Choice highlights global growth; RevPAR dips 2.9%

NORTH BETHESDA, Maryland – Choice Hotels International reported second quarter earnings on Wednesday, highlighting global net rooms growth of 2.1%, including 3.0% growth for the more revenue-intense global upscale, extended-stay, and midscale rooms portfolio.

Choice’s global pipeline exceeded 93,000 rooms as of June 30, 2025, including nearly 77,000 domestic rooms. It also increased net rooms portfolio for the domestic extended-stay segment by 10.5% year-over-year (YOY), and the segment's pipeline reached nearly 43,000 rooms.

At the same time, Choice’s domestic RevPAR decreased by 2.9% YOY for second quarter 2025, with more comparative weakness in upscale versus economy brands, reflecting macroeconomic uncertainty and previously disclosed difficult comparisons due to the timing of Easter and eclipse-related travel in 2024. Excluding the Easter and eclipse impacts, domestic RevPAR declined approximately 1.6% YOY for second quarter 2025.

Domestic RevPAR for extended-stay portfolio outperformed the total lodging industry by 40 basis points YOY, according to Choice, and the economy transient portfolio outperformed the economy chain scale by 320 basis points in domestic RevPAR for second quarter 2025.

The company’s RevPAR growth guidance was cut 150 bps (midpoint now -1.5%), and like-for-like Adjusted EBITDA was reduced <1%. Choice is adjusting its full year RevPAR outlook to -3% to 0% from -1% to +1%, reflecting a more moderate domestic expectation amidst a changing macroeconomic backdrop. Net income for full-year 2025 was adjusted to $261-$276 million from $275-$290 million.

Global pipeline data

Choice reported that it increased net international rooms system size by 5.0%, highlighted by a 15% increase in openings, compared to June 30, 2024.

Choice accelerated international expansion, including strengthening the company's presence in Brazil by extending a master franchise agreement for more than 10,000 rooms with Atlantica Hospitality International by 20 years. It nearly tripled the room count in France through a direct franchise agreement with Zenitude Hotel-Residences and signed strategic agreements with SSAW Hotels & Resorts in China, including a distribution agreement which is expected to add over 9,500 rooms in 2025 and a master franchising agreement, which is expected to add approximately 10,000 rooms over the next five years.

Choice also acquired the remaining 50% interest in Choice Hotels Canada in July for approximately $112 million, subject to customary adjustments for working capital and cash, funded through available cash and existing credit facilities. The transaction paves the way for the company’s accelerated growth in Canada by expanding the product offering from eight to 22 Choice brands, including particularly strong opportunities in the extended-stay segment. The portfolio includes 327 units and over 26,000 rooms, already reflected in the company’s system count. Management expects the total Choice Hotels Canada business to generate approximately $18 million in EBITDA for full year 2025.

Domestic upscale, extended-stay, and midscale net rooms portfolio grew by 2.3% compared to June 30, 2024.

The company’s WoodSpring Suites brand grew by 9.7% to nearly 33,000 rooms since June 30, 2024.

For the upscale brands, global net rooms grew by 14.7% YOY, and global pipeline increased by 7% from March 31, 2025, reaching nearly 29,000 rooms.

Choice also increased the domestic economy transient pipeline by 8% YOY to over 1,700 rooms as of June 30, 2025.

Financial results

Choice’s franchise and management fees came in at $177.1 million (-1.5% YOY).

Net income for Choice in 2Q25 was $81.7 million, compared to $87.1 million in the same period of 2024, representing diluted earnings per share (EPS) of $1.75, compared to $1.80 in second quarter 2024.

EBITDA for second quarter 2025 grew to $165.0 million, a second quarter record and a 2% increase compared to the same period of 2024. Excluding the impact of a $2 million operating guarantee payment for a portfolio of managed hotels, which was acquired in connection with the company’s purchase of Radisson Hotels Americas, second quarter 2025 adjusted EBITDA was $167.0 million.

Adjusted diluted EPS for second quarter 2025 grew to $1.92, a second quarter record and a 4% increase compared to the same period of 2024.