Choice Hotels International Continues Global Expansion Through Consolidation of Investment in Choice Hotels Canada

Rhea-AI Summary

Choice Hotels International (NYSE: CHH) has acquired the remaining 50% stake in Choice Hotels Canada from InnVest Hotels for $112 million, transitioning from a master franchising model to a direct franchising model. The transaction, completed in July 2025, was funded through available cash and existing credit facilities.

The consolidated Canadian business is expected to generate $23 million in fee revenue and $18 million in EBITDA for full-year 2025. Choice Hotels Canada currently operates 350 hotels with 30,000 rooms and has 2,500 rooms in the pipeline. The consolidation will expand Choice Hotels Canada's brand portfolio from 8 to 22 brands, with Brian Leon continuing as CEO of Canadian operations.

This move is part of Choice Hotels' broader international expansion strategy, which includes recent growth in Brazil, France, and China, with the company's international rooms portfolio growing 5% to over 140,000 rooms in Q2 2025.

Positive

• Acquisition provides full control over Canadian operations, enabling direct franchising model
• Expected to generate $23M in fee revenue and $18M in EBITDA for 2025
• Canadian market projected to grow over 5% annually through 2030
• Expansion of brand portfolio from 8 to 22 brands in Canada
• Strong pipeline with 2,500 rooms under development
• Retention of existing management team ensures operational continuity

Negative

• $112 million cash outlay impacts company's financial resources
• Integration costs and operational adjustments may affect short-term performance

Insights

Financial Analyst

Choice Hotels' $112M acquisition of remaining Canadian stake strengthens market position and enhances revenue potential.

Choice Hotels International's $112 million acquisition of the remaining 50% stake in Choice Hotels Canada marks a strategic shift from a joint venture to direct franchising model. This consolidation demonstrates significant commitment to the Canadian hospitality market, which is projected to grow at 5% annually through 2030, reaching over $50 billion.

The financial implications are meaningful - management expects the consolidated Canadian business to generate approximately $23 million in fee revenue and $18 million in EBITDA for 2025. This represents an attractive 78% EBITDA margin, suggesting strong operational efficiency.

Beyond immediate financial returns, the acquisition offers three substantial growth catalysts. First, it expands Choice Hotels Canada's brand portfolio from 8 to 22 brands, creating cross-selling opportunities. Second, it leverages the existing foundation of 350 hotels, 30,000 rooms, and 9 million Choice customers in Canada. Third, it enhances pipeline development, with 2,500+ rooms already planned including expansion of premium brands like Cambria and Radisson.

This move aligns with Choice's broader international expansion strategy, which showed impressive 5% growth in international rooms last quarter. The company has made parallel strategic moves in Brazil, France, and China, significantly expanding its global footprint. The transaction was funded through available cash and existing credit facilities, indicating strong liquidity position without substantially increasing leverage.

Full Portfolio of Choice Hotels' 22 Hotel Brands will Now Benefit from Canadian Owner Success System

NORTH BETHESDA, Md., Aug. 6, 2025 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE: CHH), one of the world's largest franchisors, today announced the acquisition of the remaining 50% stake in Choice Hotels Canada from long-time joint venture partner InnVest Hotels, thereby transitioning from a master franchising model to a fully direct franchising model in Canada. This strategic move underscores Choice Hotels' deep commitment to the Canadian market and its franchisees and its confidence in the strength of the in-country leadership team.

With a legacy dating back to 1955, Choice Hotels Canada has played a pivotal role in the company's international growth. The acquisition marks a significant milestone in Choice's 70- year history in Canada and positions the company for accelerated growth.

"This milestone reflects our confidence in the Canadian market and the exceptional capabilities and legacy of success of our local team," expressed Patrick Pacious, President & CEO of Choice Hotels International. "By consolidating operations in Canada and expanding Choice Hotels Canada's owner success system from the current 8 hotel brands to our full portfolio of 22 brands, we are opening doors to remarkable opportunities for our franchisees and guests, while paving the way for accelerated growth across Canada."

The transaction, completed in July 2025, was valued at approximately $112 million and was funded through available cash and the company's existing credit facility. Management expects the total Choice Hotels Canada business to generate approximately $23 million of fee revenue and $18 million in EBITDA for full-year 2025.¹

As of June 30, 2025, Choice Hotels' Canadian portfolio included 350 hotels and 30,000 rooms, with more than 2,500 rooms in the pipeline — including its first Cambria Hotel, four Radisson hotels, and more than 20 Comfort, Quality, and Ascend Collection hotels.²

Canada is a highly attractive hospitality market, with projected average annual growth expected to exceed 5% through 2030, reaching over $50 billion. With a strong foundation of over 9 million existing Choice customers and a robust network of franchisees, Choice Hotels aims to expand its market share across all 22 brands.

Brian Leon, CEO of Choice Hotels Canada and an 18-year company veteran, will continue to lead the Canadian operations. InnVest Hotels, the largest franchisee of Choice Hotels in Canada will remain a key partner, owning and operating 50 Comfort hotels nationwide.

"This is an exciting moment for Choice Hotels Canada and our franchisees," added Brian Leon, Toronto-based CEO of Choice Hotels Canada. "With the full backing of Choice Hotels International, we are well-positioned to deliver even greater value to our franchisees and guests as we write the next chapter of our success story."

Global Expansion
This investment accelerates Choice Hotels' continued growth outside of the United States. In Q2 2025, the company grew its net international rooms portfolio by 5% to over 140,000 rooms since June 30, 2024, driven by a 15% increase in openings. Major developments year-to-date include strengthening the company's presence in Brazil by extending a master franchise agreement for over 10,000 rooms with Atlantica Hospitality International by 20 years, nearly tripling the room count in France through a direct franchise agreement with Zenitude Hotel-Residences, and signing strategic agreements with SSAW Hotels & Resorts in China, including a distribution agreement which is expected to add over 9,500 rooms in 2025 and a master franchising agreement, which is expected to add approximately 10,000 rooms over the next five years.

About Choice Hotels^® 
Choice Hotels International, Inc. (NYSE: CHH), is one of the largest lodging franchisors in the world, with nearly 7,500 hotels, representing nearly 650,000 rooms, in 46 countries and territories. A wide-ranging portfolio of 22 brands that includes full-service upper upscale, midscale, extended stay, and economy properties enables Choice Hotels^® 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^® rewards program and co-brand credit card options provide members with a fast and easy way to earn reward nights and personalized perks. For more information, visit www.choicehotels.com.

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1	The fee revenues of $23 million exclude reimbursable revenues from franchised properties. The July 2, 2025 exchange rate of 0.734 was used to convert the purchase price, fee revenues, and EBITDA from Canadian dollars to US dollars.
2	Of the 30,000 rooms, 26,000 were part of the Choice Hotels Canada joint venture.

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SOURCE Choice Hotels International, Inc.

FAQ

How much did Choice Hotels (NYSE:CHH) pay for the remaining stake in Choice Hotels Canada?

Choice Hotels paid $112 million for the remaining 50% stake in Choice Hotels Canada, with the transaction completed in July 2025.

What is the expected revenue and EBITDA for Choice Hotels Canada in 2025?

Choice Hotels Canada is expected to generate $23 million in fee revenue and $18 million in EBITDA for full-year 2025.

How many hotels and rooms does Choice Hotels operate in Canada as of 2025?

As of June 30, 2025, Choice Hotels operates 350 hotels with 30,000 rooms in Canada, with an additional 2,500 rooms in the development pipeline.

Who will lead Choice Hotels Canada after the acquisition?

Brian Leon, an 18-year company veteran, will continue to serve as CEO of Choice Hotels Canada.

How many brands will Choice Hotels offer in Canada after the consolidation?

The consolidation will expand Choice Hotels Canada's brand portfolio from 8 to 22 brands, offering their full portfolio to Canadian franchisees.

What is the projected growth rate for the Canadian hospitality market?

The Canadian hospitality market is projected to grow at an average annual rate exceeding 5% through 2030, reaching over $50 billion.