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1. Company Snapshot

1.a. Company Description

Choice Hotels International, Inc., together with its subsidiaries, operates as a hotel franchisor worldwide.The company operates in Hotel Franchising and Corporate & Other segments.It franchises lodging properties under the brand names of Comfort Inn, Comfort Suites, Quality, Clarion, Clarion Pointe, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, WoodSpring Suites, Everhome Suites, Cambria Hotels, and Ascend Hotel Collection.


The company also develops and markets cloud-based property management software to non-franchised hoteliers.As of March 31, 2022, it had approximately 7,000 hotels with approximately 600,000 rooms in 35 countries and territories.Choice Hotels International, Inc.


was founded in 1939 and is headquartered in Rockville, Maryland.

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1.b. Last Insights on CHH

Choice Hotels International's recent performance has been positively driven by strategic expansions and development milestones. The company has accelerated its Everhome Suites growth, lifting its U.S. extended-stay footprint to 27 properties with new openings across multiple states (Source: Feb 3, 2026). Additionally, it announced a record-high 130 newly onboarded international hotels in key markets, showcasing sustained momentum across key segments (Source: Jan 26, 2026). A redesigned Everhome Suites prototype was also introduced, focusing on smarter extended-stay development (Source: Feb 4, 2026).

1.c. Company Highlights

2. Choice Hotels International's 2025 Earnings: A Strong Performance

Choice Hotels International delivered adjusted EBITDA of $626 million, up 4% year-over-year, and adjusted earnings per share of $6.94, in line with expectations. The company's revenue streams saw continued strength in franchisee retention, with U.S. contract renewal activity in 2025 matching prior all-time highs. The actual EPS for the fourth quarter came out at $1.6, slightly beating estimates of $1.56. The company's financial performance was driven by the strength of its higher revenue brand mix and accelerating earnings contribution from its international portfolio.

Publication Date: Feb -22

📋 Highlights
  • Adjusted EBITDA Growth: Achieved $626 million in 2025, a 4% year-over-year increase, aligning with guidance.
  • Global Hotel Expansion: 14% year-over-year growth in global hotel openings, with 97% of pipeline rooms in higher-revenue brands (1.7x more accretive than current portfolio).
  • Royalty Rate Expansion: U.S. average royalty rate rose 8 basis points in 2025, including a 10 bps increase in Q4, driven by higher-revenue brands and franchisee economics.
  • Liquidity and Leverage: Ended 2025 with $571 million liquidity and 3x net debt/EBITDA, within the 3–4x target range, while returning $189 million to shareholders.
  • 2026 Outlook: EBITDA projected at $632–647 million, EPS at $6.92–7.14, and net hotel development outlays declining 70% to $20–45 million due to brand scale milestones.

Revenue Growth and Hotel Openings

The company grew its global rooms by 0.5% year-over-year, led by 1.2% growth in its higher revenue segments, and saw a 42% increase in hotel openings. The U.S. market saw more than 22,000 gross rooms opened during the year, and the conversion pipeline increased 7% year-over-year as of December 31. As Patrick Pacious noted, "We are excited about the recent launch of the next evolution of our Choice Privileges loyalty platform and the launch next quarter of a dedicated digital platform for small and midsized businesses."

RevPAR Performance and Royalty Rate

The company's RevPAR performance declined 4.6% year-over-year in the fourth quarter on a currency-neutral basis, driven by the tougher hurricane comparison in the U.S. Southeast from the prior year. However, international performance remained strong, with RevPAR up 3.2% year-over-year on a currency-neutral basis. The company's royalty rate exceeded its full-year U.S. average royalty rate guidance, finishing the year up 8 basis points, including a 10 basis point increase year-over-year in the fourth quarter.

Valuation and Outlook

Analysts estimate next year's revenue growth at 2.8%. With a P/E Ratio of 13.72 and an EV/EBITDA of 10.9, the company's valuation appears reasonable. The company's guidance for 2026 expects adjusted EBITDA to be in the range of $632 million to $647 million, reflecting organic growth across higher revenue hotels and markets, strong royalty rate growth, and sustained international momentum. The expected net global rooms growth of approximately 1% year-over-year and the decline in capital outlays for recyclable capital also support the company's outlook.

Financial Position and Capital Allocation

The company ended the year with total liquidity of $571 million and net debt to trailing 12-month EBITDA of 3x, comfortably within its targeted gross leverage range of 3 to 4x. The company prioritizes high-return organic investments and selective acquisitions to drive long-term growth, and returned $189 million to shareholders through dividends and share repurchases in 2025.

3. NewsRoom

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DATA BREACH INVESTIGATION: Choice Hotels International, Inc. Franchisees and Customers Who Have Received a Notice of Data Breach Are Encouraged to Contact Edelson Lechtzin LLP

Feb -20

Source: globenewswire.com

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Choice Hotels International Data Breach Exposes Personal Information: Murphy Law Firm Investigates Legal Claims

Feb -20

Source: globenewswire.com

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Choice Hotels: Turning 'Neutral' On In-Line Results, Tepid Outlook (Downgrade)

Feb -20

Source: seekingalpha.com

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Choice Hotels International, Inc. (CHH) Q4 2025 Earnings Call Transcript

Feb -19

Source: seekingalpha.com

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Here's What Key Metrics Tell Us About Choice Hotels (CHH) Q4 Earnings

Feb -19

Source: zacks.com

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Choice Hotels (CHH) Surpasses Q4 Earnings and Revenue Estimates

Feb -19

Source: zacks.com

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Choice Hotels International Reports Fourth Quarter and Full-Year 2025 Results

Feb -19

Source: prnewswire.com

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Choice Hotels Prepares to Report Q4 Results: Key Things to Watch

Feb -18

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.83%)

6. Segments

Hotel Franchising & Management

Expected Growth: 4.83%

Choice Hotels International, Inc.'s 4.83% growth in Hotel Franchising & Management is driven by increasing demand for mid-scale hotels, strategic partnerships, and expansion into new markets. Additionally, the company's focus on digital transformation, loyalty programs, and cost savings initiatives have contributed to its growth.

Corporate & Other

Expected Growth: 4.83%

The 4.83% growth in Corporate & Other segment of Choice Hotels International, Inc. is driven by increased demand for corporate travel, expansion of loyalty programs, and strategic partnerships. Additionally, the company's efforts to enhance its digital presence and improve customer experience have contributed to the growth.

Intersegment Eliminations

Expected Growth: 4.83%

The 4.83% growth in Intersegment Eliminations at Choice Hotels International, Inc. is driven by increased royalty fees from franchise agreements, higher software licensing revenue, and a rise in procurement services fees. Additionally, the company's strategic initiatives, such as the expansion of its loyalty program and growth in international markets, have contributed to the segment's growth.

7. Detailed Products

Econo Lodge

A budget-friendly hotel brand offering comfortable rooms and essential amenities for travelers on a budget.

Comfort Inn

A mid-range hotel brand providing comfortable rooms, free breakfast, and amenities like pools and fitness centers.

Quality Inn

A mid-range hotel brand offering comfortable rooms, free breakfast, and amenities like pools and fitness centers.

Clarion

An upscale hotel brand providing luxurious rooms, fine dining, and premium amenities like spas and fitness centers.

Ascend Hotel Collection

A soft brand of unique, independent hotels offering luxurious rooms and personalized service.

Suburban Extended Stay Hotel

A long-stay hotel brand providing spacious rooms with kitchenettes and amenities like laundry facilities.

WoodSpring Suites

An extended-stay hotel brand offering spacious rooms with kitchenettes and amenities like laundry facilities.

MainStay Suites

An extended-stay hotel brand providing spacious rooms with kitchenettes and amenities like laundry facilities.

8. Choice Hotels International, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Choice Hotels International, Inc. faces moderate threat from substitutes, as customers have various options for accommodations, including Airbnb, vacation rentals, and other hotel chains.

Bargaining Power Of Customers

Customers have significant bargaining power due to the high level of competition in the hospitality industry, allowing them to negotiate prices and amenities.

Bargaining Power Of Suppliers

Suppliers, such as food and beverage providers, have limited bargaining power due to the large number of suppliers available and the company's significant purchasing power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new companies to enter the market.

Intensity Of Rivalry

The hospitality industry is highly competitive, with many established players, leading to intense rivalry among companies, including Choice Hotels International, Inc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 97.93%
Debt Cost 4.94%
Equity Weight 2.07%
Equity Cost 10.02%
WACC 5.05%
Leverage 4724.25%

11. Quality Control: Choice Hotels International, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Red Rock Resorts

A-Score: 6.4/10

Value: 5.6

Growth: 5.2

Quality: 7.8

Yield: 7.0

Momentum: 7.0

Volatility: 6.0

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Sonoco

A-Score: 6.1/10

Value: 7.3

Growth: 5.0

Quality: 5.6

Yield: 8.0

Momentum: 2.0

Volatility: 8.7

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Patrick Industries

A-Score: 5.2/10

Value: 4.0

Growth: 4.8

Quality: 3.9

Yield: 4.0

Momentum: 7.5

Volatility: 7.0

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Wyndham Hotels

A-Score: 4.7/10

Value: 3.1

Growth: 4.9

Quality: 6.9

Yield: 4.0

Momentum: 2.0

Volatility: 7.3

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Choice Hotels

A-Score: 4.5/10

Value: 4.0

Growth: 6.3

Quality: 6.5

Yield: 1.0

Momentum: 1.0

Volatility: 8.3

1-Year Total Return ->

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Hyatt Hotels

A-Score: 4.4/10

Value: 3.3

Growth: 7.3

Quality: 2.9

Yield: 0.0

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

110.2$

Current Price

110.2$

Potential

-0.00%

Expected Cash-Flows