Positive global net rooms growth for Choice Hotels International in the second quarter was partially offset by sluggish RevPAR growth and a decline in net income, the company reported.
Global net rooms grew 2.6% compared to the same time a year ago, driven by 3.6% growth in Choice’s higher-revenue extended stay, midscale and upscale brands. An early-morning Truist note noted “the positive surprise” in Choice’s sizable sequential improvement in global net rooms growth, which it wrote is a number that is usually slower to increase. As a result, Choice said it is raising its full-year guidance by 50 basis points for the KPI. At the same time, peers including Hyatt and Marriott said they were trimming their guides for the metric.
Contemporaneously, U.S. RevPAR growth was up 1.3% year-over-year, which Truist wrote implies Choice continues to lose market share, having calculated its fair share should have been closer to at least +3% to 3.5%. It was up 2.1% in international markets.
U.S. room openings increased 27% in the second quarter compared to the same period of 2025, as the company opened approximately 6,400 U.S. rooms, its highest second-quarter level since 2019. Attrition rates were also down, declining to their lowest second-quarter level since 2020.
Conversions continue to be a high source of business growth. Choice said its U.S. conversion rooms pipeline grew 24% to 24,100 rooms, compared to June 30, 2025 and 6% sequentially from March 31, 2026. U.S. franchise agreements awarded increased 30% in the second quarter compared to the same period of 2025, representing approximately 9,400 new U.S. rooms for development.
“Our second-quarter results reflect encouraging progress across our key priorities, with U.S. net rooms growth improving for the second consecutive quarter to its strongest first-half performance since 2021 and U.S. RevPAR trends strengthening,” said Interim CEO Dom Dragisich. “Over the past several years, we’ve built a stronger commercial engine and technology platform, and we continue to invest in both. Our biggest opportunity now is sharpening execution—leveraging those capabilities to further enhance franchisee economics by increasing the number and quality of the guests we deliver while lowering operating costs. While we still have work to do, this business has significantly more potential, and I’m confident we can realize it. The progress we delivered this quarter reinforces that confidence.”
Net income was $64 million for the second quarter, a 21% decline compared to the same period last year. Choice blamed the decrease on a higher net reimbursable deficit from franchised and managed properties related to investments in franchisee-related tools and guest delivery capabilities, timing of SG&A expenses and increased depreciation and amortization associated with owned hotels and the prior year acquisition of Choice Hotels Canada. These items were partially offset by higher franchise and management fees.
Total revenue increased 3.5% year over year to $441 million.
Franchise and management fees increased 6% to $188 million for the second quarter, compared to the same period last year, reflecting higher international royalty fees, higher franchisee programs and services revenue, along with U.S. RevPAR and U.S. royalty rate improvement.