8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported) December 18, 2007

Choice Hotels International, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	001-13393	52-1209792
(State or Other Jurisdiction of Incorporation)	(Commission File No.)	(I.R.S. Employer Identification Number)

10750 Columbia Pike Silver Spring, Maryland	20901
(Address of Principal Executive Office)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (301) 592-5000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 7.01.   Regulation FD Disclosure.

On December 18, 2007, Choice Hotels International, Inc.’s Vice Chairman and Chief Executive Officer, Charles A. Ledsinger, Jr. and other members of the Company’s senior management team will present an update on Choice’s business operations, growth strategies and outlook for 2007 and 2008 during its Investor Day in New York City. The presentation slides that will be provided by certain members of the management team are furnished as Exhibit 99.1 to this Form 8-K and incorporated by reference.

The session will include an update on Choice’s business operations, growth strategies and outlook for 2007 and 2008. The presentation material and audio from the event will be accessible via live Webcast at investor.choicehotels.com. An archive of the session will be available at the Web site for 90 days following the event.

ITEM 9.01.   Financial Statements and Exhibits.

(d) Exhibits. The following exhibit is furnished with this report:

Exhibit 99.1 Choice Hotels International, Inc. Investor Day presentation slides, dated December 18, 2007.

SIGNATURE

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 hereunto duly authorized.

	Choice Hotels International, Inc.
Date: December 18, 2007	By:	/s/ David L. White
		David L. White
		Chief Financial Officer

CHOICE HOTELS INTERNATIONA, INC.

CURRENT REPORT ON FORM 8-K

Report Dated December 18, 2007

EXHIBIT INDEX

Exhibit No.	Description
Exhibit 99.1	Choice Hotels International, Inc. Investor Day presentation slides, dated December 18, 2007.

EX-99.1

CHUCK LEDSINGER

Vice Chairman and Chief Executive Officer

DISCLAIMER

Certain matters discussed throughout all of today’s presentations constitute forward-looking statements within the

meaning of the federal securities law.

Generally, our use of words such as “expect,”

“estimate,”

“believe,”

“anticipate,”

“will,”

“forecast,”

“plan,”

project,”

“assume”

or similar words of futurity identify statements that are forward-looking and that

we

intend

to

be

included

within

the

Safe

Harbor

protections

provided

by

Section

27A

of

the

Securities

Act

and

Section

21E

of the Securities Exchange Act of 1934.

Such

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

for the company’s revenue, earnings and other financial and

operational measures, company debt levels, payment of stock dividends, and future operations.

We caution you not to

place undue reliance on any forward-looking statements, which are made as of the date of this presentation.

Forward-

looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other

factors.

Several factors could cause actual results, performance or achievements of the company to differ materially from those

expressed in or contemplated by the forward-looking statements.

Such risks include, but are not limited to, changes to

general, domestic and foreign economic conditions;

operating risks common in the lodging and 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; our ability to keep pace with

improvements in technology utilized for reservations

systems and other operating systems; fluctuations in the supply and demand for hotels rooms; and

our ability to manage

effectively our indebtedness.

These and other risk factors are discussed in detail in Risk Factors section of the company’s

Form 10-K for the year ended December

31, 2006, filed with the Securities and Exchange Commission on March

1,

2007.

We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new

information, future events or otherwise.

A Decade in Review

AGENDA

Significant Growth Opportunities Remain

62,384

68,853

242,161

350,701

304,545

419,554

Dec. 31, 1997

Sept. 30, 2007

ENYO

Open

Total

WHAT A DIFFERENCE A DECADE MAKES!

$3

$5

Dec. 31, 1997

Sept. 30, 2007

TTM

Creates strong and growing royalty stream

Strong Unit and

Room Growth

Large, Growing

Fee Base

Improved Contract

Pricing Power

ENYO = Executed Not Yet Opened

+

+

R

e

v

P

A

R

+68 bps

Effective Royalty Rate

Domestic Gross Room Revenue

Domestic Rooms Open & Pipeline

Source: Choice Internal Data, September 2007

B

B

Franchising Revenues

(in millions)

WHAT A DIFFERENCE A DECADE MAKES!

Growing Franchising

Revenue Stream

Laser Focus on

Efficient Operations

High Returns on

Invested Capital

•

Cumulative free cash flows –

nearly $1 billion since 1997

•

Opportunities to create value for long-term shareholders

•

All of this in a variety of economic and industry environments

Returns on

Invested Capital

Franchising

Margins

18%

65%

1997

2007 TTM

Source: Choice Internal Data, September 2007

+

+

WHAT A DIFFERENCE A DECADE MAKES!

Prudent and focused brand management……

……Positions Choice well for continued profitable growth

1997

2007

Creating/Acquiring Brands 

Entering Segments

Enhancing Existing Brands

A Decade in Review

AGENDA

Significant Growth Opportunities Remain

SIGNIFICANT GROWTH

OPPORTUNITIES REMAIN

•

Leverage size, scale and distribution

•

Focus on franchisee ROI

•

Exploit core competencies

–

Innovation

–

Selling hotel rooms

–

Exceptional services for hotel operators

–

Selling hotel franchises

Leverage Size, Scale & Distribution

Focus On Franchisee ROI

Exploit Core Competencies

SIZE, SCALE & DISTRIBUTION

•

Lowers costs and increases revenues for owners

•

Enables highly-valued capabilities

–

Brand awareness

–

National marketing

–

Reservations

–

Services

–

Technologies

•

Franchising model is difficult to duplicate

–

Scale required to duplicate reasonable returns for shareholders

–

Capital required to generate scale

–

Long term contracts & scale are barriers to entry

11.4

5.6

5.2

5.0

4.3

1.9

1.3

1.1

0.8

9.0

Wyndham

Choice

IHG

Hilton

Marriott

Best

Western

Accor

Hyatt

Carlson

Starwood

ONE OF THE LARGEST HOTELIERS

U.S. Hotel Market Share –

Leading Hotel Companies

Source: Smith Travel Research, September 2007

Market Share –

Percentage of Hotels Open

0

2

4

6

8

10

12

14

Wyndham

Choice

IHG

Hilton

Marriott

Best

Western

Accor

Hyatt

Carlson

Starwood

2003

2004

2005

2006

2007

4 yr. Bps

(03-07)

-110

140          60

90

50

-20

-60

10

0

0

LEADING GAINER OF MARKET SHARE

Domestic  Market Share

Source: Smith Travel Research, September 2007

10 WELL RECOGNIZED & SEGMENTED BRANDS

Limited Service

Full Service

Economy

Mid-Scale

Upscale

Exploit Size, Scale & Distribution

Focus On Franchise ROI

Leverage Core Competencies

UNRELENTING FOCUS ON FRANCHISEE ROI

Our Vision:

To generate the highest return on

investment of any hotel franchise

Our Mission:

Deliver a franchise success system

of strong brands, exceptional

services, vast consumer reach, and

size, scale and distribution that

delivers guests, satisfies guests,

and reduces costs for our

hotel owners

Our Passion:

Customer profitability

Leverage Size, Scale & Distribution

Focus On Franchisee ROI

Exploit Core Competencies

INNOVATION CREATES OPPORTUNITIES

•

Strong consumer marketing and guest loyalty programs driving greater

awareness & reservations delivery among target guest

Brand Awareness & Reservations Delivery = Key Value Proposition For Hoteliers

SELLING HOTEL ROOMS

Brand Awareness (2007 YTD)

98%

88%

87%

81%

94%

All

Hotel Direct

Reservation

Choice Central

Reservation

Contribution

Comfort

Inn

Comfort

Suites

Quality

Clarion

Econo

Lodge

Source: Choice Internal Data, September 2007

1/3

EXCEPTIONAL SERVICES

FOR HOTEL OPERATORS

•

Global footprint of field-based hotel performance consultants

•

Independent third-party quality assurance review system provided by LRA

•

Value added training capabilities

•

Brand Solutions Qualified Vendor Program –

leverages scale to reduce costs

for hotel owners

–

Generates $15 million+ in annual revenues

•

State-of-the-art technology

–

Central Reservations System

–

Property and Yield Management Systems

Source: Choice Internal Data, September 2007

EXCEPTIONAL DEVELOPMENT TEAMS

FOCUSED ON SELLING HOTEL FRANCHISES

470

552

304

639

720

250

350

450

550

650

750

850

2002

2003

2004

2005

2006

$5

$10

$15

$20

200

284

190

258

203

201

413

602

107

176

2002

2003

2004

2005

2006

Conversion

New Construction

•

Track record of unit growth across a range of industry and economic cycles

Domestic Franchises

Open

Franchise Development

(New Contracts Sold)

Year-End

Domestic Pipeline

# of ENYO Contracts

Executed

Contracts

YTD

$ in

Millions

Initial Fee Revenue

Deals

Source: Choice Internal Data, September 2007

Strategy For Profitable Growth

SIGNIFICANT UNIT AND ROOM GROWTH

OPPORTUNITIES REMAIN

–

Conversions –

Approximately 1.5 million independent rooms in United States

–

New Builds --

PwC forecasts 2008 industry-wide room supply growth of 2%

–

Competitor portfolio management strategies create additional conversion

opportunities

–

Brand proliferation/contraction “cycle”

Sources: PwC Hospitality Directions, September 2007.  Smith Travel Research, September 2007.

FAVORABLE DEMOGRAPHICS

& ECONOMIC ENVIRONMENT

•

Demographic forecasts point to continued shift from business to leisure travel

•

2008 economic growth expected to continue albeit at a slower rate

–

GDP (+2.2%)

–

Continued low unemployment rate (5.0%)

–

Consumer disposable income (+2.5%)

Source:  Blue Chip Economic Indicators, December 2007.

OUR STRATEGY FOR MAXIMIZING

FINANCIAL & SHAREHOLDER PERFORMANCE

•

Strategically grow our brands

•

Improve brands, brand recognition, business delivery and franchisee

profitability

•

Seek external growth opportunities that improve or leverage our core business

and competencies

•

Allocate significant capital generated to “Highest & Best”

use to maximize

shareholder returns

BRUCE HAASE

Senior Vice President,

Brand Operations and International

$45

$80+

Targeted Average Daily Rate

$65

Conversion

DIVERSIFIED BRANDS

FOR GUESTS AND DEVELOPERS

New Construction

Source: Choice Internal Data, September 2007

New Construction Brands

OUR BRANDS SERVE A WIDE RANGE

OF DEVELOPER NEEDS

Conversion Brands

Economy

Mid-Scale

Mid-Scale Limited Service

Sources: Choice Internal Data, Franchisee Satisfaction Survey Results, September 2007

FOCUS ON FRANCHISEE SATISFACTION

AND ROI KEY TO CONTINUED GROWTH

Top Reasons for

Selecting a Choice Brand

New Build

Conversion

ROI / Profitability

8.6

7.7

Reservations

delivery

8.2

7.9

Brand recognition

8.1

8.0

Availability of

brand

7.9

7.4

Higher

performance

7.9

7.7

Marketing /

Advertising

7.8

7.8

Owners Rating Their Choice Brand

As Good, Very Good, or Excellent

LIMITED SERVICE BRANDS

BRAND AWARENESS YTD

CRS CONTRIBUTION YTD

58%

30%

98%

33%

88%

38%

Average Age

51

50

Median Household Income

$69,000

$67,000

College Graduate

43%

42%

Leisure / Business

66% / 34%

67% / 33%

Drive / Fly

85% / 15%

85% / 15%

MID-SCALE WITHOUT FOOD

AND BEVERAGE BRANDS

•

Free continental breakfast

buffet

•

Pool and/or exercise

facilities

•

Free high-speed Internet

access

•

Complimentary in-room

coffeemaker and coffee

TYPICAL NEEDS

TYPICAL TRAVELER

Sources:

DK

Shifflet

&

Associates,

Millward

Brown,

Choice

Internal

Data,

September

2007

COMFORT INN / COMFORT INN & SUITES

Comfort

Inn

is

the

mid-priced

hotel

brand

with

warm and welcoming service and amenities

that make you feel at ease

COMFORT SUITES

Comfort

Suites

is

the

mid-priced

hotel

that

offers

more

space for working and relaxing, allowing you to feel more

organized, productive and in control during your trip

SLEEP INN

Sleep

Inn

is

the

mid-priced

hotel

that

offers

a

consistent

environment with just the right amenities at an exceptional value,

so you feel proud about your choice of hotel

STRONG GROWTH IN SYSTEM

SIZE AND ROYALTIES

$91.6

$96.9

$107.2

$120.5

$132.2

1,850

1,900

1,950

2,000

2,050

2,100

2,150

2,200

2,250

2002

2003

2004

2005

2006

$0

$15

$30

$45

$60

$75

$90

$105

$120

$135

System Size

Royalties

Source: Choice Internal Data, December 2006

-1%

1%

3%

5%

7%

9%

11%

13%

2002

2003

2004

2005

2006

2007F

2008F

2009F

RevPAR

Demand

Supply

Sources: Smith Travel Research, PricewaterhouseCoopers LLP

POSITIVE INDUSTRY

OUTLOOK –

LIMITED SERVICE

Sources: Smith Travel Research, Choice Internal Data, September 2007

LARGE AND

GROWING SEGMENT

Domestic Hotels

1,504

1,425

606

524

399

1,479

1,429

470

345

Holiday

Inn

Express

Hampton

Inn / Inn &

Suites

La Quinta

Inns / Inns

& Suites

Fairfield

Inn

Country

Inn &

Suites

Other

(includes

25+

brands)

Comfort Suites

Sleep Inn

Flag Represents Industry Top MSAs

Comfort Inn

LIMITED SERVICE DISTRIBUTION

Sources: Choice Internal Data, September 2007

26%

26%

26%

26%

25%

25%

2002

2003

2004

2005

2006

2007

YTD

Source: Smith Travel Research, September 2007 

CHOICE DOMESTIC MARKET

SHARE –

LIMITED SERVICE

Choice Market Share by Room (in percent)

Comfort Suites

Sleep Inn

Flag Represents Industry Top MSAs

Comfort Inn

Limited Service Pipeline (Rooms)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

12/04

12/05

12/06

09/07

New Construction

Conversion

STRONG PIPELINE

Sources: Choice Internal Data, September 2007

20,032

28,123

39,187

38,764

LIMITED SERVICE BRANDS –

GROWTH OPPORTUNITIES

Strategic portfolio management

•

Refresh the Comfort Inn system:

–

Replacement/upgrade strategy for Comfort Inn

–

Strong demand for Comfort Inn & Suites

–

High-quality conversion candidates

•

Comfort Suites & Sleep Inn:

–

Protect exceptional guest experience

–

Maintain growing share of new construction pipeline

•

Comfort Inn drives growth opportunities for other Choice brands

CONVERSION BRANDS

Economy

Mid-Scale

BRAND AWARENESS YTD

CRS CONTRIBUTION YTD

94%

25%

56%

31%

Average Age

48

50

Median Household Income

$51,000

$67,000

College Graduate

34%

42%

Leisure / Business

78% / 22%

67% / 33%

Drive / Fly

86% / 14%

85% / 15%

ECONOMY BRANDS -

FOCUSED ON BASICS

•

Value-oriented product

•

Safe, clean environment

•

Attractive curb appeal

•

Consistent execution

of the basics

TYPICAL NEEDS

TYPICAL TRAVELER

Sources: DK Shifflet

& Associates, Millward

Brown, Choice Internal Data, September 2007

ECONO LODGE

Econo

Lodge

hotels

provide

a

great

stay

and

a great value for business and leisure travelers

•

Enhance curb appeal

•

Message brand improvement

•

Attract and retain more guests

•

Catalyst for development

ECONO LODGE REIMAGING

RODEWAY INN

You’ll find attractive accommodations at a great

price when you a book a room at any

Rodeway

Inn

hotel

STRONG TRACK RECORD OF

SYSTEM AND ROYALTY GROWTH

$15.6

$15.6

$16.4

$17.8

$18.9

400

600

800

1,000

1,200

2002

2003

2004

2005

2006

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

System Size

Royalties

Source: Choice Internal Data, December 2006

BRAND AWARENESS YTD

CRS CONTRIBUTION YTD

87%

31%

81%

31%

Average Age

49

50

Median Household Income

$68,000

$67,000

College Graduate

45%

42%

Leisure / Business

66% / 34%

67% / 33%

Drive / Fly

84% / 16%

85% / 15%

MID-SCALE CONVERSION BRANDS

Quality

•

Breadth of locations

•

Good value

•

Consistent delivery of

basic guest essentials

Clarion

•

Full-service product

offering

•

Meeting space and

banquet service

•

Room service and full

service restaurant

(most locations)

•

Expanded in-room

entertainment

TYPICAL NEEDS

TYPICAL TRAVELER

Sources: DK Shifflet

& Associates, Millward

Brown, Choice Internal Data, September 2007

QUALITY INN

Quality

Inn

is

the

mid-priced

hotel

that

consistently

provides guest essentials in a helpful, accommodating

environment where you feel satisfied

CLARION

Clarion

is the unpretentious full-service hotel that

offers a distinctive experience for the sensible traveler

CLARION COLLECTION

Group of unique, boutique

and historic hotels –

each

with own identity in its

local market

Econo

Lodge

Rodeway

Flag Represents Industry Top MSAs

Quality

Clarion/Collection

CONVERSION

BRAND DISTRIBUTION

Sources: Choice Internal Data, September 2007

STRONG GROWTH IN

SYSTEM SIZE AND ROYALTIES

$27.8

$31.2

$35.2

$38.8

$21.1

0

200

400

600

800

1,000

2002

2003

2004

2005

2006

$0

$5

$10

$15

$20

$25

$30

$35

$40

System Size

Royalties

Source: Choice Internal Data, December 2006

Economy

7%

7%

8%

9%

10%

10%

2002

2003

2004

2005

2006

2007

YTD

Mid-Scale w/F&B

12%

13%

15%

16%

18%

19%

2002

2003

2004

2005

2006

2007

YTD

Source: Smith Travel Research, September 2007 

CHOICE DOMESTIC MARKET SHARE –

CONVERSION BRANDS

Choice Market Share by Room (in percent)

Source: Smith Travel Research, September 2007

SIGNIFICANT GROWTH OPPORTUNITIES

IN LARGE CONVERSION MARKET

Domestic Hotels

2,110

1,888

1,818

1,703

1,504

1,425

889

807

606

583

524

390

343

366

272

252

325

824

804

275

166

Chart does not include 17,196

independent hotels in budget,

economy and

mid-scale segments

Best

Western

Other

(includes 50+

brands)

Holiday Inn

Express

Motel

6

La Quinta

Inns / Inns

& Suites

Fairfield

Inn

Red Roof

Inn

Knights

Inn

Super

8

Days

Inn

Hampton

Inn / Inn

& Suites

Holiday Inn /

Holiday Inn

Select

Americas

Best Value

Inn

Travelodge

Howard

Johnson / 

Howard

Johnson

Express

Microtel

Inn

Ramada

DOMESTIC CONVERSION PIPELINE

Econo

Lodge

Rodeway

Flag Represents Industry Top MSAs

Quality

Clarion

16,951 rooms in pipeline for conversion brands as of September 30, 2007

Source: Choice Internal Data, September 2007

CONVERSION BRANDS –

OPPORTUNITIES

FOR GROWTH

•

Strong demand and market potential for Quality Inn, Clarion

and Clarion Collection

–

Quality: “sweet spot”

In lower mid-scale segment

–

Choice portfolio management process drives opportunity

–

Competitor system product movements

–

Distribution opportunities for high-quality boutique properties

•

Large, fragmented economy market:

–

Independents seeking strong distribution access

–

Proliferation of smaller, weaker brands

–

Repositioning opportunity for Choice and competitor products

DELIVER SERVICES THAT IMPROVE

BRANDS AND PROPERTY PEFORMANCE

Portfolio Management

•

Repositioning

•

Relicensing

•

Termination

Opening Services

Ensure hotels open successfully and

meet or exceed brand standards

Brand Solutions

•

Value-engineered prototypes

•

Negotiated vendor relationships

Training

•

Onsite

•

Regional

•

Web-based

Brand Strategy

Targeted, differentiated programs,

amenities and services for each brand

Brand Performance Consulting

•

Inventory Management

•

Rate Setting

•

Local Sales & Marketing

SERVICES

SERVICES

LIFECYCLE

LIFECYCLE

562 hotels 

23% of Comfort portfolio

386 hotels 

33% of Quality portfolio

115 hotels

41% of Clarion portfolio

23 hotels  

6% of Sleep Inn portfolio

INTERNATIONAL OPERATIONS

•

1,100+ properties

•

37 countries on 5 continents

•

Largest global “pure hotel franchising”

business

•

Consistent, conservative growth

Source: Choice Internal Data, September 2007

•

Larger markets

•

Potential to achieve scale

•

Large pool of quality conversion  

properties

•

Established global travel markets

•

Cultural acceptance of franchising

model

•

Managed through local

Choice-controlled infrastructure

Direct 3

rd

Party Franchising

INTERNATIONAL BUSINESS MODELS

Choice pursues two business models:

•

Smaller markets

•

Difficult to achieve scale

•

Limited conversion opportunities

•

Relevance of management

capabilities and asset control

•

High quality master partners

•

No local infrastructure

Master Franchising

2001-2007:

Restructure international operations to create global platforms

for long-term, profitable growth

INTERNATIONAL EXPANSION TIMELINE

Agreement

with Atlantica

Hotels in Brazil

Acquisition

of Flag Hotels

in Australia/

New Zealand

Divestiture

of asset risk

in Europe

20-year

master

franchise in

Scandinavia

20-year

master

franchise

in Japan

Re-entry

into Mexican

market

Comfort

becomes

largest

Western hotel

brand in Japan

Reacquisition

of rights to

the brands in

continental

Europe

Execute

exclusive

MFA in Ireland

Choice Hotels

India enters

into landmark

agreement

with Royal

Indian Raj

2001

2001

2002

2002

2003

2003

2004

2004

2005

2005

2006

2006

2007

2007

PROFITABLE, GLOBAL GROWTH

•

Profitable, consistent growth

•

Contract-based business consistent with U.S. business models

$5.3

$16.2

$10.7

$1.0

97,944

87,354

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$16.0

$18.0

2000

2006

0

20,000

40,000

60,000

80,000

100,000

120,000

Royalty Income

Operating Income

Number of Rooms

Source: Choice Internal Data, September 2007

GROWING PRESENCE IN WORLD’S

MAJOR TRAVEL MARKETS

269 hotels

Canada

17 hotels

Mexico

306 hotels

Continental

Europe, UK

& Ireland

264 hotels

Australia &

New Zealand

25 hotels

India

2 hotels

China

13 hotels

Central

America

151 hotels

Scandinavia

48 hotels

Brazil

39 hotels

Japan

Source: Choice Internal Data, September 2007

269 hotels

Canada

17 hotels

Mexico

191 hotels

Continental

Europe

264 hotels

Australia &

New Zealand

25 hotels

India

2 hotels

China

DIRECT FRANCHISING MARKETS

Source: Choice Internal Data, September 2007

MASTER FRANCHISING MARKETS

13 hotels

Central

America

151 hotels

Scandinavia

48 hotels

Brazil

39 hotels

Japan

21 hotels

Ireland

Source: Choice Internal Data, September 2007

94 hotels

UK

BUILDING GLOBAL BRANDS

•

Build domestic brand equity

–

Build brand awareness

–

High quality assets

–

Enhance value proposition

•

Consumers

•

Franchisees

•

Leverage Choice’s global reach

–

Increasing reservations delivery

–

Globalization of key marketing programs –

Choice Privileges

–

Access to Choice’s global customer base

Comfort Hotel Gifu

Gifu

Comfort Hotel Sapporo

Sapporo

Comfort Hotel Osaka

Shinsaibashi

Osaka

HIGH-QUALITY HOTELS: JAPAN

Clarion Suites Sacred Waters

Taupo, New Zealand

Clarion Suites Gateway

Melbourne, Australia

HIGH-QUALITY HOTELS:

AUSTRALIA / NEW ZEALAND

Quality Inn

Parle International

Mumbai

Quality Inn

MGM Beach Resort

Tamil Nadu

Quality Inn

The Meadows

Aurangabad

HIGH-QUALITY HOTELS: INDIA

Comfort Inn

Los Cabos

Cabo

San Lucas

Comfort Inn

Zamora Jerico

Zamora

Quality Inn

Ciudad de Mexico Roma

Mexico City

HIGH-QUALITY HOTELS: MEXICO

Clarion Hotel Royal

Christiania

Stockholm, Sweden

Clarion Hotel Sea Lion

Pescara

Montesilvano, Italy

Quality Hotel & Suites

Berlin City East

Berlin, Germany

Clarion Hotel Prague

Prague, Czech Republic

HIGH-QUALITY HOTELS:

CONTINENTAL EUROPE

Sleep Inn Derby

Derby, United Kingdom

Quality Hotel

Leisure Centre Dublin

Dublin

Clarion Hotel Limerick

Limerick

HIGH-QUALITY HOTELS: UK/IRELAND

DAVID PEPPER

Senior Vice President,

Franchise Development and Emerging Brands

Extended Stay Business Review

AGENDA

Cambria Suites Business Review

Development Overview

Limited Service

Full Service

Economy

Mid-Scale

Upscale

2005: EMERGING BRANDS LAUNCH

WHAT IS EXTENDED STAY LODGING?

•

Kitchen equipped, residential-style hotel rooms

•

Guest stays –

average 5 nights or longer, higher occupancies

•

Higher margins

•

Reduced services = lower headcount

EXTENDED STAY SUPPLY

GROWTH COMPARISON

-1%

1%

3%

5%

7%

2002

2003

2004

2005

2006

Sep 2007 YTD

Extended Stay

Industry

Source: The Highland Group, Smith Travel Research

Year-Over-Year Change in Room Supply

EXTENDED STAY OCCUPANCY PREMIUM

50%

60%

70%

80%

2002

2003

2004

2005

2006

Sep 2007 YTD

Extended Stay Segment

Industry

Source: The Highland Group, Smith Travel Research

CHOICE HOTELS MID-MARKET EXTENDED STAY BRAND

MainStay

Suites

•

A casual extended stay hotel offering

at-home comfort and convenience.

Residential-style amenities such as a

fully equipped kitchen and task-friendly

work space, designed with long-term

stays in mind

CHOICE HOTELS ECONOMY EXTENDED STAY BRAND

Suburban Extended Stay

•

A temporary housing solution

offering the essentials of home

including well equipped kitchens,

all at affordable rates for nightly

or extended stays

789

6,138

5,114

3,564

1,763

2003

2004

2005

2006

Sep 2007 YTD

MainStay Suites

Suburban Extended Stay

PIPELINE EXPANDING RAPIDLY

Number of Rooms

Source: Choice Internal Data, September 30, 2007

UNITS

Open

81

ENYO

74

Under Construction

13

EXTENDED STAY DISTRIBUTION

Pipeline

Open

Flag Represents Industry Top

MSAs

Source: Choice Internal Data, September 30, 2007

Extended Stay Business Review

AGENDA

Cambria Suites Business Review

Development Overview

CAMBRIA SUITES –

A LIFESTYLE HOTEL

OFFERINGS IN THIS SPACE PERFORMING WELL

Source: Company Earnings Releases, Smith Travel Research

1H 2007 RevPAR

and Composition

September 2007 Distribution

(U.S. Hotels)

CAMBRIA SUITES DISTRIBUTION

Pipeline [57]

Open [3]

Flag Represents Industry Top MSAs

Master Development Agreements Representing Up To 40 Cambria Suites Hotels

Not Included

Pipeline [57]

Source: Choice Internal Data As Of September 30, 2007

LOCATION, LOCATION, LOCATION

Successful Penetration of High Barrier to Entry Markets

•

New York City, Baltimore (Inner Harbor), Chicago, Houston, Mall of America,

Orlando (I-Drive), Savannah (Downtown), Phoenix, Toronto

Airport Locations

•

Atlanta, Boise (ID), Baltimore / Washington (BWI), Denver, Minneapolis,

Newark, Oklahoma City, Ontario (CA), San Antonio, Indianapolis

Mixed-Use Projects

•

Cathedral City / Palm Desert (CA), Columbus (OH), Kansas City, Maple Grove

(MN), Omaha, San Antonio (Legacy)

INNOVATIVE MARKETING AND SUPPORT

•

Dedicated franchise

development team

•

Dedicated real estate

group:

–

Site selection and

analysis

•

Dedicated, experienced

brand team

•

Innovative marketing support:

–

Award winning pop-up suite

–

Viral marketing

–

Virtual reality goggles

Extended Stay Business Review

AGENDA

Cambria Suites Business Review

Development Overview

Top Reasons for Selecting a

Choice Brand

New Build

Conversion

ROI / Profitability

8.6

7.7

Reservations

delivery

8.2

7.9

Brand recognition

8.1

8.0

Availability of brand

7.9

7.4

Higher performance

7.9

7.7

Marketing /

Advertising

7.8

7.8

Source: Choice Internal Data, September 2007. Franchisee Decision-Making Study 2006

WHY DO DEVELOPERS CHOOSE CHOICE HOTELS?

•

Scale

–

Hotel distribution -+5,500 units

worldwide

–

$300+ million marketing and

reservation fees drive brand

awareness & reservations

delivery programs

•

Strong brand and hotel performance

improvement services

•

Reservations

delivery

-

$1.6

billion

in gross room revenue booked TTM

•

Strong, growing loyalty program

•

Protect hotel asset value

* Excludes cost of land

Conversion

$40,000+

$49,000+

$64,000+

$60,000+

$80,000+

$45

$65

$100+

Targeted Average Daily Rate

$58,000+

$52,000+

$80

DEVELOPMENT OPPORTUNITIES

AT VARIOUS PRICE POINTS

Targeted per Room Investment*

New Construction

Source: Choice Internal Data, September 2007

MOST IMPORTANT SOURCE IN SELECTION

Source: Choice Internal Data, Franchisee Decision-Making Study 2006

STRONG, KNOWLEDGEABLE SALES FORCE

Emerging

Brands

Emerging

Markets

Mid-Scale

Economy

12%

30%

14%

44%

Source: Choice Internal Data, September 2007

BRANDS GROWING VIA INCREASED SALES

304

470

552

639

720

$8.3

$13.3

$15.1

$17.9

$11.3

2002

2003

2004

2005

2006

Deals

Initial Fee Revenue (M)

Source: Choice Internal Data, 2006

128

182

237

288

241

342

370

402

432

304

470

552

639

720

63

2002

2003

2004

2005

2006

New Construction

Conversion

PHENOMENAL NEW CONSTRUCTION

SALES GROWTH

Source: Choice Internal Data, 2006

SOURCE OF CONVERSIONS

13%

45%

39%

12%

23%

13%

55%

Choice Brand

Industry Segment

Independent

Prior Affiliation

Comfort

Quality

Clarion

Econo

Lodge

Rodeway

Source: Choice Internal Data

DOMESTIC PIPELINE

EXPANDED TO 872 HOTELS

57

259

162

113

73

30

37

37

49

55

Cambria

Suites

Comfort

Suites

Comfort Inn

Sleep Inn

Quality

Clarion

Suburban

MainStay

Suites

Econo

Lodge

Rodeway Inn

New Construction

Conversion

Midscale

Extended Stay

Economy

Upscale

Source: Choice Internal Data, September 2007

BILL CARLSON

Senior Vice President, Marketing

Top Reasons for Selecting a Choice Brand

ROBUST MARKETING PROGRAMS –

A KEY INFLUENCER

New Build

Conversion

ROI / Profitability

8.6

7.7

Reservations delivery

8.2

7.9

Brand recognition

8.1

8.0

Availability of brand

7.9

7.4

Higher performance

7.9

7.7

Marketing / Advertising

7.8

7.8

Source: Choice Internal Data, Franchisee Decision-Making Study 2006

MARKETING LEVERAGES SIZE,

SCALE AND DISTRIBUTION

•

$300+ million marketing and reservation system fees

•

Multi and single brand advertising campaigns

•

Driving guests to Choice central channels

•

“One Stop”

shopping

•

Strong and growing loyalty program

•

Growing brand awareness

Source: Choice Internal Data As Of September 2007

CHOICE BRANDS SERVE LARGE,

MIDDLE AMERICA DEMOGRAPHIC

Sources: U.S. Census Bureau (2000 Census). ACS Surveys, 2006. DK

Shifflet

and Associates, 2006. Simmons, 2007.

U.S.

Population

Hotel

Industry

Choice Hotels’

Guests

Wal-Mart

Shoppers

Median Household Income

$48,000

$78,000

$67,000

$61,000

Average Age

47 years

49 years

50 years

47 years

Education (% College Graduates)

27%

47%

42%

24%

% Leisure Room-nights

N/A

57%

67%

N/A

Employment

Professional/Executive/Manager

Other Profession

Retired/Homemaker/Student/Not Employed

21%

44%

35%

37%

41%

22%

32%

42%

26%

22%

35%

43%

Child in Household

31%

32%

32%

33%

Gender

Men (male solo if travelers)

Women (female solo if travelers)

Couples without kids (travelers only)

Couples with kids/Other adults (travelers only)

49%

51%

N/A

N/A

26%

12%

32%

30%

23%

9%

36%

31%

44%

56%

N/A

N/A

CHOICE CAPTURES DISPROPORTIONATE

SHARE OF LEISURE AND 60+ ROOM NIGHTS

Sources: STR, DK Shifflet & Associates, 2002-2006

Percent of Roomnights Sold

Choice

Leisure

Mid / Econ

Leisure

Choice Leisure,

Age 60+

Mid / Econ Leisure ,

Age 60+

LEISURE TRAVEL DEMAND CONTINUES TO INCREASE

2.0% CAGR

5.1% CAGR

Sources: STR, DK Shifflet & Associates, 2002-2006

U.S. Leisure Roomnights

U.S. Age 60+ Roomnights

Roomnights at Midscale / Economy Chains

2002                         2006

2002                         2006

223,186,000

246,547,000

55,796,000

71,498,000

…AND IS LIKELY TO GROW

•

79MM Boomers Start Turning 60

This Year

•

Over 65 in America

12% (36MM) in 2003

20% (72MM) in 2030

•

79MM Boomers Start Turning 60

This Year

•

Over 65 in America

12% (36MM) in 2003

20% (72MM) in 2030

Source: Yesawich

2007

YOUNGER BUSINESS TRAVELERS

TARGETS FOR CAMBRIA SUITES

•

“Millenials”

generation nearly same size as entire Baby Boom population

•

Millenials

and strong Gen-X segment expected to exert a greater influence

on business travel volume

Source: DK Shifflet & Associates, 2006, Choice Internal Forecasts.

Contribution of Business

Travel Room Nights by Generation

CHOICE GOES TO MARKET IN DIFFERENT

WAYS TO ACCOMPLISH BRAND GOALS

TARGET MARKET REACHED THROUGH

INTEGRATED MULTI-MEDIA CAMPAIGN

MULTIMEDIA ADVERTISING CAMPAIGN

•

Build brand awareness

•

Drive revenue and guests to central channels

•

Multi-brand national advertising

–

Popular TV ads featuring Johnny Cash music

–

Emphasis on attracting leisure travelers

•

Single-brand efforts to communicate unique brand benefits

Television:

Leading

network

and

cable

TV programs including NFL, Larry King

Live, Good Morning America, Law &

Order, CSI

Radio:

ABC

Radio,

Premiere

Radio,

Jones Media America

National Advertising and Partnerships with Leading

Companies Help Reinforce Brand Image

NATIONAL ADVERTISING

FOR CORE TARGET AUDIENCE

National Advertising and Partnerships with Leading

Companies Help Reinforce Brand Image

NATIONAL ADVERTISING

FOR CORE TARGET AUDIENCE

Print:

USA Today, Inside Flyer

magazine, Travel Agent, Travel

Weekly, BTN

Internet:

Orbitz, Travelocity,

Expedia, Yahoo! Travel, FoxNews.com,

ESPN.com

National

Partnerships:

With

leading

complimentary consumer brands such

as Southwest Airlines, AAA, AARP

EMERGING MEDIA TO ENGAGE

YOUNGER AUDIENCES

PDA

Advertising

Captivate Network –

Elevator Advertising

in Office Buildings

Satellite

Radio

Internet Radio

GPS Device Advertising

Pre-roll Video Placements

on Websites

Logo on streaming videos

STRONG, GROWING LOYALTY PROGRAM

•

Choice Privileges is our comprehensive loyalty rewards program that delivers

incremental business to our hotels

–

Points-based program that is free to consumers to join

–

Launched in 1998, competitively structured to catch-up with mature

programs

–

Important selling point for franchise sales

STRONG, GROWING LOYALTY PROGRAM

•

The program has steadily grown business delivery

–

Over 6 million members (2 million new members in 2 years)

–

$1 billion in spend on Choice Privileges Visa card

–

Over 20% of room revenue (up from 8% in 2001)

Revenue as Percent of Domestic Gross Room Revenues

8.3%

10.0%

12.2%

15.3%

16.2%

18.0%

20.3%

2001

2002

2003

2004

2005

2006

2007

YTD

Source: Choice Internal Data, November 2007

WINNING WITH GUESTS

•

Growing recognition amongst frequent travelers

•

Voted top award for Gift Card Program (Freddie Awards)

•

Achieved top 5 status in all 9 categories

Award Categories

Best Award

Best Bonus

Best Affinity Credit Card

Best Newsletter

Best Customer Service

Best Web Site

Best Award Redemption

Best Elite Level

Best Program

0

3

6

9

2003

2004

2005

2006

2007

Top 5 Finish

Top 2 Finish

Source: Insider Flyer magazine, 2007.

AND –

IMPROVING BRAND AWARENESS

97

76

44

86

70

13

20

98

88

58

87

81

94

56

28

14

39

Comfort

Inn

Comfort

Suites

Sleep Inn

Quality

Clarion

Econo

Lodge

Rodeway

Inn

MainStay

Suburban

Choice

Hotels

2001

2007 YTD

Source: Millward Brown

Name Recognition (Percentage)

MARY BETH KNIGHT

Senior Vice President, eCommerce & Worldwide Distribution

ROBUST DISTRIBUTION PLATFORM

CRITICAL ELEMENT OF GROWTH STRATEGY

Top Reasons for Selecting a Choice Brand

7.8

7.8

Marketing/Advertising

7.7

7.9

Higher performance

7.4

7.9

Availability of brand

8.0

8.1

Brand recognition

7.9

8.2

Reservations delivery

7.7

8.6

ROI/Profitability

Conversion

New Build

7.8

7.8

Marketing/Advertising

7.7

7.9

Higher performance

7.4

7.9

Availability of brand

8.0

8.1

Brand recognition

7.9

8.2

Reservations delivery

7.7

8.6

ROI/Profitability

Conversion

New Build

Source: Choice Internal Data, Franchisee Decision-Making Study 2006

Amadeus

Sabre

Galileo

Worldspan

Pegasus

Global Distribution Systems

choicehotels.com

Brand Sites

International Sites

Regional & State Sites

Niche Sites

Affiliate Program

Search

Meta Search

Call Centers

Minot, ND

Grand Junction, CO

London, EN

Melbourne, AU

Toronto, ON

Travelocity

Orbitz

Expedia

hotels.com

Travelweb

Online Travel Agencies (OTAs)

CHOICE WORLDWIDE DISTRIBUTION NETWORK

Choice

CRS

Hotels

5,000+ Worldwide

CENTRAL RESERVATIONS

CONTRIBUTION CONTINUES TO GROW…

Source: Choice Internal Data, September 2007

$1,000

$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

2005

2006

TTM Sept 2007

Domestic Choice CRS

Net Room Revenue

Domestic Choice CRS

Net Channel Share

0%

10%

20%

30%

40%

50%

60%

2005

2006

TTM Sept 2007

Internet

Voice

Travel Agent (GDS)

…AND IMPROVES FRANCHISEE PERFORMANCE

35%

37%

39%

41%

43%

45%

47%

49%

2005

2006

YTD Oct

2007

North American

Call Center Conversion

$40

$50

$60

$70

$80

$90

2005

2006

TTM Sept 2007

Systemwide

Call Center

choicehotels.com

Central Channel ADR

Source: Choice Internal Data, September 2007

EVOLVING INDUSTRY BOOKING PATTERNS

41%

46%

51%

56%

60%

59%

54%

49%

44%

40%

0%

20%

40%

60%

80%

100%

2005

2006

2007

2008

2009

Online

Offline

Source: PhoCusWright’s

U.S. Online Travel Overview Seventh Edition –

November 2007

Choice online bookings surpassed 50% in 2006

CHOICE WEBSITE CONSISTENTLY RANKS HIGH

Source: Hitwise

November 2007

LEVERAGING SIZE, SCALE & DISTRIBUTION

CONSUMERS HAVE HIGHER EXPECTATIONS

THAN EVER BEFORE

Personalization

Value-Added Services

Engagement

PROVIDING RELEVANT INFORMATION

INCREASES RESERVATIONS

0%

20%

40%

60%

80%

100%

Services & Amenities

Description of Hotel

Hotel Photos

Maps

Virtual tours

Local Area Information

Upcoming Local Events

5 - Very Important

4

3

2

1 - Not Important

Source: Choice Hotels International 2006 iPerceptions

Study

EXCEPTIONAL SUPPORT & SERVICES

Call Forwarding Reservation Service

–

Delivers ADR premium

Property-Level eCommerce

and Reservations Dashboard

–

Comprehensive view into CRS

revenue and reservation

performance

Full-service Franchisee eCommerce

and Customer Care Helpdesks

–

Strategic marketing, sales and

customer service assistance

EXPANDING OUR DISTRIBUTION STRATEGY

•

Mobile devices

•

Knowledgeware

•

Global Positioning Systems

•

Customer Reviews

•

Site Redesign

Select your room online

DAVID WHITE

Senior Vice President, Chief Financial Officer

INVESTMENT THESIS

•

Strong, growing operating business

–

Large market share & fee base –

with opportunities to expand

–

Predictable, profitable growth in variety of lodging & economic environments

–

High margins + low capital intensity generates high ROICs

–

Long-term franchise contracts –

represent barrier to entry

•

Significant free cash flow generation / capital allocation opportunities

–

Utilization focused on returns for shareholders

–

Creates opportunities

•

Investments in profitable growth –

organic, acquisitions, new concepts, brand extensions

•

Return excess to shareholders –

share repurchases, dividends

•

Capital structure –

strong balance sheet provides opportunity to enhance returns

–

Minimal incremental working capital and capex

requirements forseen

–

Current debt levels below long-range target

STRONG, STEADY FRANCHISE

SYSTEM GROWTH

2,880

3,039

3,123

3,244

3,327

3,482

3,636

3,834

4,048

4,211

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

242

252

258

266

271

282

294

310

329

339

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

CAGR = 4.3%

CAGR = 3.8%

Domestic Hotels On-Line

Domestic Rooms On-Line

(in thousands)

Source: Choice Internal Data, December 2006

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

1998

1999

2000

2001

2002

2003

2004

2005

2006

$0

$50

$100

$150

$200

$250

$300

CHH RevPAR

Chain Scale (Supply Weighted)

Industry RevPAR

Franchising Revenue

GROWING FRANCHISING REVENUES IN +/-

REVPAR ENVIRONMENTS

Source: Smith Travel Research, Choice Internal Data, December 2006

($ in millions)

STEADY EBITDA GROWTH IN +/-

LODGING

ENVIRONMENT

0

5

10

15

20

25

30

1998

1999

2000

2001

2002

2003

2004

2005

2006

0

20

40

60

80

100

120

140

160

180

200

Industry Profits

Adjusted EBITDA

Source: Smith Travel Research, Choice Internal Data, December 2006

($ in millions)

($ in billions)

CAPITAL “LIGHT”

MODEL

GENERATES STRONG RETURNS

ON INVESTED CAPITAL

15.2%

16.1%

14.7%

27.6%

36.7%

49.7%

62.9%

78.5%

19.5%

1998

1999

2000

2001

2002

2003

2004

2005

2006

Source: Choice Internal Data, December 2006

TRACK RECORD OF STRONG

EARNINGS PER SHARE GROWTH

$0.40

$0.51

$0.51

$0.58

$0.76

$0.93

$1.07

$1.26

$1.49

1998

1999

2000

2001

2002

2003

2004

2005

2006

Source: Choice Internal Data, December 2006, Per Share Amounts Retroactively Adjusted For 2005 Stock Split

Adjusted Diluted Earnings Per Share

GROWING FRANCHISING REVENUE BASE

$262.1

$203.7

$187.1

$172.1

$230.0

Source: Choice Internal Data, December 2006

•

Market share & unit growth potential remains –

organic, acquisitions, new concepts, brand extensions

•

High franchisee retention through hotel asset lifecycle

•

Effective royalty rate upside remains

–

“Published”

effective rate for current domestic brand mix = 5.09% (+100 bps

from 2006 levels)

($ in millions)

FRANCHISING MARGINS EXPANDED WHILE

INVESTING IN GROWTH OPPORTUNITIES

60.6%

60.5%

61.0%

62.0%

63.1%

2002

2003

2004

2005

2006

“Investments”

in Emerging Brands, International, Corporate Development Activities Impact

SG&A And Franchising Margins

Create Opportunities For Incremental Profitable Revenue Growth

Source: Choice Internal Data, December 2006

Adjusted Franchising Margins

LONG-TERM CAPITAL ALLOCATION

AND STRUCTURE PRIORITIES

•

Maintain optimal debt level over time

–

+/-

leverage based on “highest and best use of capital”

–

Investment grade –

better pricing / terms, access to capital, demonstrates

financial strength to prospective franchisees

•

Invest in profitable growth opportunities that leverage core competencies

•

Return excess capital to shareholders

–

Strong cash flows enable-

•

Strong, steady growing dividends

•

Opportunistic and accretive share repurchases

BALANCE SHEET --

ROOM TO EXPAND DEBT

LEVELS

•

Net Debt

$231         9%

•

Equity*

2,366        91%

•

Total Capitalization

$2,597       100%

•

TTM –

Adjusted EBITDA

$189.5

•

Net Debt / Adjusted EBITDA

1.2x

September 30, 2007

Source: Choice Internal Data, September 2007

* Based on closing price of $37.67 and approximately 62.8 million common shares outstanding

TRACK RECORD OF RETURNING EXCESS

CAPITAL TO SHAREHOLDERS

$871.7

$122.8

$935.2

$0

$200

$400

$600

$800

$1,000

Cumulative Free Cash Flow (Jan '98-Sep '07)

Dividends

Share Repurchases

Free Cash Flow

Source: Choice Internal Data as of September 30, 2007

NEARLY ½

OF COMMON SHARES

REPURCHASED SINCE ’97 SPIN-OFF

119.7

113.5

107.7

105.1

84.0

74.3

69.5

64.6

65.2

66.4

62.8

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

9/30/2007

Source: Choice Internal Data, December 2007, Share Amounts Retroactively Adjusted To Reflect  2005 Stock Split

Common Shares Outstanding (Year End and September 30, 2007)

Remaining Authority on Current Authorization –

3.4 million shares as of December 12, 2007

HIGH DIVIDEND YIELD COMPARED TO

OTHER LODGING C-CORPS

0.00%

0.00%

1.95%

0.61%

1.83%

0.90%

0.17%

1.21%

Choice

Wyndham

Starwood

Morgans

Marriott

Gaylord

Orient-Express

Intercontinental

Source: Bloomberg Financial, December 14, 2007

Source:

Choice

Internal

Data,

December

2007,

PricewaterhouseCoopers

(industry

RevPAR

projection

only)

PROJECTIONS –

KEY ASSUMPTIONS

(Applicable To 2007 & 2008 Outlook For Franchising Revenues, Adjusted EBITDA and Adjusted Diluted EPS)

•

Gross Domestic Unit Openings

–

2007E –

297 Conversion Units (71%), 123 New Construction Units (29%)

–

2008E –

339 Conversion Units (73%), 127 New Construction Units (27%)

•

PwC Industry RevPAR

projection for 2008 is 4.86% (CHH room supply weighted)

•

Adjusted diluted earnings per share projections assume no share repurchases

subsequent to December 12, 2007

•

Outstanding common shares approximately 62.2 million as of December 12, 2007

Previous Full Year 2007

Expectations

Current Expectations --

Full Year 2007

Current Expectations --

Full Year 2008

Unit Growth

5.0%

5.0%

4.75%

RevPAR Growth

4.0%

4.0%

3.75%

Effective Royalty Rate Improvement

4 bps

4 bps

4 bps

Effective Tax Rate

36.1%

36.1%

36.5%

$203.7

$230.0

$262.1

$289.3

$312.0

2004

2005

2006

2007E

2008E

2008 OUTLOOK –

FRANCHISING REVENUES

Source: Choice Internal Data, December 2007

($ in Millions)

+8%

2008 OUTLOOK –

ADJUSTED EBITDA

Source: Choice Internal Data, December 2007

$134.2

$152.8

$176.3

$193.1

$207.0

2004

2005

2006

2007E

2008E

+7%

($ in Millions)

2008 OUTLOOK –

ADJUSTED DILUTED EARNINGS PER SHARE

$1.07

$1.26

$1.49

$1.70

$1.87

2004

2005

2006

2007E

2008E

+10%

Source: Choice Internal Data, December 2007

ROYALTY FEE “LEVERS”

Domestic Royalty Impact

Estimated

Impact on ‘08

Royalties

Estimated

Impact on ‘08

Diluted EPS

1,2

RevPAR

Improvement

1% =

$2,388,000

$0.02

5% =

$11,940,000

$0.12

New Franchise Growth

1% (46 units) =

$2,399,000

$0.02

5% (230 units) =

$11,995,000

$0.12

Improvement in

Royalty Rate

1 bps increase =

$549,000

$0.005

5 bps increase =

$2,745,000

$0.03

(1) Assumes outstanding diluted shares of 63,268,204

(2) Assumed tax rate of 37.75%

Source: Choice Internal Data, December 2007

CHUCK LEDSINGER

Vice Chairman and Chief Executive Officer

WHY CHOICE?

•

Pure-play lodging franchisor

•

Highest returning model in the industry

•

Profitable growth in a wide variety of economic conditions and industry cycles

•

Substantial size, scale and distribution –

difficult to duplicate

•

Highly-skilled and experienced management team

•

Focused on returning value to shareholders

Questions?

Appendix

Reconciliation of Non-GAAP

Financial Measurements to GAAP

DISCLAIMER

Adjusted franchising margins, adjusted earnings before interest depreciation and

amortization (EBITDA), adjusted net income, adjusted diluted earnings per share,

franchising revenues,  net operating profits after taxes (NOPAT), return on

invested capital (ROIC) 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 operating

income, net income, diluted earnings per share, total revenues or net cash

provided by operating activities.  The calculation of these non-GAAP measures

may be different from the calculation by other companies and therefore

comparability may be limited. The company has included the following appendix

which reconcile these measures to the comparable GAAP measurement.

FRANCHISING REVENUES AND

ADJUSTED FRANCHISING MARGINS

Source: Choice Internal Data, December 2007

Expected

Expected

Trailing Twelve

($ amounts in thousands)

Year Ended

Year Ended

Months Ended

Year Ended

Year Ended

Year Ended

Year Ended

December 31,

December 31,

September 30,

December 31,

December 31,

December 31,

December 31,

2008

2007

2007

2006

2005

2004

2003

Total Revenues

660,585

$    

612,361

$  

594,009

$      

544,662

$   

477,399

$ 

428,208

$    

385,866

$  

Adjustments:

Marketing and Reservation 

(343,707)

(318,376)

(304,953)

(278,026)

(243,123)

(220,732)

(195,219)

Product Sales

-

-

-

-

-

-

-

Hotel Operations

(4,872)

(4,684)

(4,648)

(4,505)

(4,293)

(3,729)

(3,565)

Franchising Revenues

312,006

$    

289,301

$  

284,408

$      

262,131

$   

229,983

$ 

203,747

$    

187,082

$  

Operating Income

196,945

$    

180,763

$  

176,994

$      

166,625

$   

143,750

$ 

124,983

$    

113,946

$  

Adjustments

Hotel Operations

(1,612)

(1,484)

(1,417)

(1,311)

(1,068)

(725)

(842)

Executive Termination Benefits

-

3,690

3,690

-

-

-

-

Product Sales

-

-

-

-

-

-

-

Impairment of Friendly Investment

-

-

-

-

-

-

-

Net

195,333

$    

182,969

$  

179,267

$      

165,314

$   

142,682

$ 

124,258

$    

113,104

$  

Adjusted Franchising Margin

62.6%

63.2%

63.0%

63.1%

62.0%

61.0%

60.5%

FRANCHISING REVENUES AND ADJUSTED

FRANCHISING

MARGINS

(CONTINUED)

Source: Choice Internal Data, December 2007

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

($ amounts in thousands)

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001

2000

1999

1998

1997

Total Revenues

365,562

$          

341,428

$          

352,841

$           

324,203

$          

165,474

$           

175,416

$         

Adjustments:

Marketing and Reservation 

(190,145)

(168,170)

(185,367)

(162,603)

-

-

Product Sales

-

-

-

(3,871)

(20,748)

(23,806)

Hotel Operations

(3,331)

(3,215)

(1,249)

-

(1,098)

(17,303)

Franchising Revenues

172,086

$          

170,043

$          

166,225

$           

157,729

$          

143,628

$           

134,307

$         

Operating Income

104,700

$          

73,577

$            

92,427

$            

94,170

$            

85,151

$            

77,068

$           

Adjustments

Hotel Operations

(385)

(714)

(640)

-

35

(1,679)

Executive Termination Benefits

-

-

-

-

-

-

Product Sales

-

-

-

12

(1,216)

(1,037)

Impairment of Friendly Investment

-

22,713

-

-

-

-

Net

104,315

$          

95,576

$            

91,787

$            

94,182

$            

83,970

$            

74,352

$           

Adjusted Franchising Margin

60.6%

56.2%

55.2%

59.7%

58.5%

55.4%

RETURN ON INVESTED CAPITAL

Source: Choice Internal Data, September 2007

Trailing Twelve

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Months Ended

($ in millions)

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

September 30,

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Operating Income (a)

$77.1

$85.2

$94.2

$92.4

$96.3

$104.7

$113.9

$125.0

$143.8

$166.6

$177.0

Tax Rate(a)

41.7%

41.7%

39.5%

39.0%

35.0%

36.5%

36.1%

35.1%

33.0%

27.4%

36.1%

After-Tax Operating Income

45.0

49.7

57.0

56.4

62.6

66.5

72.8

81.1

96.3

121.0

113.1

+ Depreciation & Amortization

9.2

6.7

7.7

11.6

12.5

11.3

11.2

9.9

9.1

9.7

8.8

- Maintenance CAPEX

9.2

6.7

7.7

11.6

12.5

11.3

11.2

9.9

9.1

9.7

8.8

Net Op. Profit After-tax (NOPAT)

$45.0

$49.7

$57.0

$56.4

$62.6

$66.5

$72.8

$81.1

$96.3

$121.0

$113.1

Total Assets

386.4

398.2

464.7

484.1

321.2

316.8

267.3

263.4

265.3

303.3

337.8

- Current Liabilities

68.2

64.7

88.7

93.8

71.2

84.3

102.2

102.1

120.3

139.8

151.1

Invested Capital

318.2

333.6

375.9

390.3

250.0

232.5

165.1

161.3

145.0

163.5

186.7

Return on Average Invested Capital

17.8%

15.2%

16.1%

14.7%

19.5%

27.6%

36.7%

49.7%

62.9%

78.5%

64.6%

(a) Operating income and tax rate for the year ended December 31, 2001 have been adjusted to exclude the effect

of a $22.7 million impairment charge related the write-off of the company’s investment in Friendly Hotels.

FREE CASH FLOWS

Source: Choice Internal Data, September 2007

Trailing Twelve

Months Ended

Nine Months Ended

Year Ended

Year Ended

Year Ended

Year Ended

September 30,

September 30,

December 31,

December 31,

December 31,

December 31,

($ in thousands)

2007

2007

2006

2005

2004

2003

Net Cash Provided by Operating Activities

138,742

$         

100,404

$                

153,928

$      

133,588

$      

108,908

$      

115,304

$      

Net Cash Provided(Used) by Investing Activities

(23,453)

(18,361)

(17,331)

(24,531)

(14,544)

27,784

Free Cash Flows

115,289

$         

82,043

$                  

136,597

$      

109,057

$      

94,364

$        

143,088

$      

FREE

CASH

FLOWS

(CONTINUED)

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

December 31,

December 31,

December 31,

December 31,

December 31,

($ in thousands)

2002

2001

2000

1999

1998

Net Cash Provided by Operating Activities

99,018

$         

101,712

$       

53,879

$         

65,040

$         

38,952

$         

Net Cash Provided(Used) by Investing Activities

(14,683)

87,738

(16,617)

(36,031)

(9,056)

Free Cash Flows

84,335

$         

189,450

$       

37,262

$         

29,009

$         

29,896

$         

Source: Choice Internal Data, September 2007

ADJUSTED EBITDA

Source: Choice Internal Data, December 2007

Forecasted

Forecasted

Trailing Twelve

Year Ended

Year Ended

Months Ended

Year Ended

Year Ended

Year Ended

Year Ended

($ in thousands)

December 31,

December 31,

September 30,

December 31,

December 31,

December 31,

December 31,

2008

2007

2007

2006

2005

2004

2003

Operating Income

196,945

$       

180,763

$        

176,994

$        

166,625

$      

143,750

$      

124,983

$      

113,946

$    

Adjustments

Executive Termination Benefits

-

3,690

3,690

-

-

-

-

Product Sales

-

-

-

-

-

-

-

Impairment of Friendly investment

-

-

-

-

-

-

-

Depreciation and Amortization

10,057

8,642

8,780

9,705

9,051

9,947

11,225

Adjusted EBITDA

207,002

$       

193,095

$        

189,464

$        

176,330

$      

152,801

$      

134,930

$      

125,171

$    

ADJUSTED

EBITDA

(CONTINUED)

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

($ in thousands)

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001

2000

1999

1998

1997

Operating Income

104,700

$       

73,577

$         

92,427

$         

94,170

$         

85,151

$         

77,068

$         

Adjustments

Executive Termination Benefits

-

-

-

-

-

-

Product Sales

-

-

-

12

(1,216)

(1,037)

Impairment of Friendly investment

-

22,713

-

-

-

-

Depreciation and Amortization

11,251

12,452

11,623

7,687

6,710

9,173

Adjusted EBITDA

115,951

$       

108,742

$       

104,050

$       

101,869

$       

90,645

$         

85,204

$         

Source: Choice Internal Data, December 2007

ADJUSTED DILUTED EARNINGS PER SHARE

Source: Choice Internal Data, December 2007

(In thousands, except per share amounts)

Net Income

Adjustments:

Loss(Gain) on Extinguishment of Debt

Executive Termination Benefits, Net of Taxes

Resolution of Provisions for Income Tax Contingencies

Income Tax Expense Incurred Due to Foreign Earnings Repatriation

Loss(Gain) on Sunburst Note Transactions

Impairment of and Equity Losses in Friendly Hotels PLC Investment

Adjusted Net Income

Weighted Average Shares Outstanding-Diluted

Diluted Earnings Per Share

Adjustments:

Loss(Gain) on Extinguishment of Debt

Executive Termination Benefits, Net of Taxes

Resolution of Provisions for Income Tax Contingencies

Income Tax Expense Incurred Due to Foreign Earnings Repatriation

Loss(Gain) on Sunburst Note Transactions

Impairment of and Equity Losses in Friendly Hotels PLC Investment

Adjusted Diluted Earnings Per Share (EPS)

Forecasted

Forecasted

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2008

2007

2006

2005

2004

2003

118,000

$               

109,049

$               

112,787

$               

87,565

$                  

74,345

$                  

71,863

$                  

-

-

217

-

433

-

-

2,310

-

-

-

-

-

-

(12,791)

(4,855)

(1,182)

-

-

-

-

1,192

-

-

-

-

-

-

-

(3,383)

-

-

-

-

-

-

118,000

$               

111,359

$               

100,213

$               

83,902

$                  

73,596

$                  

68,480

$                  

63,268

65,405

67,050

66,336

69,000

73,349

1.87

$                      

1.67

$                      

1.68

$                      

1.32

$                      

1.08

$                      

0.98

$                      

-

-

-

-

0.01

-

-

0.03

-

-

-

-

-

-

(0.19)

(0.08)

(0.02)

-

-

-

-

0.02

-

-

-

-

-

-

-

(0.05)

-

-

-

-

-

-

1.87

$                      

1.70

$                      

1.49

$                      

1.26

$                      

1.07

$                      

0.93

$                      

ADJUSTED DILUTED EARNINGS PER SHARE

(CONTINUED)

Source: Choice Internal Data, December 2007

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

December 31,

December 31,

December 31,

December 31,

December 31,

(In thousands, except per share amounts)

2002

2001

2000

1999

1998

Net Income

60,844

$              

14,327

$              

42,445

$              

57,155

$              

55,305

$              

Adjustments:

Loss(Gain) on Extinguishment of Debt

-

-

-

-

(7,232)

Executive Termination Benefits, Net of Taxes

-

-

-

-

-

Resolution of Provisions for Income Tax Contingencies

-

-

-

-

-

Income Tax Expense Incurred Due to Foreign Earnings Repatriation

-

-

-

-

-

Loss(Gain) on Sunburst Note Transactions

-

-

4,721

-

-

Impairment of and Equity Losses in Friendly Hotels PLC Investment

-

37,166

7,532

-

-

Adjusted Net Income

60,844

$              

51,493

$              

54,698

$              

57,155

$              

48,073

$              

Weighted Average Shares Outstanding-Diluted

80,114

89,144

106,506

111,334

119,096

Diluted Earnings Per Share

0.76

$                    

0.16

$                    

0.40

$                    

0.51

$                    

0.46

$                    

Adjustments:

Loss(Gain) on Extinguishment of Debt

-

-

-

-

(0.06)

Executive Termination Benefits, Net of Taxes

-

-

-

-

-

Resolution of Provisions for Income Tax Contingencies

-

-

-

-

-

Income Tax Expense Incurred Due to Foreign Earnings Repatriation

-

-

-

-

-

Loss(Gain) on Sunburst Note Transactions

-

-

0.04

-

-

Impairment of and Equity Losses in Friendly Hotels PLC Investment

-

0.42

0.07

-

-

Adjusted Diluted Earnings Per Share (EPS)

0.76

$                    

0.58

$                    

0.51

$                    

0.51

$                    

0.40

$