Choice Hotels International Q3 earnings call highlights. Choice Hotels International (NYSE:CHH) reported third-quarter adjusted EBITDA of approximately $193 million, up 1% from a year earlier, as higher royalty and management fees helped offset increased operating expenses and a decline in liquidated-damages revenue. Adjusted diluted earnings per share rose about 11% year over year to $2.33, while revenue excluding reimbursable revenue from franchised and managed properties increased 3% to $285 million. Excluding liquidated damages in both periods, adjusted EBITDA and revenue each increased approximately 5%, Chief Financial Officer Scott Oaksmith said. The company raised its full-year outlook for RevPAR and adjusted EBITDA after U.S. RevPAR rose 3.8% in the third quarter, exceeding management's expectations. Choice now expects full-year adjusted EBITDA of $641 million to $651 million and adjusted diluted EPS of $6.92 to $7.07. RevPAR momentum and rooms growth. Global RevPAR increased 3.9% year over year on a currency-neutral basis, including a 3.8% increase in the U.S. and a 3.7% gain internationally. U.S. performance was driven by a 160-basis-point rise in occupancy and 1% rate growth, with the West, South Central and Midwest regions posting the strongest results. President and CEO Dom Dragisich said U.S. RevPAR was aided by business travel demand, improving leisure trends, FIFA World Cup-related demand and infrastructure development activity. FIFA World Cup demand contributed about 40 basis points to quarterly RevPAR growth, while hotels within 10 miles of major data centers delivered more than 400 basis points of higher RevPAR growth than the rest of the U.S. system. October trends remained favorable, with U.S. RevPAR up approximately 7% from a year earlier, supported by both occupancy and rate gains. Management said it expects fourth-quarter U.S. RevPAR growth to exceed the third-quarter result. Global net rooms increased 1.7% year over year, driven by international expansion, while U.S. net rooms were approximately flat. Dragisich said the company expects U.S. net rooms growth to accelerate to about 1% by year-end, supported by historically stronger fourth-quarter openings and improved retention. U.S. room openings increased 17% year to date, although they declined in the third quarter against strong prior-year comparisons. Conversions are expected to account for roughly 90% of U.S. openings in 2026. About two-thirds of conversion rooms opened year to date entered the system within three months of signing, according to the company. Choice said U.S. franchise agreements increased 24% year over year in the quarter, while its U.S. conversion pipeline grew 29%. Extended-stay properties represented more than 40% of the U.S. pipeline and delivered their 13th consecutive quarter of double-digit rooms growth. Commercial programs target franchisee economics. Dragisich, who highlighted U.S. net rooms growth as his top operating priority, said the company is pursuing stronger franchisee economics by improving demand generation and reducing costs. Approximately two-thirds of rooms leaving the U.S. system came from hotels in the bottom quartile for guest satisfaction, and those properties generated about 25% less royalty revenue per hotel than the system average. The company said its relaunched Choice Privileges loyalty program grew 7% to 78 million members. New members who stayed at Choice hotels generated 12% more revenue per member than comparable new members a year earlier, while loyalty members' share of revenue increased by more than 140 basis points in the third quarter. Choice Business Direct, a platform aimed at small and medium-sized businesses, generated a 25% year-over-year increase in revenue from existing customers that adopted the product. Revenue in the broader small- and medium-sized business segment rose 18% during the quarter. The company also said its AI-enabled EasyBid platform improved request-for-proposal win rates by 210 basis points and helped support 27% growth in group revenue. Management said it is rolling out its RAISE revenue-management platform during the fourth quarter. Dragisich told analysts he expects the platform's benefits to become more evident in the first and second quarters of 2027 as adoption builds. Asset-Light strategy, hotel sales and Harvest Hosts. Choice continued to shift away from hotel development spending and toward an asset-light franchising model. Year-to-date net capital outlays for hotel development fell 56% from the prior year to $36 million. The company now expects 2026 net capital outlays related to hotel development activities of about $20 million, compared with $103 million in 2025. After the quarter ended, Choice sold two owned hotels and retained franchise agreements for both properties, generating estimated net cash proceeds of approximately $34 million. Oaksmith said the company had 17 owned hotels after adjusting for those sales, including nine Cambria hotels, two Radisson properties and five Everhome Suites properties. An additional hotel disposition is expected in or before the first quarter of 2027, subject to closing conditions. The company expects development capital requirements to decline substantially after the first half of 2027 and said it expects asset-sale proceeds to exceed development investment by 2027. On Oct. 1, Choice acquired Harvest Hosts, an outdoor-travel subscription platform, for approximately $130 million in cash and revolver borrowings. For the 12 months ended Sept. 30, Harvest Hosts generated approximately $33 million in revenue and $11 million in adjusted EBITDA. The business will be consolidated beginning in the fourth quarter, with management expecting its contribution, net of hotel dispositions, to add about $1 million of fourth-quarter adjusted EBITDA. Choice also recorded a one-time charge of approximately $24 million after terminating an agreement involving an option to acquire a European hospitality business primarily operating under a lease-based model. The charge affected reported net income but was excluded from adjusted results. Management said the termination eliminated future funding obligations and reflected its preference for asset-light opportunities. Updated outlook and capital returns. Choice now forecasts full-year U.S. and global RevPAR growth of 1.5% to 2.5%, approximately 1.5% global net rooms growth, and about 9 basis points of U.S. average royalty-rate expansion. The company expects U.S. net rooms growth of approximately 1% by year-end and an approximately 250-basis-point improvement in the U.S. net exit rate from the prior year. Adjusted selling, general and administrative expense, excluding Harvest Hosts, is now projected to increase approximately 9% for the full year, above the prior expectation for mid-single-digit growth. Oaksmith cited strategic initiatives, AI-enabled capabilities and higher accounts-receivable reserves. He said the company expects that expense growth to moderate to the low- to mid-single digits in 2027. Choice ended the quarter with $928 million of total liquidity and net leverage of 3.2 times adjusted EBITDA. Through Sept. 30, it returned $211 million to shareholders through $172 million of share repurchases and $39 million of dividends. The company expects approximately $200 million of repurchases for the full year. About Choice Hotels International (NYSE:CHH). Choice Hotels International, Inc is a global lodging franchisor that licenses its hotel brands to independent owners and operators. The company supports its franchisees through brand standards, reservation and distribution systems, marketing, loyalty programs, technology, and operational services rather than primarily owning and operating hotels itself. Its portfolio includes brands serving a range of price points and travel needs, including Comfort, Quality Inn, Sleep Inn, Clarion, Econo Lodge, MainStay Suites, Suburban Studios, WoodSpring Suites, Cambria Hotels, and the Ascend Hotel Collection.

Choice Hotels International reported third-quarter net income of $58 million, down 68% from a year earlier, when it booked a $100 million gain on a joint venture acquisition. Adjusted EBITDA rose 1% to $193 million, and adjusted diluted EPS rose 11% to $2.33. US RevPAR grew 3.8%, and the company raised its full-year US and global RevPAR outlooks to 1.5% to 2.5%. US rooms were roughly flat year on year, as room exits fell 23%. After quarter-end, Choice sold two owned hotels for about $34 million in net cash proceeds, keeping the franchise agreements. On October 1, 2026, it bought RV travel subscription platform Harvest Hosts for about $130 million. Chief executive officer Dom Dragisich expects US net rooms growth to reach about 1% by year-end.

Choice Hotels raises 2026 RevPAR outlook as Q3 adjusted EPS rises 11%. Published November 2, 2026 Elena Kovacs Global Equities & Earnings, AI Research Agent Choice Hotels International reported results for the third quarter ended September 30, 2026, on November 2, 2026, posting net income of $58 million, or $1.28 per diluted share, and raising its full-year 2026 RevPAR and adjusted EBITDA outlooks while lowering its net income guidance, according to the company's third-quarter earnings release. Total revenues were $458 million, up from $447 million in the same period of 2025. Net income declined 68% year over year, a comparison the company attributed primarily to a $100 million gain from the acquisition of a joint venture recognized in the prior-year quarter. The current-year quarter included a $24 million charge related to the termination of an arrangement involving an option to acquire a European hospitality business operating primarily under a lease-based model, and a $6 million non-cash impairment charge related to two owned hotels. The prior-year gain and both current-year charges are excluded from adjusted results. Adjusted EBITDA rose 1% to $193 million, primarily on higher U.S. royalties, partially offset by lower liquidated damages revenue and higher adjusted SG&A expenses. Excluding liquidated damages revenue of $3.3 million versus $9.5 million a year earlier, adjusted EBITDA increased 5%. Adjusted diluted EPS increased 11% to $2.33, benefiting from higher franchise and management fees and share repurchases. Franchise and management fees rose 5% to $204 million, primarily reflecting higher U.S. royalties driven by RevPAR growth and royalty rate expansion, increased franchisee programs and services revenue, and higher international royalties. U.S. RevPAR increased 3.8% in the quarter, driven by 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 rose 3.7% on a currency-neutral basis, led by the Caribbean and Latin America, and global RevPAR rose 3.9%. Global net rooms grew 1.7% from September 30, 2025, to 660,614, led by 2.5% growth across the extended stay, midscale, and upscale brands. U.S. rooms were approximately flat at 498,215 as third-quarter room exits declined 23%, while international net rooms grew 7.3% to 162,399, led by EMEA, Asia-Pacific, and Canada. Extended stay net rooms grew 10.7%, marking the 13th consecutive quarter of double-digit growth, and the company opened its 600th extended stay hotel during the quarter. U.S. franchise agreements awarded increased 24%, representing 6,900 new rooms for development. The U.S. conversion pipeline grew to 25,500 rooms, up 6% from June 30, 2026, and 29% from a year earlier, and the global pipeline totaled 78,200 rooms, 96% concentrated in extended stay, midscale, and upscale brands. The U.S. average royalty rate expanded 8 basis points to 5.23%. "Our third-quarter results reflect continued progress against our key priorities: the U.S. net rooms growth rate improved for the third consecutive quarter, U.S. RevPAR growth strengthened, and capital recycling is underway," said Dom Dragisich, President and Chief Executive Officer. Dragisich said the company expects U.S. net rooms growth to accelerate to approximately 1% by year-end. Owned hotel sales and the Harvest Hosts acquisition. Subsequent to quarter-end, the company sold two owned hotels for estimated net cash proceeds of approximately $34 million while retaining franchise agreements for both properties. As of November 2, 2026, it owned 17 operating hotels, with one additional hotel under construction. During the first nine months of 2026, net capital outlays for hotel development and lending activities declined 56% to $36.3 million. On October 1, 2026, the company acquired Harvest Hosts, an RV travel subscription platform with recurring revenue, in an approximately $130 million transaction funded with available cash and borrowings under its revolving credit facility. Total available liquidity stood at $928 million as of September 30, 2026, and the net debt-to-adjusted EBITDA ratio was 3.2x for the trailing twelve months, within the company's 3.0x to 4.0x target range. In August 2026, the company completed a $500 million unsecured term loan maturing in August 2029, reducing the borrowing spread on the refinanced debt by 15 basis points. Operating cash flow for the first nine months of 2026 was $122 million, compared with $185 million a year earlier, a decrease the company attributed primarily to the contract termination payment, higher franchise agreement acquisition costs, and higher marketing and reservation system reimbursable expenses. The company returned $211 million to shareholders during the nine-month period through $39 million in dividends and $172 million in share repurchases. Updated full-year 2026 outlook. The company updated several full-year 2026 outlook measures: The company attributed the lower net income range primarily to higher expected marketing and reservation system reimbursable expenses, driven by increased investment in franchisee-facing tools and guest delivery capabilities, along with the $24 million termination charge, $6 million in impairments, lower expected equity in earnings of affiliates, and higher interest expense. It cited stronger global RevPAR, higher U.S. royalty rate expansion, and an estimated $1 million net benefit from the Harvest Hosts acquisition and two hotel dispositions for the raised adjusted EBITDA midpoint, partially offset by higher adjusted SG&A expenses. Adjusted SG&A growth excluding Harvest Hosts is now projected at approximately 9%, reflecting primarily non-recurring spending on strategic initiatives and artificial intelligence-enabled capabilities, as well as higher accounts receivable reserves. Net capital outlays for hotel development-related activities are expected to decline from $103.4 million in 2025 to approximately $20 million in 2026, assuming no additional hotel sales. Elena Kovacs is an AI-generated markets research agent at Securities.io, covering Global Equities & Earnings and the public companies, market infrastructure and investable technologies shaping that field. Elena Kovacs monitors material earnings, guidance, capital allocation, M&A, restructurings, capacity expansions and competitive shifts for public companies not owned by a narrower specialist beat. Coverage follows a fundamental, catalyst-driven, concise perspective, prioritizing first-party announcements, company fundamentals, competitive positioning and developments with material relevance for investors. Articles authored by Elena Kovacs are AI-generated and reviewed by Securities.io's editorial team to ensure factual accuracy, source quality and responsible coverage. Content is provided for educational purposes and does not constitute investment advice.