Comfort Inn 2008 Annual Report Download - page 6

6 CHOICE HOTELS INTERNATIONAL
Internationally, Choice’s operations remain profi table and
our revenues are growing. The company views international
expansion as a strong driver of our future growth. In 2009,
we will focus on improving our international reservations
delivery in order to better meet the needs of our more than
1,100 international hotels. We also anticipate developing a
long-term international strategy focused on achieving scale
in key emerging markets where there is tremendous need
for mid-market lodging alternatives such as those provided
by our core brands.
DRIVE RESERVATIONS
DELIVERY
In an economically challenging environment, hotel owners
seek to benefi t from access to a robust distribution platform.
Choice will continue to improve its value proposition for
existing and potential franchisees.
Choice is continuing to invest aggressively in marketing,
eCommerce and reservations efforts that will encourage
occupancy and capture trade downs to our value-oriented
brands. Once guests elect to stay at our hotels, it is
imperative we increase the likelihood they will return. The
Choice Privileges rewards program will be a key driver in
this effort, and our goal is to increase membership from 7.5
million members to 9.25 million members in 2009. To enable
us to achieve this growth target, we have launched several
innovative enrollment initiatives, and will also introduce the
program in Central America, South America and Australasia.
We continue to drive more reservations through our central
channels, which deliver a signifi cant rate premium over
hotel-direct reservations. Choice will continue to drive more
guests to choicehotels.com by accelerating investment in
both paid and organic Internet search efforts. We also will
launch a full redesign of choicehotels.com that will improve
the guest experience and retention and provide enhanced
brand positioning online.
In the current industry environment, we recognize the
importance of helping owners maintain rate integrity. We
will implement a property-level rate management tool
that promotes a best-available rate structure which will
allow properties to select from a set of predefi ned selling
strategies based on demand and market conditions, helping
franchisees optimize both rate and occupancy.
ACHIEVE OPERATIONAL
EXCELLENCE
The economic slowdown will require the company to ensure
it is achieving operating effi ciencies and leveraging the scale
advantages inherent in the core business. To that end, we
have identifi ed ways to limit the growth of selling, general
and administrative costs; assess infrastructure needs to
achieve desired operating effi ciencies; address information
technology requirements; and continue to build a talented,
engaged, and diverse workforce. The company is also
committed to elevating its profi le in the overall industry and
in the communities in which it operates.
MAXIMIZE FINANCIAL AND
SHAREHOLDER RETURNS
We remain committed over the long term to utilizing the
strong, predictable cash fl ows that our business generates
to return excess capital to our shareholders, primarily
through dividends and share repurchases. Through a
disciplined approach to capital allocation, we have returned
to shareholders over 99 percent of the more than $1 billion
in cumulative free cash fl ows (operating cash fl ows less
investing cash fl ows) that the company has generated since
its fi rst full year of franchising operations in 1998.
In 2008, the Board of Directors elected to raise the annual
dividend 8 percent to $0.185 cents per share per quarter. For
the year ended December 31, 2008, the company paid $43.1
million of cash dividends to shareholders.
For the year ended December 31, 2008, the company
purchased approximately 2.2 million shares of its common
stock at an average price of $24.56 for a total cost of
$54.7 million. Subsequent to December 31, 2008 and
through February 28, 2009, Choice repurchased an additional
0.7 million shares at a total cost of $18.0 million. Since