Choice Hotels Posts 3.8 Percent U.S. RevPAR Growth in Third Quarter 2026
According to reporting from Lodging Magazine, Choice Hotels International achieved a 3.8 percent increase in U.S. RevPAR during the third quarter of 2026. The company saw a significant 24 percent rise in domestic franchise agreements and a total net income of $58 million, even as it navigated charges related to a terminated European acquisition option.
Context from Industry Pulse
The 2026 third-quarter results illustrate Choice Hotels International's strategic pivot toward higher-revenue segments. By concentrating 96 percent of its 78,200-room global pipeline in extended-stay, midscale, and upscale brands, the company is prioritizing quality over sheer volume. The 29 percent year-over-year growth in the U.S. conversion pipeline suggests that the firm is successfully capturing existing inventory to offset room exits, which fell by 23 percent. Additionally, the expansion of the average royalty rate to 5.23 percent indicates increased pricing power within its franchise model. This financial discipline, paired with the sale of owned assets for $34 million, reflects a broader move toward an asset-light strategy centered on management and franchise fees.
Financial results for the third quarter show that Choice Hotels International generated $193 million in adjusted EBITDA, representing a slight 1 percent increase over the previous year. As Lodging Magazine reports, the firm saw its net income decline by 68 percent to $58 million, a shift largely attributed to a high prior-year gain from a joint venture acquisition and a current $24 million charge for ending an option to acquire a European hospitality business. Despite these specific costs, adjusted diluted earnings per share grew by 11 percent, reaching $2.33.
The domestic market showed signs of stabilization and growth, with U.S. rooms remaining roughly flat compared to the previous September. This trend was supported by a 23 percent drop in room exits during the quarter. Lodging Magazine notes that the company awarded franchise agreements for 6,900 new rooms in the United States, marking a 24 percent increase. Furthermore, the domestic conversion pipeline reached 25,500 rooms, which is a 29 percent jump from the same period in 2025.
RevPAR performance was a highlight for the quarter, driven by gains in both occupancy and daily rates. Domestic RevPAR rose 3.8 percent, with particular strength noted in the Midwest and West South Central regions. International performance followed a similar trajectory, increasing 3.7 percent on a currency-neutral basis. Lodging Magazine indicates that the Caribbean and Latin American markets were primary contributors to the international growth figures.
Development focused heavily on premium segments, with 96 percent of the global pipeline concentrated in midscale, upscale, and extended-stay brands. The extended-stay segment specifically maintained its momentum, growing net rooms by 10.7 percent and marking 13 consecutive quarters of double-digit expansion. The company also reached a milestone by opening its 600th extended-stay property during this reporting period. Management has subsequently raised its full-year outlook for both global and domestic RevPAR.
The Industry Pulse Bottom Line
Choice Hotels is successfully leveraging its conversion pipeline and extended-stay brands to drive domestic growth. The upward revision of RevPAR guidance signals confidence in sustained demand through the end of 2026.