Choice Hotels International Inc. reported total revenues of $ 340.6 million for the three months ended March 31, a company record. Global net rooms grew 1.7% compared to March 31, 2025, driven by 2.5% growth in higher revenue extended-stay, midscale and upscale brands.
“Choice Hotels delivered first-quarter financial results in line with expectations, with key operating indicators signaling an inflection point in underlying trends,” said Patrick Pacious, president/CEO. “We are driving sequentially improving U.S. net rooms growth, supported by our conversion-led model and more accretive pipeline, achieving faster, more capital-efficient expansion. Franchisee unit economics continue to strengthen and capital intensity is declining. This positions Choice to deliver more consistent earnings growth and enhances our ability to return capital to shareholders.”
First-quarter highlights include:
- Net income was $20.3 million, representing diluted EPS of $0.44.
- Adjusted EBITDA totaled $125.7 million, while adjusted diluted EPS reached $1.07.
- U.S. royalty rate expanded 11 basis points to 5.22%, compared to the same period of 2025.
- U.S. room openings increased 32% compared to the same period of 2025, reaching the highest first-quarter level since 2023, while exits declined year-over-year to the lowest quarterly level since 2023, driving sequential net rooms growth from year-end 2025.
- Global franchise agreements awarded increased 72%, compared to the same period of 2025.
- U.S. pipeline grew sequentially to approximately 71,500 rooms, with the conversion rooms pipeline increasing 17% compared to March 31, 2025, and 3% sequentially from Dec. 31, 2025.
- Capital recycling generated $24.6 million of proceeds, with hotel development and lending shifting from net outflows in the prior year to net inflows in the current period.
Financial performance
- Revenue excluding reimbursable costs increased 3% to $216.7 million in the first quarter, from $209.4 million in the prior year.
- Adjusted EBITDA was $125.7 million for the first quarter, compared to $129.6 million in the prior year, primarily reflecting timing-related factors and in line with expectations.
- Adjusted diluted EPS was $1.07 for the first quarter, compared to $1.34 in the prior year, reflecting timing-related factors and a temporarily elevated effective income tax rate that is expected to be approximately 25% for the full year.
RevPAR
- U.S. RevPAR increased 1.8% in the first quarter, compared to the same period of 2025, excluding the prior-year hurricane-related impact.
- International RevPAR increased 2.6% on a currency-neutral basis in the first quarter, compared to the same period of 2025.
System size and development
- Global pipeline exceeded 77,700 rooms as of March 31, 2026, with 97% concentrated in extended-stay, midscale and upscale brands, supporting a more accretive future earnings profile.
- Franchise agreements awarded increased 65% in the U.S. and 113% in international markets in the first quarter of 2026, compared to the same period of 2025.
- International net rooms grew 13% compared to March 31, 2025, highlighted by a 59% increase in room openings, bringing the international system to approximately 160,500 rooms, with strong momentum across regions, including Canada and EMEA.
- Extended-stay remains a core growth engine, supported by strong unit economics and continued developer demand, with U.S. extended-stay net rooms growing 11.8% compared to March 31, 2025, and a pipeline of more than 30,300 rooms as of March 31, 2026.
- U.S. midscale room openings increased 57% compared to the same period of 2025, and the pipeline grew 6% from March 31, 2025, reflecting improving owner returns and demand for cost-efficient prototypes.
- U.S. economy transient rooms pipeline grew 26% sequentially from Dec. 31, 2025, supported by a 13% increase in franchise agreements awarded in the first quarter of 2026.
- U.S. upscale room openings increased 112% compared to March 31, 2025, and the pipeline grew 8% compared to March 31, 2025, driven by Radisson Individuals, Ascend Collection and Radisson brand.
Outlook
The company is maintaining its full-year 2026 outlook. The following outlook includes forward-looking non-GAAP measures used by management to assess expected performance. Adjusted metrics exclude the net surplus or deficit from reimbursable revenue from franchised and managed properties, due diligence and transition costs, share repurchases completed after March 31, 2026, and other items.
Net capital outlays for hotel development-related activities are expected to decline significantly, from $103.4 million in 2025 to a range of $20 million to $45 million in 2026, reflecting the company’s transition to a more capital-efficient model.
Full-year 2026
- Net income between $265 million and $275 million
- Adjusted net income between $320 million and $330 million
- Adjusted EBITDA between $632 million and $647 million
- Global RevPAR growth between -2% and 1%
- U.S. RevPAR growth between -2% and 1%
- Global net system rooms growth of approximately 1%
