Welcome back, everybody. Now I have to make that tough transition from way in the rabbit hole on prediction markets to what's going on in the hotel space. But this is actually really exciting. To my right is Dom Dragisich. Dom is President and Chief Executive Officer of Choice Hotels. But the real story here is that he was just appointed to this role within the last few weeks. Congratulations, Dom. Thank you very much. I appreciate it. It's an honor to be here. We've had the chance to work together for a number of years in your prior life as CFO, and we kept touch even in between there. But I don't think everybody's quite as familiar with you, so let's just walk through, if you wouldn't mind, a little bit of your background and bio, because you don't trace all your roots back to the hotel industry either. I'd love to just walk through that and what's led up to your current role. I certainly have a diversified set of experiences, and I know we have a prior relationship. But first thing I want to do is just say, week two on the job, so it's good to see everybody again. It's great to be back. I was the CFO of the company for about seven years, so a lot of familiar faces in the room. Really excited to see everybody and talk throughout the day. But first off, honored by the board's confidence in me with this appointment. Really excited about leading the company through its next chapter of growth, and I think that's going to be the theme, just really laser-focused on execution and growth. To your point, Shaun, I am not new to the industry. Spent a little bit of time at Marriott, but had a diversified set of experiences before I got to Choice Hotels. Actually focused on finance, operations, strategy. Also had a little bit of telecom experience. Right. We share a little bit of a background there. I've been in the technology world for some time. Just before Choice Hotels, I actually was the CFO of a company called XO Communications, which was a unique opportunity. I actually was able to work directly with Carl Icahn and his team. It was a bit of a turnaround situation, turn around the company, and had the opportunity to lead the company through its eventual acquisition by Verizon. It was back in 2017, where I got the call from Choice Hotels to basically become the CFO. At the time, the company was going through a bit of a transition period. Obviously, there were some white spaces that the company was entering, extended stay, growth in some of the more revenue-intense segments, and I had a front row seat to all of that. That was the reason I was brought into the company, to really lead Choice Hotels through that phase of its growth. We were very successful in doing that. I obviously was instrumental in some of the inorganic things, so the acquisition of Radisson, WoodSpring, et cetera, but also really helped lead the organic growth in terms of this revenue-intent strategy, which is very much becoming a both/and, which we can certainly get into. The reality is, seven years into the job, I was able to then really have a 360 view where I led the operations for the company, led the strategy of the company, led growth development brands. You name it, I've kind of done it here at Choice Hotels. It's really an honor to be in this role. Candidly, all of those experiences gave me a front row seat to effectively what is core to our model, and that's the franchisee, right? At the end of the day, when the franchisee wins, we as a franchisor win. Everything that we're focused on, it's the unit economics for our franchisee. Candidly, when they're growing, we're growing. I'm really proud of the growth under the leadership team that I've actually had the honor of working with. When I joined the company back in 2017, we were a $295 million adjusted EBITDA business. Today, the guidance that we issued in Q2 implied about a $643 million adjusted EBITDA business, so pretty tremendous growth over a nine-year period of time. Just really excited to lead the company during this next phase of growth. When we think about presidents or executives, we always think about that first 100 days, right? You said it yourself, you are in your first two weeks in, so what does that first 100 days look like for you? Because you are coming from that internal seat, it is not like you do not know what some of the priorities of the business are, but you now have the ability to start to put some of your plans into action. Give us a little bit of a teaser of what are some of your first initial things that you are working on. Sure. The first thing I would say is the core of who we are as a company, that is not changing. There is going to be a little bit of a returning to our roots theme that you are probably going to hear throughout this conversation. But really it comes down to that franchising business model. It is really being that asset-light franchisor, and again, when our franchisees win, we win. So, laser focus on unit-level economics for our franchisees, and really leveraging what we classify as a best-in-class conversion engine. Really that is what has been the catalyst for our growth this year, and in the supply-constrained environment, we see that continuing to be the catalyst for our growth in the foreseeable future. But when you think about, and I will just kind of peek behind the curtain a little bit, what I have told our associates internally, I am laser-focused on three things. You are going to see a maniacal focus on execution, which is mission critical. But there is really three buckets. It is culture, it is execution, and it is long-term strategy. As it pertains to the culture, really bringing in a sense of urgency in the role that I am sitting in today, a renewed energy. I think you heard it on the Q2 call, a transparent approach, frankly. I think it is really important to own where we may be falling short and to really lean in where our strengths are. So that is my commitment to the investor community, that is my commitment to you as an analyst, to continue to have that transparency and the sense of urgency. I think from an execution perspective, there is really three priorities, and that is my number one priority is net rooms growth. Specifically in the U.S., our investors have asked for this time and time again. We are delivering momentum in that category, and we are going to continue to do so. I have already talked about unit-level economics. The third really is doing all this in a capital-light fashion. I think throughout my tenure, we have actually put the balance sheet to work for acquisitions, for development and whatnot, but you are actually seeing us becoming a net recycler of that capital. So that is going to continue to be a huge focus for me and really returning to our roots from a capital light perspective. The last bucket, like I said, it is really around the long-term strategy, and I think the bridge there is a lot of what you heard on the Q2 call as well. It is really our commercial engine. I think that this is an area where we've really leaned in on the investments that we've made over the last two years, just with regards to a guest data platform, a RFP tool, a new loyalty program, a loyalty tool itself. A few things we'll probably talk about throughout the day today, but that really is the bridge in terms of us becoming a much more consumer-centric organization that is really AI enabled. I think you can't have a conversation without talking AI, but I won't get into that just yet. But really It's on the list. It's on the list. Great. But really, as you think about that evolution, where we've really fallen a little bit short, frankly, it's relative RevPAR performance. The investments that we've made over the last two years are really going to help us fuel the growth in the future in terms of heads and beds and that same-store sales growth. We're feeling good about where we are. Those are going to continue to be my top three priorities, and I'm really excited about the opportunities ahead. We've talked about, I think, two variables in particular, and so we may have already touched on this, but let's go that layer deeper. When we think about the investment community, these are algorithmic businesses as we've discussed plenty. They're not that hard, right? Nope. We've got RevPAR and same-store growth. We've got rooms growth. We've got royalty rate. We've got an ancillary fee basket that has become more important to the industry. Which of the KPIs, though, do we want to associate with you right now? Kind of like when we're looking back, and we're like we've talked about net rooms and a little bit falling behind on RevPAR. RevPAR's harder to be a controllable, so which one or both those North Stars, what's going to be the North Star for your leadership tenure? Yeah. I think you hit the nail on the head. It's a very simple business model. Obviously, over the last couple of years, there's been a little bit of noise with regards to the acquisitions, and like I said, the development and whatnot. At the end of the day, my number one priority is net rooms growth. The algorithm is simple. It's net rooms growth, RevPAR, effective royalty rate, those non-RevPAR fees, the ancillaries, and then our international growth, which is about $50 million in terms of international. So that can continue to be a driver for the business. But I said them in order, right? My number one priority continues to be net rooms growth. We're very encouraged by the progress that we're making. You continue to see sequential improvements, and you saw global rooms growth really accelerate in Q2. The U.S., in particular, is much more revenue intense, so to speak, and so from that perspective, my focus is really around just getting that U.S. rooms growth back to positive. We're feeling very good about the fact that openings were up about 30% in Q2. The development environment franchise agreements were up about 30%. We're opening these hotels faster. The role that I was in even prior to the CEO seat, that's where my focus was. It was really on that operational variable. I think from a RevPAR perspective, you're right. You can't control the broader macro, but you can control really maintaining your fair share, and that's really where those commercial investments that we've made will allow us to get back to our fair share. Obviously, the goal is not just to get to fair share, but it's to eventually take share. RevPAR is the second key factor, and then effective royalty rate as you continue to drive franchisee profitability, revenue, lower costs, and then obviously give them better tools. The effective royalty rate is the willingness to pay from our franchisees increases. So you have seen that as a tailwind for us. 7- 9 basis points is what we guided to for the year. So those three metrics are the core revenue metrics, and then obviously the ancillaries and international growth. We'll continue to provide transparency on that international line item as well. Let's talk about this net rooms growth kind of turnaround, right? If that's going to be the North Star, and I think it's really important for Choice Hotels. There was a period in there, and this is where you and I were interacting quite a bit, actually, was around the revenue intense net unit growth strategy, and that was a hard one for Wall Street, right? We didn't have a major problem with it because analytically, we found that sort of everything you were doing actually backed up. But the bottom line was that aggregate room count was declining for Choice Hotels for a period of probably close to two years. That's right. While you were turning out some lower value units and you were bringing in higher value ones where you were able to even replace maybe catchment areas or AOPs with brands that you would like to have had there, but you couldn't before. But that's also been rolled off for probably more than a year, probably closer to two at this point. What's been driving the turnaround that you saw in the second quarter? Because I think, what's kind of gotten us back to a little glimmer of growth, and again, appreciating that there's plenty of white space or room to maybe improve that metric further. But walk us through the journey of where were we at the RING strategy and then kind of where do you think we are right now? What's driven that change? Yeah. The RING strategy, revenue intense unit growth, is kind of where we were three, four, five years ago and continue to be today. The product that we're bringing into the system continues to be a higher revenue per unit. So you're seeing more product in mid-scale, upper mid-scale, extended stay, upscale, and less product coming in economy, specifically economy transient. So that's going to continue to be an important driver for earnings growth for years to come. The reality is we're over the biggest kind of what I would call the kind of the cliff of termination, so to speak, as it pertains to exiting some of that underperforming product out of the portfolio, lower quality, which has really been a nice tailwind for just the overall portfolio for us as well in terms of guest reviews and those types of things. We made the best decision for the time, in terms of really turning around the Comfort brand, really leaning in on that revenue intense strategy. But where we are today, there's no reason why this can't be a both and. That's really as it pertains to that franchisee success system that I think is the leading franchisee success system in the industry. We have a right to win in economy and lower mid-scale as well. So yes, we want to bring in higher quality product, but that's really where you're seeing the focus. That's where you've seen my focus over the last two years in that operational role, like I said. There's two sides of that, right? The net rooms growth has been driven by openings. Like I said, openings in Q2 were up about 30%. All of that has really been driven by two factors, the conversion engine, and then on the new construction side, extended stay. Those have really been the bread and butter. 90% of our openings this year are expected to be conversions. We have a proven conversion engine. The flip side of it is you've actually seen terminations significantly decline year-over-year. We're focusing people, process, and systems on this. Obviously, like I said, we got over the biggest cliff. But the reality is our exits are down about 50% year-over-year as well. So, you can do the math. Obviously, that's going to be a nice tailwind for us. It actually led to our increasing our net rooms growth guidance for the year as well. Just given the concentration of our portfolio in the U.S., that implies that we were increasing our U.S. rooms growth guidance as well. I think the retention metric in particular, we do see just natural levels of higher churn at the lower, as we move down the chain scale ladder a little bit. But it's a hard one for us on Wall Street to pin down. Can it seems like some of the work you've been doing has been behind the scenes, and we may just starting to see a little bit of the fruit there. But can you help us unpack, or how would we gain confidence in this moving forward? Meaning, have we taken a brand by brand approach where we culled what we needed to cull and we're going to see that move through? Again, we know the Comfort initiative, but maybe. Yes. Since then it hasn't been as clear. What's the right way to just gauge and make sure that what we're not seeing is, the one place where it would be dangerous would be if we saw a change in brand standards just to keep. Got it. Just to move the pendulum, just to allow more to stay in the system for longer, right? Couldn't agree with you more. This is where the both/and strategy comes into play. Because we need to continue to be revenue intense, but at the same time, we have the right to win with Econo Lodge, with Rodeway Inn, some of our lower mid-scale brands as well. We're going to continue to do that, right? I think what it comes down to, it goes back to, again, unit level economics. If you're performing and your franchisees are making money, they're staying in your system. We have obviously continued to drive profitability at the lower end of the chain scales as well with some of the programs and the tools and everything that we're rolling out to the select service, lower mid-scale, and economy players as well as up the chain scale. That has been one of the reasons why you've seen that. The other is we've lapped a few of those initiatives that we talked about, the Comfort cleanup. We're back to standard termination rates with the Comfort brand, which obviously is our largest brand and our biggest revenue contributor. That's no longer going to be a headwind. But really, this comes down to also just the way that we operate operationally, right? What we were able to do is put, like I said, our best people, we've got systems, and we've got the data to allow us to get in front of that owner sooner. Right? If you see an expiration coming up, or if you see a window coming up, what is it that we have to do to ensure that they're satisfied? What is it that we have to do in terms of being able to retain them in our system? Not at all costs, right? But at the same time, making sure that we have that relationship and we're getting in front of it. The reality is when you take a look at the termination side, we expected, and this is what we guided to, about a 250 basis point improvement in our retention rate this year. What that reflects is back to effectively where we were historically. I think that we had a little bit of a wave of terminations over the last two, three, four years. But what you're starting to see again, a return to where we were historically, and we believe that we're going to be able to sustain that churn rate in the foreseeable future. Walk us through then the medium to long term. We'll put this comfortably under the not guidance. But what would be the aspirational goal or possibility of where net rooms growth could get to? Again, this is going to be something that's going to move over time. Yep. I keep just keep see you staring. Looking at my investor relations team. From the heart palpitations of what's about to be said. Just help us steer the boat here a little bit. The background is we know what the industry's. Yeah. Achieving. We know what all the peers are doing. These are all publicly traded companies, and so we know the metrics that are out there. What's reasonable for Choice Hotels, acknowledging that your churn rates are yours and your brands may be at a different part of your life cycle. I'm not going to issue any sort of guidance, Ally, so don't worry about that. When you take a look at just the algo, what I'll talk about is historically speaking, this was a business that's grown 2%, 3%, 4% from a net rooms growth perspective. Obviously, the revenue intense strategy doesn't necessarily require us to get back to 4% plus or whatever it might be. When you take a look at the implied guidance for this year, 1.5% is effectively what we guided. We talked about in Q2, we felt very good about where we were, and that's the reason why we raised the guidance. Again, we expect to see, you saw sequential improvement from Q4 to Q1. You saw sequential improvement from Q1 to Q2. We expect to continue to see sequential improvement. And candidly, we believe that there is momentum in the business to certainly sustain that, and ideally, you would get back to those historical rates over the mid to long term. Great. You brought up a few times, and I think it is super important, the dynamic around franchisee health. So goes the franchisee, that retention rate is going to move very naturally with if they are having a great experience, they are going to stay in the system for longer, right? Which is sort of the output of the function. This topic has become a bigger topic across the broad industry. So, it has been a little less so at your chain scales, but I imagine it is being held across the industry. The truth is, we know what owners have been up against, right? That is right. There was a very low ADR inflation environment, 2017-2019. There was COVID, where it was just pure survival, and then maybe a quick hockey stick ramp, but after that, sustained levels of high unit cost inflation, which just makes it hard, right? Sure. It's hard to grow revenues faster than costs. Put all that together and, franchisees are feeling it after eight, nine, 10 years of mostly headwind. What can you do on that side to return back to them some of those things? What are they asking for, and walk us through a couple of the initiatives that. Sure. You're starting to feel good about that are helping franchisees at that most basic level of saying, "Look, Choice, we're paying you. Here's what we want to see on our margins to make this a symbiotic relationship. Yeah. It certainly has been a headline, especially as of late. It all comes back to you've got to look at it as a basket of goods, a basket of services that you're provided, and ultimately, the overall franchisee profitability. That's where it starts. At the end of the day, fees, et cetera, are one component of that. I'm not going to sugarcoat it. The franchisees are pinched right now. Insurance, labor, property taxes, interest rates. The cost of financing has certainly increased over the last couple of years as well. Everything that we're doing, and this is a company that has an 85-year history working hand-in-hand with small business owners, and I think that's where it starts, right? How do you ensure that you're giving the franchisee what it is that they need to run a profitable business? We think about it. There's three levers. Again, very simple business model. We're driving top-line revenue, and all the things that I talked about from a commercial perspective, that's the key there, is making sure that we're continuing to gain share in that regard. We're lowering their costs, and then we're giving them tools to operate their businesses more efficiently. We can certainly talk about each of the three. But it's not just about the cost to operate as well, it's the cost to enter the system. A lot of what we've been focused on is how do we ensure that we're driving our FF&E costs down? How do we ensure that we're driving cost to convert, cost to build? What you've seen is several initiatives that we've led over the last couple of years that has driven our prototype cost down by about 25%. You've actually seen FF&E reduced by about 20% as well. A lot of the headlines is really around fee relief, right? This isn't something new to Choice. Interestingly enough, for the last several years, not last couple quarters, we have actually tied fee reductions to guest review scores from a loyalty cost perspective, from an overall fees perspective as well, especially in the lower end of the chain scales where they are particularly pinched, just given the pressure on ADR as well. This is a holistic view of that franchisee profitability, and we're not new to this game. It's been 85 years, and we're really proud of where our franchisees are. Granted, there's still some headwinds, and frankly, supply is going to be less than 1%. A lot of this is really centered around the cost to convert, more so than the cost to build. The faster we can get those owners cash flowing, the better it's going to be. A lot of our focus has also been on accelerating the time from signing to getting that franchise open. We've actually been able to compress that by about a month as well, which has also been net favorable to the cash flow of a lot of these owners that are ramping. You mentioned fee relief, which is, again, it's one component of a complex matrix of what an owner is working through. But it's an important one, right? When they are looking at their P&L and scrutinizing every line item more than they arguably ever have, right? Sure. Can you help us put it in perspective? Again, some of these initiatives sound like they've been in place. It's not new, what you're doing. But what's in play here? Because this is something that is becoming a little bit more of a discussion point across the industry. Whether it's directional magnitude or what are you able to do in incent, and how are you able to fund it, right? Sure. Is it really just efficiencies through some of the system fund and some of the different kind of fees that they're paying external, obviously, to the royalty rate that they're ultimately being charged? Well, I think, broadly speaking, when you think about the model, all-in fees for any franchisor, 10% when you think about the royalty rate, and the system fund. I think the one that has gotten the most attention lately has been on the loyalty side, right? Right. We've talked a lot about the brand companies talking about loyalty in terms of who ultimately wins, and ultimately, if it's driving heads and beds, that's the goal here, is really driving that top line. But that's where one of the focus areas has always been for Choice Hotels. But we want to tie that relief to an outcome. To me, it's not just giving relief for the sake of relief. If you drive a certain guest review score above a threshold, which obviously is the most closely correlated metric to RevPAR index, we're going to give you some relief, because why? We're going to be able to make it up, basically, and both of the parties win, the franchisee and the franchisor. Again, that's one of the areas where you've seen the fee relief. The other is just on, like I said, in the economy segment in particular, where obviously if they have an LTR score above a certain amount, which is our likelihood to recommend score, we would give that relief as well. You'll see that come off of that overall 10%. It's a smaller component of it, but the reality is it goes back to do you have the ability to drive other SG&A down for that franchisee as well from an automation perspective, et cetera? Broadly speaking, because of the rising cost in some of the other P&L items, the franchisee fee has become a smaller percentage of the overall cost picture. The key here is how do we actually go target reducing their cost to operate. Right. Through those other P&L items? We'll come back to that in a minute, but I want to, one last area in the rooms development picture is, we've started to hear some competitive buzz about just more investment spending in the landscape, more key money, that's being commanded and potentially at lower chain scale and price points. Yeah. I think all this is a pretty natural outgrowth of four or five years now straight. Sure. Of materially below long-term average of supply growth. So we're all competing over a smaller and smaller pie and all looking for ways to get involved in that. What's your perspective just on the topic overall? Are you seeing that money trickle down to your price points? And then you're at a very different phase of where you might be on key money, which is you put a lot into some new brands and starting to actually maybe recycle a piece of that. That's right. Talk about those two different balancing acts. What are you seeing in the industry and then how is this translating to Choice Hotels' budgeting and thought process? Absolutely. There are two different classifications of capital there. One of which is key money, one of which is development capital, which I will get into. I will start with the key money side of the house. You have heard that a lot lately in terms of, especially in the mid-scale space, that larger competitors are coming in with key money. When you take a look at our key money this year, the reality is it has been pretty consistent on a per deal basis. The reason why in Q2 we talked about possibly a $10 million, $15 million, $20 million increase in our key money is the momentum that we have seen on the opening side. Every deal that we underwrite is actually underwritten to a specific payback, a specific IRR, et cetera. We have not seen those payback periods lengthen, and we have not seen those IRRs come down. We are still feeling really good about the unit economics of each of the deals, even when we are putting key money out there. It is a very capital efficient way to continue to grow. Like I said, on a per deal basis, we have seen that fairly consistent even with the competitive pressures. Again, it goes back to the unit level economics for the franchisee. Again, as you continue to bring in more revenue intense product, and as you see momentum in terms of the volume, you may see elevated key money cumulatively speaking, but that is a good news story for us because that means net unit growth has picked up. On the development side of the house, there were two brands in particular, Cambria and Everhome, that we were putting our balance sheet to work on. That was really to get those brands to scale. We were putting shovels in the ground ourselves. Cambria is now at 75. Everhome, we have 30 units that are open, one of the fastest growing mid-scale extended stay brands in the industry. We are beyond that now. You are going to see a significant transition from a capital deployer to a capital recycler. To put this in perspective, we have about $650 million of capital out there to be recycled on our balance sheet today. Our leverage ratio is still 3.1 times as of Q2. When you think about all of those puts and takes, you are seeing a transition back to the franchise business model. We are going to be your capital recycler. We are going to be able to deploy $450 million- $650 million of capital to more growth initiatives organically, returning capital to our shareholders. We believe that our stock is trading at a low multiple right now, and we issued guidance that we were going to repurchase 200 million shares. First time in my 10 years where we issued share repurchase guidance to the street. Again, this is all part of, again, returning back to those roots, Shaun. The $650 million is a big number to your point. That is like a full turn of leverage on the business, which would put you comfortably below plenty long-term averages, IG thresholds, anything you need to think about. Give us a generic time horizon. Again, some of these are going to be lumpier deals. Yeah. They are probably multi-year contracts roll off. What is the right timeframe to start to target a bucket of that opportunity? Listen, we're not going to hold ourselves to an arbitrary timeline because at the end of the day, if we have the ability to get a higher value for some of these assets, and if it's net positive for our investors, that's what we're going to do. I'll start with that. We did say that we believe the first wave is probably going to be in the first half of 2027. We talked about that publicly on the Q2 call. There's a couple assets in particular that we can see recycling as early as first half of 2027. Again, it comes back to if the value is right, if the timing is right and it's net positive and accretive for our shareholders, we're going to do that. Again, we're sitting comfortably within our leverage ratios to your point. 3-4x is what we've targeted. The reality here is this is a value maximizing opportunity for us and ensuring that you retain the flag in the long term as well. I believe there's still a couple of chunkier owned assets on the balance sheet as well. Yeah. These are things that were acquired through. Yeah. Largely through acquisition. Where do those stand? Is that part of that bucket and because that could have sort of the tangential benefit of, it should improve, even small owned and leased assets have a big impact on sort of consolidated financials when it comes to a company of Choice's size. That's right. The answer is the $650 million is inclusive of those. Yep. It was Cambria, Everhome, which we were developing ourselves. Then we actually purchased three assets as part of the overall Radisson Hotels Americas acquisition. Those assets are part of that, and candidly, we believe that we're going to be recycling those in the same time frames that we've talked about for the broader real estate portfolio. Again, part of the $650 million overall, that we'll be able to continue to deploy both for value accretive growth initiatives, and returning capital to shareholders. Let's talk about the, we've hit on multiple layers. Let's go back to the demand environment now. We've touched on net rooms growth. Sure. This has been a hard one for us to pinpoint. The truth is, for the balance of last year, we saw a much bigger gap between high and low, between sort of the natural state of how we'd expect to see economic growth translate to the hotel industry than we typically see. It feels like, really since maybe even only early summer, it came a little later in the lower end chain scales than it did in others. It feels like we're starting to see some signs that things, convergence might be an aggressive word depending upon how nerdy you are. I think, we've rebranded it K-shaped economy. Is this C shape? Is it convergence? What do we want to call it? The vernacular aside, what are we seeing? Are we starting to see those things kind of balance out? It feels like this is relatively recent, really maybe even as recently as June, that we're starting to see some of those fundamentals improve on the lower end side. That is super encouraging. Yeah. I think that's absolutely right. The headline, I think, is the macro backdrop is improving, especially for our consumer, a more value-oriented consumer in our spaces. We're seeing it in terms of the momentum that we talked about, which I can hit on a little bit more, whether it's in this question or later. The reality is, I think to your point, we've used every single letter. I think Chris actually went out publicly with the C-shaped economy, and I think there's a lot of momentum behind that particular letter right now. I'm not going to get into a debate around just the macro in terms of geopolitical and gas prices, which has not been an issue for us, and we can certainly talk about that one as well. When you take a look at the fundamentals, wages are increasing even at the low levels. You're seeing job growth is remaining resilient. Consumer spending is resilient. I think when you take a look at all those factors, you're seeing that show up in results. A lot of it comes to a lot of different demand drivers for us. All of it is underpinned by that value orientation, right? When you think about project-based business travel, as well as more value driven leisure travel, I think a lot of that is showing up in the RevPAR results that we saw. We saw a pretty dramatic step up in RevPAR in Q2. We did say that our July RevPAR was going to be about 100 basis points higher than our June RevPAR, and I am not going to sit here and talk about guidance at this point, but that is what we said in the Q2 call. We also said that our Q3 RevPAR was actually going to be much higher, or at least higher than Q2. So again, we are seeing that momentum, and we are seeing that sequential improvement, which I think, to your point, is sometime in that May-ish timeframe, you started to see a bit more of that convergence at the low end. I think you are also possibly seeing some trade down, right? I think there is a couple economic reports that are out there that is talking about even the higher net worth households are starting to trade down and look for more value because people are spending so much at these higher end properties. The higher end is still holding up, and it is going to continue to hold up. But we are starting to see a bit of that convergence. Just for the skeptic out there that are going to say, "Oh, but easy comps," right? Yes, on a two-year stack basis, some of these chain scales, particularly as we drift down towards the lower end in the economy, are still relatively weak. But what gives you some confidence that this is stickier? We have already had some conversations up here today. Yep. I believe that is the sort of the belief across the industry, is that this is bigger, this feels more like a cycle and something more macro, and that maybe last year was more an unnatural state of affairs. But what are you looking at to. Yeah. Sort of provide some of that confidence? This one certainly feels a little more sustainable, frankly. Yes, there was some easier comps or some tailwinds, I would say, that were baked in Q2. You had the World Cup demand. You had the America250 events. Some urban centers had some tailwinds as well. But what gives me confidence is that continued sequential improvement, right? We, as a company, actually had some tougher comps in the first half of the year. I promised Scott Oaksmith that I wouldn't say the word hurricane. But the reality is there were some tougher comps for us, and we're beyond that, and we're beyond, candidly, the easier comps in Q2. But we still stood behind the fact that July, 100 basis points better than June, Q3 better than Q2. Again, that sequential improvement that we're seeing tells me that it's sustainable. Now, again, I'm not going to be able to control the macro, but what we are going to be able to control is getting our fair share, right? Kind of going back to the beginning of the conversation, it's those commercial tools that we talked about that can really drive heads in beds, that can really allow us to capture our fair share. So there's demand that was always out there that we were entitled to. We just didn't have the tools to actually go get that demand. Now we do, especially on the business side of the house. Well, maybe that's a little bit of a good kind of transformation in either ancillary or technology or both. I'll let you kind of. Sure. Maybe choose. Dealer's choice. We had a. Maybe choose the direction for us. Let's talk technology, right? Sure. I think, AI is obviously the buzzword. Just walk us through, let's zoom way out. Just give us a quick overview of the technology stack. I think we go a number of years back, and actually Choice Hotels was on the very cutting edge of some of the cloud based technology. Now we're talking eight to 10 years ago. So give us a little bit of update or fill us in. What are the capabilities today? Are there things that you're rolling out that you need another layer of technology before you can get in? Because look, hotel chains are notoriously tough, right? We've got reservation systems, property management systems, third party software. It doesn't all talk to each other, right? What's the state of Choice today? Then help us kind of. Sure. Then we can use that as the jumping in place. Absolutely. I will start with our technology stack. We believe that this is a structural advantage for us. I will start there. For those of you who might not know, we actually have a homegrown central reservation system that was native built to Amazon Web Services. We have a property management system that was homegrown, and native to the cloud as well. Our two primary systems were built native to the cloud. Our entire technology stack is now sitting in the cloud. We were the very first company that put end-to-end our technology stack in the cloud. That has been really important for us in this AI-driven world that we are going to continue to be living in, and it is going to continue to evolve. To me, that is a structural advantage. Now, as it pertains to how we think about just AI technology, et cetera, going forward, what is critical, it is the data. It is the data that underpins all of this, and I am not going to sit up here and geek out on data nodes or anything else. But if you think about the data, the semantic layer, it ultimately allows you to go deploy technology in three ways. We look at our AI strategy in three different buckets. The first is, how does a guest ultimately find you, and what is the guest journey? How does a franchisee use a tool as a teammate? Then how does an employee become more productive? The data that underpins that allows you to go deploy all of those tools as effectively and as quickly as possible. We think that that is going to continue to be a huge differentiator for us. We are not just talking the talk. When you take a look at what we have shared publicly, our property management system now has a teammate that is embedded within it. It is called CHARLIE. The reality is that teammate can now reduce operational requests. We are seeing it show up about 40% reduction in operational requests. We are actually seeing the time of a shift reduced by about 50% in terms of the activities that those shift workers were executing on. We are seeing that show up. We saw it show up in a tool that we deployed that was effectively an RFP response tool. It is now automated. So, if you think about mom and pop owner/operator, who is not just overseeing the hotel, but they are running the hotel on a day-to-day basis, they never had the opportunity to go respond to some of these RFPs. We now have an AI tool that can do that for them, and we are seeing it show up in, I think it was a 360-basis point improvement in the conversion rates. Early innings, but these are the types of things that you are seeing. Then I think everyone talks about guest journey, and again, it comes down to content creation, content curation. Websites were developed for the human eye, not for LLMs. As you are thinking about all this infrastructure coming together and the data that we have, it allows us to really hit on the guest, it allows us to hit on the franchisee, and at Choice Hotels, we talk about every associate really being a builder. Let us just talk distribution for a minute. Sure. Because particularly for these chain scales, right, and as we lean more leisure, that is where some of that mixture distribution channel can matter, right? I think you have done a very good job of obviously increasing your proprietary share, but of how much of the overall revenue distribution you are delivering for your franchisees. But give us an update on sort of where you are at, and then what maybe the next move could be of where AI could start to impact that mix even further, that you can capture more direct and less to OTA. Yeah. And other places. Yeah, so distribution is changing. It's changing rapidly. I won't pretend to tell you where it's going to be five years from now. But when you think about just where we are today, the key is being discoverable. Being discoverable and being bookable. All of that is underpinned by, again, content curation, content creation. A lot of what we're doing right now is ensuring the clean data that we have is set up in a way that's servable to the LLMs and whatnot. Because now I can actually log into my LLM of Choice Hotels and say, it's very natural language, conversational, "I want to now take a trip to XYZ. I've got four children. This is my occasion." You're going to see a shift from persona-based to occasion-based marketing, I think. A lot of that comes down to the data. We've really doubled, tripled, and quadrupled down on ensuring that we've got the data right, that we're basically serving it up in such a way that we're always on that shelf, regardless of the LLM that you choose. It's going to be a continued evolution, but that's where we're focused. There's some headlines that you heard just with regards to Google AI Mode. We were an early adopter there. That effectively allows a customer to start the search in Google, and essentially have a conversation, and then ultimately book using Google Pay without ever leaving that sort of environment because that's about a frictionless experience. I think that's really what AI's creating is just the need for frictionless experiences for our guests, for our owners, and for our associates. Google's one channel. We've got a lot of the other big LLM companies. Do we have direct connectors in place with some of those? Are those on the shelf and being rolled out? You've got the raw tech stack to be able to do it, but you need that MCP layer, not to totally geek out, but that'll be my one AI name drop. Yeah. But just, are these in place? If I open up Claude, how long is it going to take me to get to see a Choice connector where I'm really able to tap into and actually see your inventory? Yeah. Stay tuned for all of that, but the reality is we've been prioritizing where we're going to lean in. I think Google AI Mode was one area in particular, just because of the direct connection that it does have and the frictionless experience. But all the capabilities that you hear in the marketplace with regards to a ChatGPT app, et cetera, we have the capability to do that right now as well. So stay tuned on that one, and more to come because it's certainly going to be a part of the future going forward. Perfect. Unfortunately, we're out of time. But Dom, congratulations again. Thank you. On the new seat. Best wishes as you start to ramp up in the fall, and thanks for spending time with us so early in your tenure. Really appreciate it. Really appreciate it as well. Thanks, everyone. Thank you.