Ladies and gentlemen, thank you for standing by. Welcome to Choice Hotels International's second quarter 2021 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 Director for Choice Hotels. Good morning, and thank you for joining us today. Before we begin, we'd 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. Moreover, we'd like to acknowledge that there continues to be uncertainty as to the impact of the COVID-19 pandemic on our future performance. 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 2021 earnings press release, which is posted on our website at choicehotels.com under the investor relations section. This morning, Pat Pacious, our President and Chief Executive Officer, and Dom Dragisich, our Chief Financial Officer, will speak to our second quarter operating results and financial performance. They'll be joined by Scott Oaksmith, Senior Vice President, Real Estate and Finance. Following Pat and Dom's remarks, we'll be glad to take your questions. With that, I'll turn the call over to Pat. Thanks, Allie, good morning, everyone. We appreciate you taking your time to join us. I'm pleased to report that Choice Hotels has continued to deliver strong results that once again, significantly outperformed the industry and gained share across all segments in which we compete. Our June and July RevPAR results exceeded 2019 levels by approximately 5% and 15% respectively, a truly remarkable achievement. For almost a year and a half, we've maintained significant RevPAR index share gains against the competition as compared to 2019. In fact, this quarter, we increased RevPAR index versus our local competitors by nearly five percentage points as compared to 2019 through notable lifts in both weekday and weekend RevPAR index, as reported by STR. Retaining these elevated competitive share gains, even as the broader industry recovers, illustrates that our strategic investments are working and gives us further optimism about our future revenue trajectory. Our goal is not simply to return to our 2019 performance levels, but rather to capitalize on current and future investments to fuel our long-term growth and drive our performance to new levels. As previously discussed, we were very intentional in our approach to investing prior to the pandemic to drive growth across the more revenue-intense hotel segments. While we reduced our overall spend in 2020 due to the pandemic, we continued to invest in key strategic areas. More importantly, in today's stronger demand environment, we see an outsized opportunity to continue or even accelerate strategic investments to capture a greater share of travel demand. What gives us optimism is that the bold investments we've continued to make are paying off. These include launching and enhancing brands in each of our strategic segments, namely expanding our upscale positioning, strengthening our mid-scale leadership role, and rapidly growing our extended stay portfolio. We're also improving our guest delivery at the hotel level while strengthening our marketing and reservation systems and franchisee tools that have contributed to the outperformance our brands are demonstrating. We are also bolstering our platform capabilities through the strategic partnerships that drive incremental revenue to our existing portfolio, allowing us to play in non-traditional segments such as gaming and all-inclusive resorts, among others. I will now outline more specifically why we are confident that we can continue to increase our share of travel demand in the years to come. First, we strengthened our existing brands and launched new brands to appeal to the customer of tomorrow in key segments that provide a compelling return on investment. Our strategic investments in the extended stay segment allowed us to quadruple the size of the portfolio over the past five years to reach 460 domestic units with a domestic pipeline of over 300 hotels. Last year, we launched our newest midscale extended stay brand, Everhome Suites. To provide franchisees an opportunity to capitalize on the best performing segment of the hotel industry. The interest level from multi-unit developers, backed by institutional capital for this new product is high, similar to what we are seeing with our WoodSpring Suites brand. In our mid-scale segment, we have reinvested in the future of our brand portfolio with Comfort's Move to Modern transformation. The Comfort portfolio grew its domestic unit count by 2.5% in the second quarter year-over-year, and recently celebrated the highest number of openings since 2014, while achieving RevPAR index gains versus its local competitors in the second quarter. Clarion Pointe has already experienced a five-fold increase of its portfolio since the end of 2019, ending the first half of the year with over 30 hotels open in the U.S. and more than 20 additional hotels awaiting conversion this year. At the same time, we rapidly grew our upscale segment. Specifically, we've increased the number of domestic upscale rooms by nearly 25% since the end of 2019, driven by impressive growth of both Cambria and the Ascend Hotel Collection. We also continue to invest in capabilities to further enhance our owners' value proposition and drive the bottom line results through value-added programs and resources to achieve higher levels of profitability. Notably, we enhanced our pricing and merchandising tools to further enable our franchise owners to reach their target customers and effectively drive top-line revenue. Thanks to these tools, we were successful in swiftly executing our pricing strategy and optimizing rate delivery, which resulted in significant average daily rate gains. The company is currently outpacing the rate recovery seen following prior recessions. Finally, we continue to propel our future forward by expanding our platform capabilities through signing strategic agreements with new travel partners in adjacent business segments. These platform expansion strategies enabled us to attract new franchisees and guests to the core brand portfolio and supplement investment in strategic brand growth with increases to high-margin affiliation fee streams. As discussed on our prior calls, we've been anticipating long-term consumer and demographic trends to drive a significant uptick in travel demand, and we've been making investments to capitalize on them. Specifically, we are benefiting from trends such as Americans rediscovering domestic destinations and the continued rise of road trips, an increase in workers retiring early, and the trend of work from anywhere, which affords Americans flexibility in where and when they travel for leisure. We now know that the pandemic has only accelerated these trends, and we believe that our business will therefore benefit in an outsized way from additional travel demand coming to our key segments. The investments we've made allowed us to capitalize on demand that has historically propelled our core business and also enabled us to attract and capture a larger share of leisure demand with customers who are new to our brands driving more revenue this year than in 2019. At the same time, we're benefiting from our most loyal customers, Choice Privileges Diamond Elite members, who are experiencing our new and refreshed brands, and who contributed an even higher percentage of overall revenue for the quarter as compared to 2019. Not only are our customers planning their travel further in advance, as witnessed by the continued lengthening of average booking windows, but we continue to see a slightly greater share of revenue coming from longer lengths of stay. While our expectation to capture a larger share of consumers' wallet among leisure travelers is already coming to fruition, we also see continuing momentum in our business travel trends with additional runway for growth. We have seen sequential quarter-over-quarter and month-over-month increases in our business travel booking trends in the second quarter 2021. Likewise, with our recent refresh of the Comfort brand family and further upscale penetration, we are well positioned not only to recover our existing business customers, but to expand our guest base as business travel rebounds. As a matter of fact, our group travel bookings reached 90% of our 2019 levels in the first half of the year, with key segments strongly rebounding and lead volumes steadily rising close to 2019 levels. The results we achieved confirm our focus to grow in our strategic segments, which will further fuel the long-term revenue intensity of our system. I'll now provide a brief update on our key segments, where all of our select service brands achieved RevPAR index gains versus their local competitors in the second quarter as compared to 2019. Our extended stay segment, a significant growth engine for the company, expanded by over 45 hotels in the second quarter year-over-year, and now represents over 10% of our total domestic rooms. For the second quarter as compared to 2019, WoodSpring Suites reported 16% RevPAR growth, and the brand's pipeline continues to expand, reaching 155 domestic hotels. Our Suburban Extended Stay portfolio expanded to nearly 70 domestic hotels open, representing 15% unit growth year-over-year. Additionally, franchise agreements awarded for the brand in the first half of the year exceeded levels reported in the same period of 2019. At the same time, our MainStay Suites mid-scale extended stay brand continued to capture nearly 14 percentage points in RevPAR index gains versus its local competitors as compared to 2019. The brand's portfolio of over 90 domestic hotels open experienced 27% year-over-year unit growth. We are especially pleased with a significant increase in developers' interest in new construction extended stay projects year-over-year as hotel financing begins to rebound. The high developer activity and interest reaffirm that our strategic commitment and continued investments in this highly cycle-resilient segment are driving a competitive advantage. Our mid-scale transient brands represent over two-thirds of our total domestic room portfolio and over half of the total domestic pipeline. Specifically, the Comfort family achieved a RevPAR change that was nine percentage points more favorable than the upper mid-scale chain scale in the second quarter as compared to 2019. In the first half of the year, the Comfort portfolio opened the highest number of the brand's conversion hotels in the past decade while increasing domestic new construction agreements by 20% year-over-year. With newly updated properties from coast to coast, a recently refreshed brand identity, and the new Rise and Shine prototype revealed this spring, the future is certainly bright for Comfort. Our upscale portfolio achieved impressive year-over-year growth in the second quarter, where we increased our domestic room count by 24%, marking a record for domestic openings in the first half of the year for the company, including 22 Penn National Gaming properties. The Ascend Hotel Collection leads the industry as the first and largest soft brand. The brand grew its domestic room count by 28% year-over-year and expanded to nearly 390 hotels open around the globe. In addition, Ascend Hotels outperformed the upscale segment RevPAR change by 26 percentage points for the quarter as compared to 2019. Our upscale Cambria Hotels brand continues its positive momentum, growing its portfolio size by 14% to 58 units, with 17 projects under active construction at the end of June, and approximately 10 additional hotels planned to open this year. These results are proof of Choice's value proposition in the upscale segment for our current and prospective owners. The recovery is not just about travelers returning. It's also about continuing to drive forward our efforts to improve the unit economics of our franchises. I've been traveling a lot since late March across the country, and every time I speak with our franchise owners, they are optimistic about the progress of their business recovery and the outlook for the remainder of the year. The close relationship we've had with our franchisees has always been strong, but the pandemic was an opportunity for us to strengthen this bond. Specifically, our owners are very pleased with the new pricing tool we recently introduced that has helped drive their top-line outperformance versus competitors, and with several initiatives we launched that reduce their total cost of ownership. Our franchisees are also benefiting from our strong business delivery. Thanks to our enhancements in our distribution capabilities, we recorded nine of our top 10 all-time highest booking days for choicehotels.com and other proprietary digital channels in the last two months. With such a powerful value proposition, it's no surprise why Choice has an industry-leading voluntary franchisee retention rate, and our franchise owners continue to seek and develop our brands. Aided by our strong value proposition for our current and future owners, we also experienced significant demand for new franchise contracts. In the first half of the year, we awarded 200 new domestic franchise agreements, a 32% increase over the same period of 2020. Likewise, demand for our conversion brands throughout the first half of the year has increased by over 40% year-over-year. In addition, our development and franchise service team that is fully dedicated to driving diverse ownership of Choice franchise hotels among underrepresented and minority owners has awarded nearly a dozen franchise contracts in the first half of the year, while growing and cultivating the number of women owners. We also continue to strengthen our platform business portfolio, which represents a highly revenue-intense extension for Choice. Our guests are increasingly engaging with our travel partners and continuing to benefit with additional travel options. While our more than 49 million Choice Privileges members have the opportunity to earn and redeem points at our travel partners' properties by booking their stays directly on choicehotels.com. In fact, we are seeing an increase in our domestic loyalty program sign-ups in the second quarter 2021 as compared to 2019. We are committed to enhancing our value proposition by further strengthening the platform portfolio and continuing to establish new strategic partnerships. In closing, I'm proud to say that our culture, centered around diversity, equity, and belonging, is being recognized. This year, we've been named one of the best employers for diversity by Forbes, the best place to work for LGBTQ equality by the Human Rights Campaign for the ninth consecutive year, and one of the best places to work for people with disabilities, earning a perfect score on the Disability Equality Index for the second year in a row. I am confident that thanks to the strategic investments we're making, our impressive performance, and this award-winning culture, we are now in a stronger position than ever as a company to further capitalize on outsized growth opportunities over the long term that will continue to pay off for our owners and shareholders alike. With that, I will hand it over to our CFO. Dom? Thanks, Pat. Good morning, everyone. I hope you and your families are all well. Today, I'd like to provide additional insights around our second quarter results, update you on our liquidity profile and capital allocation, and share our thoughts on the outlook for the road ahead. Throughout my remarks today, I'll provide financial performance and RevPAR comparisons to 2019, which we believe are more meaningful in analyzing trends, as the prior year's quarter results were significantly impacted by the pandemic. For comparisons to 2020, please refer to our press release. For second quarter 2021 as compared to the same period of 2019, total revenues excluding marketing and reservation system fees were $142.4 million. Adjusted EBITDA increased 9% to $111.8 million, driven by improving RevPAR performance and continued cost discipline. Our adjusted EBITDA margin expanded to 79%, an 8% increase, and as a result, our adjusted earnings per share were $1.22 for the second quarter, a 3% increase versus the same period of 2019. Let's now take a closer look at our three key revenue levers, beginning with royalty rate. The continued increases in our effective royalty rate remains a significant source of our revenue growth, which is driven by the attractive value proposition we provide to our franchisees, their continued desire to be affiliated with our proven brands, and our pipeline. The company's domestic effective royalty rate once again exceeded 5% for the second consecutive quarter, growing 7 basis points for the second quarter 2021 compared to the same period of 2020, a reflection of the continued strengthening of the value proposition we provide to our franchise owners. We expect to maintain the historical growth trajectory of this lever for full year 2021 as owners seek Choice Hotels' proven capabilities of delivering strong top-line revenues to their hotels while helping them reduce their total cost of ownership and maximize return on investment. Our domestic system-wide RevPAR outperformed the overall industry by 20 percentage points for the second quarter, declining only 1% from 2019, while occupancy increased by 20 basis points as compared to the same quarter of 2019. At the same time, our second quarter results continued to exceed the primary chain scale segments in which we compete, as reported by STR, by nearly seven percentage points versus 2019. We are proud to report that our June RevPAR results exceeded 2019 levels by approximately 5%, driven by a nearly 3% increase in average daily rate and a two percentage point increase in occupancy. The trends of improving RevPAR performance have continued into the third quarter. Our July performance was significantly stronger, with RevPAR growth of approximately 15%, driven by occupancy levels of 70% and an average daily rate increase of 10% versus 2019 levels. In fact, July RevPAR for our upscale, extended stay, upper midscale, and economy segments all surpassed 2019 pre-pandemic levels, and we saw month-over-month acceleration in performance across all of our segments. These trends give us continued optimism for the remainder of the year. As discussed in the past, we've long focused our brand strategy on driving growth across the higher value and more revenue-intense upscale, extended stay, and midscale segments. The investments we've made are paying off. These strategic segments continue to help us achieve material RevPAR change outperformance against our respective industry chain scales and drove gains versus our local competitors. Specifically, when compared to second quarter 2019, our upscale portfolio increased its RevPAR index relative to its local competitive set and outperformed the industry's RevPAR change by nearly 13 percentage points. Our extended-stay portfolio grew RevPAR by 10% in the second quarter year-over-year, driven by occupancy levels of 82% and a 2% increase in average daily rate. The segment outperformed the industry's RevPAR change by more than 31 percentage points. Finally, the RevPAR change for our midscale and upper midscale portfolio exceeded these segments by eight percentage points. Let me also highlight just a few impressive performance achievements for our brands in the second quarter as compared to the same period of 2019. Our WoodSpring brand reported 16% RevPAR growth, reaching an average occupancy rate of nearly 86% and experiencing a nearly 6% increase in average daily rate. Ascend Hotels grew June RevPAR by nearly 5%, driven by an over 12% average daily rate increase, and achieved RevPAR index gains of 11 percentage points against their local competitors, while our Cambria Hotels drove the brand's RevPAR share gains versus their local competitors to 14 percentage points. Quality, our largest brand in the portfolio, recorded nearly 2% RevPAR growth, driven mainly by a 1.2% increase in average daily rate. Finally, Suburban Extended Stay Hotel grew its occupancy by over four percentage points. Across the Choice system, we were able to increase our overall RevPAR index against local competitors by nearly five percentage points, driven by both our franchisees' ability to grow rate and occupancy gains. More specifically, our ADR improved from the prior quarter, and our ADR index continued to increase as compared to 2019, thanks to our investments in pricing optimization capabilities for our franchisees. We continued to grow the overall size of our domestic franchise system and exceeded 2019 levels for conversion openings through the first half of the year. Across our more revenue-intense brands in the upscale, extended stay, and midscale segments, we observed stronger unit growth, increasing the number of hotels and rooms by 2.5% and 3.1% year-over-year, respectively, and increasing the growth rate from the first quarter of 2021. For full year 2021, we expect our overall unit growth trend to continue. We continue to expect the unit growth of the more revenue-intense segments to accelerate versus 2020 and range between 2% and 3%. Aided by our strong value proposition and outperformance, demand for our brands continued to gain momentum since the beginning of the year, with more than a third of the total domestic agreements executed in the month of June. In fact, development activity for our extended-stay in upscale domestic franchise contracts throughout the first half of the year exceeded 2019 levels by nearly 60% and 14%, respectively. At the same time, our developers are increasingly optimistic about the long-term fundamentals of the lodging industry. Nearly 40% of total domestic franchise agreements awarded in the second quarter were for new construction contracts, which increased by over 20% in the second quarter year-over-year. In fact, demand for our new construction brands continued to accelerate throughout the first half of the year, with more than half of the total new construction contracts executed in June alone. I'd now like to say a few words about our liquidity profile and provide a capital allocation update. Our strong results have led to an even stronger liquidity position for the company. At the end of second quarter 2021, the company had approximately $908 million in cash and available borrowing capacity through its revolving credit facility. We are also pleased to report cash flow from operations of $102.3 million for the second quarter of 2021, a 28% increase versus second quarter 2019. Today, our gross debt to EBITDA leverage levels remain well within our target range of three times to four times. Our impressive results, combined with our confidence in continuing to generate strong levels of cash and our optimism for the future, led us to reinstate the quarterly dividend at the pre-pandemic level and resume our share repurchase program. In June and July 2021, we returned over $14 million back to our shareholders in the form of cash dividends and repurchases of our common stock. These actions reflect our continued commitment to driving long-term shareholder value and returning excess capital to our shareholders. We will continue to monitor the environment for other investment opportunities and evaluate capital returns in the context of our leverage levels, market conditions, and our overall capital allocation strategy. Before closing, I'd like to offer some thoughts on what lies ahead. While we are not providing detailed guidance today, we currently expect the third quarter RevPAR to grow in the mid to high single digits as compared to 2019. Assuming elevated consumer sentiment remains and the broader RevPAR and economic recovery trends continue, we expect to see our 2021 adjusted EBITDA approaching 2019 levels, even with potential incremental investments in the back half of the year. Our view is reinforced by our strong year-to-date financial performance, broader macro and consumer trends, and our recent domestic June and July RevPAR results, and our continued investments to support growth for the remainder of 2021 and beyond. We will continue to evaluate the impact of COVID-19 across the business, and we'll provide further updates in November during our next earnings call. In closing, we remain confident that our strategic approach and resilient business model, coupled with our disciplined capital allocation strategy and strong balance sheet, will help us further capitalize on growth opportunities and drive outsized returns for years to come. The investments that we have made and will continue to make will allow us to execute on our ambitious long-term growth plan. At this time, Pat and I would be happy to answer any questions. Operator? Thank you. We will now begin the question-and-answer session. To ask a question you may press star then one on your touch-tone phone. If you are using a speaker phone please pick up your handset before pressing the keys. To withdraw your question please press star then two. At this time we will pause momentarily to assemble our roster. Our first question comes from Dany Asad with Bank of America. Please go ahead. Hey, good morning, Pat and Dom. Morning, Dany. I just wanted to start off by just asking a question on, first, you were talking about how effectively the Choice portfolio has been gaining so much share, right? It's pretty significant. Can you just help us try and see those big gains? Are they in certain chain scales? Are they driven by certain markets? How sustainable do you think that is? Yeah, Dany, it's a very broad-based pickup across all of our brands, across all of our regions. When we look at the consumer base, our guests that are 65 and older, that traveler is already back to 2019 levels. We're also seeing a younger traveler, a traveler that skews more female as well. There isn't a single brand or a single region that's sort of driving this. It's really broad-based. We look at this really in a variety of ways as to why that's happening. As I mentioned, our merchandising and promotion tools and our pricing tools that we've really invested in over the last several years are a significant driver of that. It's really helping us find those customers that are out there. We did this all last year as well when demand was low. Those are the things that we see that are driving it. Secondly, the investments we made in our brands, Comfort in particular. We're seeing a lot of pickup in the Quality and the Comfort brand in particular, and the investments we made on refreshing that brand again are helping. Finally, if you look at it pre-pandemic, we were cleaning up Comfort, so there were a lot more rooms out of commission as that brand was going through the renovation. Again, that's giving us additional optimism for a bigger size of the share that we're going to take as we move forward. Yeah, Dany, just quantitatively speaking, that five percentage points of RPI gain that we achieved in the second quarter, we actually report that on a local basis. It's like-for-like products within like-for-like markets. When you take a look, in the prepared remarks we talked about every one of our select service brands had material RPI gains. We are seeing it across the entire portfolio, and again, it averages out to about that five percentage points. Got it. Dom, you ended your prepared comments with talking about EBITDA approaching 2019 levels even with incremental investments in the back half of this year. Can you just unpack that a little bit? First, in terms of the cadence of these investments, first of all, is it going to be in corporate expense? Then what are these types of investment? Is it on new brands? Is it on technology? Are you adding more people on your development teams? Or kind of what's driving that? When you take a look at it, obviously, the EBITDA outperformance was driven by both significant strength on the top line. Obviously, we're continuing to see those outsized RevPAR results. When you take a look at Q3, what we had guided in Q3 is that RevPAR will continue to grow, I'd call it the mid to high single digits versus 2019. When you take a look at year to date, you're starting to get within your 2019 RevPAR level. We expect to see that strength in RevPAR to continue. Obviously, we expect to see it moderate potentially a little bit in the back half of the year as you get into Q4, et cetera. We're not expecting to see these 15 percentage points of RevPAR outperformance versus 2019 as we enter Q4 and some of that leisure travel begins to moderate somewhat. Obviously, we do expect to see continued strength on the top line. From an SG&A perspective, we had guided previously that the SG&A savings were going to be somewhere in the ballpark normalized of that 10%-15%. When you take a look at where we were in Q2, it was right around 10% down, apples to apples. That includes, obviously, things like merit increase and whatnot. You're certainly on an apples-to-apples basis within that guidance that we had previously reported as well. The reality is we're in a much stronger demand environment now. When we're looking at the back half of the year, much like we did even during the pandemic, we're going to continue to invest. We're certainly willing to sacrifice a little bit of margin if it ultimately leads to outsized growth and those outsized share gains. When you think about those investments, certainly continuing to invest in brand growth opportunities, continuing to improve the value proposition as it pertains to revenue management tools and those types of things, and then continuing to make the corporate functions more efficient. If it means some capital investments that are required to do that, we would certainly be willing to make those investments. Ultimately, when you think about just the corporate margin, you would still continue to see it in those pre-pandemic levels. I know this company's always operated about 70% margin or so. We were 79% margin this quarter, and the reason for that, it's the higher demand period coupled with some of those SG&A investments. Got it. Thank you very much. Thank you. Our next question comes from Robin Farley with UBS. Please go ahead. Thanks. Great. I just wanted to make sure I understand the dynamics of your EBITDA up such a strong 9% versus Q2 2019, and then the EPS up 3%. The difference had to do with marketing and system revenues or something. I wonder if you could just clarify if that's just a timing issue or what made the lower EPS growth relative to the great EBITDA growth. Thanks. Yeah. When we report the adjusted EBITDA and the adjusted EPS, it's net or it's excluding that marketing and reservation. Obviously, we can run surpluses and deficits, so just for comparable purposes, much like several of our competitors do, we adjust that out of the number. It is a corporate EBITDA beat when we're quoting the significant outperformance. Again, Robin, what I would tell you is the significant EBITDA beat when you have a RevPAR that's coming in in line with those 2019 levels, down 1% for the quarter, coupled with the 10%-15% SG&A reduction that we had committed to, we're operating at a higher margin. We're a more efficient business today than we were back in 2019. Again, as we continue to look ahead into the Q3, and you see those outsized RevPAR gains versus 2019, we're continuing to see that margin flow through. On the EPS side, that flows through to the bottom line. Taxes may have been slightly up versus where we had expected, and the reason for that is our taxable income was significantly up as well for the quarter. In general, what kind of flow through do you expect from EBITDA to the EPS line? In other words, you mentioned taxes slightly up. Was there anything else about the quarter that was unusual that wouldn't create that same dynamic in forward periods? No. The reality is it was a pretty normalized and pretty clean quarter, and we would expect to see the same flow through from EBITDA to EPS in the future. Okay. All right. Thank you. Thank you. Our next question comes from Dori Kesten with Wells Fargo. Please go ahead. Thanks. Good morning. If you think about your trend in new signings, openings, removals, when would you expect your pipeline to return to year-over-year growth versus its current contraction? Hey, Dori. When we look at our pipeline, obviously right now with the increase in the conversion contracts we're doing, the velocity of those conversions moving through our pipeline increases. The average conversion stays in our pipeline anywhere from three to six months. If you look at Q2, we had about 8%, or 14%, rather, of our openings in Q2 were actually sold and opened within the quarter. They never even show up, even in a quarter-over-quarter view. The other thing that we do on a normal basis is to look at the pipeline and remove those contracts where the developers are not planning to move forward. We do that so that our sales team can have the opportunity to go out and fill those markets to fuel our long-term growth. As you look at what we have been doing as the pandemic started a little over a year and a half ago and what we've been doing since then, we have been taking out contracts that when we talk to those developers, they are no longer planning to move forward. I would expect that's probably going to reverse itself by Q4 as owners sort of begin to reengage with their lenders and get their projects financed and start moving forward again. That's a little bit of the assumption that we're looking at, but a lot of it depends on hotel financing coming back, which we are seeing, particularly in our extended-stay segment. Just broadly speaking, when you look at our pipeline, about 50% of that pipe is a conversion hotel, a hotel under construction, or one that is in advanced stages of planning. We feel really good about what we have in our pipe, and that additional 50%, we closely monitor it and make sure that it's a contract that's going to move forward. At the end of the day, we're not changing our outlook on net unit growth, and we're excited by the uptick that we're seeing in application volumes for new contracts as well. That's kind of how we think about the pipeline and how we're looking at it as it contributes to our net unit growth in the long term. Oh, thanks. Historically, I think terminations have been about a 3%-4% headwind to net unit growth or net rooms growth. Is there a reason to believe that this level should be lower going forward, when you consider how many hotels have been refreshed and you have, I guess, relatively higher-end properties coming into the system versus historically? Well, certainly we're finished with the Comfort cleanup. If you look back over the last four or five years, that was a key driver of terminations. We're back to our historical levels, and feel really comfortable moving forward that we're not going to see increased terminations. The health of our franchisees right now, with the PPP loans, the interest forbearance they were able to get, and those total cost of ownership savings that we're helping them with, which is lowering other areas of cost on their P&L. We see our franchisee base in a very healthy financial situation, so we would not anticipate terminations anything above historical levels. Yeah, Dori, when you take a look at where the terminations are trending today, they're trending right around that 4% mark. The reality is when you take a closer look at the exhibits, you see that the vast majority of those terminations are actually coming from our transient economy brands. Obviously, economy extended stay, very much red hot in terms of that unit growth, but it's really Rodeway and Econo Lodge in particular. Again, this goes back to that revenue intensity story. You're seeing it on the termination side that we're continuing to add more and more revenue intense units and you're losing some of the less revenue intense units. Even on the pipeline side, the vast majority of our pipeline is made up in those revenue intense segments. Again, I would say close to 95% or so of the pipeline is those revenue intense segments that we are really focused on. Great. Thank you. Thank you. Our next question comes from Michael Bellisario with Baird. Please go ahead. Thanks. Good morning, everyone. Good morning. Along those same lines, maybe could you provide some more details on the sequential decline in the system size? What came in during the quarter, what went out, and then any updated thoughts on when that net unit growth inflection might occur? Yeah. When you take a look at the domestic unit growth, Michael, certainly, very optimistic about those trends. We're continuing to see growth portfolio wide, excluding the economy transient segment. Your rooms growth is above 3%, so certainly in line with where those historical trends were and frankly, accelerating versus where we were last year. The broader net unit growth decline was really driven in international. A lot of that has to do with the disproportionate impact that COVID-19 had specifically in Europe. Obviously, hotel closures were more common in Europe, especially in the portfolio that we were dealing with. We also looked at this as an opportunity to terminate some marginal or lower performing products from the European portfolio that we felt in the long term, were not necessarily going to be profitable. A couple of multi-packs with lower profitability. We expect to continue to see some of that trend continue into Q3 and Q4 this year, internationally speaking, but then anticipate significant pickup in 2022 and beyond. Got it. That's helpful. The bigger picture, maybe when you look at your franchisee base today, or at least maybe the incremental franchisee, are you seeing new first time hotel owners join the Choice platform, or are you seeing the existing franchisee base getting a little bit more concentrated? What's the makeup there of the new signings and the new franchisees coming onto the platform? It's been interesting. Historically, we sell about two-thirds of our contracts to existing owners. I would say if we look at the last, I know in Q2, and it's probably true in Q1 as well, we're seeing really two, because I mentioned these are more institutional capital-backed multi-unit owners. We are seeing a higher percentage of owners who we hadn't seen before, who are developing, particularly in our extended stay segment, which is a great opportunity for us. It means we're continuing to have our existing customers come back and build new hotels, but we're also attracting a new category of franchisees, which again, I think is going to be a real tailwind for us in the future. Got it. Are those new franchisees asking for anything differently, or are the contracts structured any differently than they would have been if it were an existing franchisee joining the platform? Our franchise contracts are fairly market. What we are offering our existing owners and what we're offering the new owners are fairly consistent with regard to franchise terms. A new owner that is new to the industry completely, Choice has always been a great place for people who are new to the industry to start. Our Choice University online training platform, our area directors, and our opening teams out in the field are used to dealing with owners new to the industry. That's a muscle that we've had for many years, and so it's always helped new people get into the industry. As I mentioned in the last couple of quarters, we are actually seeing that, which is a real positive. Helpful. Thank you. Thank you. Our next question comes from Patrick Scholes with Truist. Please go ahead. Hi. Good morning, everyone. Morning, Patrick. Morning. Thank you. First off, thank you for talking at the start about changing customer habits and trends, certainly as we try to figure out what is changing in the world of hotels, having thoughts and information like that is very helpful. Moving on to my questions here. Certainly, your balance sheet, at least by year-end, will be in pre-COVID shape. How do you think about the priority of either share repurchases or dividends, in light of the stock pretty much being at or near an all-time high here? I think as we've mentioned many times before, the allocation of our capital really goes to its highest and best use. We always start with our internal investments. As Dom and I have been talking about, we've been investing prior to the pandemic, and we invested through it, and we will continue to invest. We really, as I said, see some exciting opportunities in these revenue-intense segments to continue to grow our product portfolio. We're going to continue to invest in our value proposition. There's a significant amount of opportunity for us to lower the cost of running one of our hotels and help our owners set pricing and market their product more effectively as the cost of customer acquisition continues to go up as well. Those investments are going to continue. Secondly, we will look for M&A opportunities if they are out there and if they fit with our criteria around our ability to improve the unit economics for the franchisee and our ability to grow the brand for our shareholders. When it gets to dividends and share repurchases, it's really a factor of, on share repurchases, when we see a dislocation from our view of intrinsic value, we're going to be in the market. We're not in the market in a programmatic way. We're in the market in a much more opportunistic way. That really is a function of how the capital markets perform and our internal view on the long-term growth of our equity. Our dividend policy, we've returned it to our pre-COVID-19 levels. We feel comfortable at the current dividend yield. That's kind of as you walk down those four steps how we think about our capital and how we think about returning it to shareholders as well as investing it back in the business. Yeah, Patrick, the only thing I would add is we feel very good about where those leverage levels are as well. On a growth basis, we're well within that three to four times. When you look at it on a net basis, just given the fact that we are sitting on a little bit of cash still, you're at 2. 5 times. The reality is, when you look at each of those priorities, it's not an either/or in my opinion. I do think that you're going to have the ability to pull every one of those levers. We're going to continue to pay the dividend at those pre-pandemic levels. Again, I think to Pat's point, the ability to play offense, especially in this recovery period, is critical. Make no mistake, I think that returning capital back to shareholders will still continue to be a priority going forward. Okay. Good. Certainly a high-class problem with having to pick and choose what to use there. I have two more questions. The first one is, in the press release you talked about third quarter RevPAR growing mid to high single digits versus 2019. Can you tell us what that comparable RevPAR number was? As I look back in the press release from two years ago, it was $59, but I don't think that is in fact the comparable number to grow off of. Or do you have a ballpark number we can use? Let me just broadly speak and talk about the third quarter. As we mentioned, July was off to a very strong start in the quarter and at +15%. We have to be careful. July had an extra Saturday in it. We also had a favorable location of the 4th of July as regards to how it fell within the week. Those two elevated an already strong month. As we look into August and September, we're seeing continued strength in the business. As you think about August and September, the calendar impacts of that are going to have a slightly lesser impact than we saw in the first month of the quarter. I think Dom is trying to check on your number. Yeah. The number's 5510, Patrick. Okay. Thank you just changing methodology in terms of full room availability and ensuring that we were actually reporting on a full room availability perspective, just given the fact that COVID did have an impact on temporary rooms out of service. We wanted to make sure that we changed that methodology to be apples to apples. The number is 5510. Okay. Great. Helpful. Lastly, in the owned hotel revenue line in the quarter, obviously up quite significantly. When I think about the drivers of that, was that because you had a year ago in the quarter quite a few of the Cambrias out of service? I just want to make sure we're thinking about the right way to model that going forward. Was that growth due to any new hotels subsequently coming in over the past year? Thank you. No, it's really the location of the five hotels. LAX is an airport hotel, so obviously when there was nobody flying, that one was- Okay significantly impacted. New Orleans and Nashville, and now Houston are doing quite well with the type of traveler who is out there and what's going on in those markets. It's really location driven as to why things were lower last year and why they're really strong this year. Okay. Makes sense. Thank you. That's it. Thank you. Again if you would like to ask a question please press star then one. Our next question comes from David Katz with Jefferies. Please go ahead. Hi. Good morning, everyone. Thanks for taking my question. Thank you. Hi, David. Morning. I wanted to go back to the conversions number, which I think you've discussed somewhat is strikingly large. Can you just talk about the value proposition out there? I suppose that's a nice way of asking, just how competitive it is and how much capital people are putting into the marketplace, because we certainly hear peers talking about conversion pursuits as well. Any color there would be helpful. Thanks. Yeah. I think, David, conversions are nothing new to us, and it may be new to some competitors and certain brands. If you're going to take a new build brand and all of a sudden start working conversions, there's a significant amount of internal hurdles I would say you have to get over. That's not the case with the majority of our brands. Comfort Inn is about two-thirds new construction and about one-third conversions. That's essentially what we saw in the quarter from the standpoint of contracts being added. When you look at other brands that we have, Quality, Clarion, Econo Lodge, Rodeway, Clarion Pointe, these are all 100% conversion brands. We have an engine here that runs through those performance improvement plans that are aligned with those individual brand standards. We know what we're looking for in the marketplace. We know how to engage with owners, particularly in a time like this when supply chains are constrained, and understand what the guest values and what needs to be in a property improvement plan. There's a lot of complexity in driving conversions into your brands if you're not doing it on a regular basis. I think that's one aspect of this is, during good times, we do conversions, during bad times, we do even more conversions. It's not something we have to turn the switch on. It's an always-on process. I think that's part of it. The second thing is, if you go back to the last downturn, Ascend wasn't where it is today. Clarion Pointe isn't where it is today. Mainstay and Suburban, as Dom and I discussed, are really accelerating from the standpoint of new contracts. We have additional brands that, 10 years ago, were not really in the conversion part of our portfolio that are there now. It's really providing us that strength. When we engage with owners, it's a negotiation over what they need to do with their existing hotel to bring it into one of our brands and bring it up to standards. The second piece of it is we have a better value proposition, certainly than an independent hotel that is trying to pay high costs of customer acquisition, high labor costs, high insurance costs. All of those are things that we, because we are a platform of 7,000 hotels, can help lower the cost for an independent owner and for an owner that might be in a weaker brand, that is looking for a more robust business delivery engine, and also a franchisee success system, everything from training to cost reduction that can help them improve their profitability. I think as a company, we've always had a great conversion story, and capability, and that's really showing up now, that owners having been through the downturn in the last 18 months are really looking not just for a safe harbor, but for a company that can continue to drive their profitability higher. David, it's really showing up in the numbers as well when you look at the first half of this year. Your conversion agreements are up 43% year-over-year, and I know that 2020 is probably not the best comp. Even when you take a look at 2019, your conversion contracts are approaching 90% of 2019 levels as well, even in the environment that we're in today. Okay. Super helpful. Thank you. Thank you. Sure. This concludes our question-and-answer session. I would like to turn the conference back over to Pat Pacious for any closing remarks. Thank you, operator, and thanks everyone again for your time this morning. I hope you all stay safe, stay healthy, and we'll talk to you again in the fall. Have a great day. The conference has now concluded. Thank you for attending today's presentation