Baron Funds Comments on Choice Hotels International Inc.

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Aug 18, 2015

Choice Hotels International, Inc. (CHH, Financial), a franchisor of economy hotels, decreased in the quarter as slightly slower-than-expected growth in RevPAR (revenue per available room) and a high multiple led to investor sales. However, we still believe the company has growth potential with its recent revamp of its Comfort Inn brand, continuing increases in RevPAR, and stronger unit growth in the various Choice hotel brands. Choice’s “asset light” business model continues to generate strong cash flow, which the company uses to invest in growth initiatives and repurchase shares.

From Baron Funds' second quarter commentary.