CHH · Choice Hotels International, Inc.

Choice Hotels delivered first-quarter 2026 results characterized by record top-line revenue ($340.6M), modest GAAP earnings decline ($20.3M net income vs. $45.0M in Q1 2025), and stable non-GAAP profitability ($125.7M adjusted EBITDA, down $3.9M YoY). The earnings pressure stemmed primarily from timing-related items—including higher franchise agreement acquisition costs tied to a 37% increase in global room openings—and a temporarily elevated effective tax rate (25% projected for full-year 2026, versus prior-year lower rate). Management emphasized operational inflection points: U.S. net rooms growth turned positive sequentially after year-end 2025, driven by the highest first-quarter U.S. openings since 2023 and the lowest quarterly exits since 2023; global franchise agreements awarded surged 72% YoY, with outsized gains in international (+113%) and extended stay (+11.8% U.S. net rooms growth); and the U.S. pipeline expanded to ~71,500 rooms, with conversion rooms up 17% YoY. RevPAR trends were mixed—U.S. RevPAR declined 2.3% YoY overall but improved to +1.8% excluding a 410-basis-point hurricane impact—while international RevPAR rose 2.6% on a currency-neutral basis. Capital efficiency improved markedly: net capital outlays for hotel development are projected to fall to $20–$45M in 2026 from $103.4M in 2025, and capital recycling generated $24.6M in proceeds. Shareholder returns totaled $75.2M ($13.1M dividends, $62.1M buybacks), with $2.3M shares remaining under authorization. The Company reaffirmed full-year 2026 guidance, signaling confidence in sustained pipeline momentum and margin stabilization despite near-term earnings headwinds.