CHOICE HOTELS INTERNATIONAL INC /DE
For the period ended Dec 31, 2024. Filed Apr 15, 2025.
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Dec 31, 2024 · Filed Apr 15, 2025
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrantý
Filed by a Party other than the Registrant¨
Check the appropriate box:
| ¨ | Preliminary Proxy Statement |
|---|---|
| ¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ý | Definitive Proxy Statement |
| ¨ | Definitive Additional Materials |
| ¨ | Soliciting Material Pursuant to §240.14a-12 |
| CHOICE HOTELS INTERNATIONAL INC /DE | |
| (Name of Registrant as Specified in Its Charter) | |
| (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) | |
Payment of Filing Fee (Check all boxes that apply):
| ý | No fee required |
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| ¨ | Fee paid previously with preliminary materials |
| ¨ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
Who We Are
Choice Hotels is one of the world’s largest hotel companies with over 80 years of success building a portfolio of 22 diversified brands. Ranging from limited service to full-service hotels in the upper upscale, upscale, midscale, extended-stay and economy segments, the Choice family of hotel brands provides business and leisure travelers with a range of high-quality lodging options throughout the United States and internationally.
| Franchising | Hospitality | Technology | |||
| MORE THAN7,500OPEN HOTELS GLOBALLY | HOTELS IN OVER46COUNTRIES & TERRITORIES WORLDWIDE | OVER650,000ROOMS | MORE THAN69 MillionCHOICE PRIVILEGES LOYALTY MEMBERS |
Choice Hotels attracts and retains franchisees because of our long-held commitment to drive their success and profitability.Connecting franchisees to the power of Choice’s customer delivery platform•Award-winning over 69 million member loyalty programOffering best-in-class franchisee resources•Dedicated consultants to drive revenue and optimize hotel operations•Leading-edge, cloud-based property management system (Choice Advantage)Mutually beneficial franchise agreements with long horizons•High voluntary franchisee retention rateFocusing on lowering franchisees’ total cost of ownership and driving operational excellence•Low cost-to-build improves franchisees’ investment returns, operating profitability and resiliency•Leveraging procurement and design services provides a simpler purchasing process that reduces ongoing operating costs of the hotel
Letter to Our Shareholders
Dear Fellow Shareholders:
On behalf of the Choice Hotels Board of Directors, it is our pleasure to invite you to join our virtual Annual Meeting of Shareholders on May 15, 2025, at 9:00 a.m. Eastern Time by visiting https://meetnow.global/MYAXZX4. During the meeting, we will address the voting items in this year’s Proxy Statement and answer shareholder questions. Your vote is crucial, so whether or not you plan to attend, please review the enclosed materials and submit your proxy.
A Year of Strong Performance
2024 was yet another year of strong performance for Choice Hotels. We unlocked new value from the Radisson Americas acquisition and created exciting growth opportunities by relaunching four brands - Radisson, Radisson Blu, Radisson Individuals and Park Inn by Radisson. We also achieved record organic growth in our rewards program, significantly expanded our strategic partnerships, and continued to lead in extended stay, opening our 515th property in that sought-after segment. In fact, despite the challenging economic environment, Choice drove strong development growth across our portfolio in 2024, achieving a 3.3% year-over-year net increase in global hotel rooms and ending the year with a pipeline that has 98% of rooms within our more revenue-intense brands.
Positioned for Future Growth
Our success - driven largely by the outperformance of the Radisson Americas brands and our growing international portfolio - has enabled us to strategically reinvest in promising new technology-centered initiatives. They include an advanced AI-ready digital marketing capability that will enable us to deliver personalized messages and offers to customers; a self-serve platform to make it easier for small- and mid-sized companies to do business with us; a new rate-management tool that will provide greater flexibility for our owners; and much more.
Additionally, with hotel demand growth projected to continue outpacing supply growth through 2026, Choice will continue to capitalize on our world-class conversion capability, which enables us to quickly move properties through our development pipeline, providing tremendous value to new or existing owners in any market conditions.
With Choice's larger scale, enhanced growth profile and relentless focus on strengthening our value proposition to owners, guests and investors alike, we are well-positioned to drive our revenue, including top-line revenue, in 2025 and beyond as we work to ensure that our shared tomorrow is even better than our today.
Thank you, as always, for your continued trust and investment in Choice Hotels.
Sincerely,
| Stewart W. Bainum, Jr.Chairman of the Board of Directors | Patrick S. PaciousPresident & Chief Executive Officer |
| 2025 Proxy Statement | 1 |
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Financial/Strategic Highlights
Full-Year 2024 Financial Performance
| SHAREHOLDER RETURNS | BALANCE SHEET | ||||
| >$435MIn cash dividends and share repurchases(1) | >3Msharesrepurchased(2) | >6%of sharesoutstanding(2) | ~$700MAvailable liquidity | ||
| SYSTEM GROWTH · DOMESTIC REVPAR GROWTH · EFFECTIVE ROYALTYRATE GROWTH | |
|---|---|
| Global Openings · +21% vs. FY'23 · +4.5% vs. Q4'23 · +7bps vs. FY'23 | |
| Outperformedindustry by 90bps | |
| Global Rooms | +3.3% vs. FY'23 |
| DomesticRooms(3) · +4.3% vs. FY'23 · STRATEGICPARTNERSHIP | |
| with the industry's premier resort operator: | |
| InternationalRooms · +4.4% vs. FY'23 · REWARDS PROGRAMMEMBERS | |
| 69 million | |
| Global RoomsPipeline | 98% |
| within more Revenue-Intense Brands · +8% vs. FY'23 · Added 14,000+ rooms | |
| Organic Growth Record | |
(1)Reflects $55.5 million in cash dividends and $382.1 million in share repurchases during the full year ending December 31, 2024.
(2)During 2024, repurchases of 6% of shares as of December 31, 2023.
(3)For Upscale, Midscale, and Extended Stay segments.
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Sustainability Highlights
We aim to build a lasting legacy of sustainability and wellbeing for our franchisees, associates, guests, communities and world. Our practical, franchisee-focused approach is central to advancing our sustainability efforts. Choice’s latest Sustainability report can be found athttps://investor.choicehotels.com.*
| Environment | Choice Hotels' refreshed “Room to be Green” environmental program helps franchisees improve their environmental practices, position themselves for third-party certifications and potentially achieve greater savings. The program takes into account the most recognized third-party certification standards, the most frequent sustainability requests from corporate clients, and expectations from our broader stakeholders and industry. The program has four certification levels, ranging from low-cost solutions to a best-in-class approach that requires more innovative, capital-intensive actions designed for sustainability trailblazers. The program's five pillars cover energy, water, waste, employee and guest engagement and biodiversity. All domestic and international hotels in direct markets were required to meet the Level 1 standards by early 2025. Each higher level thereafter is designed to encourage hotels to take additional meaningful and attainable steps to improve sustainability, positioning them for third-party certifications. Choice also:•Continued the rollout of our automated utilities tracking dashboard across Choice's domestic hotels. This enables hotels to automatically track their energy and water consumption and calculates their greenhouse gas (GHG) emissions. It takes into account hotel occupancy and helps hotel owners identify savings opportunities and anomalies, such as major leaks. The dashboard also helps owners prepare for current and upcoming state and local regulations related to utility reporting and energy efficiency for commercial buildings, which vary by jurisdiction and often include steep non-compliance penalties.•Aligned our disclosures with SASB, TCFD and CDP ahead of our 2025 commitment.•Signed the Science Based Targets initiative (SBTi) public commitment letter in December 2023.•Eliminated polystyrene products from the brand standards for all applicable brands. Bulk bathroom amenities will be standard by year-end 2025 across our domestic brands.•Saved more than 55 million letter-sized sheets of paper at our hotels through use of a digital registration program allows guests to check-in using a touch screen.•Installed three beehives at our corporate headquarters building in North Bethesda, Maryland, to promote biodiversity.•Shifted to using 100% cage-free egg products and crate-free pork at all-day dining restaurants located at our managed hotels.•Launched a pilot program using artificial intelligence technology to monitor and reduce food waste in managed hotel kitchens.•Signed a partnership agreement with the National Park Foundation to preserve nature and wildlife and connect our hotels to nearby parks.•Expanded our greenhouse gas emissions data to Scope 3.•Marked our first year of public reporting to CDP Climate and Water Surveys. |
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| 2025 Proxy Statement | 3 |
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| CommunitiesandHuman Rights | •We strive to improve lives and uplift communities through our signature national partnerships with organizations like the American Red Cross and Operation Homefront, that help people all over the country. And we’re focused on local impact as well through associate giving and volunteerism.•In 2024, we rolled out Choice Gives, our new donation and volunteering online platform for corporate associates in the U.S. This innovative platform enables associates to learn more about organizations and causes they care about, making it easier to volunteer, track their volunteering hours, donate and receive a company match, and create donation and volunteering opportunities to invite other associates to give back to local communities. Choice Gives offers a generous matching gift program, up to $1,500 per associate each year, subject to available funds. Associates can also log their volunteer hours and receive a $15 credit for every hour volunteered at a registered non-profit, which can then be donated to a non-profit of their choice. Corporate associates receive up to eight hours of paid volunteer leave per year for personal volunteerism.•We are committed to protecting human rights. We make anti-human trafficking training required for all franchisee owners or their manager-level designees, all on-property managed hotel associates and all Choice corporate associates worldwide. Choice maintains relevant and strong affiliations to combat human trafficking and to support victims with American Hotel & Lodging Association (AHLA) Foundation’s No Room for Trafficking (NRFT), PACT, and Polaris. Choice is also committed to providing emergency lodging for victims of abuse and violence with Safe Stays by ReloShare Alliance. |
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| FranchiseeCommunityGrant Program | As a champion of local businesses since our founding over 80 years ago, Choice Hotels places our franchisees at the center of everything we do — from helping them along the road to economic recovery during the pandemic, to supporting the initiatives that are most important to them and their businesses. Through the Your Community, Your Choice. Choice Hotels' Local Business Grant Program, we help franchisees further their longstanding commitment to caring for the communities just outside their hotel doors.Choice is proud to have donated a total of $275,000 to local non-profit organizations through more than 70 hotels that have participated in the Your Community, Your Choice program over the last five years. |
*The information on the Company website is not part of this proxy statement and is not soliciting material.
4
Shareholder Outreach and Engagement
Choice's leadership and Board of Directors values feedback from our shareholders, whom we regularly engage with on a broad range of topics, including matters of compensation.
Our Human Capital and Compensation Committee (the "Committee") seeks the feedback of our shareholders through our annual shareholder advisory vote on the compensation of our executive officers as well as direct reach out and dialogue with shareholders. In May 2024, we received 99% support for our say-on-pay advisory vote, which we believe represented strong support for our compensation program.
The Committee continues to engage in meaningful dialogue with our shareholders and in Fall 2024, reached out to shareholders representing over 90% of outstanding shares to discuss a broad range of topics, including executive compensation decisions.
of votes cast werein favor of ourcompensationproposal in 2024.
Given the level of shareholder support at 99%, the Committee believes our shareholders recognized that our compensation program continues to provide pay-for-performance alignment and best practice market competitive pay that incentivizes our NEOs to maximize shareholder while supporting recognition and retention of key talent. The Committee will continue to consider the outcome of our say-on-pay votes and our shareholders' views when making future NEO compensation decisions.
| 2024 OUTREACH | |||
|---|---|---|---|
| Shareholders Engaged | Engagement Leads | Key Matters Discussed | Result of Engagement |
| We reached out to shareholders representing more than 90%* of stock and discussed with shareholders representing more than 54%* of stock. | SustainabilityHRLegalInvestor Relations | ExecutiveCompensationCompany Performance ESGBoard PerformanceBoard Oversight | Feedback from investors was reported back to and considered by our Board and members of management. |
*Includes Bainum family affiliated shares, approximately 42% of outstanding shares as of March 17, 2025.
| 2025 Proxy Statement | 5 |
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Inclusion and Belonging
At Choice, we are committed to nurturing an environment where every associate feels welcome, wanted, and respected – that’s our brand promise. We seek out the best talent that the hospitality, franchising and technology industries have to offer, and we nurture that talent in an open and inclusive workplace, yielding a high performing organization with positive business outcomes. As part of our efforts, we strive to attract associates with different perspectives, experiences, and backgrounds that reflect the broad range of guests and franchisees that we serve. We empower our associates to advance their careers by providing them with access to networks, resource groups and other tools that promote career development and cultural awareness. Part of how we deliver on our promise of every associate feeling welcome, wanted, and respected is by deliberately weaving our commitment to inclusion and belonging throughout all levels of the enterprise, focusing on three core commitments:
| Aspiring for a Choice workforce comprised of associates with different perspectives, experiences and backgrounds that reflect the world we live in. | Providing fair and competitive pay for all associates, regardless of gender, race, or other demographics. | Fostering a culture of belonging where associates are inspired, engaged and thrive. |
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Fair and Competitive Pay
We are committed to providing fair and competitive pay. To ensure that we are delivering on our commitment to fair compensation decisions, Choice conducts a fair pay study annually on all U.S. based roles and reports the results of this analysis to our Board of Directors. During 2024, we conducted this analysis for the all our U.S. based associate population. We promptly reviewed any identified discrepancies for similar positions (e.g., by career track, level, and/or salary grade) that cannot be explained by the level of experience, performance, or other legitimate, non-discriminatory factors.
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Awards and Recognitions
| Time World's BestCompanies 2024 | Newsweek America's GreatestWorkplaces for Women 2024 |
| 2024 Best Place to Workfor Disability Inclusion | World Sustainable Travel &Hospitality Award |
| Newsweek America's MostResponsible Companies 2025 | PACT'sFreedom Award |
| 2025 Proxy Statement | 7 |
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