Choice Hotels Raises 2026 RevPAR Outlook as Q3 Adjusted EPS Rises 11%

Choice Hotels International (CHH ) reported results for the third quarter ended 2026年9月30日, on 2026年11月2日, posting net income of $58 million, or $1.28 per diluted share, and raising its full-year 2026 RevPAR and adjusted EBITDA outlooks while lowering its net income guidance, according to the company’s third-quarter earnings release.

Total revenues were $458 million, up from $447 million in the same period of 2025. Net income declined 68% year over year, a comparison the company attributed primarily to a $100 million gain from the acquisition of a joint venture recognized in the prior-year quarter. The current-year quarter included a $24 million charge related to the termination of an arrangement involving an option to acquire a European hospitality business operating primarily under a lease-based model, and a $6 million non-cash impairment charge related to two owned hotels. The prior-year gain and both current-year charges are excluded from adjusted results.

Adjusted EBITDA rose 1% to $193 million, primarily on higher U.S. royalties, partially offset by lower liquidated damages revenue and higher adjusted SG&A expenses. Excluding liquidated damages revenue of $3.3 million versus $9.5 million a year earlier, adjusted EBITDA increased 5%. Adjusted diluted EPS increased 11% to $2.33, benefiting from higher franchise and management fees and share repurchases. Franchise and management fees rose 5% to $204 million, primarily reflecting higher U.S. royalties driven by RevPAR growth and royalty rate expansion, increased franchisee programs and services revenue, and higher international royalties.

U.S. RevPAR increased 3.8% in the quarter, driven by a 1.0% increase in rate and a 160-basis-point increase in occupancy, with strength in the West South Central and Midwest regions. International RevPAR rose 3.7% on a currency-neutral basis, led by the Caribbean and Latin America, and global RevPAR rose 3.9%.

Global net rooms grew 1.7% from 2025年9月30日, to 660,614, led by 2.5% growth across the extended stay, midscale, and upscale brands. U.S. rooms were approximately flat at 498,215 as third-quarter room exits declined 23%, while international net rooms grew 7.3% to 162,399, led by EMEA, Asia-Pacific, and Canada. Extended stay net rooms grew 10.7%, marking the 13th consecutive quarter of double-digit growth, and the company opened its 600th extended stay hotel during the quarter.

U.S. franchise agreements awarded increased 24%, representing 6,900 new rooms for development. The U.S. conversion pipeline grew to 25,500 rooms, up 6% from 2026年6月30日, and 29% from a year earlier, and the global pipeline totaled 78,200 rooms, 96% concentrated in extended stay, midscale, and upscale brands. The U.S. average royalty rate expanded 8 basis points to 5.23%.

“Our third-quarter results reflect continued progress against our key priorities: the U.S. net rooms growth rate improved for the third consecutive quarter, U.S. RevPAR growth strengthened, and capital recycling is underway,” said Dom Dragisich, President and Chief Executive Officer. Dragisich said the company expects U.S. net rooms growth to accelerate to approximately 1% by year-end.

Owned Hotel Sales and the Harvest Hosts Acquisition

Subsequent to quarter-end, the company sold two owned hotels for estimated net cash proceeds of approximately $34 million while retaining franchise agreements for both properties. As of 2026年11月2日, it owned 17 operating hotels, with one additional hotel under construction. During the first nine months of 2026, net capital outlays for hotel development and lending activities declined 56% to $36.3 million.

On 2026年10月1日, the company acquired Harvest Hosts, an RV travel subscription platform with recurring revenue, in an approximately $130 million transaction funded with available cash and borrowings under its revolving credit facility.

Total available liquidity stood at $928 million as of 2026年9月30日, and the net debt-to-adjusted EBITDA ratio was 3.2x for the trailing twelve months, within the company’s 3.0x to 4.0x target range. In 2026年8月, the company completed a $500 million unsecured term loan maturing in 2029年8月, reducing the borrowing spread on the refinanced debt by 15 basis points. Operating cash flow for the first nine months of 2026 was $122 million, compared with $185 million a year earlier, a decrease the company attributed primarily to the contract termination payment, higher franchise agreement acquisition costs, and higher marketing and reservation system reimbursable expenses. The company returned $211 million to shareholders during the nine-month period through $39 million in dividends and $172 million in share repurchases.

更新日 Full-Year 2026 Outlook

The company updated several full-year 2026 outlook measures:

The company attributed the lower net income range primarily to higher expected marketing and reservation system reimbursable expenses, driven by increased investment in franchisee-facing tools and guest delivery capabilities, along with the $24 million termination charge, $6 million in impairments, lower expected equity in earnings of affiliates, and higher interest expense. It cited stronger global RevPAR, higher U.S. royalty rate expansion, and an estimated $1 million net benefit from the Harvest Hosts acquisition and two hotel dispositions for the raised adjusted EBITDA midpoint, partially offset by higher adjusted SG&A expenses.

Adjusted SG&A growth excluding Harvest Hosts is now projected at approximately 9%, reflecting primarily non-recurring spending on strategic initiatives and artificial intelligence-enabled capabilities, as well as higher accounts receivable reserves. Net capital outlays for hotel development-related activities are expected to decline from $103.4 million in 2025 to approximately $20 million in 2026, assuming no additional hotel sales.