SILVER SPRING, Md. (February 8, 2000) - Choice Hotels International, Inc. (NYSE:CHH) today reported 1999 recurring net income of $57.2 million, or $1.03 recurring diluted earnings per share (EPS), increases of 22.7% and 32.1%, respectively, over the $46.6 million in recurring net income and $0.78 recurring diluted EPS reported for 1998.

For fourth quarter 1999, the company reported recurring net income of $14.8 million, or $0.27 recurring diluted EPS, compared to $12.1 million, or $0.21 recurring diluted EPS for the same period a year ago.

“Choice Hotels made great strides in 1999 by raising system-wide domestic RevPAR, improving royalty revenues and growing new revenue streams through significant new strategic partnerships,” said Charles A. Ledsinger, Jr., president and chief executive officer. “We delivered consistently strong earnings while strengthening our franchised hotel system through the addition of quality properties and the elimination of those that did not meet our ever-increasing quality standards.”

He continued, “In this new year, we are focused on reaching more consumers through more distribution channels, on delivering exceptional service to our franchisees and their guests, and building even stronger hotel brands with wider consumer acceptance.”

Royalty revenues for 1999 increased 11.7% to $128.7 million from $115.2 million for 1998. For fourth quarter 1999, royalty revenues were $33.1 million, an 11.8% increase over the $29.6 million recorded for the same period in 1998.

For 1999, the total number of domestic Choice hotels on-line grew 2.8% to 3,123 from 3,039 for 1998. For the year, the total number of domestic rooms increased 2.3% to 258,120 from 252,357 in 1998. Choice executed 318 new hotel franchise contracts in 1999 and opened a total of 301 hotels.

System-wide RevPAR was up 2.5% for the fourth quarter of 1999 and increased 3.0% system-wide for the year ended December 31, 1999. In addition to unit growth and RevPAR
gains, operating results also benefited from improved effective royalty rates in the domestic portfolio.

For fourth quarter 1999, the effective royalty rate increased 16 basis points from 3.64% to 3.80%. For the year ended December 31, 1999, the effective royalty rate improved to 3.72% from 3.57%. Royalty rates increased as a result of the Company`s emphasis in executing higher paying hotel contracts and existing contracts “stepping up” to rack rates.

As of December 31, 1999, the company had 596 franchised hotels with 46,664 rooms either in design or under construction in its domestic system. The company has an additional 165 franchised hotels with 17,431 rooms under development in its international system.

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