Ladies and gentlemen, thank you for standing by. Welcome to Choice Hotels International's Second Quarter 2024 Earnings Call. At this time, all lines are in a listen-only mode. I will now turn the conference over to Allie Summers, Investor Relations, Senior Director for Choice Hotels.

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 Forms 10-Q, 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 our second quarter 2024 earnings press release, which is posted on our website at choicehotels.com under the Investor Relations section. This morning, Pat Pacious, President and Chief Executive Officer, will speak to our second quarter operating results, while Scott Oaksmith, Chief Financial Officer, will discuss our financial performance and 2024 outlook. Following our prepared remarks, we'll be glad to answer your questions. And with that, I'll turn the call over to Pat.

Thank you, Allie, and good morning, everyone. We appreciate you taking the time to join us. I'm pleased to report that in the second quarter, Choice Hotels drove our adjusted EBITDA to $162 million, our adjusted EPS, 5% higher year-over-year, and raised our full-year adjusted EPS guidance. Over the past several years, we have created a stronger, more versatile company with multiple earnings drivers and a proven growth strategy. The increased versatility of our business model, combined with projected unit growth acceleration, provides us with the confidence to achieve our expected adjusted EBITDA growth of 9% at the midpoint of our outlook range for 2024, even as the domestic RevPAR environment has started to normalize. By increasing our system size, network of franchisee relationships, and customer reach, we have significantly increased our future growth opportunities. Importantly, we continue to grow our portfolio of revenue-intense hotels with domestic franchise agreements, up 8% year-over-year. These agreements are expected to continue to fuel a significantly higher RevPAR premium in our pipeline compared to our existing base of hotels. Our global pipeline of approximately 115,000 rooms set a record for the second quarter and represents a 22% increase year-over-year. We also accelerated the velocity of moving hotels from our pipeline to open hotels, executing 20% more global openings year-over-year in the second quarter. At the same time, we expanded our international portfolio by increasing the number of rooms by 1.6%. As we had anticipated, we saw a sequential improvement in domestic RevPAR performance in the second quarter versus both the prior year and pre-pandemic levels. In line with the industry, the pace of acceleration was slightly slower than we had previously expected. Therefore, our outlook for the remainder of the year has moderated. As the travel trends normalize when compared to 2019 levels, we expect our domestic RevPAR performance for the second half of the year to maintain the pace with the first six months of the year and exceed 2019 levels by approximately 10 percentage points at the midpoint of our guidance. Importantly, long-term business and leisure trends remain favorable. Our proactive strategic investments and more versatile business model have meaningfully enhanced our company's growth profile, and we remain confident in our ability to deliver sustained growth. The successful execution of our strategy continues to drive strong earnings, and I'm pleased with the progress we have made on each of our key priorities during the second quarter. In terms of driving more valuable growth, since we embarked on our distinct unit growth strategy of enhancing our franchise business with more revenue-intense hotels five years ago, we have expanded our mix of higher revenue-generating hotels by 6 percentage points. This mix shift now comprises 87% of our domestic hotel room portfolio, and we expect it to continue to increase in the coming years. These new revenue-intense franchises are more accretive to our earnings and have resulted in an upscaling of our portfolio. Importantly, they are a key driver of future growth as hotels within a brand, on average, generate royalty revenue over 20% higher than hotels exiting the brand. Our strategic focus on more revenue-intense hotels means that the pipeline continues to be a significantly higher value than the current hotel portfolio. This higher revenue contribution is driven by a few factors: one, the hotels in our domestic pipeline represent a RevPAR premium of more than 30% compared to our existing portfolio; two, they have higher average effective royalty rates driven by our strengthened value proposition to franchisees; and three, they have, on average, more than 40% higher room count per hotel than our current domestic system. With this positive momentum, we are very encouraged by our existing and future portfolio prospects. In the current hotel development environment, our core competency in best-in-class hotel conversion capability, which moves projects rapidly through the pipeline, is a key differentiator for winning new franchise agreements. In fact, of the domestic franchise agreements we executed for conversion hotels over the trailing 12 months, we opened 134 during the same period, a 14% increase over the same period of the prior year. Our conversion competency also allows us to successfully and quickly launch new brands. This is evidenced by our recent relaunch of Park Inn by Radisson, an innovative conversion brand that delivers a premium value lodging option at a low affiliation cost. With a compelling value proposition relative to peer offerings and a focus on ensuring the franchisees' success, we have had a strong initial reception. Specifically, we have already executed 19 global franchise agreements, of which 5 are open across the U.S. and Canada as of the end of June. With a total addressable market of more than 20,000 potential conversion properties for this brand, we believe there is a meaningful opportunity for this offering in the coming years. We expect this conversion core competency to continue to be a key growth driver throughout this year. In fact, as of the end of June, we grew our global rooms pipeline for conversion hotels by 5% quarter-over-quarter. In addition to the continued momentum in conversions, we are pleased to see increasing developer interest for our extended-stay and mid-scale new construction brands. We are very proud that for the second year in a row, J.D. Power ranked our WoodSpring Suites brand #1 in guest satisfaction among economy extended stay hotel brands. This strong guest reception is translating into increased interest from developers and attractive unit growth as the WoodSpring Suites brand grew nearly 10% in units year-over-year in the second quarter. In fact, the WoodSpring Suites brand represents over two-thirds of all the rooms under construction in the economy Extended Stay segment. Additionally, we are seeing particularly strong traction with our newest extended stay brand, Everhome Suites, with 4 hotels now open and 65 domestic projects in the pipeline, including over 20 under construction. This ongoing demand reaffirms our belief that our strategic commitment and continued investments in this cycle-resistant segment are driving a competitive advantage. In the mid-scale space, we increased the number of new construction projects in the pipeline for our Country Inn and Suites by Radisson brand by over 1,800 rooms. While applications for new construction Comfort brand hotels grew 25% year-over-year in the second quarter. With construction costs starting to normalize, our footers poured for new hotels are higher than expected. If interest rate cuts occur in the near future as anticipated, we expect to return to a more robust new construction and transaction environment, which will translate to acceleration in our development pipeline. Fueling our success is our ongoing commitment to strengthening the value proposition we provide to our franchise owners. This is supported by our investments in creating and continuing to enhance our best-in-class franchisee success system. The enhanced value proposition we continue to deliver is among the reasons why our existing owners choose to expand their hotel portfolio with Choice Hotels and contributes to our industry-leading voluntary franchisee retention rate. Over the past two years, we have grown the direct online contribution to our franchisees by over 8% in the first half of the year. And for Radisson Americas hotels, we continue to drive higher traffic and conversion rates, which translates to lower customer acquisition costs and higher margins for our franchisees. Specifically, since the digital integration back in August last year through June of this year, we drove an over 30% increase in reservations through our domestic direct online channels for the Radisson Americas brand year-over-year, with particularly strong results for the Country Inn and Suites by Radisson brand, which grew by over 40%. Thanks to our portfolio being better positioned and the more compelling value we now offer to our guests, we have meaningfully grown the size of our rewards program. Over the past five years, we added nearly 25 million Choice Privileges members, reaching over 66 million in total at quarter end. Specifically, subsequent to the Radisson Americas acquisition, our elevated hotel portfolio has enabled us to realize incremental organic growth of our rewards program, which was 9% higher this quarter. We also continued to enhance our rewards programs' redemption offerings. Our partnership with the world's largest independent hotel brand, preferred hotels and resorts, is now providing expanded opportunities for our rewards members to redeem their Choice Privileges points at a number of luxury domestic and international Virgin Hotels properties. Also, for the first time, we're offering our rewards members the ability to exchange their loyalty points for airline miles with several key international airlines, including Air France, KLM, and Turkish Airlines. Another benefit of our broader and higher-quality portfolio of hotels is that it allows us to attract more blue-chip national travel brands and strengthens our existing strategic partnerships. As we announced last quarter, we are excited about the long-term prospects of our partnership with AAA. In particular, AAA members now have the opportunity to automatically earn a Choice Privileges gold status, which expands our reward membership base with our most loyal travelers. Additionally, with more than 5,000 Choice Hotels within two minutes of a highway, we are ideally positioned to benefit from the ongoing affinity for drive-to vacations and the exposure to a 64 million AAA and its Canadian counterpart CAA member base. Another tailwind is our recently revamped partnership with AARP, which allows us to better tap into an attractive demographic that represents over 70% of all wealth in the United States. Since the relaunch of our partnership in September last year through the end of June this year, we have driven a sevenfold increase in stays booked with the AARP rate. I'd like to turn now to our international business, where we have more than doubled our international EBITDA over the past two years. We delivered another strong quarter with a 3% increase in RevPAR performance year-over-year, including a 5% growth in the EMEA region. At the same time, we expanded our international rooms portfolio by 1.6% year-over-year, highlighted by a twofold increase in openings. And we continue to see a significant opportunity to further gain international market share in the coming years as evidenced by our rooms pipeline, which has more than tripled compared to the prior year. We are making progress in onboarding the more than 4,000 rooms in France under our franchise agreement with Xenitude residential hotels. In fact, just in time for the Olympics, we opened a 400-plus room property at Paris Charles de Gaulle Airport. This strategic agreement will double our hotel footprint in the country. We're also pleased to have recently executed an agreement in Japan for over 2,200 rooms to be converted to our flagship Comfort brand portfolio. We expect all of them to be onboarded in the next two months as inbound demand in Japan is at an all-time high. In closing, even in the normalizing domestic RevPAR environment, with our multiple levers, we believe we have positioned Choice to deliver sustained earnings growth and create long-term value. We continue to generate attractive free cash flow annually, and our priority use of this capital is to reinvest in our organic growth, particularly in initiatives tied directly to driving the revenue intense growth of our brand portfolio, while returning excess cash to shareholders. We have positioned the company to capitalize on favorable long-term trends for propelling travel, including the increasing number of retirees, the continuation of flexible work arrangements, and the rebuilding of American manufacturing and infrastructure, all of which expand the pool of our target travelers. We are confident that these long-term trends that favor our brands will allow us to attract and capture an even larger share of leisure and business travel demand and enable us to maximize growth opportunities well into the future. I'll now turn the call over to our CFO, Scott.

Thanks, Pat, and good morning, everyone. Today, I will discuss our second quarter results, update you on our balance sheet and allocation of capital, and comment on our outlook for the remainder of 2024. For second quarter 2024 compared to the same period of 2023, revenues, excluding reimbursable revenue from franchised and managed properties increased 14% to $258.9 million, and our adjusted EBITDA grew 6% to a record $161.7 million. This was driven by a combination of the successful integration of the Radisson Americas portfolio, organic growth in more revenue-intense segments and markets, strong effective royalty rate growth, and the robust performance of our non-RevPAR-dependent programs. Our second quarter adjusted earnings per share also reached a record reporting $1.84 per share, a 5% increase year-over-year. Let me first discuss our key levers for franchise fee growth, which include our unit growth, royalty rate, and RevPAR performance. In terms of unit growth, our strategic goal has been to accelerate quality room growth across more revenue-intense brands and markets while simultaneously growing our effective royalty rates, which ultimately results in an outsized increase in royalties. For the second quarter, we reported domestic unit growth of 1% year-over-year across our more revenue-intense, upscale, extended-stay, and mid-scale portfolio. Supported by our expanded domestic pipeline, which has increased 11% year-over-year, we expect to see an acceleration of our growth for the remainder of the year and continue to anticipate achieving our full-year growth target of approximately 2%. At the same time, we increased the number of domestic franchise agreements for our revenue-intense brands awarded in the second quarter by 8% over the prior year. We also executed new hotel openings at an impressive pace. Through June, we averaged over 4 openings per week in the US. This resulted in a 10% increase in domestic openings year-over-year, with 118 hotel openings. Our deliberate decisions and strategic investments in our franchisee tools, brand portfolio, and platform capabilities are delivering solid results across our company. First, we strengthened our upscale franchise business. For the second quarter, we nearly doubled our upscale domestic rooms pipeline year-over-year. We expect to see continued strength in this segment over the coming years, fueled by strategic investments in transforming our upscale brands. Second, we accelerated our growth across the extended-stay brands portfolio. For the second quarter, we grew our domestic extended-stay unit system size by 14% year-over-year, and we remain on track to achieve a long-term average annual growth of 15%. And third, we continue to invest in our mid-scale portfolio. For the second quarter, we increased the number of domestic franchise agreements for our mid-scale brands awarded by 27% year-over-year and opened 30 new domestic mid-scale hotels. Our overall domestic mid-scale rooms pipeline increased 7% quarter-over-quarter, reaching over 23,000 rooms. Our effective royalty rate also continues to be a significant source of revenue growth. Our domestic system effective royalty rate for second quarter 2024 increased 5 basis points to over 5% year-over-year, representing approximately $5 million of incremental royalties on an annual basis. We continue to expect our full-year effective royalty rate to increase in the mid-single digits, driving significant growth in our overall adjusted EBITDA. This performance demonstrates the positive impact of our strategy to drive the growth of our revenue-intense brand portfolio and our enhanced value proposition to franchise owners. We are optimistic about the continued upward trajectory of our effective royalty rate for years to come, given that the contracts in our domestic pipeline have, on average, a 70 basis point higher effective royalty rate than those in our current portfolio of open hotels. The third revenue lever I will discuss is our RevPAR performance. Our domestic RevPAR growth accelerated in the second quarter, improving 540 basis points sequentially for the portfolio and has meaningfully exceeded our pre-pandemic levels. In fact, compared to 2019, the company increased RevPAR by 11%, improving average daily rates by 15.1% and achieving domestic occupancy levels of 96% of pre-pandemic performance. While our second quarter domestic RevPAR accelerated from the first quarter, the pace of acceleration was slower than anticipated. As a result, our RevPAR was down 50 basis points year-over-year, reflecting a 10 basis point increase in our occupancy levels, offset by a 60 basis point decline in average daily rates. For the second quarter, our overall domestic upscale portfolio delivered RevPAR growth led by our Radisson upscale brand, increasing 12.2% year-over-year. Notably, our Radisson upscale brand outperformed STR's upscale segment by 9 percentage points and achieved RevPAR index share gains versus competitors. Based on the recent trends of normalizing domestic travel and in line with the industry, we are lowering our US RevPAR guidance and now anticipate full-year domestic RevPAR to be in the range of negative 1.5% to negative 3.5%. We continue to build on the strong momentum of our platform business. Our ancillary fees benefit from expanded offerings to our franchisees and guests, increased transaction volume with our qualified vendors, and the broader reach of our initiatives. These fees more than doubled year-over-year in the second quarter. Continuing to expand our platform business and increase the number of products and services we offer is one of our key initiatives, and we believe that we can drive this strong revenue growth in the years ahead. In terms of capital allocation, we will continue to prioritize investing in our growth while also returning capital to shareholders. Our well-positioned balance sheet and growth trajectory, coupled with the significant valuation discount, provide us a very attractive return opportunity through the repurchase of shares. During the six months ended June 30, 2024, we generated nearly $114 million in operating cash flow, inclusive of franchise agreement acquisition costs, providing significant cash flow to both invest in profitable growth opportunities and provide substantial returns to shareholders. Year-to-date through July, we returned $347 million to shareholders, including approximately $43 million in cash dividends and over $304 million in share repurchases. We repurchased 2.5 million shares, representing over 5% of our outstanding share count, and we had approximately 4.3 million shares remaining in our authorization as of the end of July. In addition to the significant cash flows generated by our operating model, in July, we closed on a $600 million 10-year senior unsecured notes offering, which allowed us to pay down our $500 million term loan that was maturing at the end of the year and a portion of the borrowings on our revolving credit facility, reducing the effective cost of our borrowings. Importantly, we achieved the tightest credit spread in the company's history and upsized our offering from $500 million to $600 million. The offering was oversubscribed by 4.6 times, a powerful endorsement of our business model and its performance. We further enhanced our liquidity by upsizing our revolving credit facility to $1 billion and extending our maturity date to 2029. Subsequent to the quarter-end, we also fully divested the remainder of our holdings in Wyndham Hotels and Resorts. With a strong cash position and total available liquidity of approximately $530 million at the end of the second quarter, our capital allocation priorities remain unchanged. We intend to build on our long record of delivering outsized value by accretively investing to further expand our business. I'd like to now turn to our expectations for the remainder of the year. For the full year 2024, we are maintaining our adjusted EBITDA guidance while lowering RevPAR expectations, reflecting primarily disciplined discretionary investment spend as well as better-than-expected performance from our ancillary revenues. In addition, we are raising our adjusted earnings per share guidance to range between $6.40 and $6.65 per share, which is a 7% year-over-year growth at the midpoint to reflect our increased share repurchase activity and lower-than-expected interest expense. Our ability to continue to deliver attractive earnings growth in light of the normalizing RevPAR environment demonstrates the increased versatility of our model. This outlook does not account for any M&A repurchase of the company's stock after July 31 or other capital markets activity. We remain confident in the long-term growth of our franchise business with continued organic growth across more revenue-intense hotels and markets, the incremental contribution from Radisson Americas, robust effective royalty rate growth, continued earnings from our co-branded credit card, international business expansion, and other factors. We have made notable progress in executing on our strategic plan and creating a company with expanded scale, a versatile model, and a compelling value proposition for franchisees and guests. With this enhanced growth profile, we remain confident in our ability to deliver value for all of our stakeholders over time.

Sure. Thanks, Dany. When you look at our second half of the year, we effectively expect it to be very similar to the first half. We're going to see sequential improvement from Q3 into Q4. But because we're seeing the travel behaviors in the first half of the year, it looks pretty similar to what we saw in 2019, our expectations for the second half of this year are pretty much influenced by that pattern. So, when we step back and look at the long-term trend of what performance has looked like since 2019, we're really right in line with that long-term historical trend of average yearly RevPAR growth between 2% and 3%. And that's really a factor of the normalization that we talked about in our remarks. The day-of-week travel that we're observing over the last couple of years with the pandemic has sort of reverted back to the normalization that we saw in 2019. The booking window is closer in similar to what it looked like in 2019, and we're really seeing a reversion of locations where urban was sort of the last market to come back, and that has come back significantly. And that's just an area that our portfolio under-indexes. We're also seeing some different regions of the country outperforming where we under-index. So, a lot of it is driven by what we saw in the first half of the year and the similarities we see to the 2019 travel patterns that consumers were exhibiting back then. And that's why we sort of described this as more of a normalization back to what it looked like prior to the pandemic and the sort of ups and downs we've seen over the subsequent years.

Got it. Thank you very much. And in your prepared remarks, when you're talking about the international conversion agreements that you've been signing. Can you maybe just dig into the unit economics there? And how do these contracts look relative to your existing contracts that you have?

Yes. So I think as you're well aware, we go to market with two models, a direct franchise business, which has really changed since the Radisson acquisition. We have a much larger footprint and a new capability in the Americas region. We have a direct business now in Canada, which we didn't have before. It was just a joint venture. We also have a much more robust direct franchise business in the rest of the Caribbean and Latin America. The unit growth that we're seeing there and then the unit growth that we mentioned in France, these are direct franchise markets that are driving some of that growth. We're also seeing in our Master Franchise Agreements, we mentioned the Japanese partnership, which has been a long-standing really successful partnership for us over the years, adding units there as well. So it's really coming in both flavors. But I would say, the vast majority of the weight of that is coming in the direct markets.

Got it. And just one last follow-up. But can you just remind us of the current mix of your pipeline today, what's new build versus conversion? That’s it for me. Thank you.

Yes, I think that's really a pretty remarkable story. If you look at our current pipeline, about 36% of the domestic pipeline is conversion. And that's really been the key driver during a time where interest rates are elevated. 80% of our openings this year, year-to-date have been conversions, and 84% of the agreements we sold in Q2 were for conversion. When you look at the conversion agreements in mid-scale in particular, those agreements are up 31% year-to-date. It's a pretty significant driver. That's why we really want investors to understand the importance of velocity because a lot of these hotels may stay in the pipeline for three months because we have a pretty good capability of getting new conversion agreements into our pipeline and then ultimately opening in a very, very quick period of time. We're seeing that also as we mentioned in the remarks in the Park Inn by Radisson, with five open already when we effectively relaunched that in May. It's really a reflection of the speed of the velocity we can push through there. The exciting thing about the remainder, the other 64% of the pipeline, the new construction is. As we said in our remarks, we are seeing some green shoots. We're seeing interest in getting new construction contracts. We're seeing construction costs starting to moderate. The last piece that needs to fall into place is hotel financing, which is a function of interest rates coming down. If we do see that in the coming months, we expect we'll see that new construction pipeline start to move more rapidly than we've seen over the last 18 months.

Thank you very much.

Thanks Pat and good morning everyone. Today, I will discuss our second quarter results, update you on our balance sheet and allocation of capital, and comment on our outlook for the remainder of 2024. For second quarter 2024 compared to the same period of 2023, revenues, excluding reimbursable revenue from franchised and managed properties increased 14% to $258.9 million, and our adjusted EBITDA grew 6% to a record $161.7 million. This was driven by a combination of the successful integration of the Radisson Americas portfolio, organic growth in more revenue-intense segments and markets, strong effective royalty rate growth, and the robust performance of our non-RevPAR-dependent programs. Our second quarter adjusted earnings per share also reached a record reporting $1.84 per share, a 5% increase year-over-year. Let me first discuss our key levers for franchise fee growth, which include our unit growth, royalty rate, and RevPAR performance. In terms of unit growth, our strategic goal has been to accelerate quality room growth across more revenue-intense brands and markets while simultaneously growing our effective royalty rates, which ultimately results in an outsized increase in royalties. For the second quarter, we reported domestic unit growth of 1% year-over-year across our more revenue-intense, upscale, extended-stay, and mid-scale portfolio. Supported by our expanded domestic pipeline, which has increased 11% year-over-year, we expect to see an acceleration of our growth for the remainder of the year and continue to anticipate achieving our full-year growth target of approximately 2%. At the same time, we increased the number of domestic franchise agreements for our revenue-intense brands awarded in the second quarter by 8% over the prior year. We also executed new hotel openings at an impressive pace. Through June, we averaged over 4 openings per week in the US. This resulted in a 10% increase in domestic openings year-over-year with 118 hotel openings. Our deliberate decisions and strategic investments in our franchisee tools, brand portfolio and platform capabilities are delivering solid results across our company. First, we strengthened our upscale franchise business. For the second quarter, we nearly doubled our upscale domestic rooms pipeline year-over-year. We expect to see continued strength in this segment over the coming years fueled by strategic investments in transforming our upscale brands. Second, we accelerated our growth across the extended-stay brands portfolio. For the second quarter, we grew our domestic extended-stay unit system size by 14% year-over-year, and we remain on track to achieve a long-term average annual growth of 15%. And third, we continue to invest in our mid-scale portfolio. For the second quarter, we increased the number of domestic franchise agreements for our mid-scale brands awarded by 27% year-over-year and opened 30 new domestic mid-scale hotels. Our overall domestic mid-scale rooms pipeline increased 7% quarter-over-quarter, reaching over 23,000 rooms. Our effective royalty rate also continues to be a significant source of revenue growth. Our domestic system effective royalty rate for second quarter 2024 increased 5 basis points to over 5% year-over-year, representing approximately $5 million of incremental royalties on an annual basis. We continue to expect our full year effective royalty rate to increase in the mid-single digits, driving significant growth in our overall adjusted EBITDA. This performance demonstrates the positive impact of our strategy to drive the growth of our revenue-intense brand portfolio and our enhanced value proposition to franchise owners. We are optimistic about the continued upward trajectory of our effective royalty rate for years to come, given that the contracts in our domestic pipeline have, on average, a 70 basis point higher effective royalty rate than those in our current portfolio of open hotels. The third revenue lever I will discuss is our RevPAR performance. Our domestic RevPAR growth accelerated in the second quarter, improving 540 basis points sequentially for the portfolio and has meaningfully exceeded our prepandemic levels. In fact, compared to 2019, the company increased RevPAR by 11%, improving average daily rates by 15.1% and achieving domestic occupancy levels of 96% of pre-pandemic performance. While our second quarter domestic RevPAR accelerated from first quarter, the pace of acceleration was slower than anticipated. And as a result, our RevPAR was down 50 basis points year-over-year, reflecting a 10 basis point increase in our occupancy levels, offset by a 60 basis point decline in average daily rates. For the second quarter, our overall domestic upscale portfolio delivered RevPAR growth led by our Radisson upscale brand, increasing 12.2% year-over-year. Notably, our Radisson upscale brand outperformed STR's upscale segment by 9 percentage points and achieved RevPAR index share gains versus competitors. Based on the recent trends of normalizing domestic travel and in line with the industry, we are lowering our US RevPAR guidance and now anticipate full year domestic RevPAR to be in the range of negative 1.5% to negative 3.5%. We continue to build on the strong momentum of our platform business. Our ancillary fees benefit from expanded offerings to our franchisees and guests, increased transaction volume with our qualified vendors, and the broader reach of our initiatives. These fees more than doubled year-over-year in the second quarter. Continuing to expand our platform business and increase the number of products and services we offer is one of our key initiatives, and we believe that we can drive this strong revenue growth in the years ahead. In terms of capital allocation, we will continue to prioritize investing in our growth while also returning capital to shareholders. Our well-positioned balance sheet and growth trajectory, coupled with the significant valuation discount, provide us a very retractive return opportunity through the reasons of shares. During the six months ended June 30, 2024, we generated nearly $114 million in operating cash flow, inclusive of franchise agreement acquisition costs providing significant cash flow to both invest in profitable growth opportunities and provide substantial returns to shareholders. Year-to-date through July, we returned $347 million to shareholders including approximately $43 million in cash dividends and over $304 million in share repurchases. We repurchased 2.5 million shares representing over 5% of our outstanding share count and we had approximately 4.3 million shares remaining in our authorization as of the end of July. In addition to the significant cash flows generated by our operating model, in July we closed on a $600 million 10-year senior unsecured notes offering, which allowed us to pay down our $500 million term loan that was maturing at the end of the year and a portion of the borrowings on our revolving credit facility, reducing the effective cost of our borrowings. Importantly, we achieved the tightest credit spread in the company's history and upside of our offering from $500 million to $600 million. The offering was oversubscribed by 4.6 times, a powerful endorsement of our business model and its performance. We further enhanced our liquidity by upsizing our revolving credit facility to $1 billion and extended our maturity date to 2029. Subsequent to quarter end, we also fully divested the remainder of our holding in the Wyndham Hotels and Resorts. With a strong cash position and a total available liquidity of approximately $530 million at the end of the second quarter, our capital allocation priorities remain unchanged. We intend to build on our long record of delivering outsized value by accretively investing to further expand our business. I'd like to now turn to our expectations for the remainder of the year. For the full year 2024, we are maintaining our adjusted EBITDA guidance while lowering RevPAR expectations, reflecting primarily disciplined discretionary investment spend as well as better-than-expected performance from our ancillary revenues. In addition, we are raising our adjusted earnings per share guidance to range between $6.40 and $6.65 per share, which is a 7% year-over-year growth at the midpoint to reflect our increased share repurchase activity and lower-than-expected interest expense. Our ability to continue to deliver attractive earnings growth in light of the normalizing RevPAR environment demonstrates the increased versatility of our model. This outlook does not account for any M&A repurchase of the company's stock after July 31 or other capital markets activity. We remain confident in the long-term growth of our franchise business with continued organic growth across more revenue-intense hotels and markets, the incremental contribution from Adison Americas, robust effective royalty rate growth, continued earnings stream from our co-branded credit card, international business expansion and other factors. We have made notable progress in executing on our strategic plan and creating a company with an expanded scale, a versatile model and a compelling value proposition for franchisees and guests. With this enhanced growth profile, we remain confident in our ability to deliver value for all of our stakeholders over time.

It's still early in our planning process, but looking at the broader economic picture, we observed GDP growth in the US last quarter, which typically leads to an increase in RevPAR after about six months. A positive GDP outcome in the second quarter usually results in a favorable RevPAR landscape. Additionally, while many focused on last week's job report, a noteworthy detail was the rise in the labor force participation rate, indicating a return to normalcy. When consumers are employed, they tend to travel more, driven by greater confidence, whether for business or leisure. The labor force participation rate is a key predictor of RevPAR growth. As we consider 2025, if these trends persist, we can expect continued support for RevPAR and the travel sector.

Great. Thank you. And then just quickly then on the follow-up for 2Q, it looks like G&A was higher in the quarter adjusted G&A. Was there any onetime in that, any drivers there?

Yeah. In terms of our SG&A, we're still on track for our full-year target of being up about mid-single digits. In terms of year-over-year comps, we did have some credit recoveries in the prior year quarter, which made the SG&A look a little elevated quarter-over-quarter. We also during the second quarter have our annual franchisee convention. Costs were a little bit elevated on that, but they were offset by additional revenues during the quarter, so really just a comp issue. We still remain on track for our full-year targets for SG&A.

Great. Appreciate it. That’s helpful. Thanks.

Great. Thanks. I just wanted to understand a little bit better with the RevPAR guided down in EBITDA unchanged. You mentioned some non-RevPAR drivers. If you could give a little bit more color on that? Thanks.

Sure, Robin. I'll start and then Scott can kind of fill in the color. I mean, effectively, a lot of this is really just a reflection of the versatility of the business model that we have created and its ability to drive growth. The key driver here is effectively the unit growth in this more revenue intense brands is accelerating. On top of that, you put the effective royalty rate growth that we talked about, the robust performance of our non-RevPAR dependent programs. The performance that we're seeing from the Radisson integration are showing up in our co-brand credit card. They're showing up in some of our strategic partnerships as well. We've created a business that's effectively less reliant on US RevPAR only. The business or the system mix from the standpoint of larger room count hotels, higher effective royalty rate hotels is really a factor that's continuing to support the financial performance of the company and making us as a business less sensitive to U.S. RevPAR; it's still a key factor, but it's not as large of a factor as it has been in the past.

Just to add to that, as Pat mentioned, we shared with our building blocks before how we got to that midpoint of our guidance of being around 9% growth. And really everything other than RevPAR has remained intact. We've seen the acceleration, as Pat mentioned. So on the core royalty fees, we still are growing our effective royalty rate mid-single digits and our unit growth of 2%. So that's effectively driving about 3% of EBITDA growth. Our platform and procurement businesses on our core business continue, which includes our co-branded credit card continue to perform well. That's producing about a 2% growth in EBITDA. Our international and owned hotel portfolio continues to be aligned with our original targets of growth about 2%. Where we've seen the outperformance to offset the RevPARs are really the acquisition of Radisson continues to provide significant growth to our EBITDA in our initial guidance. We thought it would be about a $20 million lift, which is accretive to our EBITDA by about 4%. Given our success in unlocking some of those revenue synergies, we are now revising that estimate up to contributing about 6% EBITDA. That outperformance there is offsetting anything on the RevPAR side.

Good morning. You mentioned that the reduction in RevPAR growth in the guidance and its impact on EBITDA was offset, I think you mentioned less discretionary investments and better ancillary revenues. I was hoping you can quantify that amount of incremental EBITDA benefit from those two items. And then, how sustainable are those levels of lower investment spend and ancillary fee generation? How sustainable they are going into next year?

So as I was just saying with Robin's question, when you think about that, taking about 4% EBITDA growth on the Radisson piece, up to 6%, really that's about $1 million to $2 million there of what we're seeing better flow-through from being able to plug the Radisson franchisees into our overall services and things like growing our co-branded credit card. We should be able to continue to grow those revenue streams as we continue to grow the size of the portfolio. So I would expect those to kind of grow in line with both RevPAR and unit growth going forward. In terms of the discretionary investments, it is a minor amount of discretionary investments, as I mentioned, we're still on track for the mid-single digits. Given a little bit softer environment, we've trimmed a few discretionary investments we had; if the market gets better in RevPAR returns, we can add those back. The majority of it was the better performance on the synergies we're seeing from the Radisson integration.

Hi. Thank you. I know in the past, you've talked about expectations for high single digits EBITDA growth, I believe, next year and possibly beyond. Still feel comfortable with that expectation? Thank you.

Yes, Patrick, I think at this point, it's kind of too early to start talking about 2025. When we look at the back half of the year and the uncertainties in the economy and forecasting from both economic forecasters, STR, and the like. We kind of want to get a read into how the next six months is going to play out. I mentioned some of the key factors that will be drivers at the macro level of new development, particularly as everybody knows, it's interest rates will eventually lead to more hotel financing. That's the key question, and I think that we will get a lot more clarity between now and the end of the third quarter.

Thank you. Your next question is from Brandt Montour from Barclays. Please ask your question.

Hi. Good morning everybody. Thanks for taking the question. So one clarification in the actual 2Q report. If we look at the marketing and reservation system revenue and expenses, and see the delta there and then look at that line and the adjusted EBITDA walk, it applies like a $15 million good guy for the quarter, you had $12 million last quarter. So that step up, I'm assuming is what you're calling out in terms of the better ancillary,... So I guess my question is, is that for all? Is that revenue ancillary services for all of your system? Or is that just specific to Radisson? Anything else you can tell us about that line because that is higher than I think you were looking for $10 million to $12 million for the rest of the year and that quarterly for that line.

Yes. It's reflective of the entire system. But I would say the growth that we're seeing is plugging the Radisson hotels into that. Our system has outperformed where we had thought. Setting that up is slightly higher than where we expected, as you mentioned before, $8 million to $10 million on the last quarter. So, this quarter, we were closer to about $12 million on that and we would expect something similar in the third quarter. We also started this program change in the fourth quarter of last year, so we will start lapping the comps in Q4.

Great. Thanks. I just wanted to understand a little bit better with the RevPAR guided down in EBITDA unchanged. You mentioned some non-RevPAR drivers. If you could give a little bit more color on that? Thanks.

Sure, Robin. I'll start and then Scott can kind of fill in the color. Effectively, a lot of this is really just a reflection of the versatility of the business model that we have created and its ability to drive growth. The key driver here is effectively the unit growth in this more revenue-intense brands is accelerating. On top of that, you put the effective royalty rate growth that we talked about, the robust performance of our non-RevPAR dependent programs. We are seeing significant revenue increases due to the Radisson integration and those things are really now embedded across the company. Our co-brand credit card is performing well, strategic partnerships as well, so we’ve created a business that is effectively less reliant on US RevPAR only. Yeah. I think one of the positive drivers, that’s really reflected in sort of when you look at the revenue intensity of the brands that we're selling, it's beyond RevPAR. It's the effective royalty rate and the room counts in these hotels are driving higher royalties as a result. So I think you have to be thoughtful about kind of where the mix shift is going. It's why we're super excited and Scott walked through the numbers about the extended stay segment. There is a huge amount of supply and demand imbalance there where purpose-built supply is significantly under the demand for extended stay room nights. Our WoodSpring Suites brand is effectively 70% of the new construction going on across the industry in that economy extended-stay segment. So we feel really good about the value proposition we have there, the brand we have there, which is a proven model, proven prototype, proven operating performance, and proven exit for a developer. Those are the things that we see long-term trends continuing to fuel growth in extended-stay. Secondly, the upscale continues to be a real positive trend line for us, both in our development pipeline and in our openings that we're seeing. The Radisson acquisition is going to really help fuel that growth because those are brands that are sought after in the upscale segment and above. We are pretty confident in the next five years that our growth in those two segments will continue to be strong.

Good morning. Thank you very much for taking my questions. Just two pieces. Firstly, on the Japan deal. Could you talk about the royalty rates you expect to get that broader international business if there's something special or different about it? And then in your comments, you talked about not doing some discretionary cost spends this year, and that to help protect the EBITDA. Discretionary content are not doing the costs yet. So could you just talk about what they are and whether we should then think about them being part of the cost base for next year that sort of being pushed back?

On the Japan deal, those are part of our master franchise agreement. When we have those deals where the master franchise partnership works is we do sublicense our brands to local partners and then grow them. The royalty rates will be slightly lower than where you would see both in the US and the direct franchising market; however, there are no costs to support it. The EBITDA flow-through was quite higher, so thinking in the 1% to 2% range. But as I mentioned, no costs, so straight to an EBITDA flow-through on those. Regarding the SG&A piece, it wasn’t a material effect; really just matching up some of the initiatives that we had to the environment we're in. We do see some green shoots on new construction and I think that's coming up. That’s a little bit longer to come back than we thought earlier in the year, thus we just pared some of our spending related to when hotels are going to open. Our opportunities are to sell more deals. The additional spending for SG&A shouldn’t affect the margins in any incremental spend; but largely, we remain in line with where our overall SG&A targets were for the year.

Thank you. There are no further questions at this time. I will now hand the call back to Pat Pacious for the closing remarks.

Thank you, operator. Thanks again, everyone, for your time this morning. We'll talk to you again in November when we announce our third quarter results. Have a great rest of your day.

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines. Goodbye.