#United States #Choice Hotels #North Bethesda #Net Income #RevPAR

Choice Hotels International Reports Strong Performance in Q3 2026

On November 2, 2026, Choice Hotels International, Inc. (NYSE: CHH), a prominent global lodging franchisor, unveiled impressive results for its third quarter, which ended on September 30, 2026. As the company continues to embrace its asset-light model, these results signal a positive trajectory for the hospitality giant.

Financial Highlights

During this quarter, Choice Hotels reported a net income of $58 million, translating to $1.28 per diluted share, despite a 68% year-over-year decrease attributed primarily to previous gains from the acquisition of a joint venture. However, the adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased to $193 million, marking a 1% rise compared to the same quarter last year.

The adjusted diluted earnings per share (EPS) saw an 11% increase, reaching $2.33, supported by higher franchise and management fees along with effective share repurchase strategies.

Room Growth & Category Performance

Notably, the net rooms growth in the U.S. continued to improve, reaching near equilibrium compared to September 30, 2025. The overall global room count rose by 1.7%, with significant contributions from the extended stay, midscale, and upscale brands. The company's RevPAR (Revenue per Available Room) also grew by 3.8% in the U.S., driven by enhancements in both room occupancy and pricing power.

Franchise agreements awarded increased by 24% from the previous year, resulting in the addition of 6,900 new rooms. This year, the domestic conversion pipeline expanded further, totaling 25,500 rooms, a 6% increase from the previous quarter and a remarkable 29% from the prior year.

Strategic Initiatives

In terms of strategic decisions, the company successfully sold two owned hotels for an estimated $34 million while retaining the franchise agreements, thereby advancing its asset-light strategy. $211 million had been returned to shareholders through dividends and share repurchases, signaling a strong commitment to returning value.

Future Outlook

Choice Hotels remains optimistic, raising its full-year U.S. and global RevPAR outlook based on the positive trends observed in occupancy and demand. The company projects a 1% net rooms growth by year-end 2026 and anticipates continuing this momentum. Dom Dragisich, President and CEO, emphasized the necessity to focus on foundational strategies while pushing investments into technology and commercial capabilities that enhance franchisee demand capture capabilities.

To foster growth, the company is poised to capitalize on its recently acquired asset-light RV travel subscription platform, Harvest Hosts, which aims to cater to the expanding outdoor travel market. With a total capital outlay for hotel development and lending activities projected to decline significantly, Choice Hotels is gearing up for a more streamlined operational model.

Conclusion

As Choice Hotels International continues to enhance its market positioning and operational strategies, its recent quarterly performance stands as an exhibit of resilience and adaptability within the ever-evolving hospitality landscape. Investors and franchise partners alike can remain confident as the company navigates into next year with promising prospects for growth and expansion.