Choice Hotels International has officially disclosed its financial and operational performance for the second quarter of 2026, demonstrating sustained top-line revenue expansion and strong development momentum across its global hotel network. Supported by rising demand for extended stay, midscale, and upscale accommodation, the hospitality group delivered solid adjusted earnings growth while continuing to execute its strategic long-term development pipeline.
Total quarterly revenues expanded to $441 million, reflecting a three percent increase compared to the corresponding period in 2025. This performance was underpinned by core franchise and management fees, which climbed six percent year-over-year to reach $188 million. Additionally, revenue from partnership services and fees grew by six percent to $29 million, driven by strong performance across procurement services and franchisee support channels.
Strong Revenue Metrics and Adjusted Earnings Performance
The operational results highlight solid underlying performance across Choice Hotels’ global portfolio. Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) rose six percent year-over-year to reach $175 million. Adjusted diluted earnings per share (EPS) expanded by five percent to $2.02, compared to $1.92 recorded during the second quarter of 2025.
Net income for the quarter stood at $64 million, representing a 21 percent decline compared to the prior year period, primarily reflecting higher investment costs associated with system expansion and operational technology integration. Diluted earnings per share were reported at $1.41. On a year-to-date basis through the first six months of 2026, total revenues reached $781 million, while net income totaled $85 million and adjusted diluted EPS reached $3.09.
Revenue per Available Room (RevPAR), a critical benchmark for evaluating hotel performance, demonstrated steady momentum across domestic and international markets. Global RevPAR grew by 1.7 percent during the second quarter, while United States RevPAR experienced a 1.3 percent gain year-over-year. The domestic RevPAR expansion was propelled by a 0.7 percent increase in average daily rate (ADR) alongside a 40 basis point improvement in overall occupancy rates, with notable market strength recorded in the East North Central, Middle Atlantic, and West South Central regions. International RevPAR surged by 2.1 percent on a currency-neutral basis, led by accelerating demand across the Caribbean, Latin America, Canada, and the Asia-Pacific region.
Rapid Network Expansion Across Key Hospitality Segments
Choice Hotels achieved substantial growth in its room footprint during the second quarter, opening approximately 8,300 global rooms—a 16 percent increase in global room openings compared to the second quarter of 2025. Within the United States, room openings increased by 27 percent year-over-year to approximately 6,400 rooms, marking the highest second-quarter opening volume recorded by the company since 2019. At the same time, property exits fell to their lowest second-quarter level since 2020, strengthening net system growth.
As of June 30, 2026, the global system expanded to 661,089 operating rooms, representing a 2.6 percent global net rooms growth rate year-over-year. The growth trajectory was primarily spearheaded by the company’s focus on higher-revenue categories, including extended stay, midscale, and upscale brands, which collectively achieved a 3.6 percent net room growth rate.
Domestic extended stay brands achieved a 13.0 percent year-over-year increase in net rooms, marking the twelfth consecutive quarter of double-digit expansion for the segment. The company’s average domestic royalty rate also expanded by 11 basis points year-over-year to reach 5.2 percent, underscoring the growing value proposition delivered to franchise owners.
Expanding Global Pipeline and Capital Recycling Initiative
Development activity accelerated substantially during the second quarter. Global franchise agreements awarded rose by 20 percent year-over-year, representing approximately 11,200 new rooms added to the global development system. In the domestic market, franchise agreements awarded surged by 30 percent, adding roughly 9,400 new rooms to the development pipeline.
The total global pipeline reached approximately 77,300 rooms as of June 30, 2026, with an overwhelming 96 percent concentrated in the extended stay, midscale, and upscale categories. The development pipeline includes 71,100 rooms in the United States and 6,200 international rooms. Extended stay properties account for 29,900 rooms, representing 39 percent of the total pipeline. Furthermore, conversion brands demonstrated exceptional market traction, with the domestic conversion room pipeline increasing 24 percent year-over-year to 24,100 rooms.
Alongside development expansion, Choice Hotels disclosed a planned strategic shift toward capital recycling. As of June 30, 2026, the company held 19 operating hotels in its owned portfolio. Management expects to initiate the first sales under this asset-recycling program during the first half of 2027, subject to prevailing real estate market conditions, allowing the firm to reallocate capital into high-return franchising channels.
Financial Liquidity and Full-Year 2026 Market Outlook
Choice Hotels maintained a conservative balance sheet and strong liquidity position, finishing the second quarter with approximately $475 million in available liquidity and a net debt-to-adjusted EBITDA ratio of 3.1x. Through the first six months of the year, the company returned $139 million to shareholders, comprising $26 million in cash dividends and $113 million through share repurchases. Approximately 1.8 million common shares remain authorized for future share repurchases.
Looking ahead to full-year 2026, Choice Hotels updated its annual financial outlook to reflect operational momentum. The company raised its full-year adjusted EBITDA guidance to a range between $635 million and $650 million. Full-year global RevPAR growth is projected between 0 percent and 1.0 percent, with U.S. RevPAR growth expected between 0 percent and 1.25 percent. Global net system room growth is anticipated at approximately 1.5 percent. Adjusted net income for the full year is projected between $312 million and $323 million, while overall net income and GAAP diluted EPS guidance were adjusted downwards to accommodate planned operational investments.
Through its focus on high-revenue lodging segments, disciplined capital allocation, and conversion brand expansion, Choice Hotels continues to solidify its competitive standing across the global tourism and travel infrastructure landscape.
For more travel news like this, keep reading Global Travel Wire
