Choice Hotels International : 2023 Environmental Social Governance Report

BUILDING

• BETTER TOMORROW,
  TODAY

2023 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

INTRODUCTION

PEOPLE

PLANET

PERFORMANCE

APPENDICES

2

Table of Contents

Introduction	3
Letter from CEO Patrick Pacious	3
About This Report	4
About Choice	6
2023	Sustainability Highlights	8
2023	Sustainability Goals	9
Approach to Sustainability	11

People	20
Diverse Workforce	21
The Associate Experience	30
Human Rights	36
Community Impact and Service	38

Planet	41
Commitment to Green	42
Climate and Energy	48
Water	50
Waste	51
Responsible Sourcing	52

Performance	54
Corporate Governance	55
and Ethical Behavior
ESG Governance and Oversight	56
Risk Management	57
Data Security and Privacy	58
Public Policy and Political Activity	59

Appendices	60
Sustainability Policies	61
Performance Tables	62
GHG Emissions Methodology	63
SASB Index	64
TCFD Index	67

Choice Hotels 2023 Environmental, Social and Governance Report

INTRODUCTION	PEOPLE	PLANET	PERFORMANCE	APPENDICES	3

Letter from CEO Patrick Pacious

For more than 80 years, Choice Hotels International, Inc. has put people first. Our vision to bring people together and enable their success provides the foundation for us to champion our franchise owners, support our associates, elevate the guest experience, and give back to our local and global communities.

Every day, we advance our vision through our sustainability strategy and initiatives as we work to further embed sustainability principles throughout our organization.

This past year was pivotal for our business and our sustainability journey. We completed the integration of the Radisson Hotels Americas business within a year of acquisition, a testament to our team, as well as our experience and expertise. We also opened our new worldwide headquarters in North Bethesda, Maryland, designed with sustainability and associate wellbeing in mind.

After analyzing Choice's climate-related risks and opportunities, we published our findings in our inaugural Task

Force on Climate-RelatedFinancial Disclosures (TCFD) report.We also signed a public commitment letter with the Science Based Targets initiative to set science-basedtargets to reduce our greenhouse gas emissions. We increased support and resources for our franchisees through our refreshed Room to be Green program, which provides a more ambitious pathway to creating more sustainable hotels. We also strengthened our approach to human trafficking prevention with refreshed training and resources available to our associates and franchisees.

With the integration of Radisson Americas, we seized the opportunity to enhance the associate experience and wellbeing, while reinforcing our inclusive, people-centered culture. We are taking a holistic approach to support the evolving needs of our associates, including adding new associate benefits. Our Choice Resource Groups continued to advance our focus on diversity, equity and belonging and we welcomed the Green Team, a new associate resource group dedicated to driving environmental awareness.

Our sustainability practices aren't just good for our communities and the planet - they are also good for business. Finding new ways to reduce water and energy use at our Choice-branded hotels, for example, can benefit the environment while also boosting our franchisees' bottom lines. We are proud of the progress we made in 2023 and look forward to continuing our evolution and growth, all while keeping people at the forefront of our efforts, welcoming every guest everywhere their journey takes them.

Patrick Pacious

President & CEO

Choice Hotels 2023 Environmental, Social and Governance Report

INTRODUCTION	PEOPLE	PLANET	PERFORMANCE	APPENDICES

About This Report

We are proud to present the Choice Hotels International (Choice) 2023 Environmental, Social and Governance (ESG) Report, which details the advancement of our sustainability initiatives during fiscal year 2023 (January 1, 2023 to December 31, 2023). All references are to the 2023 fiscal year unless otherwise stated.

This report highlights our journey and progress as we aim to build a lasting legacy of sustainability and wellbeing for our franchisees, associates, guests, communities and world.

Choice acquired Radisson Hotel Group Americas (Radisson) in 2022 and the integration of the business was completed in December 2023. References to "our associates" include all corporate employees; any references pertaining to managed hotel employees are

clearly identified.

Sustainability Frameworks and Disclosures

This report was prepared in alignment with Sustainability Accounting Standards Board (SASB) Hotel & Lodging standards. We also align certain practices with principles, standards and frameworks contained in the United Nations Sustainable Development Goals (SDGs), the United Nations Universal Declaration of Human Rights, the Carbon Disclosure Project and the Task Force on Climate-related Financial Disclosures (TCFD). The inaugural Choice TCFD Reportwas published in December 2023.

Choice Hotels 2023 Environmental, Social and Governance Report

4

Cambria Hotels Boston Downtown - Seaport, MA

INTRODUCTION	PEOPLE	PLANET	PERFORMANCE	APPENDICES	5

Materiality

This report may use certain terms, including "material," "materiality," "significant" and other similar terms, to refer to environmental, social and governance issues that are important to Choice and our stakeholders. Used in this context, these terms are not intended to be construed in accordance with the U.S. federal securities laws or any other laws of the United States or any other jurisdiction, or as these terms are used in the context of financial statements and financial reporting. Matters considered material for purposes of this report may not be considered material in the context of our financial statements, reports with the SEC, or our other public statements, and the inclusion of information in this report is not an indication that such information is necessarily material to us in those contexts.

As the basis of this report, we've conducted a materiality assessment to understand the most significant environmental, social and governance issues for us and our stakeholders. Sustainability and corporate responsibility topics are considered material for us if they influence the judgment and decisions of our internal and external stakeholders, as well as have an impact on them and our business.

This report and its content are not substitutes for financially material information provided in Choice's SEC filings including, but not limited to, our Annual Reports on Form 10- K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Choice Hotels 2023 Environmental, Social and Governance Report

Forward-Looking Statement

This report includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our environmental, social and governance ambitions, goals, targets, initiatives, commitments and activities, as well as our future operations and long-term strategy. These forward-looking statements are based on management's current beliefs, assumptions and expectations regarding future events, which, in turn, are based on information currently available to management. We caution you not to place undue reliance on any such forward-looking

statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other factors. These and other risk factors are discussed in detail in the company's filings with the Securities and Exchange Commission (the SEC), including, but not limited to, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

INTRODUCTION	PEOPLE	PLANET	PERFORMANCE	APPENDICES	6

About Choice

Choice is one of the largest lodging franchisors in the world.

The challenger in the upscale segment and a leader in midscale and extended stay, Choice® has nearly 7,500 hotels, representing almost 630,000 rooms, in 46 countries and territories. A diverse portfolio of 22 brands that range from full-service upper upscale properties to midscale, extended stay and economy enables Choice® to meet travelers' needs

in more places and for more occasions while driving more value for franchise owners and shareholders. The award-winning Choice Privileges® loyalty program and co-brand credit card options provide members with a fast and easy way to earn reward nights and personalized perks.

$1.54 billion	~18,000
annual revenue full year 2023	franchise owners
>1,800		>64 million
global corporate associates	Choice Privileges
plus nearly 1,000 hotel	loyalty members
employees in the
managed division
>7,500
open hotels globally

• More than 630,000 rooms in approximately 46 countries and territories
• 14 managed hotels (inclusive of 4 owned hotels)
• 10 fully owned hotels
• 6 open partially owned hotels through joint ventures
• 57% average domestic occupancy rate
• More than 3.5 million square feet of total area of managed and owned lodging facilities

Radisson Blu Toronto Downtown, ON, Canada

Choice Hotels 2023 Environmental, Social and Governance Report

INTRODUCTION	PEOPLE	PLANET	PERFORMANCE	APPENDICES

7

History of Innovation

1941		1995
Choice	1983	First hotel
becomes	website with
nation's first	First global	real-time
hotel chain	marketing and	rate and
	reservations	availability
	system	information

2008

First hotel company to launch a soft brand

	2015
	New Corporate
	logo and identity
	Launched pricing
	optimization
2009	solution to drive
Choice develops	RevPAR
first hotel app
for iOS

2017

The first hotel company to develop a new cloud-based central reservation system in the last 30+ years

2019

The first hotel company to partner with Google to book a hotel on Google Assistant

2023

1970

First to offer guests 24-hour,toll-free reservations

1984

First to offer non- smoking rooms in every hotel

2005

First cloud- based property management system

2014

Forbes top 100 most innovative growth companies

First hotel company to offer instant book on TripAdvisor

Econo Lodge becomes the first economy brand to implement a sustainability program across the full system

2016

The first hotel company to offer immediate in- app gift card downloads

Radisson Blu Mall of America becomes the first hotel in the world equipped with the CleanO2 / CarbinX™ carbon capture technology

More information about Choice can be found in our 2023 Proxy Statementand on ourCorporate Social Responsibilitywebsite.

Choice Hotels 2023 Environmental, Social and Governance Report

INTRODUCTION	PEOPLE	PLANET	PERFORMANCE	APPENDICES	8

2023 Sustainability Highlights

Joined the American Hotel & Lodging Association (AHLA) No Room for Trafficking Advisory Council, which unites leaders across the industry in the fight against human trafficking.

Refreshed our corporate and franchisee-facing human trafficking prevention training.

Revamped and expanded our Room to Be Green program, enhancing Level 1 brand standards and adding more ambitious standards at each level.

Expanded our Total Rewards benefits program with a focus on integrated associate wellbeing.

Choice Hotels 2023 Environmental, Social and Governance Report

Publicly committed to setting near-term science based targets for reducing our greenhouse gas emissions

Launched our 12th Choice Resource Group, the Green Team, an employee-led group focused on driving awareness and engagement with sustainable practices.

Opened our new worldwide headquarters in North Bethesda, Maryland, designed with sustainability and associate wellbeing in mind.

Published our inaugural TCFD
Report, including conducting
scenario-based workshops to
assess climate-related risks	Radisson RED Miami Airport, FL
and opportunities

INTRODUCTION	PEOPLE	PLANET	PERFORMANCE	APPENDICES	9

2023 Sustainability Goals

FOCUS AREAS	GOALS	STATUS	2023 PROGRESS
	Drive hotel adoption and engagement with property-level utilities
	tracking dashboard, helping hotels identify opportunities for
	reducing energy and water usage and costs:	In Progress	More than half of the domestic system has adopted
			the dashboard.
	•	100% adoption by owned and managed hotels by end of 2025
	•	90% adoption by franchised hotels by end of 2025
Environmental
Sustainability	Phase out single-use polystyrene products across domestic brands1	Achieved	Polystyrene products have been eliminated from the
	by end of 2023	brand standards for all applicable brands.
			In Progress	Bulk amenities are included in the refreshed Room to Be
	Make bulk amenities standard across domestic brands2 by end of 2025	Green Level 1, which is a brand standard across all brands2.
				The new requirements go into effect on Jan 1, 2025.
				100% of our suppliers in the U.S. offer cage-free
				eggs products.
Responsible Sourcing	Provide the hotels in our system with suppliers of cage-free eggs,	In Progress	100% of the all-day dining restaurants at our
in order to source 100% of eggs used (shell, liquid and egg products)
managed hotels serve cage-free eggs products.
	from cage-free sources globally by end of 2025
				Globally, approximately 13% of our hotels' total egg
				spend is from cage-free eggs.
Sustainability Reporting	Align disclosures with SASB, TCFD and CDP in annual reporting by	Achieved	This goal was achieved ahead of schedule in 2023.
end of 2025

1. Does not apply to the Ascend Hotel Collection and Radisson Collection, which are soft brands.
2. Does not apply to extended stay brands, which do not provide amenities on a daily basis, or the Ascend Hotel Collection and Radisson Collection.

Choice Hotels 2023 Environmental, Social and Governance Report

INTRODUCTION	PEOPLE	PLANET	PERFORMANCE	APPENDICES	10

FOCUS AREAS	GOALS	STATUS	2023 PROGRESS
	Strive to increase representation of associates who identify as	In progress
	a member of a traditionally underrepresented racial/ethnic
	demographic to 40% by end of 2027		At the end of year one, we have seen improved
	Strive to increase demographic representation in senior		metrics for each of the workforce diversity, equity
		and belonging goals.
Diverse Workforce1	leadership levels2 by end of 2027 to 50% women and 22% leaders	In progress
who identify as a member of a traditionally underrepresented
	racial/ethnic demographic
	Achieve 0% differential in pay equity based on gender or racial	Achieved	Continue to monitor, evaluate and take action as needed
	identity at the corporate level	to maintain 0% differential in pay equity.
	Strive to increase the percentage of newly awarded franchise	In progress
	agreements involving underrepresented minority owners by 50%
	by end of 2025
Diverse Hotel Ownership1			At the end of year one, we have seen improved metrics
Strive to increase the percentage of newly awarded franchise	In progress
for each of the diverse hotel ownership goals.
	agreements involving women owners by 50% by end of 2025
	Of financial incentives available for owners, strive to provide $25 million	In progress
	to women and/or underrepresented minority owners by 20253

1. For all applicable focus areas, the goals are aspirational. Choice does not consider protected class status in employment or contracting decisions.
2. Senior Director level and above; pertains to U.S.-based corporate associates.
3. Contracts with entities 50%+ owned by underrepresented minorities and/or women are included toward these goals.

Choice Hotels 2023 Environmental, Social and Governance Report