Choice Hotels International reported stronger operating performance and development activity in the second quarter of 2026, supported by higher room openings, improved U.S. RevPAR and continued growth across its extended-stay, midscale and upscale brands.
The hotel franchisor generated total revenue of $441 million during the three months ended June 30, up from $426 million a year earlier.
Net income declined 21% year over year to $64 million, while adjusted EBITDA increased 6% to $175 million. Adjusted diluted earnings per share rose 5% to $2.02.
U.S. RevPAR Returns to Growth
Revenue per available room across Choice Hotels’ U.S. portfolio increased 1.3% compared with the second quarter of 2025.
The improvement reflected a 0.7% increase in average room rates and a 40-basis-point rise in occupancy, with particularly strong performance in the East North Central, Middle Atlantic and West South Central regions.
International RevPAR increased 2.1% on a currency-neutral basis, led by growth in the Caribbean and Latin America, alongside continued strength in Canada and Asia Pacific.
Global RevPAR increased 1.7% during the quarter.
Hotel Openings Reach Highest Second-Quarter Level Since 2019
Choice Hotels opened approximately 6,400 rooms in the United States during the quarter, representing a 27% increase from the same period in 2025 and the company’s highest second-quarter total since 2019.
Hotel exits also declined to their lowest second-quarter level since 2020, contributing to an improvement in net room growth.
Globally, the company opened around 8,300 rooms, 16% more than in the second quarter of last year.
Choice Hotels ended June with 661,089 rooms worldwide, an increase of 2.6% year over year. Its global portfolio of upscale, extended-stay and midscale rooms grew 3.6% to more than 599,000 rooms.
International room supply increased 12.5%, supported by double-digit growth in Asia Pacific and Europe, the Middle East and Africa.
Extended Stay Remains a Major Growth Driver
Extended-stay hotels continued to play a central role in the company’s expansion strategy.
U.S. extended-stay net room growth reached 13% compared with June 2025, marking the 12th consecutive quarter of double-digit growth.
Choice Hotels’ global development pipeline stood at approximately 77,300 rooms at the end of June, with 96% of those rooms concentrated in its extended-stay, midscale and upscale brands.
The pipeline included 29,900 extended-stay rooms, 26,400 conversion rooms and 50,900 rooms planned as new-build developments.
The U.S. conversion pipeline increased 24% year over year to 24,100 rooms and was 6% higher than at the end of the first quarter.
Franchise Agreements Increase
Choice Hotels awarded franchise agreements covering approximately 11,200 rooms worldwide during the quarter, up 20% from the same period last year.
In the United States, franchise agreements increased 30% and represented around 9,400 future rooms.
The company said continued demand for conversion-led brands and stronger developer interest helped drive the increase.
Franchise and management fee revenue rose 6% to $188 million, supported by higher international royalty fees, improved U.S. RevPAR and an increase in the average U.S. royalty rate.
Choice Hotels Raises Parts of 2026 Outlook
Following the second-quarter performance, Choice Hotels raised several elements of its full-year guidance.
The company now expects adjusted EBITDA of between $635 million and $650 million, compared with its previous range of $632 million to $647 million.
Global RevPAR is forecast to increase by between 0% and 1%, while U.S. RevPAR is expected to grow by between 0% and 1.25%.
Global net system room growth is now expected to reach approximately 1.5%, up from the previous forecast of around 1%.
However, the company lowered its net income and adjusted earnings outlook, primarily due to higher interest costs, a higher effective tax rate and increased spending on marketing, reservation systems and tools for franchisees.
Asset Sales Planned from 2027
Choice Hotels also plans to begin selling properties from its owned hotel portfolio as it moves into the next stage of its asset-light strategy.
As of August 5, the company owned 19 operating hotels and had one additional property under construction.
The first asset sales are expected during the first half of 2027, subject to market conditions.
Choice Hotels returned $139 million to shareholders through dividends and share repurchases during the first six months of 2026.
