Choice Hotels International reported mixed performance for the fourth quarter of 2025, highlighting both challenges and opportunities. The company recorded a 2.5% year-over-year decline in global revenue per available room. The U.S. market drove much of this downturn, raising questions about near-term recovery prospects.
Despite domestic struggles, the company announced a new digital platform aimed at small and midsized businesses. Executives estimate this segment represents a $13 billion addressable opportunity. The platform aims to strengthen corporate travel relationships and drive future bookings.
Hospitality analysts continue to monitor RevPAR trends closely as they reflect pricing power and occupancy levels. For Choice Hotels, the next phase depends on innovation and strategic market focus.
U.S. market pressures impact fourth quarter performance
Choice Hotels experienced a 7.6% decline in U.S. RevPAR during the fourth quarter. Company leadership attributed the drop to multiple factors, including reduced government travel and weaker inbound international demand. Challenging year-over-year comparisons also affected performance.
The domestic market remains critical to the company’s overall financial health. Many Choice-branded properties operate in suburban and secondary markets across the United States. When domestic travel slows, these locations feel the impact quickly.
Business travel typically supports steady occupancy levels for the company. However, economic uncertainty and budget adjustments influenced corporate bookings during the quarter. As a result, U.S. performance weighed heavily on overall results.
Industry observers note that the U.S. lodging market has faced volatility due to shifting travel patterns. Leisure demand remains stable in certain regions, yet business and government travel fluctuated throughout 2025.
International growth provides a stabilizing force
While U.S. operations struggled, international markets delivered more encouraging results. Global RevPAR increased by 3.2% during the fourth quarter, supported by growth in Europe and parts of Asia.
International average daily rates rose modestly, reflecting stronger pricing conditions outside the United States. Occupancy levels in several overseas markets improved compared with the previous year.
Choice Hotels continues to expand its presence internationally through franchise partnerships. Emerging markets in Europe and Asia offer opportunities for midscale and upper-midscale brands. These segments often appeal to value-conscious travelers seeking reliable accommodations.
Executives emphasize the importance of geographic diversification. By strengthening international operations, the company can reduce reliance on any single market.
Business travel and group demand remain key drivers
Despite overall U.S. softness, the company reported strong growth in group and small business segments. Group revenue increased significantly year over year, while small and midsized business revenue also expanded.
Business travel now accounts for a substantial portion of total stays across Choice properties. Construction, utilities, and manufacturing sectors continued to generate consistent demand. These industries often require extended stays and frequent bookings.
Choice Hotels invested in digital tools to streamline corporate booking processes. AI-powered enhancements improved the company’s request-for-proposal system, allowing faster responses to business clients. This innovation helped secure higher-value contracts.
Corporate travel remains an essential pillar for midscale hotel brands. Reliable weekday occupancy from business travelers can offset fluctuations in leisure demand.
New digital platform targets $13 billion small business opportunity
Choice Hotels announced plans to launch a dedicated digital platform focused on small and midsized businesses. Executives estimate this segment represents a $13 billion opportunity within the broader travel market.
The platform aims to simplify booking processes and deliver customized travel solutions for smaller enterprises. Small businesses often lack centralized travel programs, creating an opportunity for streamlined services.
By enhancing digital engagement, Choice seeks to improve customer loyalty and booking frequency. Technology investments reflect a broader trend within the hospitality industry toward data-driven marketing and automation.
Industry reports show that small businesses increasingly prioritize cost control and flexibility in travel planning. A specialized platform may position Choice Hotels as a preferred partner within this segment.
Full-year results highlight both decline and resilience
For the full year 2025, systemwide RevPAR declined by 4.6%. Average daily rates decreased slightly, and occupancy levels dipped marginally. These figures reflect broader market headwinds affecting domestic lodging performance.
However, international operations recorded stronger gains throughout the year. RevPAR growth abroad demonstrated the benefits of diversified portfolios.
Looking ahead to 2026, company projections suggest cautious optimism. Leadership forecasts that RevPAR could stabilize or experience modest improvement. These expectations depend on economic conditions and travel demand recovery.
Hospitality analysts continue to emphasize the importance of operational efficiency and digital transformation. Brands that adapt quickly to shifting travel patterns may outperform competitors.
Strategic outlook centers on innovation and expansion
Choice Hotels plans to focus on innovation, geographic expansion, and corporate travel growth in the coming year. The company views digital transformation as a long-term investment rather than a short-term solution.
Technology-driven initiatives may help capture higher-value customers and strengthen relationships with business clients. Enhanced analytics can improve pricing strategies and occupancy forecasting.
International development also remains a priority. By expanding into high-growth markets, the company can balance domestic volatility.
The hospitality sector continues to evolve as travelers demand convenience, transparency, and flexibility. Choice Hotels aims to align its strategy with these expectations while addressing recent performance challenges.
A pivotal year ahead for Choice Hotels
The launch of a new small business platform signals a proactive approach to market challenges. By targeting a large and underserved segment, Choice Hotels seeks to generate incremental revenue streams.
Although U.S. RevPAR declines created headwinds in 2025, international growth and corporate demand provided stability. The coming year will test whether digital innovation and strategic expansion can offset domestic pressures.
As the hospitality industry adapts to changing travel behaviors, Choice Hotels stands at a crossroads. Its focus on technology, small business engagement, and international markets may determine its trajectory in 2026 and beyond.
For more travel news like this, keep reading Global Travel Wire
