Choice Hotels International published its second-quarter 2026 results on Wednesday 5 August, for the period ended 30 June. The US group, one of the world’s largest hotel franchisors under an asset-light model, reported total revenue of $441 million, up from $426 million in the same period in 2025. Net income stood at $64 million, or $1.41 per diluted share, down 21% year-on-year, a decline attributed mainly to a higher reimbursable deficit linked to investments in franchisee tools. Adjusted EBITDA, however, reached $175 million, up 6%, and adjusted diluted EPS rose 5% to $2.02.
The US market confirmed its recovery momentum. US room openings rose 27% in the second quarter compared with 2025, with approximately 6,400 rooms opened, the strongest second-quarter figure since 2019. Network exits reached their lowest second-quarter level since 2020, allowing US net room growth to improve for the second consecutive quarter, bringing first-half performance to its best level since 2021. US RevPAR grew 1.3%, driven by both occupancy and average rate, with particularly strong momentum in the East North Central, Middle Atlantic and West South Central regions.
Globally, net room growth reached 2.6% year-on-year, driven by 3.6% growth in the higher-revenue-contributing extended stay, midscale and upscale segments. The extended stay segment remained the primary US growth driver, with 13% net growth year-on-year, marking the twelfth consecutive quarter of double-digit growth in this segment. Internationally, net rooms grew 12.5%, driven by double-digit growth in Asia-Pacific and the Europe-Middle East-Africa region, alongside continued growth in Canada. This international momentum extends what was already observed in the first quarter of 2026, when the Group recorded a 72% increase in franchise agreements signed globally.
US franchise agreements awarded rose 30% in the second quarter, representing approximately 9,400 new rooms in development. The US conversion pipeline now stands at 24,100 rooms, up 24% year-on-year and 6% compared with the first quarter of 2026. The average US royalty rate rose 11 basis points to 5.2%. The Group’s global pipeline totalled approximately 77,300 rooms as at 30 June 2026, 96% concentrated in the extended stay, midscale and upscale segments, split between 26,400 conversion rooms and 50,900 new-build rooms.
Dom Dragisich, Interim CEO of Choice Hotels, said the quarter’s results reflect encouraging progress on the Group’s key priorities, with US net room growth improving for the second consecutive quarter and RevPAR trends strengthening. He noted that the Group had built a more robust commercial engine and technology platform in recent years, and that the main room for improvement now lay in execution, in order to improve franchisee economics by increasing both the number and quality of guests delivered while reducing operating costs.
On the financial side, the Group held total available liquidity of $475 million as at 30 June 2026, with a net debt to adjusted EBITDA ratio of 3.1x on a trailing twelve-month basis, within the target range of 3.0x to 4.0x. Net investment in hotel development and financing fell 80% over the first six months of the year, to $15 million, from $76 million a year earlier. The Group also returned $139 million to shareholders since the start of the year, through dividends and share buybacks.
Choice Hotels announced it is entering a new phase of its asset-light strategy, progressively recycling capital tied up in its portfolio of wholly owned hotels. As at 5 August 2026, the Group still directly operated 19 hotels, along with one additional property under construction. The first asset sales are expected during the first half of 2027, subject to market conditions. The Group also raised several of its full-year 2026 guidance ranges, notably adjusted EBITDA, now expected between $635 million and $650 million, up from $632 million to $647 million previously.
===AT_A_GLANCE===
At a Glance
Choice Hotels International — Q2 2026 Results – Total revenues: $441M (vs. $426M in Q2 2025) – Net income: $64M ($1.41 diluted EPS); Adjusted EBITDA: $175M; Adjusted diluted EPS: $2.02 – Global net rooms growth: +2.6% YoY; U.S. RevPAR: +1.3%; International RevPAR: +2.1% – U.S. room openings: ~6,400 (+27% YoY), highest Q2 level since 2019 – U.S. franchise agreements awarded: +30% YoY (~9,400 new U.S. rooms) – Global pipeline: ~77,300 rooms (96% extended stay/midscale/upscale) – Total liquidity: $475M; Net debt/Adjusted EBITDA: 3.1x – Shareholder returns YTD: $139M (dividends + buybacks) – FY2026 outlook raised: Adjusted EBITDA $635-650M (from $632-647M) – Leadership: Dom Dragisich, Interim CEO
