Choice Hotels International IncFor the second quarter of 2024, the company reported a net income of $81.7million, down from $87.1million in the same period. The company’s global pipeline exceeded 93,000 rooms as of June 30, including nearly 77,000 domestic rooms.
“Choice Hotels delivered another quarter of record financial performance despite a softer domestic RevPAR environment, underscoring the successful execution and diversification of our growth strategy,” said Patrick Pacious, president/CEO. “We are especially pleased with our strong international performance, where we have achieved significant growth and accelerated global expansion through a recent strategic acquisition, the signing of key partnerships and entry into new markets. With more diversified growth avenues; enhanced product quality and value proposition driving stronger customer engagement; and a leading position in the cycle-resilient extended-stay segment, we remain well-positioned to deliver long-term returns for all our stakeholders.”
Second-quarter highlights:
- EBITDA (earnings before taxes, depreciation and amortisation) adjusted to $165m, was a new record for the second quarter and an increase of 2% compared with 2024. Excluding the impact of a $2 million operating guarantee payment for a portfolio of managed hotels, which was acquired in connection with the company’s purchase of Radisson Hotels Americas, second-quarter 2025 adjusted EBITDA was $167 million.
- Adjusted Diluted EPS has grown to $1.92. This is a new record for the second quarter and represents a 4 percent increase over 2024.
- Net global room system size increased by 2.1%. This includes a 3% increase for the global upscale, long-stay, and midscale portfolios, as compared to 30 June 2024.
- The net international room system was increased by 5%. This is highlighted by an increase of 15% in openings compared to the June 30, 2024.
- Accelerated international expansion, including strengthening the company’s presence in Brazil by extending a master franchise agreement for more than 10,000 rooms with Atlantica Hospitality International by 20 years; nearly tripling the room count in France through a direct franchise agreement with Zenitude Hotel-Residences; and signing strategic agreements with SSAW Hotels & Resorts in China, including a distribution agreement which is expected to add over 9,500 rooms in 2025 and a master franchising agreement, which is expected to add approximately 10,000 rooms over the next five years.
- In July, acquired the remaining 50% stake in Choice Hotels Canada, for around $112m, subjected to standard adjustments for cash and working capital. Funded by available cash and credit facilities. The transaction paves the way for the company’s accelerated growth in Canada by expanding the product offering from eight to 22 Choice brands, including particularly strong opportunities in the extended-stay segment. The portfolio includes 327 units and more than 26,000 rooms, already reflected in the company’s system count. Management expects Choice Hotels Canada to generate an EBITDA of approximately $18 million for the full year 2025.
- Increased net rooms portfolio for the domestic extended-stay segment by 10.5% compared to June 30, 2024, and the segment’s pipeline reached nearly 43,000 rooms as of June 30, 2025.
Financial performance
In the second quarter of 2025 the partnership services and fees increased by 7%, to $27.1m, as compared with the same period in 2024. They also increased by 16%, to $52.4m, in the first half, in comparison to the same time period in 2024.
Adjusted selling, general and administrative expenses (SG&A) declined 4% to $77.6 million in second-quarter 2025, compared to the same period of 2024. Excluding the impact of a $2 million operating guarantee payment for a portfolio of managed hotels, which was acquired in connection with the company’s acquisition of Radisson Hotels Americas, second-quarter 2025 adjusted SG&A was $75.6 million, 6% lower than the same period of 2024.
The domestic effective rate of royalty increased by 8 basis point to 5.12% in the second quarter 2025 compared to 2024.
The domestic RevPAR declined by 2.9% in the second quarter of 2025 compared to 2024. This was due to macroeconomic uncertainty, and the previously reported difficult comparisons resulting from the timing of Easter travel and eclipse-related trips in 2024. If Easter and eclipse effects are excluded, domestic RevPAR for the second quarter of 2025 is down approximately 1.6% compared to 2024.
In the second quarter of 2025, the domestic RevPAR in the extended-stay portfolio was higher than the overall lodging industry by 40 basis point and the domestic RevPAR in the economy transients portfolio was higher than the economy chain scale. This is compared with the same period from 2024.
Size and development of systems
Portfolio of domestic upscale and extended stay, midscale and midscale hotel rooms grew 2.3% in comparison to June 30th 2024.
The company’s WoodSpring Suites brand grew by 9.7% to nearly 33,000 rooms since June 30, 2024, and was ranked number one for the third year in a row in guest satisfaction among economy extended-stay hotel brands in the J.D. Power 2025 North America Hotel Guest Satisfaction Index Study.4
Global net rooms for the upscale brands grew 14.7% between June 30, 2024 and March 31, 2025. The global pipeline grew 7%, reaching almost 29,000 rooms.
By June 30, 2025 the number of rooms in the transient economy pipeline will have increased by 8 percent, from June 30, 2024 to June 30, 2020.
Full-year outlook
The company has adjusted its RevPAR forecast to reflect a more modest domestic expectation amid a changing macroeconomic background. The company’s adjusted EBITDA outlook reflects an incremental contribution of approximately $6 million for the remainder of 2025 from the acquisition of Choice Hotels Canada. The figures reflect the impact of the $2 million operating guarantee payment for managed hotels that was incurred in the second quarter 2025.
- The previous outlook had projected a net income of between $275 and $290 millions. This has been revised to between $261 and $276millions.
- Prior outlook had projected $324-million adjusted net income, but the new outlook has it at $339-million.
- Prior outlooks had a growth of -1% or 1%, but now it is flat.
- The growth rate of global net system rooms remained at approximately 1%
The Post Choice reports Q2 net income of $81.7M The first time that appeared on hotelbusiness.com.
