Choice Hotels International Reports Q4 and Full-Year 2025 Results

Choice Hotels International Reports Fourth Quarter and Full-Year 2025 Results

Choice Hotels International has reported financial results for the fourth quarter and full year ended December 31, 2025, outlining growth in international operations, development activity and adjusted earnings.

Financial Performance

For the full year 2025, net income totalled $369.9 million, compared with $300 million in 2024. Fourth quarter net income was $63.7 million, compared to $76 million in the same period last year. Full-year results include a $100 million gain related to the fair value remeasurement of the company’s previously held 50% equity investment in Choice Hotels Canada.

Diluted earnings per share (EPS) were $7.90 for the full year and $1.37 for the fourth quarter. Adjusted EPS was $6.94 for the full year and $1.60 for the fourth quarter.

Adjusted EBITDA reached $625.6 million for the full year, compared to $604 million in 2024. Fourth quarter adjusted EBITDA was $140.9 million.

Total revenues for full-year 2025 increased to $1.597 billion from $1.585 billion in 2024. Revenue excluding reimbursable costs from franchised and managed properties rose to $981 million, compared to $947 million in the prior year.

Partnership services and fees increased 14% to $113.8 million for the full year and 16% to $32.5 million in the fourth quarter. The U.S. royalty rate expanded to 5.14% for the full year and 5.19% in the fourth quarter.

RevPAR Performance

On a currency-neutral basis, global RevPAR declined 1.2% for the full year and 4.6% in the fourth quarter.

U.S. RevPAR decreased 3.0% for the full year and 7.6% in the fourth quarter. Adjusted to exclude a hurricane-related benefit in the fourth quarter of 2024, U.S. RevPAR declined 2.2% in the fourth quarter, reflecting softer government and international inbound demand.

International RevPAR increased 3.5% for the full year and 3.2% in the fourth quarter on a currency-neutral basis.

System Growth and Development

As of December 31, 2025, Choice’s global system size stood at 656,825 rooms, a 0.5% increase year-over-year. Global net rooms in upscale, extended-stay, and midscale brands grew by 1.2%.

International net rooms increased 12.5% year-over-year to 159,846 rooms, supported by an 82% increase in hotel openings during the year. The international system now includes nearly 160,000 rooms.

In the U.S., net rooms declined 2.9% as the company continued portfolio optimisation, exiting hotels with lower economic contribution while adding new properties. U.S. extended stay net rooms grew 11.7% year-over-year, supported by an 8% increase in hotel openings during 2025.

Global hotel openings rose 14% to 440 hotels for the full year, including a 42% increase in the fourth quarter compared to 2024.

Global franchise agreements awarded increased 22% for the full year and 6% in the fourth quarter. International franchise agreements grew 35% in the fourth quarter and more than doubled for the full year compared to 2024.

The global pipeline exceeded 77,800 rooms at year-end, with 97% of those rooms concentrated in upscale, extended-stay, and midscale brands. The U.S. pipeline included 70,600 rooms.

Balance Sheet and Liquidity

As of December 31, 2025, the hotel group reported total available liquidity of $571.4 million, including cash and available borrowing capacity. The company’s net debt-to-adjusted EBITDA ratio was 3.0x.

Cash flows from operating activities totalled $270.4 million for the year, including $85.6 million in the fourth quarter. Net capital outlays related to hotel development and lending declined to $103.4 million in 2025.

During the year, the company returned $189.3 million to shareholders through $53.5 million in dividends and $135.8 million in share repurchases. As of year-end, 2.8 million shares remained under the current repurchase authorisation.

2026 Outlook

For full-year 2026, Choice expects:

• Net income between $265 million and $275 million

• Adjusted net income between $320 million and $330 million

• Adjusted EBITDA between $632 million and $647 million

• Diluted EPS between $5.72 and $5.94

• Adjusted diluted EPS between $6.92 and $7.14

• An effective tax rate of approximately 25%

Global RevPAR growth is projected to range from -2% to 1%, with similar expectations for the U.S. market. Global net system rooms growth is anticipated at approximately 1%.

The company will host a conference call on February 19, 2026, to discuss results, with details available on its Investor Relations website.