Choice Hotels International Inc., for the third quarter ended Sept. 30, reported that net income grew to $180 million from $105.7 million in the same period of 2024, bolstered by 9.5% RevPAR growth internationally.
“Choice Hotels International delivered another quarter of record profitability, underscoring the strength of our portfolio’s continued shift toward higher-value brand segments and multiple growth avenues beyond U.S. RevPAR,” said Patrick Pacious, president/CEO. “We are especially excited by the accelerating momentum in our international business, where we are on track to double profitability by 2027. With an accretive, high-quality pipeline that rapidly converts signings into openings, and an enhanced value proposition that is attracting a growing base of higher-value guests, Choice is exceptionally well-positioned to deliver long-term growth and create meaningful value for all stakeholders.”
Third-quarter highlights:
- Net income grew to $180 million from $105.7 million in the same period of 2024, representing diluted EPS of $3.86, an increase from $2.22 in third-quarter 2024.
- Adjusted EBITDA increased 7% to a third-quarter record of $190.1 million, compared to $177.6 million in the same period of 2024.
- Adjusted diluted EPS was $2.10, a decrease from $2.23 in the same period of 2024.
- Global net rooms grew 2.3%, driven by 3.3% growth across the more accretive, higher-revenue upscale, extended-stay and midscale segments, compared to Sept. 30, 2024.
- International net rooms grew 8.3% compared to Sept. 30, 2024, highlighted by a 66% increase in openings, and grew 5.2% compared to June 30, 2025. Key milestones:
- Added more than 4,800 midscale rooms in France through direct franchise agreements and is expecting to nearly double the company’s France portfolio by year-end 2025.
- Entered Argentina through a direct franchise agreement.
- Onboarded nearly 80% of the anticipated 9,500 rooms in China under a distribution agreement with SSAW Hotels and Resorts.
- Subsequent to quarter-end, the company introduced the midscale extended-stay Mainstay Suites brand to Australia through direct franchise agreements, the brand’s first expansion outside North America, entered new markets in Africa and Suriname, and added a second franchise agreement in Argentina.
- Global pipeline exceeded 86,000 rooms as of Sept. 30, 2025, with 98% concentrated in upscale, extended-stay and midscale segments.
- U.S. extended stay net rooms grew 12%, highlighted by a 14% increase in openings, compared to Sept. 30, 2024.
Financial performance
- Total revenues increased 5% to $447.3 million in Q3, compared to the same period of 2024.
- Franchise and management fees increased 3% to $193.8 million in Q3, compared to the same period of 2024.
- Partnership services and fees increased 19% to $28.9 million in Q3, compared to the same period of 2024.
- Global RevPAR increased 0.2% for Q3, compared to the same period of 2024, reflecting international RevPAR growth of 9.5% that was offset by a 3.2% decline in U.S. RevPAR primarily due to softer government and international inbound demand.
- International RevPAR increased 9.5%, or 5.1% on a constant-currency basis, for Q3 compared to the same period in 2024, with growth recorded across all regions outside of the U.S., as EMEA delivered an 11% year-over-year (YOY) increase; Americas (excluding the U.S.) reported a 5% YOY increase, driven by strong results from Canada, where the newly acquired operations achieved a 7% YOY increase; and Asia-Pacific grew 5% YOY.
- U.S. RevPAR for the extended-stay portfolio outperformed the U.S. lodging industry by 20 basis points, while the U.S. economy transient portfolio outperformed its chain scale by 180 basis points for Q3 , compared to the same period of 2024.
- U.S. average royalty rate expanded 10 basis points to 5.15% for Q3, compared to the same period of 2024.
System size and development
- U.S. upscale, extended-stay and midscale net rooms portfolio grew 1.6% compared to Sept. 30, 2024.
- Global net upscale rooms grew 20.8% in Q3, highlighted by a more than fourfold increase in global openings, compared to the same period of 2024.
- U.S. franchise agreements awarded increased 7% in Q3, driven by a 7% increase for conversion hotels and a 10% increase for new-construction hotels, compared to the same period of 2024.
- Global midscale pipeline expanded 5% to nearly 30,000 rooms as of Sept. 30, 2025, including a 15% increase in the U.S. pipeline for the Country Inn & Suites by Radisson brand compared to Sept. 30, 2024.
- U.S. economy transient brands rooms pipeline grew 35% and U.S. franchise agreements awarded increased 27% in Q3 compared to the same period of 2024.
Outlook
The following full-year outlook includes forward-looking non-GAAP measures used by management to forecast the company’s performance. The net income guidance range has been revised from the company’s prior outlook primarily to reflect the $100 million gain recognized during the third quarter of 2025 on the fair value remeasurement of the previously held 50% equity investment in Choice Hotels Canada. Adjusted metrics exclude the net surplus or deficit generated from reimbursable revenue from franchised and managed properties, due diligence and transition costs, and any share repurchases completed after Sept. 30, 2025, and other items.
- Net income between $353 million and $371 million
- Adjusted net income between $320 million and $331 million
- Adjusted EBITDA between $620 million and $632 million
- U.S. RevPAR growth from -3% to -2%
- U.S. average royalty rate growth of mid-single digits
- Global net system rooms growth of ~1%
