Exhibit 99.1

For Immediate Release

CHOICE HOTELS REPORTS RECORD RESULTS FOR SECOND QUARTER 2006;

DILUTED EPS UP 12.5%, NET INCOME UP 12% OVER PRIOR YEAR

SILVER SPRING, Md. (July 25, 2006) – Choice Hotels International, Inc., (NYSE:CHH) today reported the following highlights for the second quarter of 2006:

• Diluted earnings per share (EPS) increased 12.5% to $0.36, compared to $0.32 for second quarter 2005.

• Net income grew 12% from $21.5 million in second quarter 2005 to $24.1 million in the same period of this year.

• Earnings before interest, taxes, depreciation and amortization (“EBITDA”) increased 13% to $44.7 million from $39.7 million in second quarter 2005.

• Operating income increased 13% to $42.1 million, compared to $37.4 million for the same period in 2005.

• Total revenues increased 15% to $140.5 million compared to the second quarter of 2005.

• Domestic system-wide revenue per available room (RevPAR) increased 7.7%, Average Daily Rate (ADR) increased 5.7% and occupancy rose 110 basis points compared to the second quarter of 2005.

• Domestic unit growth increased 4.8% compared to the second quarter 2005 (excluding the 2005 acquisition of Suburban, domestic unit growth increased 3.2%).

• Year-to-date contracts for new construction hotel franchises increased 14% to 106; overall year-to-date new domestic hotel franchise contracts were comparable to the second quarter 2005, with 275 contracts executed in 2006 as compared to 276 in the prior year’s first two quarters.

• Executed five contracts for new upscale Cambria Suites brand during the quarter, with 15 signed year-to-date and 28 since the brand was introduced in 2005. First property in Boise, Idaho expected to open in December 2006.

• The domestic hotel pipeline of hotels under construction, awaiting conversion or approved for development increased more than 45% from the prior year to 687 hotels, representing 53,765 rooms; an additional 65 hotels, representing 5,993 rooms, were in the worldwide pipeline at June 30, 2006.

“We continue to focus on brand enhancements and are seeing strong growth in occupancy, average daily rate and RevPAR,” said Charles A. Ledsinger, Jr., president and chief executive officer. “We are pleased with the substantial increase in year-to-date sales of our new construction brands, most notably with our Cambria Suites and Comfort Suites offerings.”

“We believe that the inherent strength of our business model, the ongoing improvements to our core brands, and the expansion of our newest brands will enable us to drive top-line and bottom-line growth in a variety of economic cycles,” Ledsinger added. “We are very pleased with the 13 percent increase in EBITDA over the prior year’s second quarter and remain confident about the company’s long-term prospects.”

Outlook for 2006

The company’s third quarter 2006 diluted EPS is expected to be $0.46. Full-year 2006 diluted EPS is expected to be $1.45. Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is expected to be $175 million. These estimates include the following assumptions.

• The company expects net domestic unit growth of approximately 4% in 2006;

• RevPAR is expected to increase 5% for third quarter 2006 and 6% for full-year 2006;

• The effective royalty rate is expected to increase 3 basis points for full-year 2006;

• All figures assume the existing share count, include stock-based compensation expense and assume an effective tax rate of 36% for full year 2006.

Use of Free Cash Flow

The company has consistently used its free cash flow (cash flow from operations less capital expenditures) generated from its operations to return value to shareholders. This is primarily achieved through share repurchases and dividends.

For the six months ended June 30, 2006, the company paid $16.9 million of cash dividends to shareholders. The annual dividend rate per common share is $0.52.

The company has remaining authorization to purchase up to 5.1 million shares under the share repurchase program. Repurchases will continue to be made in the open market and through privately negotiated transactions subject to market and other conditions. No minimum number of shares has been fixed. Since Choice announced its stock repurchase program on June 25, 1998, the company has repurchased 33.6 million shares of its common stock for a total cost of $711.9 million through July 25, 2006. Considering the effect of a two-for-one stock split in October 2005, the company has repurchased 66.6 million shares at an average price of $10.69 per share.

The company expects to continue to return value to its shareholders through a combination of share repurchases and dividends, subject to market and other conditions.

Conference Call

Choice will conduct a conference call on Wednesday, July 26, 2006, at 10 a.m. EDT to discuss the company’s second quarter 2006 results. The call-in number to listen to the call is 1-877-209-0397. The conference call also will be Web cast simultaneously via the company’s Web site, www.choicehotels.com. Interested investors and other parties wishing to access the call on the Web should go to the Web site and click on the Investor Info link. The Investor Information page will feature a conference call microphone icon to access the call.

The audio of the call will be archived and available on www.choicehotels.com for those unable to listen to the call on July 26. The call will also be available for replay until August 26, 2006, by calling 1-800-475-6701 (access code 832732).

Items Impacting Comparability

Acquisition of Suburban

During 2005, the company acquired Suburban Franchise Holding Company, Inc. (“Suburban”), which included 67 Suburban Extended Stay Hotel units open and operating in the United States. The results of operations for Suburban have been included in the company’s results of operations since September 28, 2005.

Two-for-One Stock Split

In October 2005, the company effected a two-for-one stock split of its outstanding shares of common stock, par value $.01 per share. Unless otherwise noted, all share information in this release and in the accompanying exhibits, including per share amounts, have been proportionally adjusted as if the two-for-one stock split had been effective as of the date or period presented.

About Choice Hotels

Choice Hotels International franchises more than 5,200 hotels, representing more than 430,000 rooms, in the United States and more than 40 countries and territories. As of June 30, 2006, 687 hotels are under development in the United States, representing 53,765 rooms, and an additional 65 hotels, representing 5,993 rooms, are under development in more than 20 countries and territories. The company’s Cambria Suites, Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites and Suburban Extended Stay Hotel brands serve guests worldwide.

Additional corporate information may be found on Choice Hotels’ Internet site, which may be accessed at www.choicehotels.com.

Forward-Looking Statements

Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities law. Such statements are based on management’s beliefs, assumptions and expectations, which in turn are based on information currently available to management. Actual performance and results could differ from those expressed in or contemplated by the forward-looking statements due to a number of risks, uncertainties and other factors, many of which are beyond Choice’s ability to predict or control. The company’s Form 10-K for the year ended December 31, 2005 details some of the important risk factors that you should review.

Statement Concerning Non-GAAP Financial Measurements

Franchising revenues, franchising margins, EBITDA, and free cash flows are non-GAAP financial measurements. These financial measurements are presented as supplemental disclosures because they are used by management in reviewing and analyzing the company’s performance. This information should not be considered as an alternative to any measure of performance as promulgated under accounting principles generally accepted in the United States (GAAP), such as total revenues, operating income, operating margins, and cash flows from operations. The company’s calculation of these measurements may be different from the calculation used by other companies and therefore comparability may be limited. The company has included exhibits accompanying this release that reconcile these measures to the comparable GAAP measurement.

Contacts

Joseph M. Squeri, Executive Vice President and Chief Financial Officer

(301) 592-5006

Anne Madison, Vice President, Corporate Communications

(301) 592-6723

Cambria Suites, Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge, and Rodeway Inn are proprietary trademarks and service marks of Choice Hotels International, Inc.

^© 2006 Choice Hotels International, Inc. All rights reserved.

Exhibit 1

Choice Hotels International, Inc.

Consolidated Statements of Income

(Unaudited)

	Three Months Ended June 30,											Six Months Ended June 30,
	2006			2005			Variance					2006			2005			Variance
(In thousands, except per share amounts)							$			%								$			%
REVENUES:
Royalty fees	$	53,146		$	46,515		$	6,631		14	%	$	93,010		$	80,157		$	12,853		16	%
Initial franchise and relicensing fees		6,723			6,591			132		2	%		12,366			10,902			1,464		13	%
Partner services		4,900			4,596			304		7	%		7,682			7,236			446		6	%
Marketing and reservation		72,742			62,610			10,132		16	%		130,718			111,653			19,065		17	%
Hotel operations		1,180			1,141			39		3	%		2,160			2,061			99		5	%
Other		1,849			842			1,007		120	%		4,022			1,454			2,568		177	%
Total revenues		140,540			122,295			18,245		15	%		249,958			213,463			36,495		17	%
OPERATING EXPENSES:
Selling, general and administrative		22,242			19,199			3,043		16	%		40,517			35,952			4,565		13	%
Depreciation and amortization		2,642			2,256			386		17	%		4,991			4,581			410		9	%
Marketing and reservation		72,742			62,610			10,132		16	%		130,718			111,653			19,065		17	%
Hotel operations		800			813			(13	)	(2	)%		1,545			1,561			(16	)	(1	)%
Total operating expenses		98,426			84,878			13,548		16	%		177,771			153,747			24,024		16	%
Operating income		42,114			37,417			4,697		13	%		72,187			59,716			12,471		21	%
OTHER INCOME AND EXPENSES:
Interest expense		4,044			3,872			172		4	%		8,084			7,479			605		8	%
Interest and other investment (income) loss		174			(404	)		578		(143	)%		(530	)		(273	)		(257	)	94	%
Equity in net income of affiliates		(130	)		(155	)		25		(16	)%		(388	)		(354	)		(34	)	10	%
Loss on extinguishment of debt		342			—			342		NM			342			—			342		NM
Other		—			(53	)		53		(100	)%		—			(186	)		186		(100	)%
Total other income and expenses, net		4,430			3,260			1,170		36	%		7,508			6,666			842		13	%
Income before income taxes		37,684			34,157			3,527		10	%		64,679			53,050			11,629		22	%
Income taxes		13,548			12,609			939		7	%		22,878			19,503			3,375		17	%
Net income	$	24,136		$	21,548		$	2,588		12	%	$	41,801		$	33,547		$	8,254		25	%
Weighted average shares outstanding-basic		65,356			64,452								65,070			64,297
Weighted average shares outstanding-diluted		67,105			66,677								66,925			66,498
Basic earnings per share	$	0.37		$	0.33		$	0.04		12	%	$	0.64		$	0.52		$	0.12		23	%
Diluted earnings per share	$	0.36		$	0.32		$	0.04		12.5	%	$	0.62		$	0.50		$	0.12		24	%

Exhibit 2

Choice Hotels International, Inc.

Consolidated Balance Sheets

(In thousands)	June 30, 2006			December 31, 2005
	(Unaudited)
ASSETS
Cash and cash equivalents	$	21,658		$	16,921
Accounts receivable, net		40,724			37,155
Deferred income taxes		2,620			2,616
Other current assets		6,728			6,308
Total current assets		71,730			63,000
Fixed assets and intangibles, net		146,679			150,376
Receivable — marketing and reservation fees		16,565			13,225
Investments, employee benefit plans, at fair value		28,043			23,337
Other assets		17,259			15,162
Total assets		280,276			265,100
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current portion of long-term debt		146			146
Other current liabilities		129,361			119,999
Total current liabilities		129,507			120,145
Long-term debt		224,331			273,972
Deferred compensation & retirement plan obligations		35,147			28,987
Other liabilities		9,314			9,172
Total liabilities		398,299			432,276
Total shareholders’ deficit		(118,023	)		(167,176	)
Total liabilities and shareholders’ deficit	$	280,276		$	265,100

Exhibit 3

Choice Hotels International, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended June 30,
(In thousands)	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	41,801		$	33,547
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,991			4,581
Gain on sale of assets		—			(186	)
Provision for bad debts		(127	)		68
Non-cash stock compensation		5,550			2,561
Non-cash interest and other investment (income) loss		(107	)		87
Loss on extinguishment of debt		342			—
Equity in net income of affiliates		(388	)		(354	)
Changes in assets and liabilities:
Receivables		(3,414	)		(2,778	)
Receivable - marketing and reservation fees, net		670			(5,754	)
Accounts payable		8,404			10,109
Accrued expenses and other		(7,549	)		(2,240	)
Income taxes payable		4,815			13,610
Deferred income taxes		(1,912	)		309
Deferred revenue		3,603			4,255
Other current assets		(420	)		449
Other liabilities		6,200			5,014
NET CASH PROVIDED BY OPERATING ACTIVITIES*		62,459			63,278
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment		(4,045	)		(8,023	)
Proceeds from disposition of assets		—			1,812
Issuance of notes receivable		(1,277	)		(449	)
Proceeds from sales of investments		1,387			2,834
Purchases of investments		(5,784	)		(6,508	)
Other items, net		232			(441	)
NET CASH USED IN INVESTING ACTIVITIES		(9,487	)		(10,775	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of long-term debt		(73	)		(73	)
Net repayments pursuant to revolving credit facility		(49,600	)		(23,704	)
Debt issuance costs		(472	)		(193	)
Excess tax benefits from stock-based compensation		11,983			—
Purchase of treasury stock		(1,132	)		(18,843	)
Dividends paid		(16,925	)		(14,494	)
Proceeds from exercise of stock options		7,984			9,255
NET CASH USED IN FINANCING ACTIVITIES		(48,235	)		(48,052	)
Net change in cash and cash equivalents		4,737			4,451
Cash and cash equivalents at beginning of period		16,921			28,518
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	21,658		$	32,969

* Net cash provided by operating activities for the six months ended June 30, 2005 includes approximately $6.0 million of excess tax benefits related to stock-based compensation. Effective January 1, 2006, the Company began reporting these excess tax benefits as cash flows from financing activities as a result of the adoption of Statement of Financial Accounting Standards No. 123R “Accounting for Stock-Based Compensation”

EXHIBIT 4

CHOICE HOTELS INTERNATIONAL, INC.

SUPPLEMENTAL OPERATING INFORMATION

DOMESTIC HOTEL SYSTEM

(UNAUDITED)

	For the Six Months Ended June 30, 2006						For the Six Months Ended June 30, 2005						Change
	Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy		RevPAR
COMFORT INN	$	69.76	57.9	%	$	40.40	$	65.58	55.7	%	$	36.51	6.4	%	220	bps	10.7	%
COMFORT SUITES		81.30	64.3	%		52.24		75.65	61.5	%		46.52	7.5	%	280	bps	12.3	%
QUALITY		64.26	50.8	%		32.63		62.17	49.5	%		30.78	3.4	%	130	bps	6.0	%
CLARION		77.11	48.1	%		37.11		71.87	47.8	%		34.35	7.3	%	30	bps	8.0	%
SLEEP		64.64	58.6	%		37.87		60.39	56.4	%		34.06	7.0	%	220	bps	11.2	%
MAINSTAY		66.48	63.7	%		42.33		62.37	60.6	%		37.80	6.6	%	310	bps	12.0	%
ECONO LODGE		50.52	43.3	%		21.89		48.13	43.6	%		21.00	5.0	%	-30	bps	4.2	%
RODEWAY		48.57	41.9	%		20.33		46.22	43.4	%		20.05	5.1	%	-150	bps	1.4	%
TOTAL DOMESTIC SYSTEM*	$	67.21	53.7	%	$	36.12	$	63.51	52.5	%	$	33.32	5.8	%	120	bps	8.4	%
	For the Three Months Ended June 30, 2006						For the Three Months Ended June 30, 2005						Change
	Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy		RevPAR		Average Daily Rate		Occupancy		RevPAR
COMFORT INN	$	71.84	64.0	%	$	45.97	$	67.32	61.7	%	$	41.51	6.7	%	230	bps	10.7	%
COMFORT SUITES		83.04	69.5	%		57.72		77.37	67.3	%		52.09	7.3	%	220	bps	10.8	%
QUALITY		66.18	56.5	%		37.36		64.39	55.0	%		35.44	2.8	%	150	bps	5.4	%
CLARION		77.77	53.5	%		41.63		73.33	53.8	%		39.46	6.1	%	-30	bps	5.5	%
SLEEP		66.69	65.2	%		43.47		62.49	62.5	%		39.07	6.7	%	270	bps	11.3	%
MAINSTAY		67.43	70.3	%		47.39		63.75	66.7	%		42.55	5.8	%	360	bps	11.4	%
ECONO LODGE		52.09	47.5	%		24.75		49.68	48.4	%		24.05	4.9	%	-90	bps	2.9	%
RODEWAY		49.98	44.5	%		22.23		46.93	47.2	%		22.15	6.5	%	-270	bps	0.4	%
TOTAL DOMESTIC SYSTEM*	$	69.01	59.2	%	$	40.87	$	65.30	58.1	%	$	37.95	5.7	%	110	bps	7.7	%

* Amounts exclude Suburban activity from January 1, 2006 through June 30, 2006 because comparable pre-acquisition data for Q2 2005 is not available

	For the Quarter Ended				For the Six Months Ended
	6/30/2006		6/30/2005		6/30/2006		6/30/2005
System-wide effective royalty rate	4.12	%	4.09	%	4.10	%	4.08	%

EXHIBIT 5

CHOICE HOTELS INTERNATIONAL, INC.

SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA

(UNAUDITED)

	June 30, 2006		June 30, 2005		Variance
	Hotels	Rooms	Hotels	Rooms	Hotels		Rooms		%		%
COMFORT INN	1,411	110,440	1,448	114,023	(37	)	(3,583	)	(2.6	)%	(3.1	)%
COMFORT SUITES	417	32,786	402	31,648	15		1,138		3.7	%	3.6	%
QUALITY	692	68,407	612	61,783	80		6,624		13.1	%	10.7	%
CLARION	157	23,262	155	23,543	2		(281	)	1.3	%	(1.2	)%
SLEEP	320	24,133	317	24,169	3		(36	)	0.9	%	(0.1	)%
MAINSTAY	27	2,047	28	2,189	(1	)	(142	)	(3.6	)%	(6.5	)%
SUBURBAN	64	8,439	—	—	64		8,439		NM		NM
ECONO LODGE	825	50,673	795	49,741	30		932		3.8	%	1.9	%
RODEWAY	203	12,469	169	10,381	34		2,088		20.1	%	20.1	%
DOMESTIC FRANCHISES	4,116	332,656	3,926	317,477	190		15,179		4.8	%	4.8	%
INTERNATIONAL FRANCHISES	1,168	98,818	1,161	97,211	7		1,607		0.6	%	1.7	%
TOTAL FRANCHISES	5,284	431,474	5,087	414,688	197		16,786		3.9	%	4.0	%

EXHIBIT 6

CHOICE HOTELS INTERNATIONAL, INC.

SUPPLEMENTAL INFORMATION BY BRAND

DEVELOPMENT RESULTS — NEW HOTEL CONTRACTS

(UNAUDITED)

	For the Six Months Ended June 30, 2006			For the Six Months Ended June 30, 2005			% Change
	New Construction	Conversion	Total	New Construction	Conversion	Total	New Construction		Conversion		Total
COMFORT INN	24	18	42	20	25	45	20	%	(28	)%	(7	)%
COMFORT SUITES	41	2	43	29	3	32	41	%	(33	)%	34	%
QUALITY	5	57	62	2	72	74	150	%	(21	)%	(16	)%
CLARION	1	18	19	1	8	9	0	%	125	%	111	%
SLEEP	10	—	10	22	1	23	(55	)%	(100	)%	(57	)%
MAINSTAY	3	1	4	9	—	9	(67	)%	NM		(56	)%
SUBURBAN	6	2	8	—	—	—	NM		NM		NM
CAMBRIA SUITES	15	—	15	6	—	6	150	%	NM		150	%
ECONO LODGE	—	23	23	4	49	53	(100	)%	(53	)%	(57	)%
RODEWAY	1	48	49	—	25	25	NM		92	%	96	%
TOTAL DOMESTIC SYSTEM	106	169	275	93	183	276	14	%	(8	)%	(0	)%
	For the Three Months Ended June 30, 2006			For the Three Months Ended June 30, 2005			% Change
	New Construction	Conversion	Total	New Construction	Conversion	Total	New Construction		Conversion		Total
COMFORT INN	9	5	14	12	15	27	(25	)%	(67	)%	(48	)%
COMFORT SUITES	29	2	31	16	3	19	81	%	(33	)%	63	%
QUALITY	3	32	35	1	42	43	200	%	(24	)%	(19	)%
CLARION	—	9	9	—	5	5	NM		80	%	80	%
SLEEP	7	—	7	15	—	15	(53	)%	NM		(53	)%
MAINSTAY	1	—	1	9	—	9	(89	)%	NM		(89	)%
SUBURBAN	3	2	5	—	—	—	NM		NM		NM
CAMBRIA	5	—	5	5	—	5	0	%	NM		0	%
ECONO LODGE	—	14	14	1	33	34	(100	)%	(58	)%	(59	)%
RODEWAY	1	33	34	—	16	16	NM		106	%	113	%
TOTAL DOMESTIC SYSTEM	58	97	155	59	114	173	(2	)%	(15	)%	(10	)%

EXHIBIT 7

CHOICE HOTELS INTERNATIONAL, INC.

SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION

(UNAUDITED)

CALCULATION OF FRANCHISING REVENUES AND FRANCHISING MARGINS

	Three Months Ended June 30,						Six Months Ended June 30,
(dollar amounts in thousands)	2006			2005			2006			2005
Franchising Revenues:
Total Revenues	$	140,540		$	122,295		$	249,958		$	213,463
Adjustments:
Marketing and reservation revenues		(72,742	)		(62,610	)		(130,718	)		(111,653	)
Hotel Operations		(1,180	)		(1,141	)		(2,160	)		(2,061	)
Franchising Revenues	$	66,618		$	58,544		$	117,080		$	99,749
Franchising Margins:
Operating Margin:
Total Revenues	$	140,540		$	122,295		$	249,958		$	213,463
Operating Income	$	42,114		$	37,417		$	72,187		$	59,716
Operating Margin		30.0	%		30.6	%		28.9	%		28.0	%
Franchising Margin:
Franchising Revenues	$	66,618		$	58,544		$	117,080		$	99,749
Operating Income	$	42,114		$	37,417		$	72,187		$	59,716
Less: Hotel Operations		380			328			615			500
	$	41,734		$	37,089		$	71,572		$	59,216
Franchising Margins		62.6	%		63.4	%		61.1	%		59.4	%

CALCULATION OF ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS)

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share amounts)	2006		2005		2006		2005
Net Income	$	24,136	$	21,548	$	41,801	$	33,547
Adjustments:
Loss on Debt Extinguishment Costs		217		—		217		—
Adjusted Net Income	$	24,353	$	21,548	$	42,018	$	33,547
Weighted average shares outstanding-diluted		67,105		66,677		66,925		66,498
Diluted Earnings Per Share	$	0.36	$	0.32	$	0.62	$	0.50
Adjustments:
Loss on Debt Extinguishment Costs		—		—		0.01		—
Adjusted Diluted Earnings Per Share (EPS)	$	0.36	$	0.32	$	0.63	$	0.50

EBITDA Reconciliation

(in millions)	Q2 2006 Actuals		Q2 2005 Actuals		Full-Year 2006 Outlook
Operating Income (per GAAP)	$	42.1	$	37.4	$	164.9
Depreciation and amortization		2.6		2.3		10.1
Earnings before interest, taxes, depreciation & amortization (non-GAAP)	$	44.7	$	39.7	$	175.0