 Senior Notes") with an effective interest rate of 3.88%, less a discount and deferred issuance costs of $4.5 million and $4.8 million at June 30, 2022 and December 31, 2021, respectively	395,538		395,237
$216.6 million senior unsecured notes due 2022 ("2012 Senior Notes") with an effective interest rate of 6.00%, less deferred issuance costs of $0.2 million at December 31, 2021 (2)	216,571		216,351
$600 million senior unsecured revolving credit facility (1)	—		—
Economic development loans with an effective interest rate of 3.00% at June 30, 2022 and December 31, 2021, respectively	4,416		4,416
Total debt	$	1,061,300	$	1,060,474
Less current portion (2)	216,571		216,351
Long-term debt	$	844,729	$	844,123

(1) During the third quarter of 2020, the Company utilized excess cash on hand to pay down its senior unsecured revolving credit facility balance in full and the facility remains undrawn as of June 30, 2022 and December 31, 2021. As there are no outstanding borrowings at June 30, 2022 or December 31, 2021, deferred issuance costs for the senior unsecured revolving credit facility of $2.0 million and $2.3 million, respectively, are presented in non-current Other assets in the consolidated balance sheets.

(2) The 2012 Senior Notes matured on July 1, 2022. The outstanding principal of $216.6 million was re-paid at maturity.

Refer to Note 12 and the Liquidity and Capital Resources header of "Management's Discussion and Analysis of Financial Condition and Results of Operations" for more information.

6.    Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss, net of tax, for the six months ended June 30, 2022 and 2021 are as follows:

(in thousands)
Balance as of December 31, 2021	$	(4,574)
Other comprehensive income (loss) before reclassification	(237)
Net current period other comprehensive income (loss)	(237)
Balance as of June 30, 2022	$	(4,811)

(in thousands)
Balance as of December 31, 2020	$	(4,646)
Other comprehensive income (loss) before reclassification	123
Net current period other comprehensive income (loss)	123
Balance as of June 30, 2021	$	(4,523)

The other comprehensive income (loss) before reclassification for both the six months ended June 30, 2022 and 2021 relate to foreign currency items.

7.    Fair Value Measurements

The Company estimates the fair value of its financial instruments utilizing a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The following summarizes the three levels of inputs, as well as the assets that the Company values using those levels of inputs on a recurring basis.

Level 1: Quoted prices in active markets for identical assets and liabilities. The Company’s Level 1 assets consist of marketable securities (primarily mutual funds) held in the Deferred Compensation Plan.

Level 2: Observable inputs, other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable. The Company’s Level 2 assets consist of money market funds held in the Company's Deferred Compensation Plan.

Level 3: Unobservable inputs, supported by little or no market data available, where the reporting entity is required to develop its own assumptions to determine the fair value of the instrument. The Company does not currently have any assets recorded at fair value whose fair value was determined using Level 3 inputs and there were no transfers of Level 3 assets during the six months ended June 30, 2022.

As of June 30, 2022 and December 31, 2021, the Company had the following assets recorded in the consolidated balance sheets measured at fair value on a recurring basis:

	Fair Value Measurements at Reporting Date Using
(in thousands)	Total		Level 1		Level 2		Level 3
As of June 30, 2022
Mutual funds (1)	$	27,895	$	27,895	$	—	$	—
Money market funds (1)	3,019		—		3,019		—
Total	$	30,914	$	27,895	$	3,019	$	—
As of December 31, 2021
Mutual funds (1)	$	33,555	$	33,555	$	—	$	—
Money market funds (1)	2,520		—		2,520		—
Total	$	36,075	$	33,555	$	2,520	$	—

(1) Included in Investments, employee benefit plans, at fair value and Prepaid expenses and other current assets on the consolidated balance sheets.

Other financial instruments disclosure

The Company believes that the fair values of its current assets and current liabilities approximate their reported carrying amounts due to the short-term nature of these items. In addition, the interest rates of the Company's senior unsecured revolving credit facility adjust frequently based on current market rates; accordingly, we believe its carrying amount, when amounts are drawn, approximates fair value.

The fair values of the Company's senior unsecured notes are classified as Level 2, as the significant inputs are observable in an active market. Refer to Note 5 for further information on debt, including the maturity of the 2012 Senior Notes. At June 30, 2022 and December 31, 2021, the carrying amounts and fair values are as follows:

	June 30, 2022				December 31, 2021
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
2020 Senior Notes	$	444,775	$	396,675	$	444,470	$	477,675
2019 Senior Notes	395,538		355,668		395,237		425,984
2012 Senior Notes	216,571		216,571		216,351		221,702

Fair value estimates are made at a specific point in time, are subjective in nature and involve uncertainties and matters of significant judgment. Settlement of such fair value amounts may not be possible or a prudent management decision.

8. Income Taxes

The effective income tax rates were 25.3% and 23.2% for the three months ended June 30, 2022 and 2021, respectively. The effective income tax rates were 24.5% and 23.0% for the six months ended June 30, 2022 and 2021, respectively.

The effective income tax rate for the three and six months ended June 30, 2022 and 2021 was higher than the U.S. federal income tax rate of 21.0% primarily due to the impact of state income taxes, partially offset by excess tax benefits from share-based compensation.

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9.    Share-Based Compensation and Capital Stock

The components of the Company’s pretax share-based compensation activity are as follows for the three and six months ended June 30, 2022 and 2021:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Stock options	$	1,177	$	932	$	2,229	$	1,548
Restricted stock awards	3,558		2,323		6,601		4,842
Performance vested restricted stock units	4,810		3,144		8,164		4,810
Total share-based compensation expense	$	9,545	$	6,399	$	16,994	$	11,200

A summary of share-based award activity as of and changes during the six months ended June 30, 2022 are presented below:

	Stock Options				Restricted Stock			Performance Vested Restricted Stock Units
	Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	910,944	$	83.14		236,599	$	92.60	412,642	$	114.70
Granted	155,774	146.68			255,786	145.64		111,585	181.91
Performance-Based Leveraging (1)	—	—			—	—		21,281	153.75
Exercised/Vested	(43,934)	53.70			(93,354)	87.20		—	—
Expired	(986)	51.49			—	—		(78,370)	81.15
Forfeited	(1,050)	146.68			(6,551)	104.45		(1,460)	133.25
Outstanding at June 30, 2022	1,020,748	$	94.07	5.9	392,480	$	128.25	465,678	$	136.02
Options exercisable at June 30, 2022	546,114	$	76.29	3.8

(1) PVRSUs outstanding have been increased by 21,281 units in the six months ended June 30, 2022 due to the Company exceeding the targeted performance conditions contained in PVRSUs.

Stock Options

The stock options granted by the Company had an exercise price equal to the market price of the Company's common stock on the date of grant. The fair value of the options granted was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2022 Grants
Risk-free interest rate	1.92		%
Expected volatility	29.39		%
Expected life of stock option	5.9 years
Dividend yield	0.65		%
Requisite service period	4 years
Contractual life	10 years
Weighted average fair value of options granted (per option)	$	43.25

Restricted Stock Awards

The Company grants two types of restricted stock awards: i) shares of restricted stock and ii) restricted stock units ("RSU"). Shares of restricted stock provide the participant a non-forfeitable right to dividends, if declared, and the right to vote as a shareholder while the shares are unvested. RSUs provide the participant declared dividends that are contingent upon vesting of the award. Restricted stock awards generally vest ratably over the service period beginning with the first anniversary of the grant date. The fair value of restricted stock awards is measured by the market price of the Company's common stock on the

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date of grant. The service period of restricted stock awards granted during the six months ended June 30, 2022 range from 9 to 60 months.

Performance Vested Restricted Stock Units

The Company grants three types of PVRSU awards: i) PVRSUs with performance conditions based on internal performance conditions, including earnings per share ("EPS") relative to Company established targets, ii) PVRSUs with market conditions based on the Company's total shareholder return ("TSR") relative to a predetermined peer group, and iii) PVRSUs with both performance and market conditions. The vesting of PVRSU awards is contingent upon the Company achieving internal performance and/ or TSR targets over a specified period and the employees' continued employment for a service period. These performance and market conditions affect the number of shares that will ultimately vest.

During the six months ended June 30, 2022, the Company granted PVRSUs with market conditions, PVRSUs with performance conditions and PVRSUs with performance and market conditions with requisite service periods between 9 months and 60 months with award vesting ranges between 0% and 300% of the initial units granted.

The fair value of PVRSUs with only internal performance conditions is measured by the market price of the Company's common stock on the date of award grant. Compensation expense is recognized ratably over the requisite service period based on the Company's estimate of the achievement of the performance conditions. Management monitors current results and forecasts of the relevant internal performance and, as necessary, adjusts the performance-based leveraging of unvested PVRSUs.

The fair value of PVRSUs with market conditions is estimated using a Monte Carlo simulation method as of the date of award grant. Compensation expense is recognized ratably over the requisite service period, regardless of whether the market conditions are achieved and the awards ultimately vest.

The fair value of PVRSUs with both performance and market conditions is estimated using a Monte Carlo simulation method as of the date of award grant. Compensation expense is recognized ratably over the requisite service period based on the Company's estimate of the achievement of the performance conditions, with subsequent adjustments made for performance-based leveraging of unvested PVRSUs, as necessary.

Share Repurchases and Redemptions

In April 2020, in light of uncertainty resulting from the COVID-19 pandemic, the Company suspended activity under the Company's share repurchase program. In May 2021, the Company's board of directors approved resumption of the share repurchase program. Refer to the Liquidity and Capital Resources header of "Management's Discussion and Analysis of Financial Condition and Results of Operations" for more information.

During the six months ended June 30, 2022, 68,486 shares of common stock were purchased under the share repurchase program at a total cost of $9.9 million. There were no purchases of stock under the share repurchase program during the three months ended June 30, 2022. During the three and six months ended June 30, 2021, 1,582 shares of common stock were purchased under the share repurchase program at a total cost of $0.2 million. During the three months ended June 30, 2022 and 2021, the Company redeemed 2,422 and 1,156 shares of common stock at a total cost of $0.3 million and $0.1 million, respectively, from employees to satisfy the option exercise price and statutory minimum tax-withholding requirements related to the exercising of stock options and vesting of performance vested restricted stock units and restricted stock grants. During the six months ended June 30, 2022 and 2021, the Company redeemed 34,848 and 47,655 shares of common stock at a total cost of $5.2 million and $5.4 million, respectively, from employees to satisfy the option exercise price and statutory minimum tax-withholding requirements related to the exercising of stock options and vesting of performance vested restricted stock units and restricted stock grants. These redemptions were outside the share repurchase program.

10.    Earnings Per Share

The Company’s shares of restricted stock contain rights to receive nonforfeitable dividends and thus are participating securities requiring the computation of basic EPS using the two-class method. As the shares of restricted stock are both potential shares of common stock and participating securities, the Company calculates diluted earnings per share by the more dilutive of the treasury stock method or the two-class method. The calculation of EPS for net income available to common shareholders excludes the distribution of dividends and undistributed earnings attributable to participating securities from the numerator. The diluted earnings weighted average shares of common stock outstanding includes stock options, PVRSUs and RSUs.

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The computation of basic and diluted earnings per share of common stock is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands, except per share amounts)	2022		2021		2022		2021
Numerator:
Net income	$	106,168	$	85,882	$	173,559	$	108,219
Income allocated to participating securities	(622)		(324)		(919)		(463)
Net income available to common shareholders	$	105,546	$	85,558	$	172,640	$	107,756
Denominator:
Weighted average shares of common stock outstanding – basic	55,446		55,389		55,429		55,326
Basic earnings per share	$	1.90	$	1.54	$	3.11	$	1.95
Numerator:
Net income	$	106,168	$	85,882	$	173,559	$	108,219
Income allocated to participating securities	(622)		(324)		(919)		(463)
Net income available to common shareholders	$	105,546	$	85,558	$	172,640	$	107,756
Denominator:
Weighted average shares of common stock outstanding – basic	55,446		55,389		55,429		55,326
Dilutive effect of stock options and PVRSUs	524		411		583		405
Weighted average shares of common stock outstanding – diluted	55,970		55,800		56,012		55,731
Diluted earnings per share	$	1.89	$	1.53	$	3.08	$	1.93

The following securities have been excluded from the calculation of diluted weighted average shares of common stock outstanding as the inclusion of these securities would have an anti-dilutive effect:

	Three Months Ended		Six Months Ended
	June 30,		June 30,
(in thousands)	2022	2021	2022	2021
Stock options	155	—	155	—
PVRSUs	76	157	76	157

11.    Reportable Segment Information

The Hotel Franchising reportable segment includes the Company's hotel franchising operations consisting of its fourteen brands. The fourteen brands are aggregated within this segment considering their similar economic characteristics, types of customers, distribution channels and regulatory business environments. Revenues from the hotel franchising business include royalty fees, initial franchise and relicensing fees, marketing and reservation system fees, procurement services revenue and other hotel franchising related revenue. The Company is obligated under its hotel franchise agreements to provide marketing and reservation services appropriate for the operation of its systems. The revenues received from franchisees that are used to pay for part of the Company's ongoing operations are included in hotel franchising revenues and are offset by the related expenses paid for marketing and reservation system activities to calculate hotel franchising operating income. Equity in earnings or losses from hotel franchising related investment in affiliates is allocated to the Company's hotel franchising segment.

The Company evaluates its hotel franchising segment based primarily on the results of the segment without allocating corporate expenses, indirect general and administrative expenses, interest expense, interest income, other gains and losses or income taxes, which are included in the Corporate & Other column. Corporate & Other revenues include owned hotel revenues, rental income related to an office building owned by the Company, and revenues related to the Company's SaaS technology solutions division which provide cloud-based property management software to non-franchised hoteliers.

Intersegment revenue adjustment is from the elimination of Hotel Franchising revenue which include royalty and marketing and reservation system fees charged to our owned hotels against franchise fee expense recognized by our owned hotels in Corporate & Other operating income (loss).

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Our President and Chief Executive Officer, who is our chief operating decision maker, does not use assets by operating segment when assessing performance or making operating segment resource allocations decisions and therefore assets by segment are not disclosed below.

The following table presents the financial information for the Company's segments:

	Three Months Ended June 30, 2022								Three Months Ended June 30, 2021
(in thousands)	Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated		Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated
Revenues	$	349,857	$	19,411	$	(1,294)	$	367,974	$	268,092	$	10,932	$	(680)	$	278,344
Operating income (loss)	$	165,448	$	(8,099)	$	—	$	157,349	$	132,600	$	(13,576)	$	—	$	119,024
Income (loss) before income taxes	$	165,405	$	(23,279)	$	—	$	142,126	$	134,025	$	(22,171)	$	—	$	111,854
	Six Months Ended June 30, 2022								Six Months Ended June 30, 2021
(in thousands)	Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated		Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated
Revenues	$	594,228	$	33,671	$	(2,198)	$	625,701	$	445,310	$	16,972	$	(991)	$	461,291
Operating income (loss)	$	272,768	$	(16,022)	$	—	$	256,746	$	190,753	$	(27,731)	$	—	$	163,022
Income (loss) before income taxes	$	272,969	$	(43,108)	$	—	$	229,861	$	185,936	$	(45,372)	$	—	$	140,564

12.     Commitments and Contingencies

The Company is not a party to any litigation other than litigation in the ordinary course of business. The Company's management and legal counsel do not expect that the ultimate outcome of any of its currently ongoing legal proceedings, individually or collectively, will have a material adverse effect on the Company's financial position, results of operations or cash flows.

Contingencies

The Company entered into various limited payment guaranties with regards to the Company’s VIEs supporting their efforts to develop and own hotels franchised under the Company’s brands. Under these limited payment guaranties, the Company has agreed to guarantee a portion of the outstanding debt until certain conditions are met such as (a) the loan matures, (b) certain debt covenants are achieved, (c) the maximum amount guaranteed by the Company is paid in full or (d) the Company, through its affiliates, ceases to be a member of the VIE. The maximum exposure of principal incidental to these limited payment guaranties is $5.7 million, plus unpaid expenses and accrued unpaid interest. As of June 30, 2022 and December 31, 2021, the Company believed the likelihood of having to perform under the aforementioned limited payment guaranties was remote. In the event of performance, the Company has recourse for one of the transactions in the form of a membership interest pledge as collateral for the guaranty.

Commitments

The Company has the following commitments outstanding at June 30, 2022:

•The Company provides financing in the form of franchise agreement acquisition payments to franchisees for property improvements, hotel development efforts and other purposes. These payments are typically made at commencement of construction or hotel opening, in accordance with agreed upon provisions in individual franchise agreements. At June 30, 2022, the Company had commitments to extend an additional $269.4 million for these purposes provided the conditions of the payment are met by its franchisees.

•To the extent existing unconsolidated affiliates proceed to the hotel construction phase, the Company is committed to make capital contributions totaling $7.5 million to support their efforts to construct Cambria hotels.

•The Company committed to provide financing in the form of loans or credit facilities to franchisees for Choice brand development efforts. At June 30, 2022, the Company has remaining commitments of approximately $5.5 million, upon certain conditions being met.

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•The Company’s franchise agreements require the payment of franchise fees, which include marketing and reservation system fees. In accordance with terms of our franchise agreements, the Company is obligated to use the marketing and reservation system revenues it collects from the current franchisees comprising its various hotel brands to provide marketing and reservation services appropriate to support the operation of the overall system. To the extent revenues collected exceed expenditures incurred, the Company has a commitment to the franchisee system to make expenditures in future years. Conversely, to the extent expenditures incurred exceed revenues collected, the Company has the contractual enforceable right to assess and collect such amounts.

In the ordinary course of business, the Company enters into numerous agreements that contain standard indemnities whereby the Company indemnifies another party for breaches of representations and warranties. Such indemnifications are granted under various agreements, including those governing (i) purchases or sales of assets or businesses, (ii) leases of real estate, (iii) licensing of trademarks, (iv) access to credit facilities, (v) issuances of debt or equity securities, and (vi) certain operating agreements. The indemnifications issued are for the benefit of the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts, (iii) franchisees in licensing agreements, (iv) financial institutions in credit facility arrangements, (v) underwriters in debt or equity security issuances and (vi) parties under certain operating agreements. In addition, these parties are also generally indemnified against any third-party claim resulting from the transaction that is contemplated in the underlying agreement. While some of these indemnities extend only for the duration of the underlying agreement, many survive the expiration of the term of the agreement or extend into perpetuity (unless subject to a legal statute of limitations). There are no specific limitations on the maximum potential amount of future payments that the Company could be required to make under these indemnities, nor is the Company able to develop an estimate of the maximum potential amount of future payments to be made under these indemnifications as the triggering events are not subject to predictability. With respect to certain of the aforementioned indemnities, such as indemnifications of landlords against third-party claims for the use of real estate property leased by the Company, the Company maintains insurance coverage that mitigates potential liability.

13.     Transactions with Unconsolidated Affiliates

The Company has a management fee arrangement for marketing services with a partner in an unconsolidated affiliate. For the three months ended June 30, 2022 and 2021, fees earned and payroll costs reimbursed under this arrangement totaled $0.6 million and $0.3 million, respectively. For the six months ended June 30, 2022 and 2021, fees earned and payroll costs reimbursed under this arrangement totaled $0.9 million and $0.5 million, respectively.

The Company has entered into franchise agreements with certain of the unconsolidated affiliates discussed in Note 4. Pursuant to these franchise agreements, for the three months ended June 30, 2022 and 2021, the Company recorded royalty and marketing reservation system fees of approximately $6.4 million and $4.1 million, respectively. For the six months ended June 30, 2022 and 2021, the Company recorded royalty and marketing reservation system fees of approximately $10.6 million and $7.0 million, respectively. The Company recorded $3.6 million and $2.7 million as a receivable due from these affiliates as of June 30, 2022 and December 31, 2021, respectively.

14.    Assets Held for Sale

Assets held for sale of $91.9 million are recorded within Prepaid expenses and other current assets on the consolidated balance sheets related to an owned Cambria hotel asset. The hotel met held for sale classification as of May 2022. No revision to the carrying value was recorded upon reaching held for sale classification. The building was sold to a third-party franchisee in July 2022, resulting in derecognition from the balance sheet and recognition of a gain on sale of approximately $16.0 million in the third quarter of 2022 in the Corporate & Other segment.

A second owned Cambria hotel asset met held for sale classification in April 2022 and sale consummated to a third-party franchisee in June 2022, resulting in derecognition from the balance sheet and recognition of a gain on sale in the second quarter of 2022 in the Corporate & Other segment.

15.    Acquisitions

In April 2022, the Company reached a settlement with a borrower holding a senior and mezzanine loan classified as collateral-dependent, collateralized by an operating hotel. As a collateral-dependent financial asset, the expected credit losses as of March 31, 2022 were determined based on the fair value of the operating hotel. As of March 31, 2022, the Notes receivable, net of allowance for credit losses, balance was $20.4 million.

The key terms of the settlement resulted in a deed in lieu of foreclosure on the operating hotel in exchange for releasing obligations pursuant to the senior and mezzanine loans and the associated franchise agreement. The property was exchanged in full settlement of the senior and mezzanine loans and recorded at the fair value of $20.4 million as of the acquisition date of April 14, 2022. The fair value was estimated using an income approach valuation method based on discounted cash flows of the

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collateralized operating hotel utilizing historical operating performance, industry projections for the market, and comparable sales capitalization rates.

In accordance with the provisions of ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01"), the purchase represents an asset acquisition based on the concentration of value in the acquired land and building. The $20.4 million was re-characterized from Notes receivable, net of allowance for credit losses, and attributed to each asset class based on a relative fair value allocation to qualifying assets, resulting in $3.3 million to land, $16.6 million to building and improvements, $1.3 million to furniture, fixtures, and equipment, and $(0.8) million to net liabilities assumed.

16.     Subsequent Events

On June 12, 2022, the Company signed a definitive purchase agreement to acquire 100% of Radisson Hospitality, Inc. (“Radisson Hotels Americas") for a purchase price of approximately $675 million. As of August 4, 2022, the transaction has not closed.

On July 19, 2022, the Company received a termination notice from an ownership group of approximately 111 open and operating WoodSpring properties. The termination notice indicates the group's intent to exit the majority of these 111 properties from the Choice system in September 2022 and acknowledges termination fees due pursuant to the associated franchise agreements. This termination notice will be evaluated in the third quarter of 2022.

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help the reader understand the consolidated financial condition and results of operations of Choice Hotels International, Inc. and its subsidiaries (together the "Company", "we", "us", or "our") contained in this report. MD&A is provided as a supplement to — and should be read in conjunction with — our consolidated financial statements and the accompanying notes.

Recent Developments

Impact of the COVID-19 Pandemic

The COVID-19 pandemic continues to cause disruptions to the global economy and the hospitality industry, including in the United States, where more than 80% of our franchised hotels are located. Reduced travel as a result of COVID-19 adversely impacted the hospitality industry generally and the Company, however, the development and distribution of effective vaccines and other containment efforts have been significant positive developments that we believe have contributed to improved operating metrics since the second quarter of 2021. The extent to which the COVID-19 pandemic will impact the hospitality industry generally and our operations remains uncertain and will depend in part on future developments, including the severity and duration of resurgences or variants of the virus, the effectiveness of actions by government authorities and the public to continue to contain the pandemic, and the potential for adverse changes in consumer sentiment with respect to travel during the pandemic.

Since the time the impacts of COVID-19 on the Company's business were first experienced in March 2020, trends have improved steadily, with the second quarter 2022 domestic RevPAR experiencing an increase of approximately 14.3% and 13.0% relative to second quarter 2021 and second quarter 2019, respectively. As of both June 30, 2022 and June 30, 2021, less than 1% of Company's domestic hotel system had temporarily suspended operations due to governmental restriction or a franchisee’s election.

As the industry recovery continues, the Company believes it will continue to benefit from the faster rebound of leisure demand as a result of its higher share of leisure travel mix relative to competitors. The Company's properties are also well distributed in drive-to markets, which the Company believes will lead in the demand recovery and foreseeable future for the industry. We believe these points are illustrated by the Company's RevPAR results for 2021 and 2022, which reflect growth relative to comparable 2019 periods.

While the ultimate impact and duration of COVID-19 is uncertain and will depend on future developments, which are difficult to predict, the Company believes that it will continue to benefit in the long-term from its primarily franchise-only business model, which has historically provided a relatively stable earnings stream and low capital expenditure requirements. Further, as of June 30, 2022, the Company had approximately $1.2 billion in cash and additional borrowing capacity through its senior unsecured revolving credit facility.

Based on our business model and information known at this time, the Company believes that cash flows from operations and available financing capacity are adequate to meet the expected future operating, investing and financing needs of the business, inclusive of the Radisson Hotels Americas transaction, described below.

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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 pandemic evolves. For additional information, refer to Risk Factors in Part II, and Part I, Item 1A of the 2021 Form 10-K.

Agreement to acquire Radisson Hotels Americas

On June 12, 2022, the Company signed a definitive purchase agreement to acquire 100% of Radisson Hotels Americas for a purchase price of approximately $675 million. The transaction would add approximately 67,000 rooms to the Company’s portfolio and is expected to close in August 2022.

Overview

We are primarily a hotel franchisor with franchise agreements and owned hotels representing 6,970 hotels open comprising 574,888 rooms and 908 hotels under construction, awaiting conversion or approved for development comprising 82,629 rooms as of June 30, 2022, located in 50 states, the District of Columbia and nearly 40 countries and territories outside the United States. Our brand names include Comfort Inn®, Comfort Suites®, Quality®, Clarion®, Clarion Pointe™, Ascend Hotel Collection®, Sleep Inn®, Econo Lodge®, Rodeway Inn®, MainStay Suites®, Suburban Studios™, WoodSpring Suites®, Everhome Suites®, and Cambria® Hotels (collectively, the "Choice brands").

The Company's primary segment is the hotel franchising business. The Company's domestic operations are conducted through direct franchising relationships and the ownership of six Cambria hotels, while its international franchise operations are conducted through a combination of direct franchising and master franchising relationships. Master franchising relationships are governed by master franchising agreements which generally provide the master franchisee with the right to use our brands and sub-license the use of our brands in a specific geographic region, usually for a fee.

Our business strategy is to conduct direct franchising in those international markets where both franchising is an accepted business model and we believe our brands can achieve significant scale. We typically elect to enter into master franchise agreements in those markets where direct franchising is currently not a prevalent or viable business model. When entering into master franchising relationships, we strive to select partners that have professional hotel and asset management capabilities together with the financial capacity to invest in building the Choice brands in their respective markets. Master franchising relationships typically provide lower revenues to the Company as the master franchisees are responsible for managing certain necessary services (such as training, quality assurance, reservations and marketing) to support the franchised hotels in the master franchise area and, therefore, retain a larger percentage of the hotel franchise fees to cover their expenses. In certain circumstances, the Company has and may continue to make equity investments in our master franchisees. As a result of master franchise relationships and international market conditions, our revenues are primarily concentrated in the United States. Therefore, our description of our business is primarily focused on the domestic operations, which encompasses the United States and Caribbean countries and territories.

Our Company generates revenues, income and cash flows primarily from our hotel franchising operations and the initial, relicensing and continuing royalty fees attributable to our franchise agreements. Revenues are also generated from partnerships with qualified vendors and travel partners that provide value-added solutions to our platform of guests hotels, six owned hotels, and other sources. Historically, the hotel industry has been seasonal in nature. For most hotels, demand is ordinarily lower in November through February than during the remainder of the year. Our principal source of revenues is franchise fees based on the gross room revenues or number of rooms of our franchised properties. The Company’s franchise fees, as well as its owned hotels revenues, normally reflect the industry’s seasonality and historically have been lower in the first and fourth quarters than in the second and third quarters.

With a primary focus on hotel franchising, we benefit from the economies of scale inherent in the franchising business. The fee and cost structure of our franchising business provides opportunities to improve operating results by increasing the number of franchised hotel rooms and effective royalty rates of our franchise contracts resulting in increased initial and relicensing fee revenue, ongoing royalty fees, and procurement services revenues. In addition, our operating results can also be improved through our company-wide efforts related to improving property-level performance and expanding the number of partnerships with travel-related companies.

The principal factors that affect the Company’s results are: the number and relative mix of hotel rooms in the various hotel lodging price categories; growth in the number of hotel rooms owned and under franchise; occupancy and room rates achieved by the hotels in our system; the effective royalty rate achieved on our franchise agreements; the level of franchise sales and relicensing activity; the number of qualified vendor arrangements and travel-related partnerships and the level of engagement with these partners by our franchisees and guests; and our ability to manage costs. The number of rooms in our hotel system and the occupancy and room rates at those properties significantly affect the Company’s results because our fees are based upon room revenues or the number of rooms at owned and franchised hotels. To varying degrees, all of these factors have been and may continue to be disrupted by the COVID-19 pandemic. The key industry standard for measuring hotel-operating

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performance is RevPAR, which is calculated by multiplying the percentage of occupied rooms by the average daily room rate realized. Our variable overhead costs associated with franchise system growth of our established brands have historically been less than incremental royalty fees generated from new franchises. Accordingly, over the long-term, any continued growth of our franchise business should enable us to realize benefits from the operating leverage in place and improve operating results. The effects of the COVID-19 pandemic on our second quarter 2022 results and anticipated trends are discussed above under the heading "Impact of the COVID-19 Pandemic" and below under the heading "Operations Review".

We are required by our franchise agreements to use the marketing and reservation system fees we collect for system-wide marketing and reservation system activities. These expenditures, which include advertising costs and costs to maintain our central reservations and property management systems, enhance awareness and consumer preference for our brands and deliver guests to our franchisees. Greater awareness and preference promotes long-term growth in business delivery to our franchisees and increases the desirability of our brands to hotel owners and developers, which ultimately increases franchise fees earned by the Company.

Our Company articulates its mission as a commitment to our franchisees’ profitability by providing our franchisees with hotel franchises that strive to generate the highest return on investment of any hotel franchise. We have developed an operating system dedicated to our franchisees’ success that focuses on delivering guests to hotels and reducing hotel operating costs.

The Company has taken and is continuing to take measures to combat the impact of the COVID-19 pandemic on our business and on our franchisees. We believe these measures support and complement our strategic priorities to create value for our shareholders over the long-term. These key long-term goals are as follows:

Profitable Growth. Our success is dependent on improving the performance of our hotels, increasing our system size by selling additional hotel franchises with a focus on revenue-intense chain scales and markets, improving our effective royalty rate, expanding our qualified vendor programs and travel-related partnerships and maintaining a disciplined cost structure. We have introduced several temporary measures designed to assist franchisees during the COVID-19 pandemic. We attempt to improve our revenues and overall profitability by providing a variety of products and services designed to increase business delivery and/or reduce operating and development costs. These products and services include national marketing campaigns, a guest loyalty program, a central reservation system, property and yield management programs and systems, revenue management services, quality assurance standards, qualified vendor relationships and partnerships with other travel-related companies that provide services to our franchisees and guests. We believe that healthy brands, which deliver a compelling return on investment, will enable us to sell additional hotel franchises and raise royalty rates. We have multiple brands that meet the needs of many types of guests, and can be developed at various price points and applied to both new and existing hotels. This ensures that we have brands suitable for creating growth in a variety of market conditions. Improving the performance of the hotels in our system, strategically growing the system through additional franchise sales, and improving franchise agreement pricing while maintaining a disciplined cost structure are the keys to profitable growth. Prior to the second quarter of 2021, the Company's hotels experienced declines in occupancy and RevPAR resulting from the impacts of the COVID-19 pandemic. The declines impacted the profitability of the Company and the negative impact to the Company could return if a resurgence of the COVID-19 pandemic significantly impacts travel.

Maximizing Financial Returns and Creating Value for Shareholders. Our capital allocation decisions, including capital structure and uses of capital, are intended to maximize our return on invested capital and create value for our shareholders. We believe our historically strong and predictable cash flows create a strong financial position that provides us a competitive advantage. We maintain a capital structure intended to generate high financial returns and use our excess cash flow to provide returns to our shareholders primarily through share repurchases, dividends and investing in growth opportunities. In April 2020, in light of uncertainty resulting from the COVID-19 pandemic, we suspended future, undeclared dividends and activity under the Company's share repurchase program. Given our strong liquidity and credit profile, in May 2021, the Company resumed the payment of quarterly dividends, subject to future declarations by our board of directors, and activity under the share repurchase program. On December 6, 2021, the Company's board of directors approved a 6% increase in the quarterly cash dividend and declared a quarterly cash dividend of $0.2375 per share of common stock, which was paid in January 2022. On February 24, 2022 and May 24, 2022, the Company's board of directors declared a quarterly cash dividend of $0.2375 per share of common stock.

In addition to our hotel franchising business, we have also developed or acquired six Cambria hotels. We intend to continue to strategically develop hotels to increase the presence of our brands in the United States, drive greater guest satisfaction and brand preference, and ultimately increase the number of franchise agreements awarded. When developing hotels, we seek key markets with strong growth potential that will deliver strong operating performance and improve the recognition of our brands. Our hotel development and ownership efforts currently focus on the Cambria Hotels and Everhome Suites brands. We believe our owned hotels provide us the opportunity to support and accelerate growth of our brands. We do not anticipate owning hotels on a permanent basis and expect to target dispositions to a franchisee in the future.

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The Company also allocates capital to financing, investment and guaranty support to incentivize franchise development for certain brands in strategic markets; and to explore growth opportunities in business areas that are adjacent or complementary to our core hotel franchising business, which leverage our core competencies and are additive to our franchising business model. The timing and amount of these investments are subject to market and other conditions.

We believe our growth investments and strategic priorities, when properly implemented, will enhance our profitability, maximize our financial returns and continue to generate value for our shareholders. The ultimate measure of our success will be reflected in the items below.

Results of Operations: Royalty fees, operating income, net income and diluted EPS represent key measurements of our financial performance. These measurements are primarily driven by the operations of our hotel franchise system and therefore, our analysis of the Company's operations is primarily focused on the size, performance and potential growth of the hotel franchise system as well as our variable overhead costs.

Our discussion of results excludes the Company’s marketing and reservation system revenues and expenses. The Company's franchise agreements require the payment of marketing and reservation system fees to be used exclusively by the Company for expenses associated with providing franchise services such as central reservation systems, national marketing, and media advertising. The Company is obligated to expend the marketing and reservation system fees it collects from franchisees in accordance with the franchise agreements. Furthermore, franchisees are required to reimburse the Company for any deficits generated by these marketing and reservation system activities. Over time, the Company expects cumulative revenues and expenses to break even and, therefore, no income or loss will be generated from marketing and reservation system activities. As a result, the Company generally excludes the financial impacts of this program from the analysis of its operations.

Due to the seasonal nature of the Company’s hotel franchising business and the multi-year investments required to support franchise operations, in addition to the Company's incremental spend to support franchisees and lower marketing and reservation system fees for certain periods most significantly impacted by the COVID-19 pandemic, quarterly and/or annual deficits may be generated. During the six months ended June 30, 2022, marketing and reservation system revenues exceeded expenses by $48.5 million. During the six months ended June 30, 2021, marketing and reservation system revenues exceeded expenses by $16.1 million.

Refer to MD&A heading "Operations Review" for additional analysis of our results.

Liquidity and Capital Resources: Historically, the Company has generated significant cash flows from operations. Since our business has not historically required significant reinvestment of capital, we typically utilize cash in ways that management believes provide the greatest returns to our shareholders which include share repurchases and dividends. The Company's declaration of quarterly dividends and activity under the share repurchase program were temporarily suspended at the height of the COVID-19 pandemic, as detailed above within the Maximizing Financial Returns and Creating Value for Shareholders section.

We believe the Company’s cash flow from operations and available financing capacity is sufficient to meet the expected future operating, investing and financing needs of the business, inclusive of the pending Radisson Hotels Americas acquisition. Refer to MD&A heading Liquidity and Capital Resources for additional analysis.

Inflation: We believe that moderate increases in the rate of inflation will generally result in comparable or greater increases in hotel room rates. We are monitoring future inflation trends and any resulting impacts on our business.

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Non-GAAP Financial Statement Measurements

The Company utilizes certain measures which do not conform to generally accepted accounting principles accepted in the United States ("GAAP") when analyzing and discussing its results with the investment community. This information should not be considered as an alternative to any measure of performance as promulgated under GAAP. The Company’s calculation of these measurements may be different from the calculations used by other companies and therefore, comparability may be limited. We have included a reconciliation of these measures to the comparable GAAP measurement below as well as our reasons for reporting these non-GAAP measures.

Revenues excluding marketing and reservation system activities: The Company utilizes revenues excluding marketing and reservation system activities rather than total revenues when analyzing the performance of the business. Marketing and reservation activities are excluded since the Company is contractually required by its franchise agreements to utilize the fees collected specifically for system-wide marketing and reservation activities. This non-GAAP measure is a commonly used measure of performance in our industry and facilitates comparisons between the Company and its competitors.

Calculation of Revenues excluding marketing and reservation system activities

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Total revenues	$	367,974	$	278,344	$	625,701	$	461,291
Adjustments:
Marketing and reservation system revenues	(189,382)		(135,988)		(316,019)		(227,509)
Revenues excluding marketing and reservation system activities	$	178,592	$	142,356	$	309,682	$	233,782

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Operations Review

Comparison of Operating Results for the Three-Month Periods Ended June 30, 2022 and 2021

Summarized financial results for the three months ended June 30, 2022 and 2021 are as follows:

(in thousands)	2022		2021
REVENUES
Royalty fees	$	121,449	$	106,242
Initial franchise and relicensing fees	6,222		7,328
Procurement services	21,803		12,092
Marketing and reservation system	189,382		135,988
Owned hotels	17,191		8,993
Other	11,927		7,701
Total revenues	367,974		278,344
OPERATING EXPENSES
Selling, general and administrative	43,888		34,470
Depreciation and amortization	5,479		6,232
Marketing and reservation system	153,846		113,285
Owned hotels	10,692		5,333
Total operating expenses	213,905		159,320
Gain on sale of business and assets, net	3,280		—
Operating income	157,349		119,024
OTHER INCOME AND EXPENSES, NET
Interest expense	11,252		11,691
Interest income	(1,628)		(1,234)
Other loss (gain)	5,559		(2,108)
Equity in net loss (gain) of affiliates	40		(1,179)
Total other income and expenses, net	15,223		7,170
Income before income taxes	142,126		111,854
Income tax expense	35,958		25,972
Net income	$	106,168	$	85,882

Results of Operations

The Company recorded income before income taxes of $142.1 million for the three-month period ended June 30, 2022, a $30.2 million increase from the same period of the prior year. The increase in income before income taxes primarily reflects a $38.3 million increase in operating income partially offset by a $7.7 million decrease in other loss (gain) and $1.2 million decrease in equity in net loss (gain) of affiliates from the three-month period ended June 30, 2021.

Operating income increased $38.3 million primarily due to a $15.2 million increase in royalty revenues, a $12.9 million increase in the net surplus generated from marketing and reservation system activities, a $9.7 million increase in procurement services, a $4.2 million increase in other revenues, a $3.3 million net gain on sale of business and assets recognized during the second quarter of 2022, a $2.8 million increase in owned hotels revenues in excess of expenses, partially offset by a $9.4 million increase in SG&A expenses.

The primary reasons for these fluctuations, including the impact of the COVID-19 pandemic, are described in more detail below.

Royalty Fees

Domestic royalty fees for the three months ended June 30, 2022 increased $13.9 million to $116.7 million from $102.8 million for the three months ended June 30, 2021, an increase of 13.5%. The increase in domestic royalties reflects a 14.3% increase in domestic RevPAR. System-wide RevPAR increased due to a 15.3% increase in average daily rates, partially offset by a 50 basis point decrease in occupancy. The increase in domestic royalties is also due to a 3 basis point increase in the effective royalty rate from 5.01% for the three months ended June 30, 2021 to 5.04% for the three months ended June 30, 2022, partially offset by a 2.9% decrease in the number of domestic franchised hotel rooms in the comparative period.

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A summary of the Company's domestic franchised hotels operating information is as follows:

	Three Months Ended						Three Months Ended						Change
	June 30, 2022						June 30, 2021
	Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy		RevPAR
Comfort	$	111.88	65.6	%	$	73.39	$	96.67	65.3	%	$	63.11	15.7	%	30	bps	16.3	%
Sleep	98.92		63.9	%	63.22		86.47		64.2	%	55.54		14.4	%	(30)	bps	13.8	%
Quality	92.75		57.3	%	53.17		82.72		59.0	%	48.80		12.1	%	(170)	bps	9.0	%
Clarion	97.66		48.8	%	47.71		85.75		46.2	%	39.62		13.9	%	260	bps	20.4	%
Econo Lodge	73.36		52.8	%	38.73		67.47		54.9	%	37.04		8.7	%	(210)	bps	4.6	%
Rodeway	73.46		53.5	%	39.29		67.15		55.4	%	37.18		9.4	%	(190)	bps	5.7	%
WoodSpring	58.45		81.9	%	47.84		50.49		85.8	%	43.31		15.8	%	(390)	bps	10.5	%
MainStay	89.80		64.7	%	58.11		79.01		67.6	%	53.38		13.7	%	(290)	bps	8.9	%
Suburban	62.88		72.8	%	45.77		54.03		75.3	%	40.67		16.4	%	(250)	bps	12.5	%
Cambria Hotels	167.44		68.1	%	114.03		127.76		58.6	%	74.82		31.1	%	950	bps	52.4	%
Ascend Hotel Collection	155.20		59.4	%	92.18		133.07		56.9	%	75.68		16.6	%	250	bps	21.8	%
Total	$	95.34	61.8	%	$	58.89	$	82.72	62.3	%	$	51.54	15.3	%	(50)	bps	14.3	%

A summary of domestic hotels and rooms in our franchise system at June 30, 2022 and 2021 by brand is as follows:

	June 30, 2022		June 30, 2021		Variance
	Hotels	Rooms	Hotels	Rooms	Hotels	Rooms	%		%
Comfort	1,662	130,976	1,661	130,762	1	214	0.1	%	0.2	%
Sleep	418	29,419	411	29,027	7	392	1.7	%	1.4	%
Quality	1,630	121,149	1,681	126,603	(51)	(5,454)	(3.0)	%	(4.3)	%
Clarion	188	21,100	180	21,702	8	(602)	4.4	%	(2.8)	%
Econo Lodge	718	43,161	747	45,096	(29)	(1,935)	(3.9)	%	(4.3)	%
Rodeway	505	28,783	532	30,683	(27)	(1,900)	(5.1)	%	(6.2)	%
WoodSpring	312	37,586	298	35,876	14	1,710	4.7	%	4.8	%
MainStay	107	7,549	93	6,559	14	990	15.1	%	15.1	%
Suburban	70	6,246	69	6,349	1	(103)	1.4	%	(1.6)	%
Cambria Hotels	60	8,303	58	8,166	2	137	3.4	%	1.7	%
Ascend Hotel Collection	200	21,169	225	28,258	(25)	(7,089)	(11.1)	%	(25.1)	%
Total Domestic Franchises	5,870	455,441	5,955	469,081	(85)	(13,640)	(1.4)	%	(2.9)	%

As of both June 30, 2022 and June 30, 2021, less than 1% of the Company's domestic hotel system had temporarily suspended operations due to governmental restriction or a franchisee’s election. These temporarily suspended hotels are included in the summary table above of domestic hotels in our franchise system.

International royalty fees for the three months ended June 30, 2022 increased $1.3 million to $4.8 million compared to the three months ended June 30, 2021 as a result of improvements in RevPAR performance, despite reductions of the international franchise system size by 56 hotels (from 1,156 as of June 30, 2021 to 1,100 as of June 30, 2022) and 12,717 rooms (from 132,164 as of June 30, 2021 to 119,447 as of June 30, 2022). As of June 30, 2022 and June 30, 2021, approximately 1% and 2%, respectively, of the Company's international branded hotels temporarily suspended operations due to governmental restriction or a franchisee’s election.

As a result of the acquisition of AMResorts®, the Company’s relationship with AMResorts® was terminated during the fourth quarter of 2021 and 17 domestic and 37 international open AMResorts®-branded hotels exited the Ascend Hotel Collection portfolio.

We expect the uncertainty surrounding the potential duration of the pandemic, including resurgences and new variants, as well as the rate, pace and effectiveness of vaccinations around the world, to continue to have the potential to impact the number of domestic and international hotels that remain open and operating.

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Initial Franchise and Relicensing Fees

Initial franchise fees are fees paid to the Company when a franchisee executes a franchise agreement; relicensing fees include fees charged to new owners of a franchised property whenever an ownership change occurs and the property remains in the franchise system, as well as fees required to renew existing franchise agreements.

During the second quarter of 2022, the Company awarded 122 domestic franchise agreements representing 10,787 rooms compared to 111 franchising agreements representing 8,888 rooms for the second quarter of 2021. Domestic franchise agreements awarded for new construction hotels totaled 45 contracts representing 5,017 rooms during the three months ended June 30, 2022, compared to 41 contracts representing 4,011 rooms for the three months ended June 30, 2021. Conversion hotel awarded franchise agreements totaled 77 representing 5,770 rooms for the three months ended June 30, 2022, compared to 70 agreements representing 4,877 rooms for the three months ended June 30, 2021.

The Company awarded 110 domestic relicensing contracts during the three months ended June 30, 2022, compared to 128 executed during the three months ended June 30, 2021. The Company awarded 5 domestic renewal agreements during the three months ended June 30, 2022, compared to 8 awarded during the three months ended June 30, 2021.

Initial franchise and relicensing fees are generally collected at the time the franchise agreement is awarded. However, the recognition of revenue is deferred until the hotel is open or the franchise agreement is terminated. Upon hotel opening, revenue is recognized ratably as services are provided over the enforceable period of the franchise license agreement. Upon the termination of a franchise agreement, previously deferred initial and relicensing fees are recognized immediately in the period the agreement is terminated. Initial franchise and relicensing fee revenue decreased $1.1 million from $7.3 million to $6.2 million for the three months ended June 30, 2021 and June 30, 2022, respectively.

At June 30, 2022, the Company had 864 franchised hotels with 77,970 rooms under construction, awaiting conversion or approved for development in its domestic system as compared to 884 hotels and 72,312 rooms at June 30, 2021. The number of new construction franchised hotels in the Company's domestic pipeline decreased from 663 at June 30, 2021 to 647 at June 30, 2022. New construction hotels typically average 18 to 36 months to open after the franchise agreement is executed. The number of conversion franchised hotels in the Company's domestic pipeline decreased from 221 hotels at June 30, 2021 to 217 hotels at June 30, 2022. Conversion hotels typically open three to six months after the execution of a franchise agreement. The Company had an additional 44 franchised hotels with 4,659 rooms under construction, awaiting conversion or approved for development in its international system as of June 30, 2022, compared to 60 hotels and 8,108 rooms at June 30, 2021. Fluctuations in the Company’s pipeline are primarily due to the timing of hotel openings and the timing of signing new franchise agreements. While the Company's hotel pipeline provides a strong platform for growth, a hotel in the pipeline does not always result in an open and operating hotel due to various factors. Given the uncertainty as to the potential duration of the COVID-19 pandemic and its severity, there is additional uncertainty with respect to the opening of new construction hotels, which are reliant on, amongst other things, access to liquidity, availability of construction labor and materials, and local governmental approvals and entitlements, all of which may be constrained during the duration of the pandemic. In addition, as noted above in Note 16 to our consolidated financial statements, in July 2022 the Company received notice from an ownership group of their intent to exit 111 WoodSpring properties from the Choice system in September 2022.

Procurement services: Revenues increased $9.7 million from $12.1 million for three months ended June 30, 2021 to $21.8 million for the three months ended June 30, 2022. These results reflect an increase in fees generated from travel-related partnerships and qualified vendors resulting from increased occupancy during 2022 at our franchised hotels, and fees generated from the Company's convention, which occurred in 2022 after a two-year hiatus as a result of the COVID-19 pandemic.

Owned Hotels: The Company's revenues, net of expenses, from owned hotels increased $2.8 million from $3.7 million for the three months ended June 30, 2021 to $6.5 million for the three months ended June 30, 2022. These results reflect improved operating performance at our owned hotels and the net addition of one owned hotel during the comparative period.

Other Revenues: Other revenues increased $4.2 million from $7.7 million for the three months ended June 30, 2021 to $11.9 million for the three months ended June 30, 2022 driven by an increase in termination fees collected and other franchising revenues.

Selling, General and Administrative Expenses: The cost to operate the business is reflected in SG&A on the consolidated statements of income. SG&A expenses were $43.9 million and $34.5 million for the three months ended June 30, 2022, and 2021, respectively. SG&A expenses experienced an increase resulting from increases for general corporate purposes and lifting of certain cost mitigation measures related to the COVID-19 pandemic, including compensation, benefits, travel and conventions & meetings. These were partially offset by a $6.8 million decrease in the Company's deferred compensation liabilities based on decreases in the underlying investments.

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Gain on sale of business and assets, net: During the second quarter of 2022, the Company recognized a $3.3 million gain primarily related to the sale of an owned hotel asset, in addition to the sale and conversion of an international direct franchising market to a master franchising market.

Other Loss (Gain): The Company recorded other net losses of $5.6 million for the three months ended June 30, 2022, compared to other net gains of $2.1 million for the three months ended June 30, 2021. The current period losses relate to decreases in the Company's deferred compensation assets based on decreases in the underlying investments and foreign currency transaction losses.

Equity in Net Loss (Gain) of Affiliates: The Company recorded net loss of $40 thousand from its unconsolidated affiliates for the three months ended June 30, 2022, compared to net gain of $1.2 million for the three months ended June 30, 2021. These investments in affiliates relate to the Company's program to offer equity support to qualified franchisees to develop and operate Cambria Hotels in strategic markets. The activity for the three months ended June 30, 2021 is primarily attributable to the sale of the ownership interest of an affiliate resulting in a gain of $2.6 million in the second quarter of 2021. Refer to Note 4 to our consolidated financial statements for additional information.

Income Tax Expense: The effective income tax rates were 25.3% and 23.2% for the three months ended June 30, 2022 and 2021, respectively.

The effective income tax rate for the three months ended June 30, 2022 and 2021 was higher than the U.S. federal income tax rate of 21.0% primarily due to the impact of state income taxes, partially offset by excess tax benefits from share-based compensation.

Operations Review

Comparison of Operating Results for the Six-Month Periods Ended June 30, 2022 and 2021

Summarized financial results for the six months ended June 30, 2022 and 2021 are as follows:

(in thousands)	2022		2021
REVENUES
Royalty fees	$	212,188	$	172,289
Initial franchise and relicensing fees	14,624		12,755
Procurement services	33,486		23,283
Marketing and reservation system	316,019		227,509
Owned hotels	29,228		13,347
Other	20,156		12,108
Total revenues	625,701		461,291
OPERATING EXPENSES
Selling, general and administrative	74,212		64,737
Depreciation and amortization	11,710		12,594
Marketing and reservation system	267,496		211,458
Owned hotels	18,846		9,480
Total operating expenses	372,264		298,269
Gain on sale of business and assets, net	3,309		—
Operating income	256,746		163,022
OTHER INCOME AND EXPENSES, NET
Interest expense	22,722		23,468
Interest income	(2,908)		(2,515)
Other loss (gain)	7,275		(3,313)
Equity in net loss (gain) of affiliates	(204)		4,818
Total other income and expenses, net	26,885		22,458
Income before income taxes	229,861		140,564
Income tax expense	56,302		32,345
Net income	$	173,559	$	108,219

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Results of Operations

The Company recorded income before income taxes of $229.9 million for the six-month period ended June 30, 2022, a $89.3 million increase from the same period of the prior year. The increase in income before income taxes reflects a $93.7 million increase in operating income, a $5.0 million increase in equity in net loss (gain) of affiliates, partially offset by a $10.6 million increase in other loss (gain).

Operating income increased $93.7 million primarily due to a $39.9 million increase in royalty revenues, a $32.5 million increase in the net surplus generated from marketing and reservation system activities, a $10.2 million increase in procurement services revenues, a $8.1 million increase in other revenues, a $6.5 million increase in owned hotels revenues in excess of expenses, and a $3.3 million increase from net gain on sale of business and assets, partially offset by a $9.5 million increase in SG&A expenses.

The primary reasons for these fluctuations are described in more detail below.

Royalty Fees

Domestic royalty fees for the six months ended June 30, 2022 increased $37.8 million to $203.6 million compared to the six months ended June 30, 2021. The increase in royalties reflect a 22.5% increase in RevPAR. System-wide RevPAR increased due to a 17.2% increase in average daily rates and a 250 basis point increase in occupancy. The increase in domestic royalties is also due to a 2.9% decrease in the number of domestic franchised hotel rooms and a 4 basis point increase in the effective royalty rate from 5.01% for the six months ended June 30, 2021 to 5.05% for the six months ended June 30, 2022.

A summary of the Company's domestic franchised hotels operating information is as follows:

	Six Months Ended						Six Months Ended						Change
	June 30, 2022						June 30, 2021
	Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy		RevPAR
Comfort	$	105.96	60.6	%	$	64.26	$	89.83	57.2	%	$	51.36	18.0	%	340	bps	25.1	%
Sleep	93.49		59.4	%	55.52		80.68		56.0	%	45.20		15.9	%	340	bps	22.8	%
Quality	88.23		52.5	%	46.35		77.41		50.7	%	39.21		14.0	%	180	bps	18.2	%
Clarion	92.34		43.6	%	40.23		79.03		39.7	%	31.37		16.8	%	390	bps	28.2	%
Econo Lodge	69.59		48.8	%	33.94		63.54		48.2	%	30.61		9.5	%	60	bps	10.9	%
Rodeway	70.72		50.3	%	35.54		63.53		49.6	%	31.49		11.3	%	70	bps	12.9	%
WoodSpring	57.38		79.4	%	45.56		49.03		80.1	%	39.26		17.0	%	(70)	bps	16.0	%
MainStay	85.53		61.3	%	52.43		75.34		59.5	%	44.83		13.5	%	180	bps	17.0	%
Suburban	62.43		69.7	%	43.52		51.97		70.5	%	36.62		20.1	%	(80)	bps	18.8	%
Cambria Hotels	156.7		61.8	%	96.83		116.93		50.8	%	59.40		34.0	%	1,100	bps	63.0	%
Ascend Hotel Collection	144.53		54.3	%	78.50		123.91		50.1	%	62.04		16.6	%	420	bps	26.5	%
Total	$	90.32	57.3	%	$	51.73	$	77.09	54.8	%	$	42.23	17.2	%	250	bps	22.5	%

International royalty fees for the six months ended June 30, 2022 increased $2.1 million to $8.6 million compared to the six months ended June 30, 2021 as a result of increases in RevPAR performance, despite reductions of the international franchise system decreasing by 56 hotels (from 1,156 as of June 30, 2021 to 1,100 as of June 30, 2022) and 12,717 rooms (from 132,164 as of June 30, 2021 to 119,447 as of June 30, 2022). As of June 30, 2022 and June 30, 2021, approximately 1% and 2%, respectively, of the Company's international branded hotels temporarily suspended operations due to governmental restriction or a franchisee’s election.

We expect the uncertainty surrounding the pandemic, including an increase in the prevalence in variants as well as the rate and pace of vaccinations around the world, to continue to impact the number of domestic and international hotels that temporarily suspend operations.

Initial Franchise and Relicensing Fees

Initial franchise fees are fees paid to the Company when a franchisee executes a franchise agreement; relicensing fees include fees charged to new owners of a franchised property whenever an ownership change occurs and the property remains in the franchise system, as well as fees required to renew existing franchise agreements.

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During the six months ended June 30, 2022, the Company awarded 215 domestic franchise agreements representing 22,164 rooms compared to 200 franchise agreements representing 20,668 rooms for the six months ended June 30, 2021. Domestic franchise agreements awarded for new construction hotels totaled 83 representing 8,734 rooms during the six months ended June 30, 2022 compared to 56 franchise agreements representing 5,293 rooms for the six months ended June 30, 2021. Conversion hotel awarded franchise agreements totaled 132 representing 13,430 rooms for the six months ended June 30, 2022 compared to 144 franchise agreements representing 15,375 rooms for the six months ended June 30, 2021.

The Company awarded 248 domestic relicensing contracts during the six months ended June 30, 2022, compared to 180 executed during the six months ended June 30, 2021. The Company awarded 12 domestic renewal agreements during both the six months ended June 30, 2022, compared to 20 executed during six months ended June 30, 2021.

Initial franchise and relicensing fees are generally collected at the time the franchise agreement is awarded. However, the recognition of revenue is deferred until the hotel is open or the franchise agreement is terminated. Upon hotel opening, revenue is recognized ratably as services are provided over the enforceable period of the franchise license agreement. Upon the termination of a franchise agreement, previously deferred initial and relicensing fees are recognized immediately in the period the agreement is terminated. Initial franchise and relicensing fee revenue increased $1.8 million from $12.8 million during the six months ended June 30, 2021 to $14.6 million during six months ended June 30, 2022.Given the uncertainty as to the potential duration of the COVID-19 pandemic and its severity, there is additional uncertainty with respect to the opening of new construction hotels, which are reliant on, amongst other things, access to liquidity, availability of construction labor and materials, and local governmental approvals and entitlements, all of which may be constrained during the duration of the pandemic.

Procurement Services: Revenues increased $10.2 million from $23.3 million for the six months ended June 30, 2021 to $33.5 million for the six months ended June 30, 2022. These results reflect a increase in fees generated from travel-related partnerships and qualified vendors resulting from increased occupancy during the first and second quarters of 2022 at our franchised hotels, and fees generated from the Company's convention, which occurred in 2022 after a two-year hiatus as a result of the COVID-19 pandemic.

Owned Hotels: The Company's revenues, net of expenses, from owned hotels increased $6.5 million from $3.9 million for the six months ended June 30, 2021 to $10.4 million for the six months ended June 30, 2022. These results reflect improved operating performance at our owned hotels and the net addition of one owned hotel during the comparative period.

Other Revenues: Other revenues increased $8.1 million from $12.1 million for the six months ended June 30, 2021 to $20.2 million in the same period of the current year driven by an increase termination fees collected and other franchising revenues.

Selling, General and Administrative Expenses: The cost to operate the business is reflected in SG&A on the consolidated statements of income. SG&A expenses were $74.2 million for the six months ended June 30, 2022, a increase of $9.5 million from the six months ended June 30, 2021. SG&A expenses experienced an increase resulting from increases for general corporate purposes and lifting of certain cost mitigation measures related to the COVID-19 pandemic, including compensation, benefits, travel and conventions & meetings. These were partially offset by a $10.0 million decrease in the Company's deferred compensation liabilities based on decreases in the underlying investments.

Gain on sale of business and assets, net: During the second quarter of 2022, the Company recognized a $3.3 million gain primarily related to the sale of an owned hotel asset, in addition to the sale and conversion of an international direct franchising market to a master franchising market.

Other Loss (Gain): The Company recorded other net losses of $7.3 million for the six months ended June 30, 2022, compared to other net gains of $3.3 million, an decrease of $10.6 million for the six months ended June 30, 2021. The losses relate to decreases in the Company's deferred compensation assets based on decreases in the underlying investments and foreign currency transaction gains.

Equity in Net Loss (Gain) of Affiliates: The Company recorded net gain of $0.2 million from its unconsolidated affiliates for the six months ended June 30, 2022 compared to net losses of $4.8 million for the six months ended June 30, 2021. These investments relate to the Company's program to offer equity support to qualified franchisees to develop and operate Cambria Hotels in strategic markets. The fluctuation is primarily attributable to the sales of ownership interests of and distributions from affiliates resulting in gains of $2.6 million in the second quarter of 2021, partially offset by the impairment of an affiliate resulting in a loss of $4.8 million in the first quarter of 2021.

Income Tax Expense: The effective income tax rates were 24.5% and 23.0% for the six months ended June 30, 2022 and 2021, respectively.

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The effective income tax rate for the six months ended June 30, 2022 and 2021 was higher than the U.S. federal income tax rate of 21.0% primarily due to the impact of state income taxes, partially offset by excess tax benefits from share-based compensation.

Liquidity and Capital Resources

Our Company historically generates strong and predictable operating cash flows primarily from our hotel franchising operations and the initial, relicensing and continuing royalty fees attributable to our franchise agreements. Our capital allocation decisions, including capital structure and uses of capital, are intended to maximize our return on invested capital and create value for our shareholders, while maintaining a strong balance sheet and financial flexibility. The Company's short-term and long-term liquidity requirements primarily arise from working capital needs, debt obligations, income tax payments, dividend payments, share repurchases, capital expenditures and investments in growth opportunities.

The Company's 2012 Senior Notes matured on July 1, 2022. The outstanding principal of $216.6 million was re-paid at maturity.

In April 2020, in light of uncertainty resulting from the COVID-19 pandemic, we suspended future, undeclared dividends and activity under the Company's share repurchase program. Given our strong liquidity and credit profile, in May 2021, the Company resumed the payment of quarterly dividends, subject to future declarations by our board of directors, and activity under the share repurchase program. On December 6, 2021, the Company's board of directors approved a 6% increase in the quarterly cash dividend and declared a quarterly cash dividend of $0.2375 per share of common stock, which was paid in January 2022. On February 24, 2022 and May 24, 2022, the Company's board of directors declared a quarterly cash dividend of $0.2375 per share of common stock.

Our board of directors authorized a program which permits us to offer financing, investment, and guaranty support to qualified franchisees, and allows us to acquire or develop and resell hotels to incentivize franchise development of our brands in strategic markets. We deploy capital pursuant to this program opportunistically to promote growth of our brands. With respect to our hotel development and ownership, affiliate investments, and lending, the Company had approximately $480.1 million in support of the Cambria Hotels and Everhome Suites brands currently reflected on the balance sheet as of June 30, 2022, which it generally targets to recycle within a five year period, and expects our outstanding investment to not exceed $975 million at any point in time based on current board of directors' authorization. The deployment and annual pace of future financial support activities will depend upon market and other conditions.

The Company also strategically deploys capital in the form of franchise agreement acquisition payments across our brands to incentivize franchise development. As of June 30, 2022, the Company had commitments to extend an additional $269.4 million for these purposes provided the conditions of the payment are met by its franchisees.

The Company's primary sources of liquidity as of June 30, 2022 consisted of $1.2 billion in cash and available borrowing capacity through its senior unsecured revolving credit facility. As of June 30, 2022, the Company was in compliance with the financial covenants of its credit agreements and expects to remain in such compliance. Based on our business model and information known at this time, the Company believes that cash, available borrowing capacity, and cash flows from operations will provide sufficient liquidity to meet the expected future operating, investing and financing needs of the business for at least the next 12 months, inclusive of the pending Radisson Hotels Americas transaction.

Operating Activities

During the six months ended June 30, 2022 and 2021, net cash provided by operating activities totaled $159.3 million and $102.4 million, respectively. Operating cash flows increased $56.9 million primarily due to an increase in operating income, excluding certain non-cash charges, and timing of working capital items.

In conjunction with brand and development programs, we strategically make certain payments to franchisees as an incentive to enter into new franchise agreements or perform designated improvements to properties under existing franchise agreements ("franchise agreement acquisition costs"). If the franchisee remains in the franchise system in good standing over the term specified in the incentive agreement, the Company forgives the incentive ratably. If the franchisee exits our franchise system or is not operating their franchise in accordance with our quality or credit standards and is terminated, the franchisee must repay the unamortized incentive payment plus interest. During the six months ended June 30, 2022 and 2021, the Company's net advances for these purposes totaled $27.0 million and $18.1 million, respectively. The timing and amount of these cash flows are dependent on various factors including the implementation of various development and brand incentive programs, the level of franchise sales and the ability of our franchisees to complete construction or convert their hotels to one of the Company’s brands. At June 30, 2022, the Company had commitments to extend an additional $269.4 million for these purposes provided the conditions of the payment are met by its franchisees.

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The Company’s franchise agreements require the payment of marketing and reservation system fees. In accordance with the terms of our franchise agreements, the Company is obligated to use these marketing and reservation system fees to provide marketing and reservation services. To the extent revenues collected exceed expenditures incurred, the Company has a commitment to the franchisee system to make expenditures in future years. Conversely, to the extent expenditures incurred exceed revenues collected, the Company has the contractual enforceable right to recover such advances in future periods through additional fee assessments or reduced spending. During the six months ended June 30, 2022 and 2021, marketing and reservation system revenues exceeded expenses by $48.5 million and $16.0 million, respectively.

Investing Activities

Our board of directors authorized a program which permits us to offer financing, investment, and guaranty support to qualified franchisees, and allows us to acquire or develop and resell hotels to incentivize franchise development of our brands in strategic markets. We are currently engaged in these financial support activities to encourage acceleration of the growth of our Cambria Hotels and Everhome Suites brands, primarily in strategic markets and locations. With respect to our hotel development and ownership, affiliate investments, and lending, the Company had approximately $480.1 million outstanding in support of the Cambria Hotels and Everhome Suites brands currently reflected on the balance sheet as of June 30, 2022, which it generally targets to recycle within a five year period, and expects our outstanding investment to not exceed $975 million at any point of time based on current board of directors' authorization. We expect to continue to deploy capital in these manners in support of our brands. The deployment and annual pace of future financial support activities will depend upon market and other conditions, including among others, our franchise sales results, the environment for new construction hotel development and the hotel lending environment, and our assessment of the ongoing impacts of the COVID-19 pandemic.

Cash utilized for investing activities totaled $24.0 million and $33.0 million for the six months ended June 30, 2022 and 2021, respectively. The change in cash utilized for investing activities for the six months ended June 30, 2022 primarily reflects the following items:

During the six months ended June 30, 2022 and 2021, capital expenditures in property and equipment totaled $49.9 million and $23.4 million, respectively. The increase in capital expenditures primarily reflects increased costs incurred to support the continued growth of the Cambria Hotels and Everhome Suites brands, including acquisition of land parcels in the first and second quarters of 2022 for hotel development.

During the six months ended June 30, 2022, the Company realized net proceeds of $32.9 million from the sale of one Cambria hotel, one parcel of land, and a sale and conversion of an international direct franchising market to a master franchising market.

The Company maintains equity method investments in affiliates related to the Company's program to offer equity support to qualified franchisees to develop and operate Cambria Hotels in strategic markets. During the six months ended June 30, 2022 and 2021, the Company invested $0.7 million and $1.1 million, respectively, and received no distributions from these affiliates. To the extent existing affiliates proceed to the hotel construction phase, the Company is committed to make additional capital contributions totaling $7.5 million to support these efforts.

The Company has entered into various limited payment guaranties with regards to the Company’s investments in affiliates. The maximum exposure of principal incidental to these limited payment guaranties is $5.7 million, plus unpaid expenses and accrued unpaid interest. The Company believes the likelihood of having to perform under the aforementioned limited payment guaranties was remote as of June 30, 2022 and June 30, 2021. In the event of performance, the Company has recourse for one of the transactions in the form of a membership interest pledge as collateral for our guaranty. Refer to Note 12 to our consolidated financial statements for further discussion.

The Company provides financing to franchisees for hotel development efforts and other purposes in the form of notes receivable. These loans bear interest and are expected to be repaid in accordance with the terms of the loan arrangements. During the six months ended June 30, 2022, the Company advanced $2.0 million and received repayments totaling $0.1 million for these purposes. For the six months ended June 30, 2021, the Company advanced no amounts and received repayments totaling $0.1 million for these purposes, and acquired a senior note with collateral in an underlying operating hotel for $17.9 million. At June 30, 2022, the Company had commitments to extend an additional $5.5 million for these purposes provided certain conditions are met by its franchisees.

Financing Activities

Financing cash flows relate primarily to the Company's borrowings, open market treasury stock repurchases, acquisition of shares in connection with the exercise or vesting of equity awards, and dividends.

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Debt

Restated Senior Unsecured Credit Facility

On August 20, 2018, the Company entered into the Restated Senior Unsecured Credit Agreement (the "Restated Credit Agreement"), which amended and restated the Company’s existing senior unsecured revolving credit agreement, dated July 21, 2015.

The Restated Credit Agreement provides for a $600 million unsecured credit facility with a maturity date of August 20, 2023, subject to optional one-year extensions that can be requested by the Company prior to each of the first, second and third anniversaries of the closing date of the Restated Credit Agreement. The effectiveness of such extensions are subject to the consent of the lenders under the Restated Credit Agreement and certain customary conditions. The Restated Credit Agreement also provides that up to $35 million of borrowings under the Restated Credit Agreement may be used for alternative currency loans and up to $25 million of borrowings under the Restated Credit Agreement may be used for swingline loans. The Company may from time to time designate one or more wholly owned subsidiaries of the Company as additional borrowers under the Restated Credit Agreement, subject to the consent of the lenders and certain customary conditions.

On July 2, 2019, the Company exercised a one-year extension option on the Restated Credit Agreement, extending the maturity date from August 20, 2023 to August 20, 2024. On August 12, 2020, the Company exercised an additional one-year extension on the Restated Credit Agreement for $525 million of the $600 million total capacity in exchange for a fee of $0.3 million. The extended maturity date is August 20, 2025. On August 11, 2021, the Company executed a one-year extension on the senior unsecured credit facility for $540 million of the $600 million total capacity in exchange for fees of $0.4 million. The extended maturity date is August 20, 2026. On May 18, 2022, the remainder $60 million of the $600 million total capacity was extended to August 20, 2026 in exchange for fees of $24 thousand.

There are no subsidiary guarantors under the Restated Credit Agreement. However, if certain subsidiaries of the Company subsequently incur certain recourse debt or become obligors in respect of certain recourse debt of the Company or certain of its other subsidiaries, the Restated Credit Agreement requires such obligated subsidiaries to guarantee the Company’s obligations under the Restated Credit Agreement (the "springing guarantee"). In the event that these subsidiary guarantees are triggered under the Restated Credit Agreement, the same subsidiary guarantees would be required under the Company’s $400 million senior unsecured notes due 2022 and certain hedging and bank product arrangements, if any, with lenders that are parties to the Restated Credit Agreement.

On February 18, 2020, the Company entered into the First Amendment to the Amended and Restated Senior Unsecured Credit Agreement (the "Amendment") among the Company, Deutsche Bank AG New York Branch, as administrative agent and the lenders party thereto. The Amendment, among other things, removes the springing guarantee and other provisions and references in the Restated Credit Agreement related to the potential existence of subsidiary guarantors.

The Company may at any time prior to the final maturity date increase the amount of the Restated Credit Agreement or add one or more term loan facilities under the Restated Credit Agreement by up to an additional $250 million in the aggregate to the extent that any one or more lenders commit to being a lender for the additional amount of such term loan facility and certain other customary conditions are met.

The Restated Credit Agreement provides that the Company may elect to have borrowings bear interest at a rate equal to (i) LIBOR plus a margin ranging from 90 to 150 basis points or (ii) a base rate plus a margin ranging from 0 to 50 basis points, in each case, with the margin determined according to the Company’s senior unsecured long-term debt rating or under circumstances as set forth in the Restated Credit Agreement, the Company’s total leverage ratio in the event that such total leverage ratio is less than 2.5 to 1.0. On August 11, 2021, we amended the Restated Credit Agreement to provide customary provisions for the replacement of LIBOR with an alternative benchmark rate if it is publicly announced that the administrator of LIBOR has ceased or will cease to provide LIBOR, or if it is publicly announced by the applicable regulatory supervisor that LIBOR is no longer representative.

The Restated Credit Agreement requires the Company to pay a fee on the total commitments, calculated on the basis of the actual daily amount of the commitments (regardless of usage) times a percentage per annum ranging from 0.075% to 0.25% (depending on the Company’s senior unsecured long-term debt rating or under circumstances as set forth in the Restated Credit Agreement, the Company’s total leverage ratio in the event that such total leverage ratio is less than 2.5 to 1.0).

The Restated Credit Agreement requires that the Company and its restricted subsidiaries comply with various covenants, including with respect to restrictions on liens, incurring indebtedness, making investments and effecting mergers and/or asset sales. With respect to dividends, the Company may not declare or make any payment if there is an existing event of default or if the payment would create an event of default.

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The Restated Credit Agreement imposes financial maintenance covenants requiring the Company to maintain a consolidated fixed charge coverage ratio of at least 2.5 to 1.0 and a total leverage ratio of not more than 4.5 to 1.0 or, on up to two nonconsecutive occasions, 5.5 to 1.0 for up to three consecutive quarters following a material acquisition commencing with the fiscal quarter in which such material acquisition occurred. The Company maintains an Investment Grade Rating, as defined in the Restated Credit Agreement, and therefore is not currently required to comply with the consolidated fixed charge coverage ratio covenant.

The Restated Credit Agreement includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations of the Company under the Restated Credit Agreement to be immediately due and payable. At June 30, 2022, the Company maintained a total leverage ratio of 2.09x and was in compliance with all financial covenants under the Restated Credit Agreement. The senior unsecured revolving credit facility was paid down in full during the third quarter of 2020 and remains undrawn as of December 31, 2021 and June 30, 2022. We expect to draw on the facility for the pending Radisson Hotels Americas transaction.

Debt issuance costs incurred in connection with the Restated Credit Agreement are amortized on a straight-line basis, which is not materially different than the effective interest method, through maturity. Amortization of these costs is included in interest expense in the consolidated statements of income.

The proceeds of the Restated Credit Agreement are generally expected to be used for general corporate purposes, including working capital, debt repayment, stock repurchases, dividends, investments and other permitted uses set forth in the Restated Credit Agreement.

Senior Unsecured Notes Due 2031

On July 23, 2020, the Company issued unsecured senior notes in the principal amount of $450 million (the "2020 Senior Notes") bearing a coupon of 3.70%. The 2020 Senior Notes will mature on January 15, 2031, with interest to be paid semi-annually on January 15th and July 15th beginning January 15, 2021. The Company used the net proceeds of the 2020 Senior Notes, after deducting underwriting discounts, commissions and other offering expenses, to repay in full the $250 million Term Loan entered in April 2020 and fund the purchase price of the 2012 Senior Notes tendered and accepted by the Company for purchase pursuant to the tender offer (discussed below under "Senior Unsecured Notes due 2022").

Interest on the 2020 Senior Notes is payable semi-annually on January 15th and July 15th of each year, commencing on January 15, 2021. The interest rate payable on the 2020 Senior Notes will be subject to adjustment based on certain rating events. The Company may redeem the 2020 Senior Notes, in whole or in part, at its option at the applicable redemption price before maturity. If the Company redeems the 2020 Senior Notes prior to October 15, 2030 (three months prior to the maturity date) (the “2020 Notes Par Call Date”), the redemption price will be equal to the greater of (a) 100% of the principal amount of the notes to be redeemed, or (b) the sum of the present values of the remaining scheduled principal and interest payments that would have been payable had the 2020 Senior Notes matured on the 2020 Notes Par Call Date, discounted to the redemption date on a semi-annual basis at the applicable Treasury Rate plus 50 basis points, plus accrued and unpaid interest. If the Company redeems the 2020 Senior Notes on or after the 2020 Notes Par Call Date, the redemption price will equal 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest. Additionally, at the option of the holders of the 2020 Senior Notes, the Company may be required to repurchase all or a portion of the 2020 Senior Notes of a holder upon the occurrence of a change of control event at a price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest, to the date of repurchase.

Senior Unsecured Notes Due 2029

On November 27, 2019, the Company issued unsecured senior notes in the principal amount of $400 million (the "2019 Senior Notes") at a discount of $2.4 million, bearing a coupon of 3.70% with an effective rate of 3.88%. The 2019 Senior Notes will mature on December 1, 2029, with interest to be paid semi-annually on December 1st and June 1st. The Company used the net proceeds of this offering, after deducting underwriting discounts, commissions and other offering expenses, to repay the previously outstanding senior notes in the principal amount of $250 million due August 28, 2020, and for working capital and other general corporate purposes.

The Company may redeem the 2019 Senior Notes, in whole or in part, at its option at the applicable redemption price before maturity. If the Company redeems the 2019 Senior Notes prior to September 1, 2029 (three months prior to the maturity date) (the “2019 Notes Par Call Date”), the redemption price will be equal to the greater of (a) 100% of the principal amount of the notes to be redeemed, or (b) the sum of the present values of the remaining scheduled principal and interest payments that would have been payable had the 2019 Senior Notes matured on the 2019 Notes Par Call Date, discounted to the redemption date on a semi-annual basis at the applicable Treasury Rate plus 30 basis points, plus accrued and unpaid interest. If the Company redeems the 2019 Senior Notes on or after the 2019 Notes Par Call Date, the redemption price will equal 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest. Additionally, at the option of the holders of the

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2019 Senior Notes, the Company may be required to repurchase all or a portion of the 2019 Senior Notes of a holder upon the occurrence of a change of control event at a price equal to 101% of their aggregate principal amount, plus accrued and unpaid interest, to the date of repurchase.

Senior Unsecured Notes Due 2022

On June 27, 2012, the Company issued unsecured senior notes with a principal amount of $400 million (the "2012 Senior Notes") at par, bearing a coupon of 5.75% with an effective rate of 6.00%. The Company utilized the net proceeds of this offering, after deducting underwriting discounts, commissions and other offering expenses, together with borrowings under the Company's senior unsecured senior credit facility, to pay a special cash dividend to stockholders totaling approximately $600.7 million paid on August 23, 2012.

On July 9, 2020, the Company commenced the tender offer (the "Tender Offer") to purchase up to $160.0 million aggregate principal amount of the 2012 Senior Notes subject to increase or decrease. The Tender Offer was subsequently upsized to $180.0 million aggregate principal amount of the 2012 Notes. On July 23, 2020, the Company amended the Tender Offer by increasing the aggregate principal maximum tender amount from $180.0 million to $183.4 million. The Tender Offer settled on July 24, 2020 for $197.8 million, including an early tender premium, settlement fees, and accrued interest paid. In combination with the early pay off of the Term Loan, the Company recorded a loss on extinguishment of debt of $16.0 million in the third quarter of 2020.

The 2012 Senior Notes matured on July 1, 2022. The outstanding principal of $216.6 million was re-paid at maturity.

Economic Development Loans

The Company entered into economic development agreements with various governmental entities in conjunction with the relocation of its corporate headquarters in April 2013. In accordance with these agreements, the governmental entities agreed to advance approximately $4.4 million to the Company to offset a portion of the corporate headquarters relocation and tenant improvement costs in consideration of the employment of permanent, full-time employees within the jurisdictions. At June 30, 2022, the Company had been fully advanced the amounts due pursuant to these agreements. These advances bear interest at a rate of 3% per annum.

Repayment of the advances is contingent upon the Company achieving certain performance conditions. Performance conditions are measured annually on December 31st and primarily relate to maintaining certain levels of employment within the various jurisdictions. If the Company fails to meet an annual performance condition, the Company may be required to repay a portion or all of the advances including accrued interest by April 30th following the measurement date. Any outstanding advances at the expiration in 2023 of the Company's current ten-year corporate headquarters lease will be forgiven in full. The advances will be included in debt in the Company's consolidated balance sheets until the Company determines that the future performance conditions will be met over the entire term of the agreement and the Company will not be required to repay the advances. The Company accrues interest on the portion of the advances that it expects to repay. The Company was in compliance with all applicable current performance conditions as of June 30, 2022.

Dividends

In April 2020, in light of uncertainty resulting from the COVID-19 pandemic, we suspended future, undeclared dividends. Given our strong liquidity and credit profile, in May 2021, the Company resumed the payment of quarterly dividends, subject to future declarations by our board of directors. On December 6, 2021, the Company's board of directors approved a 6% increase in the quarterly cash dividend and declared a quarterly cash dividend of $0.2375 per share of common stock. On February 24, 2022 and May 24, 2022, the Company's board of directors declared a cash dividend of $0.2375 per share of common stock.

During the six months ended June 30, 2022, the Company paid $26.5 million in cash dividends. We expect that cash dividends will continue to be paid in the future, subject to declaration by our board of directors, future business performance, economic conditions, changes in tax regulations and other matters. Based on our present dividend rate and outstanding share count, aggregate annual regular dividends for 2022 are estimated to be approximately $53.8 million.

The Company may not declare or make any payment if there is an existing event of default under the Restated Credit Agreement or if the payment would create an event of default.

Share Repurchases

In 1998, we instituted a share repurchase program which has generated substantial value for our shareholders.

In April 2020 in light of uncertainty resulting from the COVID-19 pandemic, we suspended activity under our share repurchase program. In May 2021, the Company's board of directors approved resumption of the share repurchase program.

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During the six months ended June 30, 2022, the Company repurchased 68,486 shares of its common stock under the share repurchase program at a total cost of $9.9 million. Through June 30, 2022, the Company repurchased 51.8 million shares of its common stock (including 33.0 million prior to the two-for-one stock split effected in October 2005) under the program at a total cost of $1.5 billion. Considering the effect of the two-for-one stock split, the Company has repurchased 84.8 million shares at an average price of $17.73 per share. As of June 30, 2022, the Company had 3.3 million shares remaining under the current share repurchase authorization.

During the six months ended June 30, 2022, the Company redeemed 34,848 shares of common stock at a total cost of $5.2 million from employees to satisfy the option exercise price and statutory minimum tax-withholding requirements related to the exercising of stock options and vesting of PVRSUs and restricted stock grants. These redemptions were outside the share repurchase program.

Critical Accounting Policies

Our accounting policies comply with principles generally accepted in the United States. Discussion of these policies is included in Note 1 to our consolidated financial statements as of and for the year ended December 31, 2021 included in our Annual Report on Form 10-K, which incorporates description of our critical accounting policies that involve subjective and complex judgments that could potentially affect reported results.

New Accounting Standards

Refer to Note 1 for information related to our evaluation of new accounting standards.

FORWARD-LOOKING STATEMENTS

Certain matters discussed in this quarterly report constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as "expect," "estimate," "believe," "anticipate," "should," "will," "forecast," "plan," "project," "assume" or similar words of futurity. All statements other than historical facts are forward-looking statements. These forward-looking statements are based on management's current beliefs, assumptions and expectations regarding future events, which in turn are based on information currently available to management. Such statements may relate to projections of the Company's revenue, expenses, Adjusted EBITDA, earnings, debt levels, ability to repay outstanding indebtedness, payment of dividends, repurchases of common stock, and other financial and operational measures, including occupancy and open hotels, RevPAR, our ability to benefit from any rebound in travel demand, our liquidity, and the impact of COVID-19 and economic conditions on our future operations, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other factors.

Several factors could cause our actual results, performance or achievements to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, the consummation of the acquisition of Radisson Hotels Americas, including the related incurrence of additional indebtedness; the company’s ability to successfully integrate Radisson Hotels Americas’ employees and operations; the ability to realize the anticipated benefits and synergies of the acquisition of Radisson Hotels Americas as rapidly or to the extent anticipated; the continuation or resurgence of the COVID-19 pandemic, including with respect to new strains or variants; the rate, pace and effectiveness of vaccination in the broader population; changes in consumer demand and confidence, including the impact of the COVID-19 pandemic on unemployment rates, consumer discretionary spending and the demand for travel, transient and group business; the impact of COVID-19 on the global hospitality industry, particularly but not exclusively in the U.S. travel market; the success of our mitigation efforts in response to the COVID-19 pandemic; the performance of our brands and categories in any recovery from the COVID-19 pandemic disruption; the timing and amount of future dividends and share repurchases; changes to general, domestic and foreign economic conditions, including access to liquidity and capital as a result of COVID-19; future domestic or global outbreaks of epidemics, pandemics or contagious diseases or fear of such outbreaks; changes in law and regulation applicable to the travel, lodging or franchising industries; foreign currency fluctuations; impairments or declines in the value of our assets; operating risks common in the travel, lodging or franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees and our relationships with our franchisees; our ability to keep pace with improvements in technology utilized for marketing and reservations systems and other operating systems; the commercial acceptance of our SaaS technology solutions division's products and services; our ability to grow our franchise system; exposure to risks related to our hotel development, financing, and ownership activities; exposures to risks associated with our investments in new businesses; fluctuations in the supply and demand for hotel rooms; our ability to realize anticipated benefits from acquired businesses; impairments or losses relating to acquired businesses; the level of acceptance of alternative growth strategies we may implement; cyber security and data breach risks; ownership and financing activities; hotel closures or financial difficulties of our franchisees; operating risks associated

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with our international operations, especially in areas currently most affected by COVID-19; the outcome of litigation; and our ability to effectively manage our indebtedness and secure our indebtedness. These and other risk factors are discussed in detail in the Risk Factors section of this quarterly report on Form 10-Q and of the Company's Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 24, 2022. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risk from changes in interest rates and the impact of fluctuations in foreign currencies on the Company's foreign investments and operations. The Company manages its exposure to these market risks through the monitoring of its available financing alternatives including, in certain circumstances, the use of derivative financial instruments. We are also subject to risk from changes in debt and equity prices from our non-qualified retirement savings plan investments in debt securities and common stock, which have a carrying value of $30.9 million and $36.1 million at June 30, 2022 and December 31, 2021, respectively, which we account for as trading securities. The Company will continue to monitor the exposure in these areas and make the appropriate adjustments as market conditions dictate.

At June 30, 2022, the Company had no variable interest rate debt instruments outstanding or derivative financial instruments.

ITEM 4.CONTROLS AND PROCEDURES

Management’s Evaluation of Disclosure Controls and Procedures

The Company has a disclosure review committee whose membership includes the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), among others. The disclosure review committee’s procedures are considered by the CEO and CFO in performing their evaluations of the Company’s disclosure controls and procedures and in assessing the accuracy and completeness of the Company’s disclosures.

Our management, with the participation of our CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), as of the end of the period covered by this quarterly report as required by Rules 13a-15(b) or 15d-15(b) under the Exchange Act. Our management, including our CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

An evaluation was performed under the supervision and with the participation of the Company’s CEO and CFO, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Company’s management, including the CEO and CFO, concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2022.

Changes in internal control over financial reporting

There have been no changes in the Company’s internal control over financial reporting that occurred during the quarter ended June 30, 2022, that materially affected, or is reasonably likely to materially affect the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

The Company is not a party to any material litigation other than litigation in the ordinary course of business. The Company's management and legal counsel do not expect that the ultimate outcome of any of its currently ongoing legal proceedings, individually or collectively, will have a material adverse effect on the Company's financial position, results of operations or cash flows.

ITEM 1A.RISK FACTORS

Other than as noted below, there have been no material changes in our risk factors from those disclosed in Part I, "Item 1A. Risk Factors" to our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, all of which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Radisson Hotels Americas Acquisition Risks

If consummated, we may not realize the anticipated benefits from the Radisson Hotels Americas Acquisition, and our integration process may take longer or be more difficult than anticipated.

Prior to and following the anticipated closing, we have and plan to continue to devote management attention and resources to integrating our and Radisson Hotels Americas’ business practices so that we can fully realize the anticipated benefits of the Radisson Hotels Americas Acquisition. Notwithstanding these efforts, the business and assets acquired may require greater resources and investments than originally anticipated. The Radisson Hotels Americas Acquisition could also result in the assumption of unknown or contingent liabilities, and because Radisson Hotels Americas operates in the same sector that we do, the Radisson Hotels Americas Acquisition could also exacerbate a number of risks that currently apply to us.

Additional potential difficulties associated with the pending acquisition that we may encounter include the following:

•the inability to successfully combine our and Radisson Hotels Americas’ businesses in a manner that permits us to realize the anticipated benefits and value of the Radisson Hotels Americas Acquisition in the time frame currently anticipated, or at all;

•the failure to integrate internal systems, programs, and controls;

•the application of different accounting policies, assumptions, or judgments to Radisson Hotel Americas’ operational results that Radisson Hotels Americas applied in the past;

•changes in laws and regulations that may impact our or Radisson Hotels Americas’ business, financial condition, results of operations, and growth prospects;

•loss of sales and other commercial relationships;

•the complexities associated with integrating a line of business with a history and strategy different to our own;

•the failure to retain key employees that may be difficult to replace;

•potential unknown liabilities and unforeseen increased expenses, delays, or regulatory conditions associated with the Radisson Hotels Americas Acquisition; and

•performance shortfalls as a result of the diversion of management's attention in completing the Radisson Hotels Americas Acquisition.

Any of these risks, if realized, could adversely affect our future operational results or our ability to maintain relationships with guests, customers, vendors, colleagues, and other commercial relationships. As a result, the anticipated benefits of the Radisson Hotels Americas Acquisition may not be realized at all or may take longer to realize or may cost more than expected.

We expect to incur additional expenses and indebtedness related to the Radisson Hotels Americas Acquisition and expect to incur additional integration expenses.

In connection with the pending closing of the Radisson Hotels Americas Acquisition, we expect to incur additional expenses in integrating aspects of the business, practices, policies, and procedures of Radisson Hotels Americas in connection with the Radisson Hotels Americas Acquisition. While we have assumed that a certain level of integration expenses will be incurred, there are a number of factors beyond our control that could affect the total amount or the timing of integration expenses. Many

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of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. Also, we expect to incur additional indebtedness on the senior unsecured revolving credit facility to fund the Radisson Hotels Americas Acquisition, which would increase our debt service obligations.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table sets forth purchases and redemptions of Choice Hotels International, Inc. common stock made by the Company during the six months ended June 30, 2022:

Month Ending	Total Number of Shares Purchased or Redeemed	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1), (2)	Maximum Number of Shares that may yet be Purchased Under the Plans or Programs, End of Period
January 31, 2022	35,486	$	144.95	35,486	3,305,976
February 28, 2022	33,000	145.00		33,000	3,272,976
March 31, 2022	—	—		—	3,272,976
April 30, 2022	—	—		—	3,272,976
May 31, 2022	—	—		—	3,272,976
June 30, 2022	—	—		—	3,272,976
Total	68,486	$	144.97	68,486	3,272,976

(1) The Company’s share repurchase program was initially approved by the board of directors on June 25, 1998. The program has no fixed dollar amount or expiration date. The share repurchase program is discretionary in nature and the board of directors has the ability to modify, suspend, or discontinue the program at any time. Since the program's inception through June 30, 2022, the Company has repurchased 51.8 million shares (including 33.0 million prior to the two-for-one stock split effected in October 2005) of common stock at a total cost of $1.5 billion. Considering the effect of the two-for-one stock split, the Company has repurchased 84.8 million shares at an average price of $17.73 a share.

(2) During the six months ended June 30, 2022, the Company redeemed 34,848 shares of common stock from employees to satisfy the option price and minimum tax-withholding requirements related to the exercising of options and vesting of restricted stock and performance vested restricted stock unit grants. These redemptions were not part of the board repurchase authorization.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.MINE SAFETY DISCLOSURES

None.

ITEM 5.OTHER INFORMATION

None.

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ITEM 6.EXHIBITS

Exhibit Number and Description

Exhibit Number	Description
3.01(a)	Restated Certificate of Incorporation of Choice Hotels Franchising, Inc. (renamed Choice Hotels International, Inc.)
3.02(b)	Amendment to the Restated Certificate of Incorporation of Choice Hotels International, Inc.
3.03(c)	Amended and Restated Bylaws of Choice Hotels International, Inc.
3.04(d)	Amendment to the Amended and Restated Bylaws of Choice Hotels International, Inc.
3.05(e)	Amendment to the Amended and Restated Bylaws of Choice Hotels International, Inc.
10.01(f)	Share Sale and Purchase Agreement, dated as of June 12, 2022 by and among Choice Hotels International, Inc., Radisson Holdings Inc., Radisson Hospitality, Inc., Aplite Holdings AB and Radisson Hospitality Belgium BV/SRL
10.02*	Assignment and Acceptance dated May 11, 2022 in connection with Senior Unsecured Credit Agreement
10.03(g)†	Amendment to Non-Competition, Non-Solicitation & Severance Benefit Agreement between the Company and Patrick Pacious, dated May 24, 2022
10.04(h)†	Letter Agreement between the company and Patrick S. Pacious, dated May 24, 2022
31.1*	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a)
31.2*	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a)
32*	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350
101.INS*	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith
†	Indicates a management contract or compensatory plan.

(a)    Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Registration Statement on Form S-4, filed August 31, 1998 (Reg. No. 333-62543).

(b)    Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K filed May 1, 2013.

(c)    Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K filed February 16, 2010.

(d)    Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K filed April 29, 2015.

(e)    Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K filed on January 13, 2016.

(f)    Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K filed on June 13, 2022.

(g)    Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.’s Current Report on Form 8-K dated May 24, 2022, filed May 27, 2022.

(h)    Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.’s Current Report on Form 8-K dated May 24, 2022, filed May 27, 2022.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CHOICE HOTELS INTERNATIONAL, INC.
August 4, 2022	By:	/s/ PATRICK S. PACIOUS
		Patrick S. Pacious
		President & Chief Executive Officer
	CHOICE HOTELS INTERNATIONAL, INC.
August 4, 2022	By:	/s/ DOMINIC E. DRAGISICH
		Dominic E. Dragisich
		Chief Financial Officer

37

EX-10.02

ASSIGNMENT AND ACCEPTANCE

Reference is made to the Amended and Restated Senior Unsecured Credit Agreement dated as of August 20, 2018, by and among Choice Hotels International, Inc., a Delaware corporation (the “Borrower”), the Designated Borrowers party thereto from time to time, the Lenders party thereto and Deutsche Bank AG New York Branch, as Administrative Agent (as amended, supplemented, restated or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms not defined herein shall have the meaning assigned thereto in the Credit Agreement. Deutsche Bank AG New York Branch (the “Assignor”) and each “Assignee” referred to on Schedule 1 hereto (each, an “Assignee”) agrees severally with respect to all information relating to it and its assignment hereunder and on Schedules 1 and 2 hereto as follows:

1.The Assignor hereby sells and assigns, without recourse, to such Assignee, and such Assignee hereby purchases and assumes, without recourse, from the Assignor, effective as of the Effective Date (as set forth below), the respective interests set forth on Schedule 1 hereto opposite such Assignee’s name (an “Assigned Interest”) in the Assignor’s rights and obligations under the Credit Agreement, including, without limitation, the interests set forth on Schedule 1 in the Commitment of the Assignor on the Effective Date and the Competitive Bid Loans (if any) owing to the Assignor which are outstanding on the Effective Date. Each of the Assignor and such Assignee hereby makes and agrees to be bound by all the representations, warranties and agreements set forth in Section 9.04(c) of the Credit Agreement, a copy of which is has been received by each such party. Pursuant to Section 2.16 of the Credit Agreement, the Maturity Date was previously extended to August 20, 2026 (the “Current Maturity Date”) as evidenced by the that certain extension confirmation letter from the Administrative Agent to the Borrower dated as of August 11, 2021. From and after the Effective Date (i) such Assignee shall be a party to and be bound by the provisions of the Credit Agreement and, to the extent of the interests assigned by this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and under the Loan Documents and (ii) the Assignor shall, to the extent of the interest assigned by this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement. For the avoidance of doubt, the Current Maturity Date applies to the Borrower’s Obligations in respect of each Assigned Interest.

2.This Assignment and Acceptance is being delivered to the Administrative Agent together with (i) if such Assignee is organized under the laws of a jurisdiction outside the United States, and to the extent not previously delivered, the forms specified in Section 2.20(e) of the Credit Agreement, duly completed and executed by such Assignee, and (ii) if such Assignee is not already a Lender under the Credit Agreement, an Administrative Questionnaire in the form of Exhibit B to the Credit Agreement.

3.By its signature below, the Borrower agrees to pay to the Administrative Agent on or before the Effective Date, for the respective accounts of the Assignees, allocated on a pro rata basis based on the respective Commitments assumed hereunder, an incremental commitment fee of $24,000.00 in the aggregate.

4.This Assignment and Acceptance shall be governed by and construed in accordance with the laws of the State of New York without reference to its conflicts of laws principles or provisions.

Date of Assignment:	May 11, 2022
Assignee’s Address for Notices:	See attached Schedule 2
Effective Date:	May 18, 2022

AMERICAS/2022978042.5    [Choice Hotels: Assignment – DB to Multiple Lenders]

The terms set forth above
are hereby agreed to:

DEUTSCHE BANK AG
NEW YORK BRANCH, as Assignor

By:	/s/ David Goodman
Name:	David Goodman
Title:	Managing Director

By:	/s/ Daniel Penn
Name:	Daniel Penn
Title:	Managing Director

GOLDMAN SACHS BANK USA,
as Assignee

By:	/s/ Jonathan Dworkin
Name:	Jonathan Dworkin
Title:	Authorized Signatory

PNC BANK, NATIONAL ASSOCIATION,
as Assignee

By:	/s/ David Notaro
Name:	David Notaro
Title:	Senior Vice President

U.S. BANK NATIONAL ASSOCIATION,
as Assignee

By:	/s/ Steven L. Sawyer
Name:	Steven L. Sawyer
Title:	Senior Vice President

WELLS FARGO BANK, NATIONAL ASSOCIATION
as Assignee

By:	/s/ Katherine A. Marcotte
Name:	Katherine A. Marcotte
Title:	Senior Vice President

[Signatures continue on following page]

AMERICAS/2022978042    S-1    [Choice Hotels: Assignment – DB to Multiple Lenders]

Accepted:

DEUTSCHE BANK AG NEW YORK BRANCH,
as Administrative Agent

By:	/s/ David Goodman
Name:	David Goodman
Title:	Managing Director

By:	/s/ Vishal M. Mahadkar
Name:	Vishal M Mahadkar
Title:	Vice President

Agreed as to paragraph 3 above:

CHOICE HOTELS INTERNATIONAL, INC.,
a Delaware corporation

By:	/s/ Dominic Dragisich
Name:	Dominic Dragisich
Title:	CFO

AMERICAS/2022978042    S-2    [Choice Hotels: Assignment – DB to Multiple Lenders]

SCHEDULE 1

to

ASSIGNMENT AND ACCEPTANCE

ASSIGNOR:	Deutsche Bank AG New York Branch
Facility
Pro Rata Percentage assigned	10%
Pro Rata Percentage retained	12.5%
Commitment assigned	$60,000,000
Commitment retained	$75,000,000
ABR Loans
Aggregate outstanding principal amount of     ABR Loans assigned	$0.00
Aggregate outstanding principal amount of     ABR Loans retained	$0.00
Eurodollar Loans
Aggregate outstanding principal amount of     Eurodollar Loans assigned	$0.00
Aggregate outstanding principal amount of     Eurodollar Loans retained	$0.00
RFR Loans
Aggregate outstanding principal amount of     RFR Loans assigned	$0.00
Aggregate outstanding principal amount of     RFR Loans retained	$0.00
Eurocurrency Loans
Aggregate outstanding principal amount of     Eurocurrency Loans assigned	$0.00
Aggregate outstanding principal amount of     Eurocurrency Loans retained	$0.00
Eurodollar Competitive Bid Loans
Aggregate outstanding principal amount of     Eurodollar Competitive Bid Loans assigned	$0.00
Aggregate outstanding principal amount of     Eurodollar Competitive Bid Loans retained	$0.00
Fixed Rate Competitive Bid Loans
Aggregate outstanding principal amount of     Fixed Rate Competitive Bid Loans assigned	$0.00
Aggregate outstanding principal amount of     Fixed Rate Competitive Bid Loans retained	$0.00
Swingline Loan Participations
Aggregate outstanding principal amount of     Swingline Loan Participations assigned	$0.00
Aggregate outstanding principal amount of     Swingline Loan Participations retained	$0.00

AMERICAS/2022978042    Sched. 1    [Choice Hotels: Assignment – DB to Multiple Lenders]

SCHEDULE 1

to

ASSIGNMENT AND ACCEPTANCE (continued)

ASSIGNEES:	Goldman Sachs Bank USA	PNC Bank, National Association	U.S. Bank National Association	Wells Fargo Bank, N.A.
Facility
Pro Rata Percentage assumed	3.95833333%	3.95833333%	1.66666667%	0.41666667%
Commitment assumed	$23,750,000	$23,750,000	$10,000,000	$2,500,000
ABR Loans
Aggregate outstanding principal amount of     ABR Loans assumed	$0.00	$0.00	$0.00	$0.00
Eurodollar Loans
Aggregate outstanding principal amount of     Eurodollar Loans assumed	$0.00	$0.00	$0.00	$0.00
RFR Loans
Aggregate outstanding principal amount of     RFR Loans assumed	$0.00	$0.00	$0.00	$0.00
Eurocurrency Loans
Aggregate outstanding principal amount of     Eurocurrency Loans assumed	$0.00	$0.00	$0.00	$0.00
Eurodollar Competitive Bid Loans
Aggregate outstanding principal amount of     Eurodollar Competitive Bid Loans     assumed	$0.00	$0.00	$0.00	$0.00
Fixed Rate Competitive Bid Loans
Aggregate outstanding principal amount of     Fixed Rate Competitive Bid Loans     assumed	$0.00	$0.00	$0.00	$0.00
Swingline Loan Participations
Aggregate outstanding principal amount of     Swingline Loan Participations assumed	$0.00	$0.00	$0.00	$0.00

AMERICAS/2022978042    S-4    [Choice Hotels: Assignment – DB to Multiple Lenders]

SCHEDULE 2

to

ASSIGNMENT AND ACCEPTANCE

Assignee Names and Notice Addresses:

Goldman Sachs Bank USA
200 West Street
New York, NY 10282
Facsimile: (212) 902 1099
Attention: Loan Operations

PNC Bank, National Association
249 Fifth Avenue
One PNC Plaza
Pittsburgh, Pennsylvania 15222
Facsimile: (866) 641-2751
Attention: Derrell Groce

U.S. Bank National Association
401 City Center
Oshkosh, Wisconsin 54901
Facsimile: (920) 237-7993
Attention: CLS Syndication Services

Wells Fargo Bank, N.A.
7711 Plantation Road
Roanoke, Virginia 24019
Facsimile: (866) 270-7214
Attention: Wholesale Loan Servicing,
Roanoke Loan Center

AMERICAS/2022978042    S-5    [Choice Hotels: Assignment – DB to Multiple Lenders]

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Patrick S. Pacious, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Choice Hotels International, Inc.;

2.    Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

(d)    Disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

August 4, 2022	/s/ PATRICK S. PACIOUS
	Patrick S. Pacious
	President & Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Dominic E. Dragisich, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Choice Hotels International, Inc.;

2.    Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.    The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

(d)    Disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;

5.    The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

August 4, 2022	/s/ DOMINIC E. DRAGISICH
	Dominic E. Dragisich
	Chief Financial Officer

EX-32

Exhibit 32

WRITTEN STATEMENT

OF

CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

The undersigned hereby certify that the Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 filed by Choice Hotels International, Inc. with the Securities and Exchange Commission fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the issuer.

August 4, 2022	/s/ PATRICK S. PACIOUS
	Patrick S. Pacious
	President & Chief Executive Officer
August 4, 2022	/s/ DOMINIC E. DRAGISICH
	Dominic E. Dragisich
	Chief Financial Officer

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2022	Jul. 29, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2022
Document Transition Report	false
Entity File Number	001-13393
Entity Registrant Name	CHOICE HOTELS INTERNATIONAL INC /DE
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	52-1209792
Entity Address, Address Line One	1 Choice Hotels Circle
Entity Address, Address Line Two	Suite 400
Entity Address, City or Town	Rockville,
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	20850
City Area Code	301
Local Phone Number	592-5000
Title of 12(b) Security	Common Stock, Par Value $0.01 per share
Trading Symbol	CHH
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		55,779,959
Entity Central Index Key	0001046311
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
REVENUES
Total revenues	$ 367,974	$ 278,344	$ 625,701	$ 461,291
OPERATING EXPENSES
Selling, general and administrative	43,888	34,470	74,212	64,737
Depreciation and amortization	5,479	6,232	11,710	12,594
Marketing and reservation system	153,846	113,285	267,496	211,458
Owned hotels	10,692	5,333	18,846	9,480
Total operating expenses	213,905	159,320	372,264	298,269
Gain on sale of business and assets, net	3,280	0	3,309	0
Operating income	157,349	119,024	256,746	163,022
OTHER INCOME AND EXPENSES, NET
Interest expense	11,252	11,691	22,722	23,468
Interest income	(1,628)	(1,234)	(2,908)	(2,515)
Other loss (gain)	5,559	(2,108)	7,275	(3,313)
Equity in net loss (gain) of affiliates	40	(1,179)	(204)	4,818
Total other income and expenses, net	15,223	7,170	26,885	22,458
Income before income taxes	142,126	111,854	229,861	140,564
Income tax expense	35,958	25,972	56,302	32,345
Net income	$ 106,168	$ 85,882	$ 173,559	$ 108,219
Basic earnings per share (in usd per share)	$ 1.90	$ 1.54	$ 3.11	$ 1.95
Diluted earnings per share (in usd per share)	1.89	1.53	3.08	1.93
Cash dividends declared per share (in usd per share)	$ 0.2375	$ 0.225	$ 0.4750	$ 0.225
Royalty fees
REVENUES
Total revenues	$ 121,449	$ 106,242	$ 212,188	$ 172,289
Initial franchise and relicensing fees
REVENUES
Total revenues	6,222	7,328	14,624	12,755
Procurement services
REVENUES
Total revenues	21,803	12,092	33,486	23,283
Marketing and reservation system
REVENUES
Total revenues	189,382	135,988	316,019	227,509
Owned hotels
REVENUES
Total revenues	17,191	8,993	29,228	13,347
Other
REVENUES
Total revenues	$ 11,927	$ 7,701	$ 20,156	$ 12,108

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 106,168	$ 85,882	$ 173,559	$ 108,219
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	(103)	71	(237)	123
Other comprehensive income (loss), net of tax	(103)	71	(237)	123
Comprehensive income	$ 106,065	$ 85,953	$ 173,322	$ 108,342

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 607,185	$ 511,605
Accounts receivable (net of allowance for credit losses of $21,822 and $34,149, respectively)	203,890	153,147
Income taxes receivable	3,123	12,511
Notes receivable (net of allowance for credit losses of $4,483 and $4,318, respectively)	53,760	54,453
Prepaid expenses and other current assets	115,651	29,945
Total current assets	983,609	761,661
Property and equipment, at cost (net of accumulated depreciation and amortization of $236,191 and $232,492, respectively)	319,161	377,367
Operating lease right-of-use assets	29,669	34,183
Goodwill	159,196	159,196
Intangible assets (net of accumulated amortization of $213,000 and $195,909, respectively)	319,922	312,389
Notes receivable (net of allowance for credit losses of $7,048 and $12,461, respectively)	48,649	66,451
Investments, employee benefit plans, at fair value	29,821	33,946
Investments in affiliates	27,789	27,967
Deferred income taxes	74,049	68,643
Other assets	84,976	90,021
Total assets	2,076,841	1,931,824
Current liabilities
Accounts payable	106,427	81,169
Accrued expenses and other current liabilities	100,631	104,472
Deferred revenue	79,767	81,538
Current portion of long-term debt	216,571	216,351
Liability for guest loyalty program	78,955	86,765
Total current liabilities	582,351	570,295
Long-term debt	844,729	844,123
Long-term deferred revenue	107,690	105,785
Deferred compensation and retirement plan obligations	34,468	38,690
Income taxes payable	15,482	20,642
Operating lease liabilities	30,355	35,492
Liability for guest loyalty program	37,684	41,785
Other liabilities	7,357	9,130
Total liabilities	1,660,116	1,665,942
Commitments and Contingencies
Common stock, $0.01 par value; 160,000,000 shares authorized; 95,065,638 shares issued at June 30, 2022 and December 31, 2021; 55,780,322 and 55,609,226 shares outstanding at June 30, 2022 and December 31, 2021, respectively	951	951
Additional paid-in-capital	274,384	259,317
Accumulated other comprehensive loss	(4,811)	(4,574)
Treasury stock, at cost; 39,285,316 and 39,456,412 shares at June 30, 2022 and December 31, 2021, respectively	(1,276,090)	(1,265,032)
Retained earnings	1,422,291	1,275,220
Total shareholders’ equity	416,725	265,882
Total liabilities and shareholders’ equity	$ 2,076,841	$ 1,931,824

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 21,822	$ 34,149
Allowance for credit losses, current	4,483	4,318
Accumulated depreciation and amortization, property, plant and equipment	236,191	232,492
Intangible assets, accumulated amortization	213,000	195,909
Allowance for credit losses, noncurrent	$ 7,048	$ 12,461
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	160,000,000	160,000,000
Common stock, shares issued (in shares)	95,065,638	95,065,638
Common stock, shares outstanding (in shares)	55,780,322	55,609,226
Treasury stock, shares (in shares)	39,285,316	39,456,412

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 173,559	$ 108,219
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	11,710	12,594
Depreciation and amortization – marketing and reservation system	14,608	12,076
Gain on sale and disposal of business and assets, net	(3,309)	0
Franchise agreement acquisition cost amortization	7,623	6,294
Stock compensation and other charges	17,770	16,295
Interest and investment loss (income)	7,459	(6,824)
Deferred income taxes	(5,493)	(3,465)
Equity in net loss of affiliates, less distributions received	745	7,398
Franchise agreement acquisition costs, net of reimbursements	(27,016)	(18,078)
Change in working capital and other	(38,307)	(32,102)
Net cash provided by operating activities	159,349	102,407
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in property and equipment	(49,866)	(23,393)
Investment in intangible assets	(1,824)	(2,976)
Asset acquisitions, net of cash paid	(856)	0
Proceeds from sale of business and assets	32,893	0
Contributions to investments in affiliates	(669)	(1,136)
Proceeds from sale of equity method investments	0	11,830
Purchases of investments, employee benefit plans	(3,294)	(931)
Proceeds from sales of investments, employee benefit plans	1,854	1,994
Issuance of notes receivable	(1,987)	(17,918)
Collections of notes receivable	63	63
Other items, net	(305)	(486)
Net cash used in investing activities	(23,991)	(32,953)
CASH FLOWS FROM FINANCING ACTIVITIES
Debt issuance costs	(24)	0
Purchase of treasury stock	(15,140)	(5,362)
Dividends paid	(26,453)	0
Proceeds from exercise of stock options	2,359	9,115
Net cash (used in) provided by financing activities	(39,258)	3,753
Net change in cash and cash equivalents	96,100	73,207
Effect of foreign exchange rate changes on cash and cash equivalents	(520)	(11)
Cash and cash equivalents at beginning of period	511,605	234,779
Cash and cash equivalents at end of period	607,185	307,975
Cash payments during the period for
Income taxes, net of refunds	40,144	17,108
Interest, net of capitalized interest	21,614	21,885
Non-cash investing and financing activities
Dividends declared but not paid	13,249	12,521
Investment in property, equipment and intangibles acquired in accounts payable and accrued liabilities	5,715	$ 4,085
Asset acquisition from extinguishment of note receivable	$ 20,446

XML

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands		Total	Common Stock	Additional Paid-in- Capital	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Retained Earnings
Beginning balance (in shares) at Dec. 31, 2020			55,535,554
Beginning balance at Dec. 31, 2020		$ (5,752)	$ 951	$ 233,921	$ (4,646)	$ (1,260,478)	$ 1,024,500
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		22,337					22,337
Other comprehensive income (loss), net of tax		52			52
Share-based payment activity (in shares)	[1]		48,781
Share-based payment activity	[1]	7,644		3,617		4,030	(3)
Dividends declared	[1]	0
Treasury purchases (in shares)			(46,499)
Treasury purchases		(5,046)				(5,046)
Ending balance (in shares) at Mar. 31, 2021			55,537,836
Ending balance at Mar. 31, 2021		19,235	$ 951	237,538	(4,594)	(1,261,494)	1,046,834
Beginning balance (in shares) at Dec. 31, 2020			55,535,554
Beginning balance at Dec. 31, 2020		(5,752)	$ 951	233,921	(4,646)	(1,260,478)	1,024,500
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		108,219
Other comprehensive income (loss), net of tax		123
Ending balance (in shares) at Jun. 30, 2021			55,646,993
Ending balance at Jun. 30, 2021		104,933	$ 951	246,604	(4,523)	(1,258,295)	1,120,196
Beginning balance (in shares) at Mar. 31, 2021			55,537,836
Beginning balance at Mar. 31, 2021		19,235	$ 951	237,538	(4,594)	(1,261,494)	1,046,834
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		85,882					85,882
Other comprehensive income (loss), net of tax		71			71
Share-based payment activity (in shares)			111,895
Share-based payment activity		12,583		9,066		3,516	1
Dividends declared		(12,521)					(12,521)
Treasury purchases (in shares)			(2,738)
Treasury purchases		(317)				(317)
Ending balance (in shares) at Jun. 30, 2021			55,646,993
Ending balance at Jun. 30, 2021		$ 104,933	$ 951	246,604	(4,523)	(1,258,295)	1,120,196
Beginning balance (in shares) at Dec. 31, 2021		55,609,226	55,609,226
Beginning balance at Dec. 31, 2021		$ 265,882	$ 951	259,317	(4,574)	(1,265,032)	1,275,220
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		67,391					67,391
Other comprehensive income (loss), net of tax		(134)			(134)
Share-based payment activity (in shares)	[1]		262,008
Share-based payment activity	[1]	9,558		6,068		3,486	4
Dividends declared	[1]	(13,250)					(13,250)
Treasury purchases (in shares)			(100,912)
Treasury purchases		(14,802)				(14,802)
Ending balance (in shares) at Mar. 31, 2022			55,770,322
Ending balance at Mar. 31, 2022		$ 314,645	$ 951	265,385	(4,708)	(1,276,348)	1,329,365
Beginning balance (in shares) at Dec. 31, 2021		55,609,226	55,609,226
Beginning balance at Dec. 31, 2021		$ 265,882	$ 951	259,317	(4,574)	(1,265,032)	1,275,220
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		173,559
Other comprehensive income (loss), net of tax		$ (237)
Ending balance (in shares) at Jun. 30, 2022		55,780,322	55,780,322
Ending balance at Jun. 30, 2022		$ 416,725	$ 951	274,384	(4,811)	(1,276,090)	1,422,291
Beginning balance (in shares) at Mar. 31, 2022			55,770,322
Beginning balance at Mar. 31, 2022		314,645	$ 951	265,385	(4,708)	(1,276,348)	1,329,365
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income		106,168					106,168
Other comprehensive income (loss), net of tax		(103)			(103)
Share-based payment activity (in shares)			12,422
Share-based payment activity		9,595		8,999		596
Dividends declared		(13,242)					(13,242)
Treasury purchases (in shares)			(2,422)
Treasury purchases		$ (338)				(338)
Ending balance (in shares) at Jun. 30, 2022		55,780,322	55,780,322
Ending balance at Jun. 30, 2022		$ 416,725	$ 951	$ 274,384	$ (4,811)	$ (1,276,090)	$ 1,422,291

[1] In April 2020, in light of uncertainty resulting from the COVID-19 pandemic, we suspended future, undeclared dividends. In May 2021, the Company resumed the payment of quarterly dividends, subject to future declarations by our board of directors, and declared a quarterly cash dividend of $0.225 per share of common stock. On December 6, 2021, the Company's board of directors approved a 6% increase in the quarterly cash dividend and declared a quarterly cash dividend of $0.2375 per share of common stock. During certain periods presented, accumulated dividends were paid to certain shareholders upon vesting of performance vested restricted stock units ("PVRSU") which are captured in Share-based payment activity.

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Parenthetical) - $ / shares		1 Months Ended
	Dec. 06, 2021	May 31, 2021
Common Stock
Dividends declared (in dollars per share)	$ 0.2375	$ 0.225
Common stock dividends, percentage increase (as a percent)	6.00%

XML

Basis of Presentation and Significant Accounting Policies

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The accompanying unaudited consolidated financial statements of Choice Hotels International, Inc. and its subsidiaries (together the "Company") have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("GAAP") pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated in consolidation.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments that are necessary to fairly present the Company's financial position and results of operations. Except as otherwise disclosed, all adjustments are of a normal recurring nature.

Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP have been omitted. Although we believe the disclosures made are adequate to prevent the information presented from being misleading, these financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2021 and notes thereto included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 24, 2022. Interim results are not necessarily indicative of the entire year results.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are detailed in the “Summary of Significant Accounting Policies” section of Note 1 in the Annual Report on Form 10-K for the year ended December 31, 2021.

Recently Adopted Accounting Standards

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Topic 606, as opposed to at fair value. ASU 2021-08 is effective for annual reporting periods beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted.

The Company has elected to early adopt ASU 2021-08 in the second quarter of 2022. The adoption has no present impact on the Company's consolidated financial statements, but will impact the accounting for contract assets and contract liabilities acquired in future business combinations.

Recently Issued Accounting Standards

In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses ("ASU 2022-02"). ASU 2022-02 eliminates the recognition and measurement guidance on troubled debt restructuring for creditors that have adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) ("Topic 326"), requires enhanced disclosures about loan modifications for borrowers experiencing financial difficulty, and includes new guidance on current-period gross write-offs presentation. ASU 2022-02 is effective for annual reporting periods beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the potential impact that ASU 2022-02 will have on the consolidated financial statements and disclosures.

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Revenue

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Contract Liabilities

Contract liabilities relate to (i) advance consideration received, such as initial franchise and relicensing fees paid when a franchise agreement is executed and system implementation fees paid at time of installation, for services considered to be part of the brand intellectual property performance obligation and (ii) amounts received when Choice Privileges points are issued, but for which revenue is not yet recognized since the related points have not been redeemed.

Deferred revenues from initial and relicensing fees and system implementation fees are typically recognized over a five- to ten-year period, unless the franchise agreement is terminated and the hotel exits the franchise system whereby remaining deferred amounts are recognized to revenue in the period of termination. Loyalty points are typically redeemed within three years of issuance.

Significant changes in the contract liabilities balances during the period December 31, 2021 to June 30, 2022 are as follows:

(in thousands)
Balance as of December 31, 2021	$	175,425
Increases to the contract liability balance due to cash received	56,392
Revenue recognized in the period	(57,127)
Balance as of June 30, 2022	$	174,690

Remaining Performance Obligations

The aggregate amount of transaction price allocated to unsatisfied or partially unsatisfied performance obligations is $174.7 million as of June 30, 2022. This amount represents fixed transaction price that will be recognized as revenue in future periods, which is captured in the consolidated balance sheet as current and non-current deferred revenue.

Based on practical expedient elections permitted by ASU 2014-09, Revenue From Contracts with Customers (Topic 606) and subsequent amendments ("Topic 606"), the Company does not disclose the value of unsatisfied performance obligations for (i) variable consideration subject to the sales or usage-based royalty constraint or comprising a component of a series (including franchise, partnership, qualified vendor, and software as a service ("SaaS") agreements), (ii) variable consideration for which we recognize revenue at the amount to which we have the right to invoice for services performed, or (iii) contracts with an expected original duration of one year or less.

Disaggregation of Revenue

	Three Months Ended						Three Months Ended
	June 30, 2022						June 30, 2021
(in thousands)	Over time		Point in time		Total		Over time		Point in time		Total
Royalty fees	$	121,449	$	—	$	121,449	$	106,242	$	—	$	106,242
Initial franchise and relicensing fees	6,222		—		6,222		7,328		—		7,328
Procurement services	20,744		1,059		21,803		11,502		590		12,092
Marketing and reservation system	148,126		41,256		189,382		121,944		14,044		135,988
Owned hotels	14,694		2,388		17,082		7,550		1,336		8,886
Other	11,927		—		11,927		7,701		—		7,701
Total Topic 606 revenues	$	323,162	$	44,703	367,865		$	262,267	$	15,970	278,237
Non-Topic 606 revenues					109						107
Total revenues					$	367,974					$	278,344
	Six Months Ended						Six Months Ended
	June 30, 2022						June 30, 2021
(in thousands)	Over time		Point in time		Total		Over time		Point in time		Total
Royalty fees	$	212,188	$	—	$	212,188	$	172,289	$	—	$	172,289
Initial franchise and relicensing fees	14,624		—		14,624		12,755		—		12,755
Procurement services	31,876		1,610		33,486		22,241		1,042		23,283
Marketing and reservation system	260,382		55,637		316,019		200,995		26,514		227,509
Owned hotels	24,635		4,385		29,020		11,068		2,058		13,126
Other	20,156		—		20,156		12,108		—		12,108
Total Topic 606 revenues	$	563,861	$	61,632	625,493		$	431,456	$	29,614	461,070
Non-Topic 606 revenues					208						221
Total revenues					$	625,701					$	461,291

Marketing and reservation system and Procurement services point in time revenues represent loyalty points redeemed by members for benefits (with both franchisees and third-party partners), net of the cost of redemptions.

As presented in Note 11, the Corporate & Other segment amounts represent $19.4 million and $10.9 million for the three months ended June 30, 2022 and 2021, respectively, and $33.7 million and $17.0 million for the six months ended June 30, 2022 and 2021, respectively, and are included in the Over time column of Other revenues and the Owned hotels and Non-Topic 606 revenues rows. The remaining revenues relate to the Hotel Franchising segment.

Royalty fees and Marketing and reservation system revenues are presented net of intersegment revenues of $1.3 million and $0.7 million for the three months ended June 30, 2022 and 2021, respectively, and $2.2 million and $1.0 million for the six months ended June 30, 2022 and 2021, respectively.

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Receivables and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2022

Accounts and Financing Receivable, after Allowance for Credit Loss [Abstract]

Receivables and Allowance for Credit Losses

Receivables and Allowance for Credit Losses

Notes Receivable

The Company has provided financing in the form of notes receivable loans to franchisees to support the development of properties in strategic markets. The Company's credit quality indicator is the level of security in the note receivable.

The composition of notes receivable balances by credit quality indicator and the allowance for credit losses is as follows:

(in thousands)	June 30, 2022		December 31, 2021
Senior	$	91,981	$	108,370
Subordinated	20,506		27,801
Unsecured	1,453		1,512
Total notes receivable	113,940		137,683
Total allowance for notes receivable credit losses	11,531		16,779
Total notes receivable, net of allowance	$	102,409	$	120,904
Current portion, net of allowance	$	53,760	$	54,453
Long-term portion, net of allowance	$	48,649	$	66,451

Amortized cost basis by year of origination and credit quality indicator are as follows:

(in thousands)	2022		2021		2020		Prior		Total
Senior	$	—	$	4,211	$	—	$	87,770	$	91,981
Subordinated	—		—		—		20,506		20,506
Unsecured	—		—		—		1,453		1,453
Total notes receivable	$	—	$	4,211	$	—	$	109,729	$	113,940

The following table summarizes the activity related to the Company’s notes receivable allowance for credit losses:

(in thousands)	June 30, 2022		December 31, 2021
Beginning balance	$	16,779	$	19,484
Provision for credit losses	230		709
Write-offs	(5,478)		(3,414)
Ending balance	$	11,531	$	16,779

As of June 30, 2022 and December 31, 2021, one loan and two loans, respectively, with senior and/or subordinated tranches met the definition of collateral-dependent and are collateralized by membership interests in the borrowing entities and either the associated land parcels or an operating hotel. The Company used a discounted cash flow ("DCF") technique to project cash flows or a market approach via quoted market prices to value the underlying collateral. The Company reviewed the borrower's financial statements, economic trends, industry projections for the market, and comparable sales capitalization rates, which represent significant inputs to the cash flow projections. These nonrecurring fair value measurements are classified as level three of the fair value measurement hierarchy, as there are unobservable inputs which are significant to the overall fair value. Based on these analyses, the fair value of collateral secures the carrying value of each loan to a significant extent. Allowances for credit losses attributable to collateral-dependent loans are $0.9 million and $6.3 million as of June 30, 2022 and December 31, 2021, respectively.

The write-offs for the year ended June 30, 2022 and December 31, 2021 are associated with loans previously classified as collateral-dependent that were settled in exchange for an operating hotel on April 14, 2022 and October 1, 2021, respectively. Refer to Note 15 regarding the second quarter 2022 asset acquisition accounting.

As a result of the COVID-19 pandemic, the Company extended interest deferral terms on certain notes receivable. The Company considers loans past due and in default when payments are not made when due in accordance with then current loan provisions or terms extended to borrowers, including loans with concessions or interest deferral. The Company suspends the accrual of interest when payments on loans are more than 30 days past due or upon a loan being classified as collateral-dependent. The Company applies payments received for loans on non-accrual status first to interest and then to principal. The Company does not resume interest accrual until all delinquent payments are received based on then current loan provisions. The amortized cost basis of notes receivable on non-accrual status was $18.2 million and $44.1 million at June 30, 2022 and December 31, 2021, respectively.

The Company has identified loans totaling approximately $7.5 million as of both June 30, 2022 and December 31, 2021, respectively, with stated interest rates that are less than market rate, representing a total unamortized discount of $0.2 million and $0.3 million as of June 30, 2022 and December 31, 2021, respectively. These discounts are reflected as a reduction of the outstanding loan amounts and are amortized over the life of the related loan.

The past due balances by credit quality indicator of notes receivable are as follows:

(in thousands)	1- 30 days Past Due		31-89 days Past Due		> 90 days Past Due		Total Past Due		Current		Total  Notes Receivable
As of June 30, 2022
Senior	$	—	$	—	$	15,200	$	15,200	$	76,781	$	91,981
Subordinated	—		—		2,209		2,209		18,297		20,506
Unsecured	—		—		—		—		1,453		1,453
	$	—	$	—	$	17,409	$	17,409	$	96,531	$	113,940
As of December 31, 2021
Senior	$	—	$	—	$	—	$	—	$	108,370	$	108,370
Subordinated	—		—		2,209		2,209		25,592		27,801
Unsecured	—		—		—		—		1,512		1,512
	$	—	$	—	$	2,209	$	2,209	$	135,474	$	137,683

The Company evaluated its off-balance-sheet credit exposure for loan commitments and determined the likelihood of having to perform is remote as of June 30, 2022. Refer to Note 12.

Variable Interest through Notes Issued

The Company has issued notes receivables to certain entities that have created variable interests in these borrowers totaling $101.7 million and $120.2 million as of June 30, 2022 and December 31, 2021, respectively. The Company has determined that it is not the primary beneficiary of these variable interest entities ("VIEs"). These loans have stated fixed and/or variable interest amounts.

Accounts Receivable

Accounts receivable consist primarily of franchise and related fees due from hotel franchisees and are recorded at the invoiced amount.

During six months ended June 30, 2022, the Company recorded reversals of provisions for credit losses on accounts receivable of $1.1 million in SG&A expenses and $0.3 million in marketing and reservation system expenses. During the six months ended June 30, 2021, the Company recorded reversal of provisions for credit losses on accounts receivable of $0.1 million in SG&A expenses and provisions of $0.2 million in marketing and reservation system expenses. During the six months ended June 30, 2022 and 2021, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $11.2 million and $2.4 million, respectively.

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Investments in Affiliates

6 Months Ended

Jun. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Investments in Affiliates

Investments in Affiliates

The Company maintains equity method investments in affiliates related to the Company's program to offer equity support to qualified franchisees to develop and operate Cambria Hotels in strategic markets. The Company has investments in affiliates that represent VIEs totaling $24.1 million and $25.2 million on the consolidated balance sheets at June 30, 2022 and December 31, 2021, respectively. The Company has determined that it is not the primary beneficiary of any of these VIEs, however it does exercise significant influence through its equity ownership and as a result the investment in these affiliates is accounted for under the equity method. For the three months ended June 30, 2022 and 2021, the Company recognized losses (gains) totaling $0.9 million and $(0.9) million, respectively, from these investments that represent VIEs. For the six months ended June 30, 2022 and 2021, the Company recognized losses totaling $1.7 million and $5.5 million, respectively, from these investments that represent VIEs. The Company's maximum exposure to losses related to its investments in VIEs is limited to its equity investments as well as certain limited payment guaranties described in Note 12 of these financial statements.

The Company recognized no impairment charges related to equity method investments during the six months ended June 30, 2022. During the first quarter of 2021, the Company recognized an other-than-temporary impairment of $4.8 million related to an equity method investment. The Company assessed the estimated fair value of the investment from comparable market transactions of the investment, which was a key judgment in the fair value determination. This nonrecurring fair value measurement was classified as level three of the fair value measurement hierarchy, as the Company utilized unobservable inputs which are significant to the overall fair value. Based on this analysis, the Company determined that the fair market value declined below the carrying value and the decline is other-than-temporary. As a result, the Company recorded an other-than-temporary impairment from the carrying value to the estimated fair value for the investment. The other-than-temporary impairment is classified as equity in net loss of affiliates in the consolidated statements of income and captured in the Hotel Franchising reportable segment in Note 11.

During the second quarter of 2021, the Company sold its ownership interest in three separate equity method investments. The Company recognized a cumulative gain of $2.6 million on the sales of these investments, which is recorded in equity in net loss (gain) of affiliates.

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Debt

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Debt

Debt

Debt consists of the following:

	June 30, 2022		December 31, 2021
	(in thousands)
$450 million senior unsecured notes due 2031 ("2020 Senior Notes") with an effective interest rate of 3.86%, less a discount and deferred issuance costs of $5.2 million and $5.5 million at June 30, 2022 and December 31, 2021, respectively	$	444,775	$	444,470
$400 million senior unsecured notes due 2029 ("2019 Senior Notes") with an effective interest rate of 3.88%, less a discount and deferred issuance costs of $4.5 million and $4.8 million at June 30, 2022 and December 31, 2021, respectively	395,538		395,237
$216.6 million senior unsecured notes due 2022 ("2012 Senior Notes") with an effective interest rate of 6.00%, less deferred issuance costs of $0.2 million at December 31, 2021 (2)	216,571		216,351
$600 million senior unsecured revolving credit facility (1)	—		—
Economic development loans with an effective interest rate of 3.00% at June 30, 2022 and December 31, 2021, respectively	4,416		4,416
Total debt	$	1,061,300	$	1,060,474
Less current portion (2)	216,571		216,351
Long-term debt	$	844,729	$	844,123

(1) During the third quarter of 2020, the Company utilized excess cash on hand to pay down its senior unsecured revolving credit facility balance in full and the facility remains undrawn as of June 30, 2022 and December 31, 2021. As there are no outstanding borrowings at June 30, 2022 or December 31, 2021, deferred issuance costs for the senior unsecured revolving credit facility of $2.0 million and $2.3 million, respectively, are presented in non-current Other assets in the consolidated balance sheets.

(2) The 2012 Senior Notes matured on July 1, 2022. The outstanding principal of $216.6 million was re-paid at maturity.

Refer to Note 12 and the Liquidity and Capital Resources header of "Management's Discussion and Analysis of Financial Condition and Results of Operations" for more information.

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Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2022

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss, net of tax, for the six months ended June 30, 2022 and 2021 are as follows:

(in thousands)
Balance as of December 31, 2021	$	(4,574)
Other comprehensive income (loss) before reclassification	(237)
Net current period other comprehensive income (loss)	(237)
Balance as of June 30, 2022	$	(4,811)

(in thousands)
Balance as of December 31, 2020	$	(4,646)
Other comprehensive income (loss) before reclassification	123
Net current period other comprehensive income (loss)	123
Balance as of June 30, 2021	$	(4,523)

The other comprehensive income (loss) before reclassification for both the six months ended June 30, 2022 and 2021 relate to foreign currency items.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company estimates the fair value of its financial instruments utilizing a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The following summarizes the three levels of inputs, as well as the assets that the Company values using those levels of inputs on a recurring basis.

Level 1: Quoted prices in active markets for identical assets and liabilities. The Company’s Level 1 assets consist of marketable securities (primarily mutual funds) held in the Deferred Compensation Plan.

Level 2: Observable inputs, other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable. The Company’s Level 2 assets consist of money market funds held in the Company's Deferred Compensation Plan.

Level 3: Unobservable inputs, supported by little or no market data available, where the reporting entity is required to develop its own assumptions to determine the fair value of the instrument. The Company does not currently have any assets recorded at fair value whose fair value was determined using Level 3 inputs and there were no transfers of Level 3 assets during the six months ended June 30, 2022.

As of June 30, 2022 and December 31, 2021, the Company had the following assets recorded in the consolidated balance sheets measured at fair value on a recurring basis:

	Fair Value Measurements at Reporting Date Using
(in thousands)	Total		Level 1		Level 2		Level 3
As of June 30, 2022
Mutual funds (1)	$	27,895	$	27,895	$	—	$	—
Money market funds (1)	3,019		—		3,019		—
Total	$	30,914	$	27,895	$	3,019	$	—
As of December 31, 2021
Mutual funds (1)	$	33,555	$	33,555	$	—	$	—
Money market funds (1)	2,520		—		2,520		—
Total	$	36,075	$	33,555	$	2,520	$	—

(1) Included in Investments, employee benefit plans, at fair value and Prepaid expenses and other current assets on the consolidated balance sheets.

Other financial instruments disclosure

The Company believes that the fair values of its current assets and current liabilities approximate their reported carrying amounts due to the short-term nature of these items. In addition, the interest rates of the Company's senior unsecured revolving credit facility adjust frequently based on current market rates; accordingly, we believe its carrying amount, when amounts are drawn, approximates fair value.

The fair values of the Company's senior unsecured notes are classified as Level 2, as the significant inputs are observable in an active market. Refer to Note 5 for further information on debt, including the maturity of the 2012 Senior Notes. At June 30, 2022 and December 31, 2021, the carrying amounts and fair values are as follows:

	June 30, 2022				December 31, 2021
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
2020 Senior Notes	$	444,775	$	396,675	$	444,470	$	477,675
2019 Senior Notes	395,538		355,668		395,237		425,984
2012 Senior Notes	216,571		216,571		216,351		221,702

Fair value estimates are made at a specific point in time, are subjective in nature and involve uncertainties and matters of significant judgment. Settlement of such fair value amounts may not be possible or a prudent management decision.

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Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective income tax rates were 25.3% and 23.2% for the three months ended June 30, 2022 and 2021, respectively. The effective income tax rates were 24.5% and 23.0% for the six months ended June 30, 2022 and 2021, respectively.

The effective income tax rate for the three and six months ended June 30, 2022 and 2021 was higher than the U.S. federal income tax rate of 21.0% primarily due to the impact of state income taxes, partially offset by excess tax benefits from share-based compensation.

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Share-Based Compensation and Capital Stock

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation and Capital Stock

Share-Based Compensation and Capital Stock

The components of the Company’s pretax share-based compensation activity are as follows for the three and six months ended June 30, 2022 and 2021:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Stock options	$	1,177	$	932	$	2,229	$	1,548
Restricted stock awards	3,558		2,323		6,601		4,842
Performance vested restricted stock units	4,810		3,144		8,164		4,810
Total share-based compensation expense	$	9,545	$	6,399	$	16,994	$	11,200

A summary of share-based award activity as of and changes during the six months ended June 30, 2022 are presented below:

	Stock Options				Restricted Stock			Performance Vested Restricted Stock Units
	Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	910,944	$	83.14		236,599	$	92.60	412,642	$	114.70
Granted	155,774	146.68			255,786	145.64		111,585	181.91
Performance-Based Leveraging (1)	—	—			—	—		21,281	153.75
Exercised/Vested	(43,934)	53.70			(93,354)	87.20		—	—
Expired	(986)	51.49			—	—		(78,370)	81.15
Forfeited	(1,050)	146.68			(6,551)	104.45		(1,460)	133.25
Outstanding at June 30, 2022	1,020,748	$	94.07	5.9	392,480	$	128.25	465,678	$	136.02
Options exercisable at June 30, 2022	546,114	$	76.29	3.8

(1) PVRSUs outstanding have been increased by 21,281 units in the six months ended June 30, 2022 due to the Company exceeding the targeted performance conditions contained in PVRSUs.

Stock Options

The stock options granted by the Company had an exercise price equal to the market price of the Company's common stock on the date of grant. The fair value of the options granted was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2022 Grants
Risk-free interest rate	1.92		%
Expected volatility	29.39		%
Expected life of stock option	5.9 years
Dividend yield	0.65		%
Requisite service period	4 years
Contractual life	10 years
Weighted average fair value of options granted (per option)	$	43.25

Restricted Stock Awards

The Company grants two types of restricted stock awards: i) shares of restricted stock and ii) restricted stock units ("RSU"). Shares of restricted stock provide the participant a non-forfeitable right to dividends, if declared, and the right to vote as a shareholder while the shares are unvested. RSUs provide the participant declared dividends that are contingent upon vesting of the award. Restricted stock awards generally vest ratably over the service period beginning with the first anniversary of the grant date. The fair value of restricted stock awards is measured by the market price of the Company's common stock on the

date of grant. The service period of restricted stock awards granted during the six months ended June 30, 2022 range from 9 to 60 months.

Performance Vested Restricted Stock Units

The Company grants three types of PVRSU awards: i) PVRSUs with performance conditions based on internal performance conditions, including earnings per share ("EPS") relative to Company established targets, ii) PVRSUs with market conditions based on the Company's total shareholder return ("TSR") relative to a predetermined peer group, and iii) PVRSUs with both performance and market conditions. The vesting of PVRSU awards is contingent upon the Company achieving internal performance and/ or TSR targets over a specified period and the employees' continued employment for a service period. These performance and market conditions affect the number of shares that will ultimately vest.

During the six months ended June 30, 2022, the Company granted PVRSUs with market conditions, PVRSUs with performance conditions and PVRSUs with performance and market conditions with requisite service periods between 9 months and 60 months with award vesting ranges between 0% and 300% of the initial units granted.

The fair value of PVRSUs with only internal performance conditions is measured by the market price of the Company's common stock on the date of award grant. Compensation expense is recognized ratably over the requisite service period based on the Company's estimate of the achievement of the performance conditions. Management monitors current results and forecasts of the relevant internal performance and, as necessary, adjusts the performance-based leveraging of unvested PVRSUs.

The fair value of PVRSUs with market conditions is estimated using a Monte Carlo simulation method as of the date of award grant. Compensation expense is recognized ratably over the requisite service period, regardless of whether the market conditions are achieved and the awards ultimately vest.

The fair value of PVRSUs with both performance and market conditions is estimated using a Monte Carlo simulation method as of the date of award grant. Compensation expense is recognized ratably over the requisite service period based on the Company's estimate of the achievement of the performance conditions, with subsequent adjustments made for performance-based leveraging of unvested PVRSUs, as necessary.

Share Repurchases and Redemptions

In April 2020, in light of uncertainty resulting from the COVID-19 pandemic, the Company suspended activity under the Company's share repurchase program. In May 2021, the Company's board of directors approved resumption of the share repurchase program. Refer to the Liquidity and Capital Resources header of "Management's Discussion and Analysis of Financial Condition and Results of Operations" for more information.

During the six months ended June 30, 2022, 68,486 shares of common stock were purchased under the share repurchase program at a total cost of $9.9 million. There were no purchases of stock under the share repurchase program during the three months ended June 30, 2022. During the three and six months ended June 30, 2021, 1,582 shares of common stock were purchased under the share repurchase program at a total cost of $0.2 million. During the three months ended June 30, 2022 and 2021, the Company redeemed 2,422 and 1,156 shares of common stock at a total cost of $0.3 million and $0.1 million, respectively, from employees to satisfy the option exercise price and statutory minimum tax-withholding requirements related to the exercising of stock options and vesting of performance vested restricted stock units and restricted stock grants. During the six months ended June 30, 2022 and 2021, the Company redeemed 34,848 and 47,655 shares of common stock at a total cost of $5.2 million and $5.4 million, respectively, from employees to satisfy the option exercise price and statutory minimum tax-withholding requirements related to the exercising of stock options and vesting of performance vested restricted stock units and restricted stock grants. These redemptions were outside the share repurchase program.

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Earnings Per Share

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share The Company’s shares of restricted stock contain rights to receive nonforfeitable dividends and thus are participating securities requiring the computation of basic EPS using the two-class method. As the shares of restricted stock are both potential shares of common stock and participating securities, the Company calculates diluted earnings per share by the more dilutive of the treasury stock method or the two-class method. The calculation of EPS for net income available to common shareholders excludes the distribution of dividends and undistributed earnings attributable to participating securities from the numerator. The diluted earnings weighted average shares of common stock outstanding includes stock options, PVRSUs and RSUs.

The computation of basic and diluted earnings per share of common stock is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands, except per share amounts)	2022		2021		2022		2021
Numerator:
Net income	$	106,168	$	85,882	$	173,559	$	108,219
Income allocated to participating securities	(622)		(324)		(919)		(463)
Net income available to common shareholders	$	105,546	$	85,558	$	172,640	$	107,756
Denominator:
Weighted average shares of common stock outstanding – basic	55,446		55,389		55,429		55,326
Basic earnings per share	$	1.90	$	1.54	$	3.11	$	1.95
Numerator:
Net income	$	106,168	$	85,882	$	173,559	$	108,219
Income allocated to participating securities	(622)		(324)		(919)		(463)
Net income available to common shareholders	$	105,546	$	85,558	$	172,640	$	107,756
Denominator:
Weighted average shares of common stock outstanding – basic	55,446		55,389		55,429		55,326
Dilutive effect of stock options and PVRSUs	524		411		583		405
Weighted average shares of common stock outstanding – diluted	55,970		55,800		56,012		55,731
Diluted earnings per share	$	1.89	$	1.53	$	3.08	$	1.93

The following securities have been excluded from the calculation of diluted weighted average shares of common stock outstanding as the inclusion of these securities would have an anti-dilutive effect:

	Three Months Ended		Six Months Ended
	June 30,		June 30,
(in thousands)	2022	2021	2022	2021
Stock options	155	—	155	—
PVRSUs	76	157	76	157

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Reportable Segment Information

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Reportable Segment Information

Reportable Segment Information

The Hotel Franchising reportable segment includes the Company's hotel franchising operations consisting of its fourteen brands. The fourteen brands are aggregated within this segment considering their similar economic characteristics, types of customers, distribution channels and regulatory business environments. Revenues from the hotel franchising business include royalty fees, initial franchise and relicensing fees, marketing and reservation system fees, procurement services revenue and other hotel franchising related revenue. The Company is obligated under its hotel franchise agreements to provide marketing and reservation services appropriate for the operation of its systems. The revenues received from franchisees that are used to pay for part of the Company's ongoing operations are included in hotel franchising revenues and are offset by the related expenses paid for marketing and reservation system activities to calculate hotel franchising operating income. Equity in earnings or losses from hotel franchising related investment in affiliates is allocated to the Company's hotel franchising segment.

The Company evaluates its hotel franchising segment based primarily on the results of the segment without allocating corporate expenses, indirect general and administrative expenses, interest expense, interest income, other gains and losses or income taxes, which are included in the Corporate & Other column. Corporate & Other revenues include owned hotel revenues, rental income related to an office building owned by the Company, and revenues related to the Company's SaaS technology solutions division which provide cloud-based property management software to non-franchised hoteliers.

Intersegment revenue adjustment is from the elimination of Hotel Franchising revenue which include royalty and marketing and reservation system fees charged to our owned hotels against franchise fee expense recognized by our owned hotels in Corporate & Other operating income (loss).

Our President and Chief Executive Officer, who is our chief operating decision maker, does not use assets by operating segment when assessing performance or making operating segment resource allocations decisions and therefore assets by segment are not disclosed below.

The following table presents the financial information for the Company's segments:

	Three Months Ended June 30, 2022								Three Months Ended June 30, 2021
(in thousands)	Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated		Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated
Revenues	$	349,857	$	19,411	$	(1,294)	$	367,974	$	268,092	$	10,932	$	(680)	$	278,344
Operating income (loss)	$	165,448	$	(8,099)	$	—	$	157,349	$	132,600	$	(13,576)	$	—	$	119,024
Income (loss) before income taxes	$	165,405	$	(23,279)	$	—	$	142,126	$	134,025	$	(22,171)	$	—	$	111,854
	Six Months Ended June 30, 2022								Six Months Ended June 30, 2021
(in thousands)	Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated		Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated
Revenues	$	594,228	$	33,671	$	(2,198)	$	625,701	$	445,310	$	16,972	$	(991)	$	461,291
Operating income (loss)	$	272,768	$	(16,022)	$	—	$	256,746	$	190,753	$	(27,731)	$	—	$	163,022
Income (loss) before income taxes	$	272,969	$	(43,108)	$	—	$	229,861	$	185,936	$	(45,372)	$	—	$	140,564

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company is not a party to any litigation other than litigation in the ordinary course of business. The Company's management and legal counsel do not expect that the ultimate outcome of any of its currently ongoing legal proceedings, individually or collectively, will have a material adverse effect on the Company's financial position, results of operations or cash flows.

Contingencies

The Company entered into various limited payment guaranties with regards to the Company’s VIEs supporting their efforts to develop and own hotels franchised under the Company’s brands. Under these limited payment guaranties, the Company has agreed to guarantee a portion of the outstanding debt until certain conditions are met such as (a) the loan matures, (b) certain debt covenants are achieved, (c) the maximum amount guaranteed by the Company is paid in full or (d) the Company, through its affiliates, ceases to be a member of the VIE. The maximum exposure of principal incidental to these limited payment guaranties is $5.7 million, plus unpaid expenses and accrued unpaid interest. As of June 30, 2022 and December 31, 2021, the Company believed the likelihood of having to perform under the aforementioned limited payment guaranties was remote. In the event of performance, the Company has recourse for one of the transactions in the form of a membership interest pledge as collateral for the guaranty.

Commitments

The Company has the following commitments outstanding at June 30, 2022:

•The Company provides financing in the form of franchise agreement acquisition payments to franchisees for property improvements, hotel development efforts and other purposes. These payments are typically made at commencement of construction or hotel opening, in accordance with agreed upon provisions in individual franchise agreements. At June 30, 2022, the Company had commitments to extend an additional $269.4 million for these purposes provided the conditions of the payment are met by its franchisees.

•To the extent existing unconsolidated affiliates proceed to the hotel construction phase, the Company is committed to make capital contributions totaling $7.5 million to support their efforts to construct Cambria hotels.

•The Company committed to provide financing in the form of loans or credit facilities to franchisees for Choice brand development efforts. At June 30, 2022, the Company has remaining commitments of approximately $5.5 million, upon certain conditions being met.

•The Company’s franchise agreements require the payment of franchise fees, which include marketing and reservation system fees. In accordance with terms of our franchise agreements, the Company is obligated to use the marketing and reservation system revenues it collects from the current franchisees comprising its various hotel brands to provide marketing and reservation services appropriate to support the operation of the overall system. To the extent revenues collected exceed expenditures incurred, the Company has a commitment to the franchisee system to make expenditures in future years. Conversely, to the extent expenditures incurred exceed revenues collected, the Company has the contractual enforceable right to assess and collect such amounts.

In the ordinary course of business, the Company enters into numerous agreements that contain standard indemnities whereby the Company indemnifies another party for breaches of representations and warranties. Such indemnifications are granted under various agreements, including those governing (i) purchases or sales of assets or businesses, (ii) leases of real estate, (iii) licensing of trademarks, (iv) access to credit facilities, (v) issuances of debt or equity securities, and (vi) certain operating agreements. The indemnifications issued are for the benefit of the (i) buyers in sale agreements and sellers in purchase agreements, (ii) landlords in lease contracts, (iii) franchisees in licensing agreements, (iv) financial institutions in credit facility arrangements, (v) underwriters in debt or equity security issuances and (vi) parties under certain operating agreements. In addition, these parties are also generally indemnified against any third-party claim resulting from the transaction that is contemplated in the underlying agreement. While some of these indemnities extend only for the duration of the underlying agreement, many survive the expiration of the term of the agreement or extend into perpetuity (unless subject to a legal statute of limitations). There are no specific limitations on the maximum potential amount of future payments that the Company could be required to make under these indemnities, nor is the Company able to develop an estimate of the maximum potential amount of future payments to be made under these indemnifications as the triggering events are not subject to predictability. With respect to certain of the aforementioned indemnities, such as indemnifications of landlords against third-party claims for the use of real estate property leased by the Company, the Company maintains insurance coverage that mitigates potential liability.

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Transactions with Unconsolidated Affiliates

6 Months Ended

Jun. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

Transactions with Unconsolidated Affiliates

Transactions with Unconsolidated Affiliates

The Company has a management fee arrangement for marketing services with a partner in an unconsolidated affiliate. For the three months ended June 30, 2022 and 2021, fees earned and payroll costs reimbursed under this arrangement totaled $0.6 million and $0.3 million, respectively. For the six months ended June 30, 2022 and 2021, fees earned and payroll costs reimbursed under this arrangement totaled $0.9 million and $0.5 million, respectively.

The Company has entered into franchise agreements with certain of the unconsolidated affiliates discussed in Note 4. Pursuant to these franchise agreements, for the three months ended June 30, 2022 and 2021, the Company recorded royalty and marketing reservation system fees of approximately $6.4 million and $4.1 million, respectively. For the six months ended June 30, 2022 and 2021, the Company recorded royalty and marketing reservation system fees of approximately $10.6 million and $7.0 million, respectively. The Company recorded $3.6 million and $2.7 million as a receivable due from these affiliates as of June 30, 2022 and December 31, 2021, respectively.

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Assets Held for Sale

6 Months Ended

Jun. 30, 2022

Discontinued Operations and Disposal Groups [Abstract]

Assets Held for Sale

Assets Held for Sale

Assets held for sale of $91.9 million are recorded within Prepaid expenses and other current assets on the consolidated balance sheets related to an owned Cambria hotel asset. The hotel met held for sale classification as of May 2022. No revision to the carrying value was recorded upon reaching held for sale classification. The building was sold to a third-party franchisee in July 2022, resulting in derecognition from the balance sheet and recognition of a gain on sale of approximately $16.0 million in the third quarter of 2022 in the Corporate & Other segment.

A second owned Cambria hotel asset met held for sale classification in April 2022 and sale consummated to a third-party franchisee in June 2022, resulting in derecognition from the balance sheet and recognition of a gain on sale in the second quarter of 2022 in the Corporate & Other segment.

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Acquisitions

6 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisitions

Acquisitions

In April 2022, the Company reached a settlement with a borrower holding a senior and mezzanine loan classified as collateral-dependent, collateralized by an operating hotel. As a collateral-dependent financial asset, the expected credit losses as of March 31, 2022 were determined based on the fair value of the operating hotel. As of March 31, 2022, the Notes receivable, net of allowance for credit losses, balance was $20.4 million.

The key terms of the settlement resulted in a deed in lieu of foreclosure on the operating hotel in exchange for releasing obligations pursuant to the senior and mezzanine loans and the associated franchise agreement. The property was exchanged in full settlement of the senior and mezzanine loans and recorded at the fair value of $20.4 million as of the acquisition date of April 14, 2022. The fair value was estimated using an income approach valuation method based on discounted cash flows of the

collateralized operating hotel utilizing historical operating performance, industry projections for the market, and comparable sales capitalization rates.

In accordance with the provisions of ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01"), the purchase represents an asset acquisition based on the concentration of value in the acquired land and building. The $20.4 million was re-characterized from Notes receivable, net of allowance for credit losses, and attributed to each asset class based on a relative fair value allocation to qualifying assets, resulting in $3.3 million to land, $16.6 million to building and improvements, $1.3 million to furniture, fixtures, and equipment, and $(0.8) million to net liabilities assumed.

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Subsequent Events	6 Months Ended
	Jun. 30, 2022
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events On June 12, 2022, the Company signed a definitive purchase agreement to acquire 100% of Radisson Hospitality, Inc. (“Radisson Hotels Americas") for a purchase price of approximately $675 million. As of August 4, 2022, the transaction has not closed.On July 19, 2022, the Company received a termination notice from an ownership group of approximately 111 open and operating WoodSpring properties. The termination notice indicates the group's intent to exit the majority of these 111 properties from the Choice system in September 2022 and acknowledges termination fees due pursuant to the associated franchise agreements. This termination notice will be evaluated in the third quarter of 2022

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Basis of Presentation and Significant Accounting Policies (Policy)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements of Choice Hotels International, Inc. and its subsidiaries (together the "Company") have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("GAAP") pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). All significant intercompany accounts and transactions between the Company and its subsidiaries have been eliminated in consolidation.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments that are necessary to fairly present the Company's financial position and results of operations. Except as otherwise disclosed, all adjustments are of a normal recurring nature.

Certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP have been omitted. Although we believe the disclosures made are adequate to prevent the information presented from being misleading, these financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2021 and notes thereto included in the Company’s Annual Report on Form 10-K, filed with the SEC on February 24, 2022. Interim results are not necessarily indicative of the entire year results.

Recently Adopted and Issued Accounting Standards

Recently Adopted Accounting Standards

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Topic 606, as opposed to at fair value. ASU 2021-08 is effective for annual reporting periods beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted.

The Company has elected to early adopt ASU 2021-08 in the second quarter of 2022. The adoption has no present impact on the Company's consolidated financial statements, but will impact the accounting for contract assets and contract liabilities acquired in future business combinations.

Recently Issued Accounting Standards

In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses ("ASU 2022-02"). ASU 2022-02 eliminates the recognition and measurement guidance on troubled debt restructuring for creditors that have adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) ("Topic 326"), requires enhanced disclosures about loan modifications for borrowers experiencing financial difficulty, and includes new guidance on current-period gross write-offs presentation. ASU 2022-02 is effective for annual reporting periods beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently assessing the potential impact that ASU 2022-02 will have on the consolidated financial statements and disclosures.

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Revenue (Tables)

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Schedule of Contract with Customer, Liability

Significant changes in the contract liabilities balances during the period December 31, 2021 to June 30, 2022 are as follows:

(in thousands)
Balance as of December 31, 2021	$	175,425
Increases to the contract liability balance due to cash received	56,392
Revenue recognized in the period	(57,127)
Balance as of June 30, 2022	$	174,690

Schedule of Disaggregation of Revenue

Disaggregation of Revenue

	Three Months Ended						Three Months Ended
	June 30, 2022						June 30, 2021
(in thousands)	Over time		Point in time		Total		Over time		Point in time		Total
Royalty fees	$	121,449	$	—	$	121,449	$	106,242	$	—	$	106,242
Initial franchise and relicensing fees	6,222		—		6,222		7,328		—		7,328
Procurement services	20,744		1,059		21,803		11,502		590		12,092
Marketing and reservation system	148,126		41,256		189,382		121,944		14,044		135,988
Owned hotels	14,694		2,388		17,082		7,550		1,336		8,886
Other	11,927		—		11,927		7,701		—		7,701
Total Topic 606 revenues	$	323,162	$	44,703	367,865		$	262,267	$	15,970	278,237
Non-Topic 606 revenues					109						107
Total revenues					$	367,974					$	278,344
	Six Months Ended						Six Months Ended
	June 30, 2022						June 30, 2021
(in thousands)	Over time		Point in time		Total		Over time		Point in time		Total
Royalty fees	$	212,188	$	—	$	212,188	$	172,289	$	—	$	172,289
Initial franchise and relicensing fees	14,624		—		14,624		12,755		—		12,755
Procurement services	31,876		1,610		33,486		22,241		1,042		23,283
Marketing and reservation system	260,382		55,637		316,019		200,995		26,514		227,509
Owned hotels	24,635		4,385		29,020		11,068		2,058		13,126
Other	20,156		—		20,156		12,108		—		12,108
Total Topic 606 revenues	$	563,861	$	61,632	625,493		$	431,456	$	29,614	461,070
Non-Topic 606 revenues					208						221
Total revenues					$	625,701					$	461,291

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Receivables and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2022

Accounts and Financing Receivable, after Allowance for Credit Loss [Abstract]

Schedule of Notes Receivable

The composition of notes receivable balances by credit quality indicator and the allowance for credit losses is as follows:

(in thousands)	June 30, 2022		December 31, 2021
Senior	$	91,981	$	108,370
Subordinated	20,506		27,801
Unsecured	1,453		1,512
Total notes receivable	113,940		137,683
Total allowance for notes receivable credit losses	11,531		16,779
Total notes receivable, net of allowance	$	102,409	$	120,904
Current portion, net of allowance	$	53,760	$	54,453
Long-term portion, net of allowance	$	48,649	$	66,451

Schedule of Financing Receivable Credit Quality Indicators

Amortized cost basis by year of origination and credit quality indicator are as follows:

(in thousands)	2022		2021		2020		Prior		Total
Senior	$	—	$	4,211	$	—	$	87,770	$	91,981
Subordinated	—		—		—		20,506		20,506
Unsecured	—		—		—		1,453		1,453
Total notes receivable	$	—	$	4,211	$	—	$	109,729	$	113,940

Schedule of Financing Receivable, Allowance for Credit Loss

The following table summarizes the activity related to the Company’s notes receivable allowance for credit losses:

(in thousands)	June 30, 2022		December 31, 2021
Beginning balance	$	16,779	$	19,484
Provision for credit losses	230		709
Write-offs	(5,478)		(3,414)
Ending balance	$	11,531	$	16,779

Schedule of Past Due Balances of Notes Receivable

The past due balances by credit quality indicator of notes receivable are as follows:

(in thousands)	1- 30 days Past Due		31-89 days Past Due		> 90 days Past Due		Total Past Due		Current		Total  Notes Receivable
As of June 30, 2022
Senior	$	—	$	—	$	15,200	$	15,200	$	76,781	$	91,981
Subordinated	—		—		2,209		2,209		18,297		20,506
Unsecured	—		—		—		—		1,453		1,453
	$	—	$	—	$	17,409	$	17,409	$	96,531	$	113,940
As of December 31, 2021
Senior	$	—	$	—	$	—	$	—	$	108,370	$	108,370
Subordinated	—		—		2,209		2,209		25,592		27,801
Unsecured	—		—		—		—		1,512		1,512
	$	—	$	—	$	2,209	$	2,209	$	135,474	$	137,683

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Debt (Tables)

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Schedule of Components of Debt

Debt consists of the following:

	June 30, 2022		December 31, 2021
	(in thousands)
$450 million senior unsecured notes due 2031 ("2020 Senior Notes") with an effective interest rate of 3.86%, less a discount and deferred issuance costs of $5.2 million and $5.5 million at June 30, 2022 and December 31, 2021, respectively	$	444,775	$	444,470
$400 million senior unsecured notes due 2029 ("2019 Senior Notes") with an effective interest rate of 3.88%, less a discount and deferred issuance costs of $4.5 million and $4.8 million at June 30, 2022 and December 31, 2021, respectively	395,538		395,237
$216.6 million senior unsecured notes due 2022 ("2012 Senior Notes") with an effective interest rate of 6.00%, less deferred issuance costs of $0.2 million at December 31, 2021 (2)	216,571		216,351
$600 million senior unsecured revolving credit facility (1)	—		—
Economic development loans with an effective interest rate of 3.00% at June 30, 2022 and December 31, 2021, respectively	4,416		4,416
Total debt	$	1,061,300	$	1,060,474
Less current portion (2)	216,571		216,351
Long-term debt	$	844,729	$	844,123

(1) During the third quarter of 2020, the Company utilized excess cash on hand to pay down its senior unsecured revolving credit facility balance in full and the facility remains undrawn as of June 30, 2022 and December 31, 2021. As there are no outstanding borrowings at June 30, 2022 or December 31, 2021, deferred issuance costs for the senior unsecured revolving credit facility of $2.0 million and $2.3 million, respectively, are presented in non-current Other assets in the consolidated balance sheets.

(2) The 2012 Senior Notes matured on July 1, 2022. The outstanding principal of $216.6 million was re-paid at maturity.

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2022

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Changes in Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss, net of tax, for the six months ended June 30, 2022 and 2021 are as follows:

(in thousands)
Balance as of December 31, 2021	$	(4,574)
Other comprehensive income (loss) before reclassification	(237)
Net current period other comprehensive income (loss)	(237)
Balance as of June 30, 2022	$	(4,811)

(in thousands)
Balance as of December 31, 2020	$	(4,646)
Other comprehensive income (loss) before reclassification	123
Net current period other comprehensive income (loss)	123
Balance as of June 30, 2021	$	(4,523)

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Assets

As of June 30, 2022 and December 31, 2021, the Company had the following assets recorded in the consolidated balance sheets measured at fair value on a recurring basis:

	Fair Value Measurements at Reporting Date Using
(in thousands)	Total		Level 1		Level 2		Level 3
As of June 30, 2022
Mutual funds (1)	$	27,895	$	27,895	$	—	$	—
Money market funds (1)	3,019		—		3,019		—
Total	$	30,914	$	27,895	$	3,019	$	—
As of December 31, 2021
Mutual funds (1)	$	33,555	$	33,555	$	—	$	—
Money market funds (1)	2,520		—		2,520		—
Total	$	36,075	$	33,555	$	2,520	$	—

(1) Included in Investments, employee benefit plans, at fair value and Prepaid expenses and other current assets on the consolidated balance sheets.

Schedule of Carrying Amounts and Fair Values

At June 30, 2022 and December 31, 2021, the carrying amounts and fair values are as follows:

	June 30, 2022				December 31, 2021
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
2020 Senior Notes	$	444,775	$	396,675	$	444,470	$	477,675
2019 Senior Notes	395,538		355,668		395,237		425,984
2012 Senior Notes	216,571		216,571		216,351		221,702

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Share-Based Compensation and Capital Stock (Tables)

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Schedule of Pre-Tax Stock-Based Compensation Expenses

The components of the Company’s pretax share-based compensation activity are as follows for the three and six months ended June 30, 2022 and 2021:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Stock options	$	1,177	$	932	$	2,229	$	1,548
Restricted stock awards	3,558		2,323		6,601		4,842
Performance vested restricted stock units	4,810		3,144		8,164		4,810
Total share-based compensation expense	$	9,545	$	6,399	$	16,994	$	11,200

Summary of Change In Stock-Based Award Activity

A summary of share-based award activity as of and changes during the six months ended June 30, 2022 are presented below:

	Stock Options				Restricted Stock			Performance Vested Restricted Stock Units
	Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2022	910,944	$	83.14		236,599	$	92.60	412,642	$	114.70
Granted	155,774	146.68			255,786	145.64		111,585	181.91
Performance-Based Leveraging (1)	—	—			—	—		21,281	153.75
Exercised/Vested	(43,934)	53.70			(93,354)	87.20		—	—
Expired	(986)	51.49			—	—		(78,370)	81.15
Forfeited	(1,050)	146.68			(6,551)	104.45		(1,460)	133.25
Outstanding at June 30, 2022	1,020,748	$	94.07	5.9	392,480	$	128.25	465,678	$	136.02
Options exercisable at June 30, 2022	546,114	$	76.29	3.8

(1) PVRSUs outstanding have been increased by 21,281 units in the six months ended June 30, 2022 due to the Company exceeding the targeted performance conditions contained in PVRSUs.

Schedule of Weighted Average Assumptions of Black-Scholes Option-Pricing Model

The fair value of the options granted was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2022 Grants
Risk-free interest rate	1.92		%
Expected volatility	29.39		%
Expected life of stock option	5.9 years
Dividend yield	0.65		%
Requisite service period	4 years
Contractual life	10 years
Weighted average fair value of options granted (per option)	$	43.25

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Earnings Per Common Share

The computation of basic and diluted earnings per share of common stock is as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands, except per share amounts)	2022		2021		2022		2021
Numerator:
Net income	$	106,168	$	85,882	$	173,559	$	108,219
Income allocated to participating securities	(622)		(324)		(919)		(463)
Net income available to common shareholders	$	105,546	$	85,558	$	172,640	$	107,756
Denominator:
Weighted average shares of common stock outstanding – basic	55,446		55,389		55,429		55,326
Basic earnings per share	$	1.90	$	1.54	$	3.11	$	1.95
Numerator:
Net income	$	106,168	$	85,882	$	173,559	$	108,219
Income allocated to participating securities	(622)		(324)		(919)		(463)
Net income available to common shareholders	$	105,546	$	85,558	$	172,640	$	107,756
Denominator:
Weighted average shares of common stock outstanding – basic	55,446		55,389		55,429		55,326
Dilutive effect of stock options and PVRSUs	524		411		583		405
Weighted average shares of common stock outstanding – diluted	55,970		55,800		56,012		55,731
Diluted earnings per share	$	1.89	$	1.53	$	3.08	$	1.93

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following securities have been excluded from the calculation of diluted weighted average shares of common stock outstanding as the inclusion of these securities would have an anti-dilutive effect:

	Three Months Ended		Six Months Ended
	June 30,		June 30,
(in thousands)	2022	2021	2022	2021
Stock options	155	—	155	—
PVRSUs	76	157	76	157

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Reportable Segment Information (Tables)

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Schedule of Financial Information for Company's Franchising Segment

The following table presents the financial information for the Company's segments:

	Three Months Ended June 30, 2022								Three Months Ended June 30, 2021
(in thousands)	Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated		Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated
Revenues	$	349,857	$	19,411	$	(1,294)	$	367,974	$	268,092	$	10,932	$	(680)	$	278,344
Operating income (loss)	$	165,448	$	(8,099)	$	—	$	157,349	$	132,600	$	(13,576)	$	—	$	119,024
Income (loss) before income taxes	$	165,405	$	(23,279)	$	—	$	142,126	$	134,025	$	(22,171)	$	—	$	111,854
	Six Months Ended June 30, 2022								Six Months Ended June 30, 2021
(in thousands)	Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated		Hotel Franchising		Corporate & Other		Intersegment Eliminations		Consolidated
Revenues	$	594,228	$	33,671	$	(2,198)	$	625,701	$	445,310	$	16,972	$	(991)	$	461,291
Operating income (loss)	$	272,768	$	(16,022)	$	—	$	256,746	$	190,753	$	(27,731)	$	—	$	163,022
Income (loss) before income taxes	$	272,969	$	(43,108)	$	—	$	229,861	$	185,936	$	(45,372)	$	—	$	140,564

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Revenue - Textual (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Disaggregation of Revenue [Line Items]
Revenue, remaining performance obligation	$ 174,700		$ 174,700
Revenues	367,974	$ 278,344	$ 625,701	$ 461,291
Royalty fees
Disaggregation of Revenue [Line Items]
Redemption of loyalty points period			3 years
Revenues	121,449	106,242	$ 212,188	172,289
Corporate & Other
Disaggregation of Revenue [Line Items]
Revenues	19,411	10,932	33,671	16,972
Corporate & Other | Over time
Disaggregation of Revenue [Line Items]
Revenues	19,400	10,900	33,700	17,000
Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Revenues	(1,294)	(680)	(2,198)	(991)
Intersegment Eliminations | Royalty fees
Disaggregation of Revenue [Line Items]
Revenues	$ (1,300)	$ (700)	$ (2,200)	$ (1,000)
Minimum
Disaggregation of Revenue [Line Items]
Deferred revenue, recognition period			5 years
Maximum
Disaggregation of Revenue [Line Items]
Deferred revenue, recognition period			10 years

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Revenue - Contract Liability (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($)
Changes in Contract Liability [Roll Forward]
Balance as of December 31, 2021	$ 175,425
Increases to the contract liability balance due to cash received	56,392
Revenue recognized in the period	(57,127)
Balance as of June 30, 2022	$ 174,690

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Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	$ 367,865	$ 278,237	$ 625,493	$ 461,070
Total revenues	367,974	278,344	625,701	461,291
Over time
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	323,162	262,267	563,861	431,456
Point in time
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	44,703	15,970	61,632	29,614
Royalty fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	121,449	106,242	212,188	172,289
Total revenues	121,449	106,242	212,188	172,289
Royalty fees | Over time
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	121,449	106,242	212,188	172,289
Royalty fees | Point in time
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	0	0	0	0
Initial franchise and relicensing fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	6,222	7,328	14,624	12,755
Total revenues	6,222	7,328	14,624	12,755
Initial franchise and relicensing fees | Over time
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	6,222	7,328	14,624	12,755
Initial franchise and relicensing fees | Point in time
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	0	0	0	0
Procurement services
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	21,803	12,092	33,486	23,283
Total revenues	21,803	12,092	33,486	23,283
Procurement services | Over time
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	20,744	11,502	31,876	22,241
Procurement services | Point in time
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	1,059	590	1,610	1,042
Marketing and reservation system
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	189,382	135,988	316,019	227,509
Total revenues	189,382	135,988	316,019	227,509
Marketing and reservation system | Over time
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	148,126	121,944	260,382	200,995
Marketing and reservation system | Point in time
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	41,256	14,044	55,637	26,514
Owned hotels
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	17,082	8,886	29,020	13,126
Total revenues	17,191	8,993	29,228	13,347
Owned hotels | Over time
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	14,694	7,550	24,635	11,068
Owned hotels | Point in time
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	2,388	1,336	4,385	2,058
Other
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Total revenues	11,927	7,701	20,156	12,108
Total Topic 606 revenues
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	11,927	7,701	20,156	12,108
Total Topic 606 revenues | Over time
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	11,927	7,701	20,156	12,108
Total Topic 606 revenues | Point in time
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue	0	0	0	0
Non-Topic 606 revenues
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Non-Topic 606 revenues	$ 109	$ 107	$ 208	$ 221

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Receivables and Allowance for Credit Losses - Schedule Of Notes Receivable (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021	Dec. 31, 2020
Notes Receivable and Allowance for Losses [Line Items]
Notes receivable	$ 113,940	$ 137,683
Total allowance for notes receivable credit losses	11,531	16,779	$ 19,484
Total notes receivable, net of allowance	102,409	120,904
Current portion, net of allowance	53,760	54,453
Long-term portion, net of allowance	48,649	66,451
Senior
Notes Receivable and Allowance for Losses [Line Items]
Notes receivable	91,981	108,370
Subordinated
Notes Receivable and Allowance for Losses [Line Items]
Notes receivable	20,506	27,801
Unsecured
Notes Receivable and Allowance for Losses [Line Items]
Notes receivable	$ 1,453	$ 1,512

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Receivables and Allowance for Credit Losses - Credit Quality Indicator (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Notes Receivable and Allowance for Losses [Line Items]
2022	$ 0
2021	4,211
2020	0
Prior	109,729
Total	113,940	$ 137,683
Senior
Notes Receivable and Allowance for Losses [Line Items]
2022	0
2021	4,211
2020	0
Prior	87,770
Total	91,981	108,370
Subordinated
Notes Receivable and Allowance for Losses [Line Items]
2022	0
2021	0
2020	0
Prior	20,506
Total	20,506	27,801
Unsecured
Notes Receivable and Allowance for Losses [Line Items]
2022	0
2021	0
2020	0
Prior	1,453
Total	$ 1,453	$ 1,512

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Receivables and Allowance for Credit Losses - Allowance for Credit Loss Rollforward (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 16,779	$ 19,484
Provision for credit losses	230	709
Write-offs	(5,478)	(3,414)
Ending balance	$ 11,531	$ 16,779

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Receivables and Allowance for Credit Losses - Narrative (Details) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2022 USD ($) loan	Jun. 30, 2021 USD ($)	Dec. 31, 2021 USD ($) loan	Dec. 31, 2020 USD ($)
Notes Receivable and Allowance for Losses [Line Items]
Total allowance for notes receivable credit losses	$ 11,531		$ 16,779	$ 19,484
Loans and financing receivable	48,649		66,451
Allowance for credit loss	11,200	$ 2,400
Variable Interest Entity, Not Primary Beneficiary
Notes Receivable and Allowance for Losses [Line Items]
Loans and financing receivable	101,700		120,200
SG&A expenses
Notes Receivable and Allowance for Losses [Line Items]
Provision for (reversal of) credit losses	(1,100)	(100)
Marketing and reservation system expenses
Notes Receivable and Allowance for Losses [Line Items]
Provision for (reversal of) credit losses	(300)	$ 200
Interest Rate Below Market Reduction | Variable Interest Entity, Not Primary Beneficiary
Notes Receivable and Allowance for Losses [Line Items]
Loans and financing receivable	7,500		7,500
Receivable with imputed interest, discount	$ 200		$ 300
Collateral-Dependent Loans
Notes Receivable and Allowance for Losses [Line Items]
Number of loans | loan	1		2
Total allowance for notes receivable credit losses	$ 900		$ 6,300
Impaired Loans
Notes Receivable and Allowance for Losses [Line Items]
Nonaccrual status	$ 18,200		$ 44,100

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Receivables and Allowance for Credit Losses - Past Due Balances Of Mezzanine And Other Notes Receivable (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Financing Receivable, Past Due [Line Items]
Notes receivable	$ 113,940	$ 137,683
Senior
Financing Receivable, Past Due [Line Items]
Notes receivable	91,981	108,370
Subordinated
Financing Receivable, Past Due [Line Items]
Notes receivable	20,506	27,801
Unsecured
Financing Receivable, Past Due [Line Items]
Notes receivable	1,453	1,512
Total Past Due
Financing Receivable, Past Due [Line Items]
Notes receivable	17,409	2,209
Total Past Due | Senior
Financing Receivable, Past Due [Line Items]
Notes receivable	15,200	0
Total Past Due | Subordinated
Financing Receivable, Past Due [Line Items]
Notes receivable	2,209	2,209
Total Past Due | Unsecured
Financing Receivable, Past Due [Line Items]
Notes receivable	0	0
1- 30 days Past Due
Financing Receivable, Past Due [Line Items]
Notes receivable	0	0
1- 30 days Past Due | Senior
Financing Receivable, Past Due [Line Items]
Notes receivable	0	0
1- 30 days Past Due | Subordinated
Financing Receivable, Past Due [Line Items]
Notes receivable	0	0
1- 30 days Past Due | Unsecured
Financing Receivable, Past Due [Line Items]
Notes receivable	0	0
31-89 days Past Due
Financing Receivable, Past Due [Line Items]
Notes receivable	0	0
31-89 days Past Due | Senior
Financing Receivable, Past Due [Line Items]
Notes receivable	0	0
31-89 days Past Due | Subordinated
Financing Receivable, Past Due [Line Items]
Notes receivable	0	0
31-89 days Past Due | Unsecured
Financing Receivable, Past Due [Line Items]
Notes receivable	0	0
> 90 days Past Due
Financing Receivable, Past Due [Line Items]
Notes receivable	17,409	2,209
> 90 days Past Due | Senior
Financing Receivable, Past Due [Line Items]
Notes receivable	15,200	0
> 90 days Past Due | Subordinated
Financing Receivable, Past Due [Line Items]
Notes receivable	2,209	2,209
> 90 days Past Due | Unsecured
Financing Receivable, Past Due [Line Items]
Notes receivable	0	0
Current
Financing Receivable, Past Due [Line Items]
Notes receivable	96,531	135,474
Current | Senior
Financing Receivable, Past Due [Line Items]
Notes receivable	76,781	108,370
Current | Subordinated
Financing Receivable, Past Due [Line Items]
Notes receivable	18,297	25,592
Current | Unsecured
Financing Receivable, Past Due [Line Items]
Notes receivable	$ 1,453	$ 1,512

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Investments in Affiliates (Details)	3 Months Ended			6 Months Ended
	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($) investment	Mar. 31, 2021 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Variable Interest Entity [Line Items]
Investments in joint ventures included in unconsolidated entities	$ 2,076,841,000			$ 2,076,841,000		$ 1,931,824,000
Equity method investment impairment				0
Number of securities sold | investment		3
Equity method investment, realized gain on disposal		$ 2,600,000
Hotel Franchising
Variable Interest Entity [Line Items]
Equity method investment impairment			$ 4,800,000
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Investments in joint ventures included in unconsolidated entities	24,100,000			24,100,000		$ 25,200,000
Losses (gains) attributable to variable interest entities	$ 900,000	$ (900,000)		$ 1,700,000	$ 5,500,000

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Debt - Schedule Of Components Of Debt (Details) - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Debt [Line Items]
Long-term debt	$ 1,061,300,000	$ 1,060,474,000
Less current portion	216,571,000	216,351,000
Long-term debt	$ 844,729,000	$ 844,123,000
Economic Development Loans
Debt [Line Items]
Debt instrument effective interest rate	3.00%	3.00%
Long-term debt	$ 4,416,000	$ 4,416,000
$450 Million Senior Unsecured Notes Due 2031 | Senior
Debt [Line Items]
Debt instrument face amount	$ 450,000,000	$ 450,000,000
Debt instrument effective interest rate	3.86%	3.86%
Deferred issuance costs	$ 5,200,000	$ 5,500,000
Long-term debt	444,775,000	444,470,000
$400 Million Senior Unsecured Notes Due 2029 | Senior
Debt [Line Items]
Debt instrument face amount	$ 400,000,000	$ 400,000,000
Debt instrument effective interest rate	3.88%	3.88%
Deferred issuance costs	$ 4,500,000	$ 4,800,000
Long-term debt	395,538,000	395,237,000
$400 Million Senior Unsecured Notes 2022 | Senior
Debt [Line Items]
Debt instrument face amount	$ 216,600,000	$ 216,600,000
Debt instrument effective interest rate	6.00%	6.00%
Deferred issuance costs		$ 200,000
Long-term debt	$ 216,571,000	216,351,000
$600 Million Unsecured Revolving Credit Facility | Senior
Debt [Line Items]
Deferred issuance costs	2,000,000	2,300,000
Total capacity	600,000,000	600,000,000
Long-term debt	$ 0	$ 0

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Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss, Net of Tax (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2022	Jun. 30, 2021
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	$ 314,645	$ 265,882	$ 19,235	$ (5,752)	$ 265,882	$ (5,752)
Other comprehensive income (loss) before reclassification					(237)	123
Other comprehensive income (loss), net of tax	(103)	(134)	71	52	(237)	123
Ending balance	416,725	314,645	104,933	19,235	416,725	104,933
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(4,708)	(4,574)	(4,594)	(4,646)	(4,574)	(4,646)
Other comprehensive income (loss), net of tax	(103)	(134)	71	52
Ending balance	$ (4,811)	$ (4,708)	$ (4,523)	$ (4,594)	$ (4,811)	$ (4,523)

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Fair Value Measurements - Schedule Of Fair Value Of Assets (Details) - Fair value, measurements, recurring - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Fair Value Measurements [Line Items]
Total	$ 30,914	$ 36,075
Mutual funds | Investments, employee benefit plans, at fair value
Fair Value Measurements [Line Items]
Mutual funds and money market funds, fair value	27,895	33,555
Money market funds | Investments, employee benefit plans, at fair value
Fair Value Measurements [Line Items]
Mutual funds and money market funds, fair value	3,019	2,520
Level 1
Fair Value Measurements [Line Items]
Total	27,895	33,555
Level 1 | Mutual funds | Investments, employee benefit plans, at fair value
Fair Value Measurements [Line Items]
Mutual funds and money market funds, fair value	27,895	33,555
Level 1 | Money market funds | Investments, employee benefit plans, at fair value
Fair Value Measurements [Line Items]
Mutual funds and money market funds, fair value	0	0
Level 2
Fair Value Measurements [Line Items]
Total	3,019	2,520
Level 2 | Mutual funds | Investments, employee benefit plans, at fair value
Fair Value Measurements [Line Items]
Mutual funds and money market funds, fair value	0	0
Level 2 | Money market funds | Investments, employee benefit plans, at fair value
Fair Value Measurements [Line Items]
Mutual funds and money market funds, fair value	3,019	2,520
Level 3
Fair Value Measurements [Line Items]
Total	0	0
Level 3 | Mutual funds | Investments, employee benefit plans, at fair value
Fair Value Measurements [Line Items]
Mutual funds and money market funds, fair value	0	0
Level 3 | Money market funds | Investments, employee benefit plans, at fair value
Fair Value Measurements [Line Items]
Mutual funds and money market funds, fair value	$ 0	$ 0

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Fair Value Measurements - Carrying Amounts and Fair Values (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Fair Value Measurements [Line Items]
Long-term debt	$ 1,061,300	$ 1,060,474
Senior | 2020 Senior Notes
Fair Value Measurements [Line Items]
Long-term debt	444,775	444,470
Senior | 2020 Senior Notes | Level 2 | Carrying Amount
Fair Value Measurements [Line Items]
Long-term debt	444,775	444,470
Senior | 2020 Senior Notes | Level 2 | Fair Value
Fair Value Measurements [Line Items]
Long-term debt	396,675	477,675
Senior | 2019 Senior Notes
Fair Value Measurements [Line Items]
Long-term debt	395,538	395,237
Senior | 2019 Senior Notes | Level 2 | Carrying Amount
Fair Value Measurements [Line Items]
Long-term debt	395,538	395,237
Senior | 2019 Senior Notes | Level 2 | Fair Value
Fair Value Measurements [Line Items]
Long-term debt	355,668	425,984
Senior | 2012 Senior Notes | Level 2 | Carrying Amount
Fair Value Measurements [Line Items]
Long-term debt	216,571	216,351
Senior | 2012 Senior Notes | Level 2 | Fair Value
Fair Value Measurements [Line Items]
Long-term debt	$ 216,571	$ 221,702

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Income Taxes - Narrative (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Tax Disclosure [Abstract]
Effective income tax rate (percent)	25.30%	23.20%	24.50%	23.00%

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Share-Based Compensation and Capital Stock - Pre-Tax Stock-Based Compensation Expenses And Associated Income Tax Benefits (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Share-Based Compensation and Capital Stock [Line Items]
Total share-based compensation expense	$ 9,545	$ 6,399	$ 16,994	$ 11,200
Stock options
Share-Based Compensation and Capital Stock [Line Items]
Total share-based compensation expense	1,177	932	2,229	1,548
Restricted stock awards
Share-Based Compensation and Capital Stock [Line Items]
Total share-based compensation expense	3,558	2,323	6,601	4,842
Performance vested restricted stock units
Share-Based Compensation and Capital Stock [Line Items]
Total share-based compensation expense	$ 4,810	$ 3,144	$ 8,164	$ 4,810

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Share-Based Compensation and Capital Stock - Summary of Change in Stock-Based Award Activity (Details)	6 Months Ended
	Jun. 30, 2022 $ / shares shares
Stock Options
Options
Outstanding, beginning balance (in shares) | shares	910,944
Granted (in shares) | shares	155,774
Performance-Based Leveraging (in shares) | shares	0
Exercised/Vested (in shares) | shares	(43,934)
Expired (in shares) | shares	(986)
Forfeited (in shares) | shares	(1,050)
Outstanding, ending balance (in shares) | shares	1,020,748
Options exercisable (in shares) | shares	546,114
Weighted Average Exercise Price
Beginning balance (in usd per share) | $ / shares	$ 83.14
Granted (in usd per share) | $ / shares	146.68
Performance-Based Leveraging (in usd per share) | $ / shares	0
Exercised/Vested (in usd per share) | $ / shares	53.70
Expired (in usd per share) | $ / shares	51.49
Forfeited (in usd per share) | $ / shares	146.68
Ending balance (in usd per share) | $ / shares	94.07
Options exercisable - weighted average exercise price (in usd per share) | $ / shares	$ 76.29
Weighted Average Remaining Contractual Term
Outstanding	5 years 10 months 24 days
Options exercisable	3 years 9 months 18 days
Restricted Stock
Restricted Stock, Weighted Average Grant Date Fair Value
Outstanding, beginning balance (in shares) | shares	236,599
Granted (in shares) | shares	255,786
Performance-Based Leveraging (in shares) | shares	0
Exercised/Vested (in shares) | shares	(93,354)
Expired (in shares) | shares	0
Forfeited (in shares) | shares	(6,551)
Outstanding, ending balance (in shares) | shares	392,480
Restricted Stock and Performance vested Restricted Stock Units, Weighted Average Grant Date Fair Value
Outstanding, beginning balance (in usd per share) | $ / shares	$ 92.60
Granted (in usd per share) | $ / shares	145.64
Performance-Based Leveraging (in usd per share) | $ / shares	0
Exercised/Vested (in usd per share) | $ / shares	87.20
Expired (in usd per share) | $ / shares	0
Forfeited (in usd per share) | $ / shares	104.45
Outstanding, ending balance (in usd per share) | $ / shares	$ 128.25
Performance Vested Restricted Stock Units
Restricted Stock, Weighted Average Grant Date Fair Value
Outstanding, beginning balance (in shares) | shares	412,642
Granted (in shares) | shares	111,585
Performance-Based Leveraging (in shares) | shares	21,281
Exercised/Vested (in shares) | shares	0
Expired (in shares) | shares	(78,370)
Forfeited (in shares) | shares	(1,460)
Outstanding, ending balance (in shares) | shares	465,678
Restricted Stock and Performance vested Restricted Stock Units, Weighted Average Grant Date Fair Value
Outstanding, beginning balance (in usd per share) | $ / shares	$ 114.70
Granted (in usd per share) | $ / shares	181.91
Performance-Based Leveraging (in usd per share) | $ / shares	153.75
Exercised/Vested (in usd per share) | $ / shares	0
Expired (in usd per share) | $ / shares	81.15
Forfeited (in usd per share) | $ / shares	133.25
Outstanding, ending balance (in usd per share) | $ / shares	$ 136.02

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Share-Based Compensation and Capital Stock - Weighted Average Assumptions Of Black-Scholes Option-Pricing Model (Details) - Stock options	6 Months Ended
	Jun. 30, 2022 $ / shares
Share-Based Compensation and Capital Stock [Line Items]
Risk-free interest rate	1.92%
Expected volatility	29.39%
Expected life of stock option	5 years 10 months 24 days
Dividend yield	0.65%
Requisite service period	4 years
Contractual life	10 years
Weighted average fair value of options granted (in usd per share)	$ 43.25

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Share-Based Compensation and Capital Stock - Narrative (Details) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022 USD ($) shares	Jun. 30, 2021 USD ($) shares	Jun. 30, 2022 USD ($) award_type shares	Jun. 30, 2021 USD ($) shares
Share-Based Compensation and Capital Stock [Line Items]
Stock repurchased during period (in shares) | shares	0	1,582	68,486	1,582
Cost of shares repurchased | $		$ 0.2	$ 9.9	$ 0.2
Stock redeemed during period (in shares) | shares	2,422	1,156	34,848	47,655
Stock redeemed during period | $	$ 0.3	$ 0.1	$ 5.2	$ 5.4
Restricted stock awards
Share-Based Compensation and Capital Stock [Line Items]
Types of awards granted | award_type			2
Restricted stock awards | Minimum
Share-Based Compensation and Capital Stock [Line Items]
Performance period, duration			9 months
Restricted stock awards | Maximum
Share-Based Compensation and Capital Stock [Line Items]
Performance period, duration			60 months
Performance vested restricted stock units
Share-Based Compensation and Capital Stock [Line Items]
Types of awards granted | award_type			3
Performance vested restricted stock units | Minimum
Share-Based Compensation and Capital Stock [Line Items]
Performance period, duration			9 months
Performance period, percent			0.00%
Performance vested restricted stock units | Maximum
Share-Based Compensation and Capital Stock [Line Items]
Performance period, duration			60 months
Performance period, percent			300.00%

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Earnings Per Share - Computation Of Basic And Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2022	Jun. 30, 2021
Numerator:
Net income	$ 106,168	$ 67,391	$ 85,882	$ 22,337	$ 173,559	$ 108,219
Income allocated to participating securities	(622)		(324)		(919)	(463)
Net income available to common shareholders	$ 105,546		$ 85,558		$ 172,640	$ 107,756
Denominator:
Weighted average shares of common stock outstanding – basic (in shares)	55,446		55,389		55,429	55,326
Basic earnings per share (in usd per share)	$ 1.90		$ 1.54		$ 3.11	$ 1.95
Numerator:
Net income	$ 106,168	$ 67,391	$ 85,882	$ 22,337	$ 173,559	$ 108,219
Income allocated to participating securities	(622)		(324)		(919)	(463)
Net income available to common shareholders	$ 105,546		$ 85,558		$ 172,640	$ 107,756
Denominator:
Weighted average shares of common stock outstanding – basic (in shares)	55,446		55,389		55,429	55,326
Diluted effect of stock options and PVRSUs (in shares)	524		411		583	405
Weighted average shares of common stock outstanding – diluted (in shares)	55,970		55,800		56,012	55,731
Diluted earnings per share (in usd per share)	$ 1.89		$ 1.53		$ 3.08	$ 1.93

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Earnings Per Share - Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options (in shares)	155	0	155	0
Performance vested restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
PVRSUs (in shares)	76	157	76	157

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Reportable Segment Information - Narrative (Details)	Jun. 30, 2022 brand
Segment Reporting [Abstract]
Number of brands	14

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Reportable Segment Information - Schedule Of Financial Information For Company's Franchising Segment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Reportable Segment Information [Line Items]
Revenues	$ 367,974	$ 278,344	$ 625,701	$ 461,291
Operating income (loss)	157,349	119,024	256,746	163,022
Income (loss) before income taxes	142,126	111,854	229,861	140,564
Corporate & Other
Reportable Segment Information [Line Items]
Revenues	19,411	10,932	33,671	16,972
Operating income (loss)	(8,099)	(13,576)	(16,022)	(27,731)
Income (loss) before income taxes	(23,279)	(22,171)	(43,108)	(45,372)
Intersegment Eliminations
Reportable Segment Information [Line Items]
Revenues	(1,294)	(680)	(2,198)	(991)
Operating income (loss)	0	0	0	0
Income (loss) before income taxes	0	0	0	0
Hotel Franchising | Operating Segments
Reportable Segment Information [Line Items]
Revenues	349,857	268,092	594,228	445,310
Operating income (loss)	165,448	132,600	272,768	190,753
Income (loss) before income taxes	$ 165,405	$ 134,025	$ 272,969	$ 185,936

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Commitments and Contingencies (Details) $ in Millions	Jun. 30, 2022 USD ($)
Commitments and Contingencies [Line Items]
Limited payment guaranties	$ 5.7
Other commitment	5.5
Forgivable notes receivable
Commitments and Contingencies [Line Items]
Other commitment	269.4
Capital contributions to joint ventures
Commitments and Contingencies [Line Items]
Other commitment	$ 7.5

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Transactions with Unconsolidated Affiliates (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Member of Unconsolidated Joint Venture
Related Party Transaction [Line Items]
Royalty and marketing and reservation system fees	$ 6.4	$ 4.1	$ 10.6	$ 7.0
Receivables	3.6		3.6		$ 2.7
Joint Venture Partner
Related Party Transaction [Line Items]
Fees earned and payroll costs reimbursed from marketing services arrangement	$ 0.6	$ 0.3	$ 0.9	$ 0.5

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Assets Held for Sale - Narrative (Details) - Building - USD ($) $ in Millions	1 Months Ended
	Jul. 31, 2022	May 31, 2022
Subsequent Event | Corporate & Other
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on sale of business and assets, net	$ 16.0
Prepaid Expenses and Other Current Assets
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Assets held for sale		$ 91.9

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Acquisitions (Details) - USD ($) $ in Thousands	Apr. 14, 2022	Mar. 31, 2022	Jun. 30, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Notes receivable, net of allowance			$ 102,409	$ 120,904
2022 Asset Acquisition
Business Acquisition [Line Items]
Asset acquisition, consideration transferred		$ 20,400
Asset acquisition, consideration transferred, liabilities assumed	$ (800)
2022 Asset Acquisition | Land
Business Acquisition [Line Items]
Property acquired	3,300
2022 Asset Acquisition | Building and Building Improvements
Business Acquisition [Line Items]
Property acquired	16,600
2022 Asset Acquisition | Furniture and Fixtures
Business Acquisition [Line Items]
Property acquired	$ 1,300
Senior And Mezzanine Loan | Commercial Real Estate
Business Acquisition [Line Items]
Notes receivable, net of allowance		$ 20,400

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Subsequent Events (Details) $ in Millions	Jun. 12, 2022 USD ($)	Jul. 19, 2022 awardType
Subsequent Event | WoodSpring
Subsequent Event [Line Items]
Number of properties | awardType		111
Radisson Americas
Subsequent Event [Line Items]
Business acquisition, percentage of voting interests acquired	100.00%
Purchase price | $	$ 675