Key Highlights

  • Total revenues were USD 458.3 million versus USD 447.3 million, with Franchise and management fees up USD 9.9 million.
  • Net income was USD 57.9 million, or USD 1.28 per diluted share, versus USD 180.0 million, or USD 3.86.
  • U.S. system-wide RevPAR rose 3.8%, with occupancy up 160 basis points and average daily rate up 1.0%.
  • A one-time USD 24.3 million charge reflected terminating an agreement to acquire a European hospitality business.

Revenue Grows, Profit Falls Against a Gain

Choice Hotels International, Inc. (NYSE:CHH) reported third-quarter 2026 total revenues of USD 458.3 million, compared with USD 447.3 million. Franchise and management fees were USD 203.7 million versus USD 193.8 million, Partnership services and fees were USD 28.3 million, and owned hotels Revenue rose to USD 38.1 million from USD 33.2 million.

Net income was USD 57.9 million, or USD 1.28 per diluted share, against USD 180.0 million, or USD 3.86, a year earlier, when results included a USD 100.0 million gain from acquiring a joint venture. Operating Income was USD 106.5 million versus USD 142.4 million.

Royalties and RevPAR

U.S. Royalty fees rose USD 5.4 million to USD 132.1 million as system-wide RevPAR grew 3.8% and the average royalty rate rose to 5.23% from 5.15%. The FIFA World Cup contributed 40 basis points to U.S. RevPAR. International royalty fees rose USD 2.7 million to USD 17.3 million as the international system grew by 109 hotels to 1,423 and by 11,029 rooms to 162,399.

Revenues from programs, platforms and services supporting franchise operations rose USD 5.2 million, while initial franchise fees fell USD 2.8 million and other revenues fell USD 6.8 million on lower liquidated damages from early terminations.

Charges and System Size

Contract termination costs of USD 24.3 million were a one-time cost from terminating an agreement to acquire a European hospitality Business operating primarily under a lease-based model. An Impairment of USD 6.0 million was recorded on two owned hotels. Selling, general and administrative expense was USD 81.3 million versus USD 79.6 million, and interest expense was USD 25.6 million versus USD 23.5 million.

At September 30, 2026, the system included 7,604 open hotels with 660,614 rooms and a pipeline of 847 hotels with 78,229 rooms under construction, awaiting conversion or approved for development.

Nine-Month View and Items to Watch

Nine-month Net Income was USD 142.6 million, or USD 3.12 per diluted share, versus USD 306.3 million, or USD 6.52, and nine-month revenues were USD 1,239.7 million. Cash dividends declared were USD 0.2875 per share, and the projected 2026 annual dividend rate is USD 1.15 per share, or about USD 52.3 million. Primary Liquidity of USD 927.5 million consists of cash and available capacity under the USD 1 billion revolver, which matures June 28, 2029, and 1.3 million shares remain under the repurchase authorization. Total operating expenses were USD 345.8 million versus USD 304.9 million, Equity in net loss of affiliates was USD 6.9 million versus USD 10.9 million and income tax expense was USD 17.1 million versus USD 30.9 million. Items to watch include U.S. RevPAR, pipeline conversion into open rooms and spending related to acquisitions.