Choice Hotels International, Inc. reported its financial results for the first quarter of 2026, revealing total revenues of $340.6 million, a 2.1% increase from $332.9 million in the same period of 2025. The growth was primarily driven by a rise in franchise and management fees, which increased to $149.6 million from $145.1 million year-over-year. However, the company experienced a significant decline in net income, which fell to $20.3 million, down from $44.5 million in the prior year, resulting in diluted earnings per share of $0.44 compared to $0.94.
The decrease in profitability was attributed to several factors, including a $19.9 million drop in operating income, which fell to $60.0 million from $79.9 million. This decline was largely due to a $17.5 million increase in the net reimbursable deficit from franchised and managed properties, alongside rising selling, general, and administrative expenses. Additionally, the company reported a $6.2 million increase in equity losses from affiliates, contributing to the overall decline in income before taxes, which decreased to $30.3 million from $59.8 million.
Strategically, Choice Hotels completed the acquisition of the remaining 50% of Choice Hotels Canada in July 2025, which has since contributed to the company’s revenue growth. The acquisition allowed the company to consolidate its operations in Canada, where it now manages over 26,000 rooms. The company also reported an increase in international royalty fees, which rose to $11.8 million, reflecting a growth in its international franchise system size.
Operationally, as of March 31, 2026, Choice Hotels had 7,588 hotels with 658,348 rooms open and operating, and an additional 830 hotels in its development pipeline. The company’s U.S. system-wide revenue per available room (RevPAR) decreased by 2.3% due to a decline in average daily rates and occupancy rates. Despite these challenges, the company remains focused on expanding its franchise system and enhancing its brand presence, particularly through its Cambria Hotels and Everhome Suites brands.
Looking ahead, Choice Hotels expressed optimism about its growth trajectory, emphasizing its commitment to profitable growth and maximizing financial returns for shareholders. The company plans to continue investing in franchise development and strategic partnerships while maintaining a disciplined cost structure. The management remains confident that its strategic initiatives will enhance profitability and shareholder value in the coming quarters.
About CHOICE HOTELS INTERNATIONAL INC /DE
Choice Hotels International, Inc. is a global hotel franchisor operating over 7,500 hotels across 49 U.S. states and 46 countries. It offers 22 diverse brands spanning economy to upscale segments, serving business and leisure travelers. The company generates revenue primarily through franchise fees based on room revenues and system size, leveraging marketing, reservation systems, loyalty programs, and vendor partnerships to enhance franchisee profitability and brand value.
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