CHOICE HOTELS INTERNATIONAL REPORTS SECOND QUARTER 2026 RESULTS

Rhea-AI Summary

Choice Hotels (NYSE: CHH) reported second quarter 2026 net income of $64 million (down 21% year over year) and diluted EPS of $1.41, while adjusted EBITDA rose 6% to $175 million and adjusted diluted EPS increased 5% to $2.02. Total revenue grew to $441 million, with franchise and management fees up 6% to $188 million and partnership services and fees up 6% to $29 million.

U.S. room openings increased 27% to about 6,400 rooms, contributing to 2.6% global net rooms growth and 3.6% growth in extended stay, midscale, and upscale brands. U.S. RevPAR rose 1.3% and global RevPAR 1.7%. The global pipeline reached approximately 77,300 rooms, with 96% in extended stay, midscale, and upscale segments.

Choice ended the quarter with $475 million in available liquidity and a 3.1x net debt-to-adjusted EBITDA ratio. For 2026, it lowered net income and EPS guidance but raised adjusted EBITDA guidance to $635–$650 million and now expects global net rooms growth of about 1.5%.

Positive

• Adjusted EBITDA up 6% to $175 million in Q2 2026
• Adjusted diluted EPS up 5% year over year to $2.02
• Total revenues increased to $441 million from $426 million in Q2 2025
• U.S. room openings up 27% to approximately 6,400 rooms in Q2
• Global net rooms growth of 2.6%, led by 3.6% in higher-revenue segments
• U.S. RevPAR growth of 1.3% and global RevPAR up 1.7% in Q2
• Franchise and management fees up 6% to $188 million in Q2
• Global pipeline of about 77,300 rooms, 96% in extended stay/midscale/upscale
• Net capital outlays for hotel development and lending cut 80% to $15 million YTD
• Raised 2026 adjusted EBITDA guidance to $635–$650 million
• Expected 2026 net capital outlays reduced to $20–$45 million from $103.4 million in 2025

Negative

• Q2 2026 net income declined 21% year over year to $64 million
• Q2 diluted EPS fell to $1.41 from $1.75 in 2025
• Six‑month 2026 net income decreased to $85 million from $126 million
• Operating cash flow for six months fell to $67 million from $116 million
• 2026 net income guidance cut to $230–$241 million from $265–$275 million
• 2026 diluted EPS guidance reduced to $5.07–$5.31 from $5.72–$5.94
• 2026 adjusted net income guidance trimmed to $312–$323 million from $320–$330 million
• Higher reimbursable expenses, interest, and tax rate expected to pressure GAAP earnings in 2026

News Explained

First asset sales are expected in the first half of 2027, so capital recycling is planned rather than completed; 1.8 million repurchase-authorized shares remain.

Choice reported its second-quarter results, while the structural change disclosed is a planned shift to recycle capital from its owned hotel portfolio: as of June 30, 2026, it owned 19 operating hotels and expected first asset sales in the first half of 2027, subject to market conditions.

Through June 30, 2026, the company returned $26 million through dividends and $113 million through share repurchases; 1.8 million common shares remained available under the current repurchase authorization, which represents permitted capacity rather than a stated future purchase.

For full-year 2026, net income guidance was reduced, while adjusted EBITDA guidance increased and adjusted diluted EPS guidance also declined.

The named checkpoint for the asset-recycling plan is the first half of 2027, when the company expects the first asset sales; market conditions are the stated condition.

Market Context

Across tag-matched earnings, the platform recorded an average move of -2.09%. That benchmark frames ...

Analysis

Across tag-matched earnings, the platform recorded an average move of -2.09%. That benchmark frames this results release's mixed guidance, while Net Selling insider activity adds a risk factor to monitor alongside execution.

Key Figures

Net Income: $64 million Adjusted EBITDA: $175 million Adjusted Diluted EPS: $2.02 +5 more

8 metrics

Net Income $64 million Q2 2026

Adjusted EBITDA $175 million Q2 2026

Adjusted Diluted EPS $2.02 Q2 2026

Global Net Rooms Growth 2.6% Compared to June 30, 2025

U.S. RevPAR Growth 1.3% Q2 2026 compared to Q2 2025

Shareholder Returns $139 million Dividends and share repurchases year-to-date through June 30, 2026

Net Income Guidance $230 to $241 million Full-year 2026, prior outlook $265 to $275 million

Adjusted EBITDA Guidance $635 to $650 million Full-year 2026, prior outlook $632 to $647 million

Previous Earnings Reports

5 past events · Latest: Apr 30 (Positive)

Same Type Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
Apr 30	Q1 earnings report	Positive	-15.6%	Strong quarterly results and operating growth were followed by a 15.58% negative reaction.
Nov 05	Q3 earnings report	Positive	+6.0%	Higher earnings, record adjusted EBITDA, system growth, and raised guidance accompanied a positive reaction.
Aug 06	Q2 earnings report	Negative	-0.4%	Lower domestic RevPAR and reduced outlook accompanied a negative reaction.
May 08	Q1 earnings report	Negative	-3.6%	Strong results were accompanied by reduced domestic RevPAR guidance and a negative reaction.
Feb 20	Q4 earnings report	Positive	+3.1%	Record adjusted EBITDA, earnings growth, system expansion, and 2025 projections accompanied a positive reaction.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Tag-matched earnings reactions were mixed, with four events aligned with the reported tone and one sharp divergence.

Key Terms

revpar, adjusted ebitda, diluted eps, basis points

4 terms

revpar financial

"U.S. RevPAR increased 1.3% in the second quarter"

RevPAR, or revenue per available room, is a measure used in the hotel industry to show how much money a hotel earns from each of its rooms over a certain period. It helps investors understand how well a hotel is performing financially, similar to how a store's sales per square foot reveal its profitability. Higher RevPAR indicates better use of resources and stronger financial health.

adjusted ebitda financial

"Adjusted EBITDA totaled $175 million"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

diluted eps financial

"adjusted diluted EPS reached $2.02 for the second quarter"

Diluted earnings per share (EPS) shows how much profit a company makes for each share of stock, assuming all possible shares from stock options or convertible securities are used. It provides a more conservative estimate than basic EPS, accounting for potential share increases that could dilute ownership. Investors use diluted EPS to get a clearer picture of a company's true profitability on a per-share basis.

basis points financial

"The U.S. royalty rate expanded 11 basis points to 5.2%"

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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U.S. Net Rooms Growth Improved for the Second Consecutive Quarter, Supporting 2.6% Global Net Rooms Growth

NORTH BETHESDA, Md., Aug. 5, 2026 /PRNewswire/ -- Choice Hotels International, Inc. ("Choice" or "the Company") (NYSE: CHH), a leading global lodging franchisor with an asset-light model, today reported results for the second quarter ended June 30, 2026.

Highlights include:

• Net income was $64 million, or $1.41 per diluted share, for the second quarter.
    
• Adjusted EBITDA totaled $175 million, and adjusted diluted EPS reached $2.02 for the second quarter.
    
• U.S. room openings increased 27% in the second quarter compared to the same period of 2025, as the Company opened approximately 6,400 U.S. rooms—the highest second-quarter level since 2019, while exits declined to their lowest second-quarter level since 2020, supporting continued improvement in U.S. net rooms growth.
    
• Global net rooms grew 2.6% compared to June 30, 2025, driven by 3.6% growth in the higher revenue extended stay, midscale, and upscale brands.
    
• U.S. RevPAR increased 1.3% in the second quarter, compared to the same period of 2025, reflecting improvements in both occupancy and rate.
    
• U.S. franchise agreements awarded increased 30% in the second quarter compared to the same period of 2025, representing approximately 9,400 new U.S. rooms for development.
    
• The Company's U.S. conversion rooms pipeline grew 24% to 24,100 rooms, compared to June 30, 2025, and 6% sequentially from March 31, 2026.
    
• The U.S. royalty rate expanded 11 basis points to 5.2% in the second quarter, compared to the same period of 2025.
    
• The Company returned $139 million to shareholders through dividends and share repurchases year-to-date through June 30, 2026.
    
• The Company raised several full-year 2026 guidance ranges.

"Our second quarter results reflect encouraging progress across our key priorities, with U.S. net rooms growth improving for the second consecutive quarter to its strongest first-half performance since 2021 and U.S. RevPAR trends strengthening," said Dom Dragisich, Interim Chief Executive Officer. "Over the past several years, we've built a stronger commercial engine and technology platform, and we continue to invest in both. Our biggest opportunity now is sharpening execution—leveraging those capabilities to further enhance franchisee economics by increasing the number and quality of the guests we deliver while lowering operating costs. While we still have work to do, this business has significantly more potential, and I'm confident we can realize it. The progress we delivered this quarter reinforces that confidence."

Financial Performance
($ in millions, except per-share amounts)	Three Months Ended June 30,		Six Months Ended June 30,
	2026	2025	2026	2025
Total revenues	$441	$426	$781	$759
Revenue excl. revenue for reimbursable costs from franchised and managed properties1	$277	$259	$494	$469
Net income	$64	$82	$85	$126
Adjusted net income	$92	$90	$142	$153
Diluted EPS	$1.41	$1.75	$1.84	$2.68
Adjusted diluted EPS	$2.02	$1.92	$3.09	$3.25
Adjusted EBITDA	$175	$165	$301	$295

• Net income was $64 million for the second quarter, a 21% decline compared to the same period of 2025. The year-over-year decrease primarily reflected a higher net reimbursable deficit from franchised and managed properties related to investments in franchisee-related tools and guest delivery capabilities, timing of SG&A expenses, and increased depreciation and amortization associated with owned hotels and the prior year acquisition of Choice Hotels Canada. These items were partially offset by higher franchise and management fees.²
    
• Adjusted EBITDA increased 6%, and adjusted diluted EPS increased 5% compared to the same period of 2025.
    
• Franchise and management fees increased 6% to $188 million for the second quarter, compared to the same period of 2025, reflecting higher international royalty fees, higher franchisee programs and services revenue, along with U.S. RevPAR and U.S. royalty rate improvement.
    
• Partnership services and fees increased 6% to $29 million for the second quarter, compared to the same period of 2025, primarily reflecting growth in procurement services revenue.

__________________________

1 Calculated as total revenues excluding reimbursable revenues. Reimbursable revenues totaled $163 million and $167 million for second quarter 2026 and 2025, respectively, and $287 million and $291 million year-to-date through June 30, 2026 and June 30, 2025, respectively. 2 Selling, general and administrative expenses for the three months ended June 30, 2026 included $0.2 million of expense related to the post-employment benefits announced on May 20, 2026. The Company expects to recognize approximately $2.7 million of total post-employment benefits through August 31, 2026.

RevPAR
(% change on a currency-neutral basis)	Change vs. Prior Year Period
	Three months ended June 30, 2026
U.S.	1.3 %
International	2.1 %
Global	1.7 %

• U.S. RevPAR increased 1.3% in the second quarter, compared to the same period of 2025, driven by a 0.7% increase in rate and a 40-basis-point increase in occupancy, primarily reflecting strength in the East North Central, Middle Atlantic, and West South Central regions.
    
• International RevPAR increased 2.1% on a currency-neutral basis in the second quarter, compared to the same period of 2025, led by the Caribbean and Latin America and further supported by continued strength in Canada and Asia Pacific.

System Size and Development
(Rooms)
	June 30, 2026	June 30, 2025	Change
U.S.	499,226	500,562	-0.3 %
U.S. upscale, extended stay, and midscale	442,676	439,744	0.7 %
International	161,863	143,838	12.5 %
Global	661,089	644,400	2.6 %
Global upscale, extended stay, and midscale	599,207	578,226	3.6 %

• Global room openings increased 16% in the second quarter of 2026 compared to the same period of 2025, as the Company opened approximately 8,300 global rooms.
    
• Extended stay remained a core growth engine, supported by strong unit economics and continued developer demand, with U.S. extended stay net rooms growing 13.0% compared to June 30, 2025, marking the 12th consecutive quarter of double-digit growth.
    
• International net rooms grew 12.5% compared to June 30, 2025, led by double-digit growth in Asia Pacific and EMEA, with continued growth in Canada.
    
• Global franchise agreements awarded increased 20% in the second quarter compared to the same period of 2025, representing 11,200 new global rooms for development and reflecting continued demand for conversion-led brands.
    
• The Company's global pipeline totaled approximately 77,300 rooms as of June 30, 2026, with 96% concentrated in extended stay, midscale, and upscale brands. The pipeline included:
  • 71,100 U.S. rooms and 6,200 international rooms.
  • 29,900 extended stay rooms, representing 39% of the total pipeline.
  • 26,400 conversion rooms and 50,900 new-construction rooms.

Balance Sheet and Liquidity
As of June 30, 2026, Choice had total available liquidity of $475 million, comprised of cash and cash equivalents and available borrowing capacity. The Company's net debt-to-adjusted EBITDA ratio was 3.1x for the trailing twelve months ended June 30, 2026, within the Company's target range of 3.0x to 4.0x.

During the six months ended June 30, 2026, the Company generated $67 million in cash flows from operating activities, compared to $116 million in the prior-year period, primarily reflecting higher franchise agreement acquisition costs associated with a 27% increase in U.S. room openings and higher marketing and reservation system reimbursable expenses.

During the six months ended June 30, 2026, net capital outlays for hotel development and lending activities declined 80% to $15 million, from $76 million in the prior-year period.³

The Company expects to enter the next phase of its asset-light strategy by recycling capital from its owned hotel portfolio. As of August 5, 2026, the Company owned 19 operating hotels, with one additional hotel under construction. The Company expects the first asset sales to occur during the first half of 2027, subject to market conditions.

Shareholder Returns

During the six months ended June 30, 2026, the Company returned $26 million to shareholders through dividends and $113 million in share repurchases.⁴

As of June 30, 2026, 1.8 million shares of common stock remained available under the Company's current share repurchase authorization.

Outlook

The Company is updating certain aspects of 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, and other items.

	Full-Year 2026	Prior Outlook
Net income	$230 to $241 million	$265 to $275 million
Adjusted net income	$312 to $323 million	$320 to $330 million
Adjusted EBITDA	$635 to $650 million	$632 to $647 million
Adjusted SG&A	Mid-single digits	Mid-single digits
Diluted EPS	$5.07 to $5.31	$5.72 to $5.94
Adjusted diluted EPS	$6.86 to $7.10	$6.92 to $7.14
Effective tax rate	26 %	25 %
	Full-Year 2026 vs. 2025	Full-Year 2026 vs. 2025
Global RevPAR growth	0% to 1%	-2% to 1%
U.S. RevPAR growth	0% to 1.25%	-2% to 1%
U.S. royalty rate growth	7 bps to 9 bps	Mid-single digits
Global net system rooms growth	Approximately 1.5%	Approximately 1%

The net income guidance range has been revised from the Company's prior outlook primarily to reflect higher expected marketing and reservation system reimbursable expenses, driven by increased investment in franchisee-facing tools and guest delivery capabilities, as well as higher interest expense and a higher effective tax rate.

The adjusted net income guidance range has been revised from the Company's prior outlook primarily to reflect higher expected interest expense and a higher effective tax rate.

Adjusted EBITDA guidance has been raised from the Company's prior outlook, primarily reflecting improvement in U.S. RevPAR, global net rooms growth, and U.S. royalty rate.

Net capital outlays for hotel development-related activities are expected to decline from $103.4 million in 2025 to a range of $20 million to $45 million in 2026.³

__________________________

3 Net capital outlays include investments in owned hotel properties, investments in affiliates, notes receivable issued, net of collections, proceeds from asset sales, and distributions from sales of affiliates. 4 Share repurchases include repurchases under the Company's stock repurchase program and repurchases from employees in connection with tax withholding and option exercises relating to awards under the Company's equity incentive plans.

Webcast and Conference Call

Choice will host a conference call to discuss second quarter 2026 results on August 5, 2026, at 10:00 a.m. ET. A live webcast will be available on the Company's Investor Relations website at www.investor.choicehotels.com/events-and-presentations. Participants may also dial (833) 461-5787 (U.S.) or (585) 542-9983 (international) and reference conference ID 558894687. A replay and transcript will be available within 24 hours on the Company's Investor Relations website.

About Choice Hotels^®

Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world, with over 7,500 hotels, representing more than 650,000 rooms, in 49 countries and territories. A wide-ranging portfolio of 22 brands that includes full-service upper upscale, midscale, extended stay, and economy properties 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® 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. 

Forward-Looking Statements

Information set forth herein includes "forward-looking statements." Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as "expect," "estimate," "believe," "anticipate," "should," "will," "forecast," "plan," "project," "assume," or similar words of futurity. All statements other than historical facts are forward-looking statements. 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. Such statements may relate to projections of Choice's revenue, expenses, adjusted EBITDA, earnings, debt levels, ability to repay outstanding indebtedness, payment of dividends, net surplus or deficit, repurchases of common stock and other financial and operational measures, including occupancy, room openings and open hotels, RevPAR, royalty rate, strategic investment and acquisition performance, international expansion performance, macroeconomic backdrop and Choice's liquidity, among other matters. 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.

Several factors could cause our actual results, performance or achievements to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, U.S. and foreign economic conditions, including access to liquidity and capital; changes in consumer demand and confidence, including consumer discretionary spending and the demand for travel, transient and group business; the timing and amount of future dividends and share repurchases; future U.S. or global outbreaks of epidemics, pandemics or contagious diseases or fear of such outbreaks, and the related impact on the global hospitality industry, particularly but not exclusively the U.S. travel market; changes in law and regulation applicable to the travel, lodging or franchising industries, including with respect to the status of our relationship with employees of our franchisees; the potential impact of changes in laws and regulations generally, or the interpretation thereof, including, without limitation, those relating to taxes, wages, labor and immigration; foreign currency fluctuations; changes in global interest rates and rate differentials; variability and unpredictability in trade relations, sanctions, tariffs or other trade controls; governmental action or inaction relating to the federal budget, including funding lapses and government shutdowns; impairments or declines in the value of our assets; our assumptions underlying our critical accounting estimates; operating risks common in the travel, lodging or franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees and our relationships with our franchisees; our ability to keep pace with improvements in technology utilized for our marketing and reservation systems and other operating systems; our ability to grow our franchise system; exposure to risks related to our hotel development, financing, franchise agreement acquisition costs and ownership activities; exposures to risks associated with our investments in new businesses; fluctuations in the supply and demand for hotel rooms; our ability to realize anticipated benefits from acquired businesses; impairments or losses relating to acquired businesses; the level of acceptance of alternative growth strategies we may implement; the impact of inflation; information technology, cyber security and data breach risks; introduction and integration of artificial intelligence technologies; climate change; our sustainability strategy; ownership and financing activities; hotel closures or financial difficulties of our franchisees; operating risks associated with our international operations; political instability, geopolitical conflicts and terrorism; labor shortages; the outcome of litigation; and our ability to effectively manage our indebtedness and secure our indebtedness.

These and other risk factors are discussed in detail in the Company's filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-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.

Non-GAAP Financial Measurements and Other Definitions

The company evaluates its operations utilizing the performance metrics of adjusted EBITDA, adjusted selling, general and administrative (SG&A) expenses, adjusted net income, and adjusted diluted EPS, which are all non-GAAP financial measurements. These measures, which are reconciled to the comparable GAAP measures in Exhibits 6 and 7, should not be considered as an alternative to any measure of performance or liquidity as promulgated under or authorized by GAAP, such as SG&A, net income and EPS. The company's calculation of these measurements may be different from the calculations used by other companies and comparability may therefore be limited. Management believes these non-GAAP financial measures provide investors with additional meaningful financial information that should be considered when assessing our underlying business performance and trends. We further discuss management's reasons for reporting these non-GAAP measures and how each non-GAAP measure is calculated below.

In addition to the specific adjustments noted below with respect to each measure, the non-GAAP measures presented herein also exclude restructuring of the company's operations including employee severance benefit, income taxes and legal costs, acquisition related to business combination, due diligence and transition (recoveries) costs, and global ERP system implementation and related costs to allow for period-over-period comparison of ongoing core operations before the impact of these discrete and infrequent charges.

Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization: Adjusted EBITDA, presented herein, is calculated as net income excluding the impact of interest expense, interest income, provision for income taxes, depreciation and amortization, amortization of cloud computing arrangements, impairments and gains on sale of business, joint ventures and assets, other (gains) and losses, equity in net income (loss) of unconsolidated affiliates and (gain) loss on extinguishment of debt, further adjusted to exclude certain items, including, franchisee agreement acquisition cost amortization and charges, mark-to-market adjustments on non-qualified retirement plan investments, share based compensation expense (benefit) and surplus or deficits generated by reimbursable revenue from franchised and managed properties. We consider adjusted EBITDA to be an indicator of operating performance because it measures our ability to service debt, fund capital expenditures, and expand our business. We also use these measures, as do analysts, lenders, investors, and others, to evaluate companies because they exclude certain items that can vary widely across industries or among companies within the same industry. For example, interest expense can be dependent on a company's capital structure, debt levels, and credit ratings, and share based compensation expense (benefit) is dependent on the design of compensation plans in place and the usage of them. Accordingly, the impact of interest expense and share based compensation expense (benefit) on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. These measures also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets or amortizing franchise-agreement acquisition costs. These differences can result in considerable variability in the relative asset costs and estimated lives and, therefore, the depreciation and amortization expense among companies. Mark-to-market adjustments on non-qualified retirement-plan investments recorded in SG&A expenses are excluded from adjusted EBITDA, as the company accounts for these investments in accordance with accounting for deferred-compensation arrangements when investments are held in a rabbi trust and invested. Changes in the fair value of the investments are recognized as both compensation expense in SG&A and other gains and losses. As a result, the changes in the fair value of the investments do not have a material impact on the company's net income. Surpluses and deficits generated from reimbursable revenues from franchised and managed properties are excluded, as the company does not operate these programs to generate a profit and has the contractual rights to adjust future collections or assess additional fees to recover prior period expenditures. The company's franchise and management agreements require these revenues to be used exclusively for expenses associated with providing franchise and management services, such as central reservation systems, hotel employee and operating costs, reservation delivery and national marketing and media advertising. Franchised and managed property owners are required to reimburse the company for any deficits generated from these activities and the company is required to spend any surpluses generated in future periods. The reimbursement for franchise and management services is typically billed and collected monthly, based on the underlying hotel's sales or usage, while the associated costs are recognized as incurred by the company, creating timing differences with the net effect impacting net income in the reporting period. These timing differences are due to our discretion to spend in excess of the revenues earned or less than the revenues earned in a single period to ensure that the programs are operated in the best long-term interests of our franchised and managed properties. Since these activities will be managed to break-even over time, quarterly or annual surpluses and deficits have been excluded from the measurements utilized to assess the company's operating performance.

Adjusted Net Income and Adjusted Diluted Earnings Per Share: Adjusted net income and adjusted diluted EPS exclude the impact of surpluses or deficits generated from reimbursable revenue from franchised and managed properties, impairments, formation costs and gains on sale of business, joint ventures and assets and gains on extinguishment of debt. Surpluses and deficits generated from reimbursable revenue from franchised and managed properties are excluded, as the company does not operate these programs to generate a profit and has the contractual rights to adjust future collections or assess additional fees to recover prior period expenditures. The company's franchise agreements require these revenues to be used exclusively for expenses associated with providing franchised and managed services, such as central reservation systems, hotel employee and operating costs, reservation delivery and national marketing and media advertising. Franchised and managed property owners are required to reimburse the company for any deficits generated from activities and the company is required to spend any surpluses generated in future periods. The reimbursement for franchise and management services is typically billed and collected monthly, based on the underlying hotel's sales or usage, while the associated costs are recognized as incurred by the company, creating timing differences with the net effect impacting net income in the reporting period. These timing differences are due to our discretion to spend in excess of the revenues earned or less than the revenues earned in a single period to ensure that the programs are operated in the best long-term interests of our franchised and managed properties. Since these activities will be managed to break-even over time, quarterly or annual surpluses and deficits have been excluded from the measurements utilized to assess the company's operating performance. We consider adjusted net income and adjusted diluted EPS to be indicators of operating performance because excluding these items allows for period-over-period comparisons of our ongoing operations.

Adjusted SG&A: Adjusted SG&A reflects SG&A excluding the impact of mark-to-market adjustments on non-qualified retirement plan investments, amortization of cloud computing arrangements and share based compensation expense. We use this measure, as do analysts, lenders, investors, and others, to evaluate companies because it excludes certain items that can vary widely across industries or among companies within the same industry. For example, share based compensation expense (benefit) is dependent on the design of compensation plans in place and the usage of them. Accordingly, the impact of share-based compensation expense (benefit) on earnings can vary significantly among companies. Mark-to-market adjustments on non-qualified retirement-plan investments recorded in SG&A expenses are also excluded as the company accounts for these investments in accordance with accounting for deferred-compensation arrangements when investments are held in a rabbi trust and invested. Changes in the fair value of the investments are recognized as both compensation expense in SG&A and other gains and losses. As a result, the changes in the fair value of the investments do not have a material impact on the company's net income.

Occupancy: Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel for a given period. Occupancy measures the utilization of the hotels' available capacity. Management uses occupancy to gauge demand at a specific hotel or group of hotels in a given period. The company calculates occupancy based on information as reported by its franchisees. To accurately reflect occupancy, the company may revise its prior years' operating statistics for the most current information provided.

Average Daily Rate (ADR): ADR represents hotel room revenue divided by the total number of room nights sold for a given period. ADR measures the average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in the industry, and management uses ADR to assess pricing levels that the company is able to generate. The company calculates ADR based on information as reported by its franchisees. To accurately reflect ADR, the company may revise its prior years' operating statistics for the most current information provided.

Revenue Per Available Room (RevPAR): RevPAR is calculated by dividing hotel room revenue by the total number of room nights available to guests for a given period. Management considers RevPAR to be a meaningful indicator of hotel performance and therefore company royalty and system revenues as it provides a metric correlated to the two key drivers of operations at a hotel: occupancy and ADR. The company calculates RevPAR based on information as reported by its franchisees. To accurately reflect RevPAR, the company may revise its prior years' operating statistics for the most current information provided. RevPAR is also a useful indicator in measuring performance over comparable periods.

Pipeline: Pipeline is defined as hotels awaiting conversion, under construction or approved for development, and master development agreements committing owners to future franchise development.

Contacts

Allie Summers, Senior Director, Investor Relations
IR@choicehotels.com
© 2026 Choice Hotels International, Inc. All rights reserved.

 

Choice Hotels International, Inc.								Exhibit 1
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)		For the Three Months Ended				For the Six Months Ended
		June 30,				June 30,
		2026		2025		2026		2025
REVENUES
Franchise and management fees		$       187,536		$       177,086		$       337,167		$       322,154
Partnership services and fees		28,674		27,064		53,408		52,445
Owned hotels		34,896		30,228		65,329		58,088
Other		26,332		24,716		38,205		35,843
Revenue for reimbursable costs from franchised and managed properties		163,324		167,349		287,228		290,773
Total revenues		440,762		426,443		781,337		759,303
OPERATING EXPENSES
Selling, general and administrative		96,153		89,298		174,199		163,508
Business combination, diligence and transition costs		536		347		772		446
Depreciation and amortization		16,813		13,424		33,634		27,172
Owned hotels		25,457		22,419		49,108		43,479
Reimbursable expenses from franchised and managed properties		197,665		176,358		359,452		320,169
Total operating expenses		336,624		301,846		617,165		554,774
Operating income		104,138		124,597		164,172		204,529
OTHER EXPENSES AND (INCOME), NET
Interest expense		24,259		22,736		48,221		43,978
Interest income		(1,095)		(1,456)		(2,306)		(3,015)
Other gains, net		(6,124)		(5,374)		(5,403)		(4,938)
Equity in net loss of affiliates		1,216		80		7,468		131
Total other expenses and (income), net		18,256		15,986		47,980		36,156
Income before income taxes		85,882		108,611		116,192		168,373
Income tax expense		21,544		26,877		31,550		42,105
Net income		$         64,338		$         81,734		$         84,642		$       126,268
Basic earnings per share		$             1.42		$             1.76		$             1.85		$             2.71
Diluted earnings per share		$             1.41		$             1.75		$             1.84		$             2.68

 

Choice Hotels International, Inc.						Exhibit 2
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)				June 30,		December 31,
				2026		2025
ASSETS
Cash and cash equivalents				$            42,826		$            44,997
Accounts receivable, net				279,813		207,491
Other current assets				109,297		153,510
	Total current assets			431,936		405,998
Property and equipment, net				653,503		649,291
Operating lease right-of-use assets				75,004		77,670
Goodwill				302,877		305,758
Intangible assets, net				1,105,813		1,082,486
Notes receivable, net of allowances				28,558		12,490
Investments for employee benefit plans, at fair value				54,794		50,227
Investments in affiliates				137,251		134,975
Other assets				199,080		199,308
	Total assets			$        2,988,816		$        2,918,203
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable				$           165,441		$           156,276
Accrued expenses and other current liabilities				110,873		125,282
Deferred revenue				104,256		100,698
Liability for guest loyalty program				85,898		85,035
	Total current liabilities			466,468		467,291
Long-term debt				2,002,339		1,906,122
Long-term deferred revenue				133,998		130,505
Deferred compensation and retirement plan obligations				61,090		56,532
Deferred income taxes				32,890		25,303
Operating lease liabilities				104,349		107,963
Liability for guest loyalty program				41,139		39,771
Other liabilities				4,365		3,487
	Total liabilities			2,846,638		2,736,974
	Total shareholders' equity			142,178		181,229
	Total liabilities and shareholders' equity			$        2,988,816		$        2,918,203

 

Choice Hotels International, Inc.			Exhibit 3
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)	Six Months Ended June 30,
	2026		2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$        84,642		$       126,268
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	33,634		27,172
Depreciation and amortization – reimbursable expenses from franchised and managed properties	11,228		9,426
Franchise agreement acquisition cost amortization	20,201		17,261
Non-cash share-based compensation and other charges	13,098		19,438
Non-cash interest, investments, and affiliate loss (income), net	(3,391)		(1,668)
Deferred income taxes	7,493		850
Equity in net loss of affiliates, less distributions received	7,468		692
Franchise agreement acquisition costs, net of reimbursements	(72,169)		(41,474)
Change in working capital and other	(34,842)		(41,895)
Net cash provided by operating activities	67,362		116,070
CASH FLOWS FROM INVESTING ACTIVITIES
Investments in other property and equipment	(17,900)		(18,333)
Investments in owned hotel properties	(27,292)		(65,676)
Contributions to investments in affiliates	(10,588)		(9,358)
Issuances of notes receivable	(1,859)		(3,353)
Collections of notes receivable	24,610		2,773
Other items, net	(995)		(1,201)
Net cash used in investing activities	(34,024)		(95,148)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings pursuant to revolving credit facilities	96,275		130,000
Purchases of treasury stock	(107,464)		(112,756)
Dividends paid	(26,333)		(26,868)
Proceeds from the exercise of stock options	2,339		6,385
Net cash used in financing activities	(35,183)		(3,239)
Net change in cash and cash equivalents	(1,845)		17,683
Effect of foreign exchange rate changes on cash and cash equivalents	(326)		750
Cash and cash equivalents, beginning of period	44,997		40,177
Cash and cash equivalents, end of period	$        42,826		$        58,610

 

													Exhibit 4
CHOICE HOTELS INTERNATIONAL, INC.
CURRENCY-NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS
(UNAUDITED)
		For the Three Months Ended June 30, 2026
		ADR				Occupancy					RevPAR
		2026		vs. 2025		2026		vs. 2025			2026		vs. 2025
Total U.S.		$        98.28		0.7 %		60.0 %		40	bps		$          58.92		1.3 %
Upscale & Above (1)		155.49		2.0 %		60.0 %		(50)	bps		93.33		1.3 %
Midscale & Upper Midscale (2)		102.76		0.7 %		59.6 %		20	bps		61.24		1.1 %
Extended Stay (3)		69.24		3.5 %		71.3 %		10	bps		49.37		3.7 %
Economy (4)		71.16		(0.2) %		49.9 %		(20)	bps		35.51		(0.7) %
International (5)		111.14		2.0 %		64.8 %		10	bps		71.96		2.1 %
Total System (5)		$       101.45		1.2 %		61.1 %		40	bps		$          61.95		1.7 %
		For the Six Months Ended June 30, 2026
		ADR				Occupancy					RevPAR
		2026		vs. 2025		2026		vs. 2025			2026		vs. 2025
Total U.S.		$        93.92		(0.5) %		55.5 %		20	bps		$          52.08		(0.2) %
Upscale & Above (1)		148.67		1.4 %		55.1 %		(10)	bps		81.97		1.4 %
Midscale & Upper Midscale (2)		98.02		(0.5) %		54.7 %		10	bps		53.62		(0.2) %
Extended Stay (3)		67.87		1.9 %		68.7 %		(80)	bps		46.65		0.7 %
Economy (4)		68.80		(2.6) %		46.1 %		(80)	bps		31.71		(4.4) %
International (5)		105.01		2.7 %		60.9 %		(20)	bps		63.90		2.2 %
Total System (5)		$        96.68		0.4 %		56.7 %		10	bps		$          54.83		0.6 %
		For the Three Months Ended				For the Six Months Ended
		June 30, 2026		June 30, 2025		June 30, 2026		June 30, 2025
		U.S. Average Royalty Rate
Total U.S.		5.23 %		5.12 %		5.22 %		5.11 %
(1) Includes Ascend Hotel Collection, Cambria, Park Plaza, Radisson, Radisson Blu, Radisson Individuals, and Radisson RED brands.
(2) Includes Clarion, Comfort Inn, Comfort Suites, Country Inn & Suites, Park Inn, Quality Inn, and Sleep Inn brands.
(3) Includes Everhome Suites, Mainstay Suites, Suburban Studios, and WoodSpring Suites brands.
(4) Includes Econo Lodge and Rodeway brands.
(5) International and Total System results are presented on a currency-neutral basis and exclude the impact of foreign currency exchange movements.

 

			Exhibit 5
CHOICE HOTELS INTERNATIONAL, INC.
SYSTEM HOTEL AND ROOM SUPPLY
(UNAUDITED)
Global System by Brand	June 30, 2026
	Hotels		Rooms
Ascend Hotel Collection	528		71,347
Cambria Hotels	77		10,278
Radisson(1)	129		22,600
Comfort(2)	2,135		178,818
Quality	1,881		148,452
Country	404		32,618
Sleep	427		30,610
Clarion(3)	274		37,020
Park Inn	31		2,573
WoodSpring	298		35,869
MainStay	157		11,486
Suburban	121		9,995
Everhome	30		3,451
Econo Lodge	631		35,947
Rodeway	427		23,479
Other (4)	58		6,546
(1) Includes Radisson, Radisson Blu, Radisson Individuals, Radisson RED and Park Plaza brands.
(2) Includes Comfort family of brand extensions including Comfort Inn and Comfort Suites.
(3) Includes Clarion family of brand extensions including Clarion and Clarion Pointe.
(4) Includes other brands under Master Franchise Agreements.
U.S. System by Chain Scale	June 30, 2026
	Hotels		Rooms
Upscale & Above	374		60,259
Midscale & Upper Midscale	4,223		322,296
Extended Stay	598		60,121
Economy	1,000		56,550
Global System by Region	June 30, 2026
	Hotels		Rooms
U.S.	6,195		499,226
Total International	1,413		161,863
Americas (excluding U.S.)	545		56,036
Europe & Middle East	484		70,998
Asia-Pacific	384		34,829
Total System	7,608		661,089

 

									Exhibit 6
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
(UNAUDITED)
ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
(dollar amounts in thousands)			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2026		2025		2026		2025
Total selling, general and administrative expenses			$       96,153		$       89,298		$      174,199		$     163,508
	Mark to market adjustments on non-qualified retirement plan investments		(6,023)		(3,973)		(4,972)		(3,250)
	Non-recurring operational restructuring charges and executive severance		(2,057)		(372)		(2,538)		(4,302)
	Share-based compensation		(4,555)		(6,236)		(9,367)		(12,126)
	Amortization of cloud computing arrangements		(297)		—		(576)		—
	Global ERP system implementation and related costs		(59)		(1,076)		(359)		(2,066)
Adjusted selling, general and administrative expenses			$       83,162		$       77,641		$      156,387		$     141,764
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("ADJUSTED EBITDA")
(dollar amounts in thousands)			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2026		2025		2026		2025
Net income			$        64,338		$        81,734		$        84,642		$      126,268
	Income tax expense		21,544		26,877		31,550		42,105
	Interest expense		24,259		22,736		48,221		43,978
	Interest income		(1,095)		(1,456)		(2,306)		(3,015)
	Amortization of cloud computing arrangements		297		—		576		—
	Depreciation and amortization		16,813		13,424		33,634		27,172
	Other gains, net		(6,124)		(5,374)		(5,403)		(4,938)
	Equity in net loss of affiliates		1,216		80		7,468		131
	Share-based compensation		4,555		6,236		9,367		12,126
	Mark to market adjustments on non-qualified retirement plan investments		6,023		3,973		4,972		3,250
	Franchise agreement acquisition costs amortization and charges		6,564		5,941		12,489		11,327
	Revenue for reimbursable costs from franchised and managed properties		(163,324)		(167,349)		(287,228)		(290,773)
	Reimbursable expenses from franchised and managed properties		197,665		176,358		359,452		320,169
	Global ERP system implementation and related costs		59		1,076		359		2,066
	Business combination, diligence and transition costs		536		347		772		446
	Non-recurring operational restructuring charges and executive severance		2,057		372		2,538		4,302
Adjusted EBITDA			$       175,383		$       164,975		$      301,103		$      294,614
ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE ("EPS")
(dollar amounts in thousands, except per share amounts)			Three Months Ended				Six Months Ended
			June 30,				June 30,
			2026		2025		2026		2025
Net income			$        64,338		$        81,734		$        84,642		$      126,268
	Revenue for reimbursable costs from franchised and managed properties		(163,324)		(167,349)		(287,228)		(290,773)
	Reimbursable expenses from franchised and managed properties		197,665		176,358		359,452		320,169
	Business combination, diligence and transition costs		536		347		772		446
	Non-recurring operational restructuring charges and executive severance		2,057		372		2,538		4,302
	Global ERP system implementation and related costs		59		1,076		359		2,066
	Income tax expense on adjustments		(9,278)		(2,756)		(18,883)		(9,053)
Adjusted Net Income			$        92,053		$        89,782		$      141,652		$      153,425
Diluted EPS			$            1.41		$            1.75		$            1.84		$            2.68
Adjusted Diluted EPS			$            2.02		$            1.92		$            3.09		$            3.25

 

			Exhibit 7
CHOICE HOTELS INTERNATIONAL, INC.
OUTLOOK
(UNAUDITED)
Guidance represents the company's range of estimated outcomes for the full year ended December 31, 2026
ADJUSTED EBITDA
(in thousands)			Full Year		Full Year
			Lower Range		Upper Range
Net income			$        230,000		$        241,000
	Income tax expense		79,900		83,700
	Interest expense		96,200		96,400
	Interest income		(4,000)		(4,000)
	Amortization of cloud computing arrangements		1,200		1,200
	Depreciation and amortization		68,200		68,200
	Other gains, net		(5,300)		(5,300)
	Equity in net loss of affiliates		10,600		10,600
	Share-based compensation		17,500		17,500
	Mark to market adjustments on non-qualified retirement plan investments		5,000		5,000
	Franchise agreement acquisition costs amortization and charges		26,600		26,600
	Revenue for reimbursable costs from franchised and managed properties		(595,700)		(595,700)
	Reimbursable expenses from franchised and managed properties		695,600		695,600
	Global ERP system implementation and related costs		1,700		1,700
	Business combination, diligence and transition costs		1,500		1,500
	Non-recurring operational restructuring charges and executive severance		6,000		6,000
Adjusted EBITDA			$        635,000		$        650,000
ADJUSTED NET INCOME & DILUTED EARNINGS PER SHARE ("EPS")
(in thousands, except per share amounts)			Full Year		Full Year
			Lower Range		Upper Range
Net income			$        230,000		$        241,000
	Revenue for reimbursable costs from franchised and managed properties		(595,700)		(595,700)
	Reimbursable expenses from franchised and managed properties		695,600		695,600
	Business combination, diligence and transition costs		1,500		1,500
	Non-recurring operational restructuring charges and executive severance		6,000		6,000
	Global ERP system implementation and related costs		1,700		1,700
	Income tax expense on adjustments		(27,100)		(27,100)
Adjusted net income			$        312,000		$        323,000
Diluted EPS			$              5.07		$              5.31
Adjusted Diluted EPS			$              6.86		$              7.10

 

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SOURCE Choice Hotels International, Inc.

FAQ

How did Choice Hotels (NYSE: CHH) perform financially in Q2 2026?

Choice Hotels reported Q2 2026 net income of $64 million and diluted EPS of $1.41. According to the company, total revenue reached $441 million, while adjusted EBITDA rose 6% to $175 million and adjusted diluted EPS increased 5% to $2.02.

What were the key RevPAR trends for Choice Hotels (CHH) in the second quarter of 2026?

Choice Hotels’ U.S. RevPAR grew 1.3% and global RevPAR increased 1.7% in Q2 2026. According to the company, U.S. gains reflected a 0.7% rate increase and higher occupancy, while international RevPAR rose 2.1% on a currency-neutral basis, led by the Caribbean and Latin America.

How is Choice Hotels’ rooms growth and pipeline evolving as of June 30, 2026?

Choice Hotels reported 2.6% global net rooms growth and about 8,300 global room openings in Q2 2026. According to the company, its global pipeline totaled approximately 77,300 rooms, with 96% in extended stay, midscale, and upscale brands and strong extended stay net-room growth in the U.S.

What changes did Choice Hotels (CHH) make to its full-year 2026 earnings guidance?

Choice Hotels lowered 2026 net income guidance to $230–$241 million and diluted EPS to $5.07–$5.31. According to the company, adjusted EBITDA guidance was raised to $635–$650 million, reflecting better U.S. RevPAR, global net rooms growth, and higher U.S. royalty rate expectations.

What is Choice Hotels’ balance sheet and liquidity position as of Q2 2026?

Choice Hotels reported total available liquidity of $475 million as of June 30, 2026. According to the company, this included cash, cash equivalents, and borrowing capacity, and its net debt-to-adjusted EBITDA ratio was 3.1x, within a stated target range of 3.0x to 4.0x.

How much capital is Choice Hotels (CHH) deploying for hotel development in 2026?

Choice Hotels expects 2026 net capital outlays for hotel development activities of $20–$45 million, down from $103.4 million in 2025. According to the company, net capital outlays for development and lending declined 80% year to date to $15 million versus the prior-year period.

What shareholder returns did Choice Hotels provide in the first half of 2026?

Choice Hotels returned $139 million to shareholders in the first half of 2026 through dividends and share repurchases. According to the company, dividends totaled $26 million and share repurchases $113 million, with about 1.8 million shares remaining under the current repurchase authorization.