Choice Hotels Raises Full-Year RevPAR Outlook

The Tip Desk · November 2, 2026 · 4 min read

U.S. RevPAR rose 3.8% in the third quarter after a 1.3% increase in the second quarter, and the company lifted its 2026 U.S. and global RevPAR outlooks.

Choice Hotels International (CHH), a global lodging franchisor with an asset-light model, reported third-quarter U.S. RevPAR growth of 3.8% versus the year-ago period, a step-up from 1.3% in the second quarter, and raised its full-year 2026 U.S. and global RevPAR outlooks.

The company said U.S. RevPAR rose on 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 increased 3.7% on a currency-neutral basis, led by the Caribbean and Latin America. Global RevPAR rose 3.9%.

U.S. net rooms growth improved for a third consecutive quarter. U.S. rooms were approximately flat versus September 30, 2025, as third-quarter room exits declined 23% from the same period of 2025. Global net rooms grew 1.7% versus September 30, 2025, after 2.6% growth versus June 30, 2025, led by 2.5% growth in extended stay, midscale, and upscale brands.

Global room openings totaled 6,000 in the third quarter, compared with 12,800 a year earlier, a period that included a 7,400-room international portfolio conversion. U.S. openings were 4,400, versus 4,800 a year earlier. Global extended stay net rooms grew 10.7% versus September 30, 2025, the 13th consecutive quarter of double-digit growth, and the company opened its 600th extended stay hotel. International net rooms grew 7.3%, led by EMEA, Asia-Pacific, and Canada.

Franchise and management fees increased 5% to $204 million, after a 6% year-over-year increase to $188 million in the second quarter. The company attributed the third-quarter rise to higher U.S. royalties from RevPAR growth and royalty-rate expansion, franchisee programs and services, and international royalties. The U.S. average royalty rate expanded 8 basis points to 5.23% from the year-ago quarter, after an 11-basis-point expansion to 5.2% in the second quarter.

Adjusted EBITDA was $193 million, up 1% from the year-ago quarter, after a 6% year-over-year increase to $175 million in the second quarter. Excluding liquidated damages of $3.3 million versus $9.5 million, adjusted EBITDA increased 5%. Adjusted diluted EPS rose 11% to $2.33 from $2.10 a year earlier.

Net income was $58 million, or $1.28 a share, a 68% decline from $180 million, or $3.86 a share, in the year-ago quarter. The company said the decline primarily reflected a $100 million gain from the acquisition of a joint venture in the prior-year quarter. Current-year results included a $24 million charge related to terminating an option to acquire a European hospitality business and a $6 million non-cash impairment on two owned hotels. Those items, and the prior-year gain, are excluded from adjusted results.

Total revenues were $458 million. Revenue excluding reimbursable costs was $285 million; excluding liquidated damages, that revenue increased 5% from the year-ago quarter.

U.S. franchise agreements awarded increased 24% year-over-year to 6,900 rooms, after a 30% year-over-year increase to about 9,400 rooms in the second quarter. Global franchise agreements awarded represented 9,000 rooms, versus 11,800 a year earlier, a period that included a 4,900-room international portfolio signing. The U.S. conversion pipeline grew to 25,500 rooms, up 6% from June 30, 2026, and 29% from September 30, 2025. The global pipeline totaled 78,200 rooms, with 96% in extended stay, midscale, and upscale brands.

Subsequent to quarter-end, the company sold two owned hotels for estimated net cash proceeds of about $34 million while retaining franchise agreements. As of November 2, 2026, it owned 17 operating hotels and one under construction. On October 1, 2026, it acquired Harvest Hosts for about $130 million, an asset-light RV travel subscription platform.

The company raised full-year 2026 U.S. and global RevPAR outlooks to 1.5% to 2.5% from 0% to 1.25% for the U.S. and 0% to 1% globally, and raised U.S. royalty-rate growth to approximately 9 basis points. Global net system rooms growth remained approximately 1.5%. Adjusted EBITDA guidance was raised to $641 million to $651 million. Net income guidance was lowered to $178 million to $185 million, and diluted EPS to $3.92 to $4.07, primarily for higher expected marketing and reservation system reimbursable expenses, the European option-termination charge, owned-hotel impairments, lower expected equity in earnings of affiliates, and higher interest expense.

President and Chief Executive Officer Dom Dragisich said the company expects U.S. net rooms growth to accelerate to approximately 1% by year-end.