Choice Hotels Intn'l

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International Guild of Hospitality & Restaurant Managers

Choice Hotels Intn'l. (CHH)

Choice Hotels International, Inc., incorporated in October 1997, is a franchisor of hotel properties with 4,545 hotels open and operating in 38 countries at December 31, 2001 . In addition, at December 31, 2001 , the Company had 689 franchise properties under development representing a total of 56,360 rooms. Choice franchises lodging properties under one of its proprietary brand names (the Choice brands): Comfort, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn and MainStay Suites. The Company franchises hotels in all 50 states, Puerto Rico and the District of Columbia and 36 additional countries, with 97% of its franchising revenue generated from hotels franchised in the United States .

The Company conducts its international business through master franchise arrangements, direct franchise agreements and investments in overseas hospitality companies that are involved with both hotel management and franchising. The use of Choice's brands by third parties overseas are governed by master franchising agreements that generally provide the master franchisee with the right to the brands in a specific geographic region, usually for a fee. As of December 31, 2001 , the Company had 1,218 franchise hotels in 37 countries outside of the United States .

Comfort

Choice's largest brand, Comfort Inns, offers rooms in the mid-scale without food and beverage category and is targeted to business and leisure travelers. Comfort Suites offer business and leisure guests a large room with separate living and sleeping areas. This product competes in the upper portion of the mid-scale without food and beverage category. At December 31, 2001 , there were 1,713 Comfort Inn properties and 319 Comfort Suites properties with a total of 131,647, and 25,472 rooms, respectively, open and operating worldwide. An additional 281 Comfort Inn and Comfort Suites properties with a total of 20,255 rooms were under development. During 2001, the Company added 140 Comfort properties while terminating 48. Comfort properties are located in the United States and in Argentina, Australia, the Bahamas, Belgium, Brazil, Canada, Cayman Islands, Costa Rica, Czech Republic, Denmark, Egypt, El Salvador, Finland, France, Germany, India, Ireland, Italy, Jamaica, Japan, Lebanon, Norway, Portugal, Puerto Rico, Sweden, Switzerland, Thailand, Turks & Caicos, the United Kingdom and the United Arab Emirates.

Principal competitor brands include Baymont, Fairfield Inn, Hampton Inn, Holiday Express, LaQuinta, AmeriSuites and Spring Hill.

Quality

Certain Quality Inns, Quality Inns and Suites and Quality Suites hotels compete in the mid-scale with food and beverage category. Quality Inns, Quality Inns and Suites and Quality Suites are targeted to business and leisure travelers. At December 31, 2001 , there were 746 Quality Inn and Quality Inns and Suites properties with a total of 78,918 rooms, and 53 Quality Suites properties with a total of 5,842 rooms open worldwide. An additional 178 Quality Inn, Quality Inns and Suites and Quality Suites properties with a total of 18,028 rooms were under development. During 2001, a total of 82 Quality properties were added while 49 were terminated. Quality properties are located in the United States and in Australia, Brazil, Canada, Chile, Costa Rica, the Czech Republic, Denmark, Egypt, Finland, France, Germany, Honduras, India, Indonesia, Ireland, Italy, Lebanon, Malaysia, New Zealand, Norway, Portugal, Sweden, Thailand, the United Kingdom and the United Arab Emirates.

Principal competitor brands include Best Western, Holiday Inn, Howard Johnson and Ramada Inn.

Clarion

Clarion Inns, Clarion Hotels, Clarion Resorts and Clarion Suites hotels are full-service properties with on-premise food and beverage facilities and operate in the upscale category. Clarion properties are targeted to business and leisure travelers. At December 31, 2001 , there were 160 Clarion properties with a total of 23,658 rooms open and operating worldwide, and an additional 28 properties with a total of 4,082 rooms under development. During 2001, 25 Clarion properties were added while 18 were terminated. The properties are located in the United States, Argentina, Australia, Canada, China, Costa Rica, Denmark, France, Germany, Guatemala, Honduras, Indonesia, Ireland, Italy, Japan, Norway and the United Kingdom.

Principal competitor brands include Crowne Plaza , Four Points by Sheraton, Radisson, Courtyard by Marriott and Doubletree.

Sleep Inn

Established in 1988, Sleep Inn is a new-construction hotel brand in the lower portion of the mid-scale without food and beverage category. Sleep Inns are targeted to the business and leisure traveler. At December 31, 2001 , there were 295 Sleep Inn properties with a total of 22,731 rooms open and operating worldwide. An additional 73 properties with a total of 5,261 rooms were under development. During 2001, 29 Sleep Inn properties were added while two were terminated. The properties are located in the United States , Brazil , Canada , Japan and the United Kingdom .

Principal competitor brands include Fairfield Inn, Holiday Express, LaQuinta and Red Roof.

Econo Lodge

Econo Lodge hotels operate in the economy category of the lodging industry. Econo Lodges are primarily targeted to senior citizens and rely to a large extent on strong roadside name recognition. At December 31, 2001, there were 730 Econo Lodge properties with a total of 44,788 rooms open and operating in the United States and Canada, and an additional 66 properties with a total of 4,298 rooms under development in those two countries. During 2001, 42 Econo Lodge properties were added while 28 were terminated.

Principal competitor brands include Days Inn, Motel 6, Ramada Limited, Red Carpet Inn, Super 8 and Travelodge.

Rodeway Inn

The Rodeway Inn brand competes in the economy category and is primarily targeted to senior citizens. At December 31, 2001, there were 142 Rodeway Inn properties with a total of 9,179 rooms open and operating in the United States, and an additional 19 properties with a total of 1,231 rooms under development in the United States and Canada. During 2001, 12 Rodeway properties were added while 21 were terminated.

Principal competitor brands include Ho-Jo Inn, Ramada Limited, Red Roof Inn, Shoney's Inn, Super 8 and Motel 6.

MainStay Suites

MainStay Suites, the Company's newest hotel brand, is a midscale extended-stay lodging product targeted to travelers who book hotel rooms for five nights or more. As of December 31, 2001, there were 39 open hotels with 3,410 rooms, and an additional 26 properties with 2,097 rooms under development. During 2001, six MainStay Suites properties were added while one was terminated. The MainStay Suites brand is designed to fill the gap in the midscale category between existing upscale and economy extended-stay lodging products.

Principal competitors brands include Candlewood Suites, Homestead Village, Sierra Suites and TownePlace Suites. The Company's additional competitors include Cendant Corporation, Six Continents (formerly Bass Hotels & Resorts), Hilton, Marriott International, Inc., Accor, Carlson Hospitality and Starwood Hotels and Resorts.

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The data included within the Financial section is solely for information and does not construe a recommendation and/or endorsement by IGHRM or its members to invest funds with any of the companies listed. You are strongly advised to obtain professional advice with qualified individuals or corporations for any investments of funds.

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