Choice Hotels International Inc.

10750 Columbia Pike

Year founded: 1968

Industry: Hospitality/travel

Post 200 Category: Top 125 Companies

Revenue: $428.81 Million

Net Income/Loss: $74.35 Million

Earnings per share: $2.15

Dividend: $0.85

Stockholder equity: ($203,053,000.00)

Auditor: PricewaterhouseCoopers LLP

Stock: CHH

Assets: $262.39 Million

Market capitalization: $2.00 Billion

52-week high: 63.4 3/18/2005

52-week low: 41.84 4/14/2004

Chairman: Stewart Bainum Jr.

President and CEO: Charles A. Ledsinger Jr.

Employees: 1656

Local employees: 360

Description: Choice is one of the world's largest hotel franchisers, with brands that are mostly at the low and mid-price points of the chain hotel market, including Comfort Inn, Sleep Inn, Econo Lodge, Clarion and Quality. Its franchisees own almost 5,000 hotels with 404,000 rooms. As a franchiser, the company does not operate hotels but markets its chains and offers centralized reservations and other services for owners and managers of the properties.

Developments: 2004 was a year of steady growth at Choice. In the first phase of the tourism industry's recovery, in 2003, its financial performance led that of other chains as budget-minded travelers chose its relatively inexpensive brands. With the tourism recovery in full swing and travelers more comfortable spending extra money on hotel rooms, Choice's growth has become more modest, by some measures, than that of full-service chains. Moreover, because its revenue comes from franchise fees, Choice stands to benefit less from growth in hotel revenue than companies that manage hotels. Choice Hotel's operating income rose 10 percent in 2004, to $125 million. By contrast, at Marriott International Inc., which has a business more concentrated in the middle and upper end of the hotel hierarchy, operating income from lodging rose 20 percent. A key to Choice's continued growth is winning new franchisees. The company completed contracts for 552 new franchised hotels in the United States in 2004, up from 470 such contracts in 2003. The contracts would generate an additional 47,277 rooms in the system. In January, the company announced plans for a new "lower-upscale" chain, Cambria Suites. Choice also repealed a "poison pill" provision in its corporate governance. Poison pills make it difficult to launch hostile takeovers against a company and are opposed by shareholder rights advocates.