Open the filing on EDGARCHOICE HOTELS INTERNATIONAL REPORTS SECOND QUARTER 2026 RESULTS
U.S. Net Rooms Growth Improved for the Second Consecutive Quarter, Supporting 2.6% Global Net Rooms Growth
NORTH BETHESDA, Md., August 5, 2026 - 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 properties | $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.
- 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.
RevPAR
| Three months endedJune 30, 2026 |
|---|
| (% change on a currency-neutral basis) | Change vs. Prior Year Period |
| U.S. | 1.3% |
| International | 2.1% |
| Global | 1.7% |
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.
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.
- 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
| June 30, 2026 | June 30, 2025 | Change |
|---|
| (Rooms) | |
| 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.
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.
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.
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.
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.
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.
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
Forward-looking statements notice
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.
Forward-looking statements notice
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.
Earnings Release Schedules
Table of Contents
| Page No. |
|---|
| Condensed Consolidated Statements of Income | 11 |
| Condensed Consolidated Balance Sheets | 12 |
| Condensed Consolidated Statements of Cash Flows | 13 |
| Currency-Neutral System-Wide Hotel Operating Statistics | 13 |
| System Hotel and Room Supply | 15 |
| Non-GAAP Financial Information | 16 |
| Outlook | 17 |
| 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 |
|---|
| For the Three Months Ended June 30, 2026 |
|---|
| ADR | Occupancy | RevPAR |
|---|
| 2026 | vs. 2025 | 2026 | vs. 2025 | 2026 | vs. 2025 |
|---|
| CHOICE HOTELS INTERNATIONAL, INC. |
| CURRENCY-NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS |
| (UNAUDITED) |
| Total U.S. | $98.28 | | 0.7% | 60.0% | | | 40bps | $58.92 | | 1.3% |
| Upscale & Above | 155.49 | | 2.0% | 60.0% | | | (50)bps | 93.33 | | 1.3% |
| Midscale & Upper Midscale | 102.76 | | 0.7% | 59.6% | | | 20bps | 61.24 | | 1.1% |
| Extended Stay | 69.24 | | 3.5% | 71.3% | | | 10bps | 49.37 | | 3.7% |
| Economy | 71.16 | | (0.2)% | 49.9% | | | (20)bps | 35.51 | | (0.7)% |
| International | 111.14 | | 2.0% | 64.8% | | | 10bps | 71.96 | | 2.1% |
| Total System | $101.45 | | 1.2% | 61.1% | | | 40bps | $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% | | | 20bps | $52.08 | | (0.2)% |
| Upscale & Above | 148.67 | | 1.4% | 55.1% | | | (10)bps | 81.97 | | 1.4% |
| Midscale & Upper Midscale | 98.02 | | (0.5)% | 54.7% | | | 10bps | 53.62 | | (0.2)% |
| Extended Stay | 67.87 | | 1.9% | 68.7% | | | (80)bps | 46.65 | | 0.7% |
| Economy | 68.80 | | (2.6)% | 46.1% | | | (80)bps | 31.71 | | (4.4)% |
| International | 105.01 | | 2.7% | 60.9% | | | (20)bps | 63.90 | | 2.2% |
| Total System | $96.68 | | 0.4% | 56.7% | | | 10bps | $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% | | | |
| Includes Ascend Hotel Collection, Cambria, Park Plaza, Radisson, Radisson Blu, Radisson Individuals, and Radisson RED brands. |
| Includes Clarion, Comfort Inn, Comfort Suites, Country Inn & Suites, Park Inn, Quality Inn, and Sleep Inn brands. |
| Includes Everhome Suites, Mainstay Suites, Suburban Studios, and WoodSpring Suites brands. |
| Includes Econo Lodge and Rodeway brands. |
| 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 | 129 | 22,600 |
| Comfort | 2,135 | 178,818 |
| Quality | 1,881 | 148,452 |
| Country | 404 | 32,618 |
| Sleep | 427 | 30,610 |
| Clarion | 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 | 58 | 6,546 |
| Includes Radisson, Radisson Blu, Radisson Individuals, Radisson RED and Park Plaza brands. |
| Includes Comfort family of brand extensions including Comfort Inn and Comfort Suites. |
| Includes Clarion family of brand extensions including Clarion and Clarion Pointe. |
| 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 |
|---|
| | June 30, | June 30, |
|---|
| | 2026 | 2025 | 2026 | 2025 |
|---|
| 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 |
| 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 |
|---|
| | Lower Range | Upper Range |
|---|
| 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 |
| 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 |
Contacts
Allie Summers, Senior Director, Investor Relations
IR@choicehotels.com
© 2026 Choice Hotels International, Inc. All rights reserved.
Choice Hotels International, Inc.