Good morning, and thank you for joining us today. Before we begin, we would like to remind you that during this conference call, certain predictive or forward-looking statements will be used to assist you in understanding the company and its results. Actual results may differ materially from those indicated in forward-looking statements, and you should consult the company's Form 10-K and other SEC filings for information about important risk factors affecting the company that you should consider. These forward-looking statements speak as of today's date, and we undertake no obligation to publicly update them to reflect subsequent events or circumstances. You can find a reconciliation of our non-GAAP financial measures referred to in our remarks as part of the first quarter 2020 earnings press release, which is posted on our website at choicehotels.com under the Investor Relations section. We would like to acknowledge that this is a challenging time for the hospitality industry, including Choice Hotels, and refer everyone to the earnings release we issued this morning and the 10-Q we'll file later today for important details about how COVID-19 has impacted and may continue to impact Choice. Instead of reiterating the information here, Pat Pacious, our President and Chief Executive Officer; and Dom Dragisich, our Chief Financial Officer, will primarily focus during this call on a few items we believe are of strategic importance and differentiate us from our competitors. They will be joined in the room by Scott Oaksmith, Senior Vice President, Real Estate and Finance. Following Pat and Don's remarks, we'll be happy to take your questions. And with that, I'll turn the call over to Pat.

Thanks, Allie, and good morning, everyone. We appreciate you taking the time to join us and hope you and your families are well. Before we begin, I first want to express my gratitude to those on the frontlines who have been working tirelessly to keep all of us safe through this crisis. I'd like to also recognize the dedication of our franchise owners and their staff, who've been caring for essential travelers during this trying time. They are truly remarkable. On behalf of all of us at Choice Hotels, thank you. While the current situation has no true precedent, Choice is uniquely positioned to outperform its peers as it has in past economic downturns, a trend that is once again bearing out. It is the strength of our well-known brands that drives the performance of our company in both rising and declining demand environments. Our hotels outperformed the competition in the first quarter on several fronts. System-wide occupancy rates were higher than the overall industry, especially for our extended-stay brands. This contributed to a domestic system-wide RevPAR growth rate that outperformed the overall industry by 430 basis points. Additionally, our brands RevPAR outperformed the primary chain scale segments in which we compete as reported by STR. These trends have continued throughout the worst weeks of the pandemic into the second quarter. For the past 8 weeks, our brands have consistently achieved RevPAR share gains versus the competition. And as shown in Exhibit 7 of our press release, occupancy rates have been climbing since early April. And even this past week, occupancy continued to grow over the previous week. We attribute this outperformance to our long-term strategy of growing the right brands in the right segments and in the right locations. Our mid-scale brands represent 2/3 of our total domestic portfolio, a segment that outperformed in the first quarter of 2020 and continues to do so through early May. Our 410 extended-stay hotels maintained an occupancy level of 60% in the month of April, and our WoodSpring brand was even higher at 64%. And almost 90% of our domestic hotels are in suburban, small town and interstate locations, areas that, according to STR, retained higher industry-wide consumer demand than hotels in urban or resort destinations. There are additional factors that contributed to our RevPAR and occupancy outperformance. Since our hotels mostly serve domestic travelers, our portfolio has been insulated from the precipitous drop in international travel caused by the pandemic. Finally, we benefited from the loyalty of those who know us best: business customer segments like transportation, logistics, construction and government travelers, who have been staying with our brands for years. Our company also entered the crisis with a strong balance sheet, thanks to years of exercising a prudent capital allocation strategy and maintaining low levels of debt. Our financial position and liquidity allowed us to take a strategic, measured approach to cost management and additional capital needs based upon our revised view of the environment. Dom will cover this in more detail in his remarks. Choice Hotels outperformed the competition, thanks to a combination of our resilient franchise owner base and the significant level of support we've provided them throughout the crisis. Our typical franchisee is an owner operator with 2 hotels financed with low overall debt levels, which provides them financial flexibility in down cycles. To adapt to a softer demand environment, our franchisees can flex payroll costs, reduce operating expenses and postpone capital expenditures. These limited service hotels are less labor intensive and, in general, operate at higher margins as compared to full-service hotels. In response to the crisis, we reduced several fixed program fees, extended brand program deadlines and adopted more flexible brand standards to lower owners' costs. We've contacted nearly every franchisee in the system to help them manage their cash position according to each owner's individual situation with an eye towards helping them succeed in the longer term. To date, 10% of hotels have been enrolled in our tailored fee deferral program. Just for perspective, the average occupancy across our portfolio has been above 30% since the week of April 12, indicating that many owners have been able to operate without additional assistance. At the same time, we ramped up our advocacy efforts at the federal level to expand our franchisees access to capital. I was fortunate to have a substantive exchange with President Trump when I visited the White House along with my industry colleagues on March 17. Because 90% of our hotels qualify as small businesses, I used the opportunity to call for specific provisions that would expand eligibility for owners and provide relief for their workers through the small business administration. We are pleased that the SBA provisions we advocated strenuously for were included in the CARES Act. Even before the CARES Act was signed into law, we launched an outreach and online education program to enable our franchisees to access this new capital as quickly as possible. To date, nearly 70% of our hotels have applied for or secured vital SBA loans through the Paycheck Protection Program and Economic Injury Disaster Loans, or EIDL. We've also taken steps to help franchisees reduce their operating costs in a lower occupancy environment through proactive outreach, online training and virtual town halls to share best practices. We've delivered business to our owners that they would not otherwise have with a robust sales team that we not only retained during this crisis but expanded by redeploying a number of Choice associates to support the sales effort. And we developed and launched our Commitment to Clean initiative, which highlights for guests the many ways our franchisees' professional housekeeping staff achieve appropriate levels of cleanliness and the additional steps they are taking in this new environment. The relationship with our franchisees has always been strong, as demonstrated by our 98% voluntary retention rate and the high proportion of new franchise agreements awarded to existing and returning owners every year. The feedback we've received from our owners about the overall level of support we provided during this crisis has been overwhelmingly positive. As our occupancy rates show, our long history of investment in a franchisee-first approach paid off during their most difficult time. This is also a difficult time for the country, which is why, together with our owners and guests, we're giving back to those affected by COVID-19. Many of our franchisees have committed their rooms at discounted rates or on a complimentary basis to support communities in need. As in previous crises, our Choice Privileges loyalty program members are stepping up to help as well. Choice is matching CP member donations at various levels in addition to making our own contributions to several great organizations, including the American Red Cross and Operation Homefront. While there are hopeful tangible signs that states are beginning to contain the virus, broad uncertainty remains regarding the course of the virus, the lifting of travel restrictions and the economic impact on the consumer. Our expectation is that the near-term recovery will be sporadic and regional. There are, however, several reasons to believe our franchisees will be well positioned to capture demand as conditions improve. First, leisure travel, which comprises about 2/3 of our room nights, is expected to lead the recovery and rebound faster than business travel. Second, our brands are at the right price point and location for the type of traveler who's been on the road these past 8 weeks and who we expect will lead the return to travel: The resourceful American, our core customer. As they did in previous down cycles, we expect these guests will replace lavish trips with lower-cost getaways, presenting an opportunity for our portfolio when folks get back on the road. And speaking of the road, we expect Americans will choose to drive when their ability and appetite for travel return. We believe that heightened concern about the safety of air travel, low gas prices and our strong presence in drive-to locations will, taken together, allow us to capture an outsized share of pent-up travel demand as stay-at-home orders are lifted. While we do expect new franchise agreements to be lower than last year, we do see development opportunities on the horizon. During The Great Recession, we continued to grow at a faster pace than the overall industry supply through increased hotel conversions. In Q1, our pipeline grew 2% year-over-year to 1,000 domestic hotels, nearly 1/4 of which are conversions, representing a 5% year-over-year increase. Despite the COVID-19 pandemic and travel restrictions weighing on the industry, we awarded nearly 60 new agreements in the first quarter, nearly 3/4 of which were for conversion hotels. Further, approximately half of the contracts in the first quarter were awarded in the last 2 weeks of March. The company's brands are well positioned to grow in this environment, and I'll highlight a few. The refresh of the Comfort brand over the past several years positions us well for the expected demand recovery. Comfort hotels that completed their renovations continued to experience RevPAR index gains versus local competitors for the past 4 consecutive quarters. And nearly half of the domestic Comfort portfolio has now installed new exterior signage with the modern brand identity. Comfort's high brand awareness is expected to attract both travelers and hotel developers looking for a brand they know and trust to deliver proven value. Finally, even amid a lower demand environment, Comfort's loyalty contribution was 45% in the month of April. Our strategic focus on the cycle-resistant extended-stay segment and investment to grow our new construction WoodSpring Suites brand afforded us a competitive advantage as the crisis unfolded by allowing us to capitalize on demand for longer-term stays. In the first quarter, we grew the number of WoodSpring Suites hotels by more than 8% and its pipeline by 20% over the same period of the prior year. We launched our newest brand, Everhome Suites, back in January to provide franchisees with another opportunity to capitalize on one of the fastest-growing segments of the hotel industry and help drive returns in practically any economic environment. The upscale Ascend Hotel Collection, which saw its initial growth during the last recession and today is 373 hotels strong globally, will likely attract interest from independent and boutique hotel owners looking to improve their reservations delivery, reduce customer acquisition costs and improve their revenue management tools. There's also opportunity for our upscale Cambria Hotels brand, which, while designed for the modern business traveler, over-indexes on leisure travel demand as a result of being affiliated with our system. Cambria same-store hotels also outperformed the upscale chain scale in the first quarter. Taken together, our upscale brands experienced RevPAR growth rates 270 basis points better than their competitive set in the first quarter of 2020, as reported by STR. We anticipate that as the current period of low travel demand and occupancy wears on, new owners will seek to affiliate with a large, proven franchisor like Choice. In closing, we are confident in our ability to weather this storm while supporting our franchisees. Choice Hotels has been through challenging times before in our 80-year history, and each time, we have always emerged stronger given our long-term focus, proven brands, broad franchisee base and high-caliber associates. Before I hand it over to Dom, I want to say how proud I am of the entire Choice Hotels team around the world, who have been working tirelessly these past 8 weeks. Our company's purpose statement puts our franchisees at the center of what we do. And when this crisis began, our people knew exactly what to do and moved with incredible speed to support our owners. Our associates have demonstrated resilience, focus and commitment at every turn, and we greatly appreciate all they've done and continue to do to help the 13,000 largely small business owners who fly the Choice Hotels flag. Dom?

Good morning, everyone. I'd like to echo Pat's sentiment and thank the incredible Choice associates for their continued contributions to our company. Choice continues to benefit from its resilient, primarily asset-light franchise-focused business model, which has historically provided a stable earnings stream, low capital expenditure requirements and significant free cash flow. Today, in addition to delving a bit deeper into our first quarter performance, I will provide more insights around our liquidity profile, cost management efforts and approach to capital allocation. I'll close by sharing our thoughts on the outlook for the road ahead. For the first quarter 2020, total revenues, excluding marketing and reservation system fees were $107.8 million. Adjusted EBITDA totaled $69.2 million, representing an adjusted EBITDA margin of 64% and adjusted earnings per share were $0.76 per share. Our domestic RevPAR for the first quarter declined 15% compared to the same period of the prior year due to the COVID-19 crisis and its subsequent impact on the travel industry. Through February, domestic system-wide RevPAR trended at the high end of our previously provided guidance. However, in March, domestic system-wide RevPAR declined 37% year-over-year as occupancy levels fell below 50% for the month. The most pronounced occupancy softening occurred over the last week of the month, averaging 29%. While domestic system-wide RevPAR declined 60% year-over-year in April, we observed consistent daily occupancy improvement in the last 2 weeks of the month with continued outperformance versus our competition. Rising occupancy trends continued into May with average occupancy rates of 34% and reached 39% mid-last week, the highest since mid-March when the crisis began. Despite the challenging environment, our brands have continued to perform ahead of the primary chain scale segments in which we compete. In terms of our first quarter unit and room growth performance, we increased the number of domestic hotels by 1.2% and rooms by 2.7% year-over-year. We are particularly pleased with the expansion of our domestic extended-stay portfolio to 410 hotels in the first quarter, a 9.6% year-over-year increase. We were also able to grow our upscale room count by 42% year-over-year with Cambria and Ascend increasing their room counts by 25% and 48%, respectively. Finally, we are pleased to report that our Comfort brand family posted positive unit and room growth as the brand's transformation journey enters its final stages. Our domestic effective royalty rate increased 10 basis points in the first quarter versus the same period of the prior year to 4.94%. Given the attractive value proposition we provide to franchisees, their continued desire to be affiliated with our strong brands and our current pipeline, we expect to observe continued growth of this lever for the remainder of the year despite the softer environment. We entered this crisis with a strong balance sheet and liquidity position highlighted by a gross leverage ratio of approximately 2.5x, which is below our long-term target range of 3 to 4x. In addition, we prudently refinanced our senior notes offering in the fourth quarter of last year to take advantage of the low interest rate environment with a new 10-year senior note offering. This allowed us to push all material debt maturities to mid-2022. As the current situation evolved, we decided to take precautionary steps to increase our financial flexibility and ensure our strengths will carry us through this uncertain time. Specifically, we borrowed $300 million of our $600 million senior unsecured revolving credit facility and had $322 million in cash on hand at March 31, 2020. We also obtained in April, a 364-day $250 million term loan with the possibility of a 1-year extension to further enhance our liquidity position. As a result of this action as well as the remaining capacity under our $600 million revolving credit facility, we improved our current liquidity position which now includes over $725 million in cash and available borrowing capacity through our revolving credit facility. In preparation for a lower consumer demand environment, we've also taken steps to adjust the company's cost structure, resulting in 2020 SG&A cost reductions of approximately 25%. We expect these measures will more optimally align our cost structure in the post-pandemic environment. I would now like to turn to our capital allocation approach. As we navigate through unchartered waters, we will continue to follow a prudent and disciplined approach to decision-making and ensure the level of investment activity is aligned with the current environment. This includes scrutinizing all investments and reducing or delaying spending as we reassess priorities. In the first quarter of 2020 and prior to the COVID-19 crisis, we returned approximately $67 million back to our shareholders through a combination of $12.8 million in cash dividends and approximately $54.1 million in share repurchases. In addition, the company declared a cash dividend on its common stock of $0.225 per share, which was paid on April 16 of this year. We previously announced that we are suspending the payout of future dividends for at least the remainder of 2020 in response to the crisis. We expect this decision will increase our 2020 cash flow by approximately $25 million, reinforcing our already strong balance sheet position. In addition, and as previously announced, we have temporarily suspended share repurchases under our stock repurchase program. Before closing, I'd like to offer some thoughts on what lies ahead. The ultimate and precise impact of the pandemic on our business in the second quarter, full year 2020 and beyond is largely unknown, as is the exact trajectory of our industry's recovery. Both are dependent on many factors outside our control, such as government mandates, the nature of the virus itself, consumer confidence to travel and the overall macroeconomic backdrop. While we are not issuing formal guidance today, we currently expect the impact of COVID-19 on our performance to be more significant for the second quarter versus the first quarter 2020. Despite the uncertainty, we remain optimistic that we will see some degree of sequential improvement in the back half of the year, spurred by the government stimulus and the anticipated pent-up travel demand. We will continue to evaluate the impact of COVID-19 across the business and will provide further updates in August during our next earnings call. While we are not immune to the pressures faced by the industry, we entered this crisis with a strong financial foundation and low leverage levels. As we have done in the past, we will continue to manage our business conservatively through this period of uncertainty, keep listening to our guests and franchisees and take necessary steps to prepare for a post-pandemic future as travel restrictions lift and markets recover. At this time, Pat and I would be happy to answer any questions.

Our first question comes from Shaun Kelley with Bank of America.

So Dom, you made an interesting comment about the royalty rate, which is somewhat unique since you've seen significant growth in that area over the past couple of years. Can you discuss how you expect that to perform not just in 2020 but throughout the economic cycle, and how it fared in the previous cycle? If I remember correctly, it tends to be influenced by market conditions. I'm not suggesting it's exclusive to Choice, but it seems you offer some rebates or discounts to new franchisees to stimulate unit growth when development activity starts to slow down. Can you remind us of the cyclical behavior associated with that?

Absolutely. So if you think about it and if you go back to the prepared comments, Shaun, I think it's clear that based on what we have in the pipeline today, those agreements that have already been signed based on what we're seeing from a pricing perspective, the value prop, et cetera, we would expect to see continued growth in that effective royalty rate through 2020. Obviously, I wouldn't expect to see a 10 basis point increase going forward. We talked about that earlier this year that we would see it moderating back to, call it, those low to mid-single digits. Now in an environment where development activity slows a little bit, you tend to see some discounting. So you might see some pressure on that effective royalty rate in the out years. But obviously, we can't give formal guidance right now on what we think that effective royalty rate is going to be in 2021 and beyond.

Great. My other question relates to some comments made by Pat in the prepared remarks. I understand that 10% of your hotels participate in the fee deferral program, so thank you for clarifying that. Can you provide more details about what this program entails? Specifically, what fees are eligible for deferral? Most importantly, does this affect the royalty rate, or is it part of other components of the overall system fees?

Sure. Broadly speaking, we offered discounts on fixed fees to our franchisees for services like revenue management. The franchise and marketing fees are part of a tailored program we developed strategically. About 60% of our portfolio has occupancy rates above 25%, so not everyone required relief. Our approach was more targeted rather than programmatic for fee deferrals, which could include a mix of franchise or marketing system fees. We’ve also allowed our franchisees a longer timeframe to repay, focusing on their short-term liquidity needs while preparing for potential downturns. Additionally, we're entering this downturn with a different brand portfolio compared to the last. For instance, we do not discount WoodSpring, and the royalty rates for the Ascend Collection have increased significantly over the past decade. We’ve also raised the rack rates across our brands in the last three years, making our overall brand value in higher demand this time around.

Yes, Shaun. To address your question about the effective royalty rate, you shouldn’t anticipate any impact on revenue or effective royalty rates since these are deferrals rather than waivers of the royalty fee. A significant portion of the deferral is related to marketing and reservation fees. Overall, it’s quite minor, and you might see a net working capital drag of about $10 million to $20 million. However, we expect to collect those fees over the next one to three years. In the grand scheme of things, this is fairly immaterial, and we do not expect any impact on the effective royalty rate or royalty revenues.

Our next question comes from Michael Bellisario with Baird.

Just thinking out a little bit, I guess, the big picture question is, when can you go on offense? And I guess I'm asking it from both a strategic perspective but also in the context of any restrictions that are in place because of your new term loan in your credit agreement that might limit your ability to invest in the near term? How should we think about both of those aspects of going on offense?

Yes, I believe that our business model is resilient and can thrive in both rising and declining demand cycles. This is due to our diverse construction and conversion portfolios, which allow us to adapt without needing to rely solely on new constructions. Think of it as having two essential components that keep our entire operation moving, regardless of market conditions. We've consistently shown growth, with our leading brand last year being the top performer in the mid-scale segment, entirely comprised of conversions. Simultaneously, we're developing a significant number of new construction properties within our Comfort brand. This dual approach caters to a variety of owners, whether they prefer new constructions or conversions, even during favorable economic times. Looking ahead, I anticipate that conversions will play a larger role in our unit growth over the next few years as we bounce back from the impacts of COVID-19.

Okay. Regarding the balance sheet and the term loan, we approached this with caution. It wasn't a necessity, but it allowed us to increase our liquidity. Overall, it was quite cost-effective compared to what others in the industry have experienced. The term loan had covenants similar to our current credit facility, along with an option to extend for another year. This provides us with two years of liquidity. Importantly, we haven't needed any covenants relief, placing us in a solid position with our balance sheet to act quickly. Our net debt remains around 2.5 times, and we are confident about our leverage situation.

Got it. That's helpful. And then just one follow-up from the prior question, maybe in that $10 million to $20 million net working capital drag that you referenced. Any other cash inflows, outflows that might impact the balance sheet, at least in the near term? Or anything else that could be offsetting the recurring operating cash flows that are coming in every month?

When considering the typical capital expenditures for the company, it ranges from approximately $30 million to $35 million annually. As I noted earlier, we have successfully reduced our selling, general, and administrative expenses by about 25%. This figure is net of certain severance and restructuring costs, and if those charges are excluded, the reduction is closer to 30%. In terms of capital, we have also lowered our capital expenditure forecast for the year by slightly over 20%. We anticipate that maintenance capital expenditures will fall below 30%. The remaining expenditures are largely discretionary, allowing us to assess the environment as needed. We have been cautious and disciplined in how we allocate capital, whether it be for internal strategic initiatives or returning funds to shareholders in the long run, and we will continue to approach this prudently before deploying any capital.

Our next question comes from Robin Farley with UBS.

I wonder if you could talk about the potential for whether you have interest in acquiring more extended-stay brands. It seems to be obviously a big strength here in the portfolio. You've made acquisitions in the past. Or do you feel like the brands you have are enough to capture that potential growth in demand?

Thanks, Robin. We've talked in the past about, clearly, there's white space in our portfolio for an upscale extended-stay brand. So there may be an opportunity to do something in that space. I mean we're really excited about the performance of WoodSpring, mainstay and suburban, particularly over the last 8 weeks. And the introduction of Everhome in January, it's really tailor-made for this type of environment. And so that's a brand that brings our expertise in the mid-scale segment and the extended-stay segment together in something that is purpose-built for the extended-stay business. We've done the analysis. Last year, it was, I think, 20% of the room nights in the U.S. Our first-ever night stays are above, but only 9% of the supply is actually purpose-built for that. And there's a big opportunity, we believe, in the mid-scale segment for something that is new and fresh and allows guests to really tailor the workspace and living space in the accommodation. So we're really bullish on Everhome. We think it will be an opportunity for us to grow even during this downturn as we have during prior downturns.

I am not particularly interested in any acquisitions or extended stay options.

Not at this point. I mean, we look at everything that comes along. And as I've said in the past, it's really got to pass 2 litmus tests. One, can Choice Hotels improve the ROI of the asset owner? And two, can I grow the brand to benefit our shareholders? And if something were available, we would look at it. It's those same two litmus tests that we always look at. And I think if you look at our acquisition of WoodSpring, it followed that path perfectly. So that's how I would sort of answer the M&A question.

Our next question comes from Jared Shojaian with Wolfe Research.

So it's probably way too early to see any evidence of foreclosures. But can you just talk about your expectations around that idea? And can you talk about what that process looks like in terms of what fees are paid to you during the transition and how we should think about the brand remaining intact?

Are you talking about hotels that might not make it through this downturn? Jared, is that your...

So the way that I would think about it is to go ahead.

No. Go ahead, Dom.

The way that I would think about it, Jared, it's really the profile of our franchisee. So on average, our franchisee owns fewer than 2 hotels. It's primarily financed with equity. And so it's not our possibility to see higher than 50% equity that's injected into these assets. So the foreclosure risk in our portfolio is very low. Even during the Great Recession, we saw very few foreclosures in the portfolio. So feel like we're in a very strong position overall from that regard. Obviously, we would continue to work with our franchisees to avoid something like that. But overall, we're not seeing that. That's immaterial risk to our portfolio.

Okay. And then I think you said 2/3 leisure travel, so implying roughly the other 1/3 is business travel. Can you just talk about that type of business traveler? And maybe how that differs from like some of the more full-service-oriented brands? And are these people usually traveling by air to get to your properties? Can you just help us understand that dynamic a little bit better?

Yes. Jared, it's certainly more driven by direct travel. About 5% of our portfolio is located in airport markets, but even in those areas, we accommodate airline crews and cargo personnel. When we discuss transportation, we are referring to truckers, railroad companies, logistics professionals, as well as trainers and IT support staff. We also see significant business travel from traveling nurses in healthcare and education services. Notably, the recent jobs report indicated that these sectors experienced fewer job losses compared to others. The hospitality sector, however, has faced substantial challenges. Our core customers on the business travel side, representing one third of our clientele, are essential for maintaining the country's operations. They have been consistently staying at our hotels over the past eight weeks, and we anticipate that trend will continue, making up the majority of that one third of business travelers.

Okay. That's helpful. And just one more quick one, if I may. Do you have your cash burn number for the month of April? And is there any sense you can give us in terms of this RevPAR environment how to be thinking about sort of your monthly burn, if there's even a burn at all?

Yes. I'll provide a headline, and then Dom can elaborate. We've assessed that in a situation with no revenue, we have sufficient cash to sustain operations for about two years without making any structural changes. In the current revenue environment, we can maintain this pace for three years. Our cash position and liquidity are strong. Dom, would you like to add anything?

Yes, Jared. The way I would think about it is your cash expenses, obviously, with no revenue coming in the door somewhere in the ballpark of that $30 million figure, which is where if you take the $725 million of capacity and divide it by that, it gets you to, call it, close to that 24-month period. So actually slightly a little bit higher than 24 months. If you assume that the trends that you've seen in the last, call it, 1 month to 1.5 months in a very low occupancy environment continued through the 3 years or so, which obviously, we don't expect either of those things to happen, the draconian no revenue environment or even continuing to see what you're seeing today, that's probably more like a net $20 million or so per month, which is putting you out to that three year period of time. And so obviously, in the last week or so, we've seen those occupancy levels rise by 200, 300, 400, 500 basis points. So that would only further reduce that $20 million of cash burn.

Our next question comes from Thomas Allen with Morgan Stanley.

Thanks for the positive commentary on the occupancy improvements you're seeing. Any color on how pricing is trending? And any expectations for how pricing is going to trend in the future?

Yes. In the whole sort of slide since the beginning of March, with RevPAR, it's been about 2/3 of that has been an occupancy decline and about 1/3 of it was rate. So what has been really positive to see is that our franchisees have not tried to chase demand that wasn't out there by lowering rate. And that's going to be really important as recovery has started to occur. So Thomas, it's really been about 2/3 occupancy, 1/3 rate in the mix of RevPAR as we've seen over the last 8 weeks.

Okay. Helpful. And then can you just help us think through kind of what the labor expenses for one of your typical franchisees and like how flexible it is when properties are closed and then when they're kind of in this kind of demand environment?

Sure. It really varies depending on the type of hotel. For example, a WoodSpring hotel might have around 5 full-time employees, while a Comfort Inn could have about 25, and a Cambria could have even more. The number of staff largely depends on the seasonal demand in their markets, and our owners adjust their housekeeping and sales teams accordingly. This is quite variable, and they are accustomed to making these adjustments based on demand fluctuations. Typically, one of the slowest periods for hotels is the week between Christmas and New Year's, which usually has the lowest occupancy rates. However, the situation in March was unexpected for them. They have a strong capability to modify their payroll in response to changing conditions. Programs like PPP and EIDL loans are assisting them during this challenging 8-week period. There are also relief options available at both federal and state levels that enable owners to retain their workforce. This support is crucial as the timeline for demand recovery remains uncertain, and they want to be prepared to rehire staff when demand does pick up. This gives you a general idea of labor staffing at hotels and the flexibility owners have with managing their workforce.

Our next question comes from David Katz with Jefferies.

I wanted to just go back to development efforts and I recognize it's an issue that we've discussed in the past about Cambria development, in particular, where you put some capital out. I think you usually give us an update on what that balance is. Can you talk a bit about what's in there and where that capital stands today?

Thank you for the question, David. It's quite similar to what we discussed last quarter from a high-level perspective. Currently, the net capital outstanding is just above $580 million, which reflects a slight increase. As I mentioned previously, a significant portion of that amount consists of owned assets. From the $581 million, around 50% is in owned assets, about 15% is key money, slightly over 10% is from joint ventures, and the rest are mezzanine loans. I want to emphasize that we are very positive about the Cambria brand. We have 50 hotels currently operational, with 25 hotels under construction and an additional 60 to 70 in the development pipeline. This is an area where our consistent capital expenditure is around $30 million, and any additional spending is discretionary. If a solid Cambria project arises, we can invest capital accordingly. This flexibility allows us to adjust our spending as needed. Overall, the portfolio has room for growth, as we have discussed aiming for 75 to 100 locations, and you can see that in the current operational and planned projects. I wanted to ensure you have the complete picture regarding the $580 million.

Yes. Good to hear. And if I can follow-up quickly on a number of companies have talked about a breakeven occupancy level. In your case, I assume it would apply both at the hotel level. And then I suppose, corporately, the better question is really where earnings neutral based on the changes that you've made so far?

Yes, if we look at it across the entire system, the occupancy rate is approximately 30%. This varies between economy hotels and Cambria, but for our largest brands like Comfort, Quality, and Econo Lodge, around 30% is the breakeven point, which includes debt service. Additionally, there are hotels where the owners have completely paid off their mortgages. Each owner is in a unique situation based on factors such as land costs and mortgages. Overall, 30% is the breakeven for the mid-scale segment, and it is slightly higher for the Cambria segment. This is the occupancy level we've been experiencing over the past few weeks.

Our next question comes from Anthony Powell with Barclays.

You just mentioned that you had 60 Cambria hotels in the pipeline. Are those fully financed? And how do you see this event changing the hotel financing market over the long run? Do you expect to see more equity required or cash reserves required? And how does that impact your strategy?

So just to give you a breakdown, there's 50 that are open. There are 25 that are going vertical. So obviously, the ones that are going vertical are financed, and there's 60-plus additional in the pipeline, of which a portion are obviously financed. And so overall, what we saw pre-COVID was somewhere where you saw the LTCs reducing from, call it, 75% down to 65% or so. And certainly, we've seen a little more hesitancy in some of the lenders lending the money in this environment. Obviously, we would have to reevaluate once we get on the tail end of this. But overall, like I said, just what the 25 that we have that are going vertical today, we're feeling very comfortable. In terms of what we think the future LTC is going to be, a little too early to tell right now given the fact that most of those are financed at this point. But out of the 60, we still feel really good about those that are under construction.

Got it. And you talked about revenue intensity a lot in the past couple of years. How do you keep pushing that revenue intensity up as you seek more conversions in this environment? Do you want to convert high-end properties in any kind of chain scale? Or what's the approach there?

Yes. I think it's really looking at those segments and locations where the higher revenue opportunities are for us as a company. And I think those are still going to be there. I think from the standpoint of continuing to push new construction Comforts into markets where there is a higher RevPAR opportunity, that's what's in our pipeline now. And a significant amount of that is under construction at Comfort, WoodSpring. I mean there's a lot of opportunity that we still see by having our hotels in these higher revenue-intensive locations. And then also the segments that they're in also will, over time, I think, improve the revenue intensity on the average across the entire portfolio because of that approach.

At this time, there are no additional questions. I would like to turn the conference back over to Pat Pacious for any closing remarks.

Thank you, Operator. Thanks again for your time this morning. These are undoubtedly challenging times, but there are opportunities going forward into the second quarter as well. We see several reasons our franchisees are better positioned than those to capture demand as the economic conditions improve. So I hope you all will stay safe and healthy, and we'll talk to you again this summer. Take care.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.