NORTH BETHESDA, Maryland—Choice Hotels International, Inc. reported its third-quarter 2025 results. Highlights include:
- Net income grew to $180.0 million for the third quarter of 2025 from $105.7 million in the same period of 2024, representing diluted EPS of $3.86, an increase from $2.22 in the third quarter of 2024.
- Adjusted EBITDA for the third quarter of 2025 increased 7 percent to a third-quarter record of $190.1 million, compared to $177.6 million in the same period of 2024.
- Adjusted diluted EPS for the third quarter was $2.10, a decrease from $2.23 in the same period of 2024, reflecting the acquisition of the company’s previously held 50 percent equity investment in Choice Hotels Canada, which resulted in higher amortization expense related to acquired intangible assets, a temporary increase in income tax expense expected to reverse in the fourth quarter of 2025, the revaluation of the company’s previously held ownership interest in the joint venture, and unrealized foreign currency adjustments across the company’s broader operations. Excluding these items, third-quarter adjusted EPS would have been $2.27, representing a 2 percent increase compared to the same period of 2024.
- Global net rooms grew 2.3 percent, driven by 3.3 percent growth across the more accretive higher revenue upscale, extended stay, and midscale segments, compared to September 30, 2024.
- International net rooms grew 8.3 percent compared to September 30, 2024, highlighted by a 66 percent increase in openings, and grew 5.2 percent compared to June 30, 2025. Key milestones include:
- Added over 4,800 midscale rooms in France through direct franchise agreements and is expecting to nearly double the company’s France portfolio by year-end 2025.
- Entered Argentina through a direct franchise agreement.
- Onboarded nearly 80 percent of the anticipated 9,500 rooms in China under a distribution agreement with SSAW Hotels and Resorts.
- Subsequent to quarter-end, introduced the midscale extended-stay Mainstay Suites brand to Australia through direct franchise agreements, the brand’s first expansion outside North America, entered new markets in Africa and Suriname, and added a second franchise agreement in Argentina.
- Global franchise agreements awarded grew 54 percent for the third quarter of 2025, compared to the same period of 2024.
- Global pipeline exceeded 86,000 rooms as of September 30, 2025, with 98 percent concentrated in upscale, extended-stay, and midscale segments.
- U.S. extended stay net rooms grew 12 percent, highlighted by a 14 percent increase in openings, compared to September 30, 2024.
“Choice Hotels International delivered another quarter of record profitability, underscoring the strength of our portfolio’s continued shift toward higher-value brand segments and multiple growth avenues beyond U.S. RevPAR,” said Patrick Pacious, president and chief executive officer. “We are especially excited by the accelerating momentum in our international business, where we are on track to double profitability by 2027. With an accretive, high-quality pipeline that rapidly converts signings into openings, and an enhanced value proposition that is attracting a growing base of higher-value guests, Choice is exceptionally well-positioned to deliver long-term growth and create meaningful value for all stakeholders.”
Financial Performance
- Total revenues increased 5 percent to $447.3 million in the third quarter of 2025, compared to the same period of 2024.
- Franchise and management fees increased 3 percent to $193.8 million in the third quarter of 2025, compared to the same period of 2024.
- Partnership services and fees increased 19 percent to $28.9 million in the third quarter of 2025, compared to the same period of 2024.
- Global RevPAR increased 0.2 percent for the third quarter of 2025, compared to the same period of 2024, reflecting international RevPAR growth of 9.5 percent that was offset by a 3.2 percent decline in U.S. RevPAR primarily due to softer government and international inbound demand.
- International RevPAR increased 9.5 percent, or 5.1 percent on a constant-currency basis, for the third quarter compared to the same period in 2024, with growth recorded across all regions outside of the United States:
- EMEA delivered an 11 percent year-over-year increase.
- Americas (excluding the United States) reported a 5 percent year-over-year increase, driven by strong results from Canada, where the newly acquired operations achieved a 7 percent year-over-year increase.
- Asia-Pacific grew 5 percent year-over-year.
- U.S. RevPAR for the extended-stay portfolio outperformed the U.S. lodging industry by 20 basis points, while the U.S. economy transient portfolio outperformed its chain scale by 180 basis points for the third quarter of 2025, compared to the same period of 2024.
- U.S. average royalty rate expanded 10 basis points to 5.15 percent for the third quarter of 2025, compared to the same period of 2024.
System Size and Development
- U.S. upscale, extended-stay, and midscale net rooms portfolio grew 1.6 percent compared to September 30, 2024.
- Global net upscale rooms grew 20.8 percent in the third quarter of 2025, highlighted by a more than fourfold increase in global openings, compared to the same period of 2024.
- U.S. franchise agreements awarded increased 7 percent in the third quarter of 2025, driven by a 7 percent increase for conversion hotels and a 10 percent increase for new construction hotels, compared to the same period of 2024.
- Global midscale pipeline expanded 5 percent to nearly 30,000 rooms as of September 30, 2025, including a 15 percent increase in the U.S. pipeline for the Country Inn & Suites by Radisson brand compared to September 30, 2024.
- U.S. economy transient brands rooms pipeline grew 35 percent, and U.S. franchise agreements awarded increased 27 percent in the third quarter of 2025, compared to the same period of 2024.
Balance Sheet and Liquidity
As of September 30, 2025, Choice had total available liquidity of $564.2 million, including cash and cash equivalents and available borrowing capacity. The company’s net debt-to-adjusted EBITDA ratio was 3.0x for the trailing twelve months ended September 30, 2025.
During the nine months ended September 30, 2025, the company generated $184.8 million in cash flows from operating activities, including $68.7 million generated in the third quarter.
For the three months ended September 30, 2025, Choice realized $25 million in net proceeds from capital recycling activities. During the nine months ended September 30, 2025, the company’s net outlays related to hotel development and lending declined by $53.2 million.
Shareholder Returns
During the nine months ended September 30, 2025, the company returned $150.4 million to shareholders through dividends, share repurchases under its stock repurchase program, and repurchases from employees in connection with tax withholding and option exercises relating to awards under the Company’s equity incentive plans.
As of September 30, 2025, the company had 3.0 million shares of common stock remaining under its current share repurchase authorization.
Outlook
The following outlook includes forward-looking non-GAAP measures used by management to forecast the company’s performance. The net income guidance range has been revised from the company’s prior outlook primarily to reflect the $100 million gain recognized during the third quarter of 2025 on the fair value remeasurement of the previously held 50 percent equity investment in Choice Hotels Canada. Adjusted diluted EPS reflects amortization expense related to the intangible assets acquired and the remeasurement of the company’s previously held equity interest in connection with the acquisition of Choice Hotels Canada—items that were not factored into prior guidance. Adjusted metrics exclude the net surplus or deficit generated from reimbursable revenue from franchised and managed properties, due diligence and transition costs, and any share repurchases completed after September 30, 2025, and other items.
