NORTH BETHESDA, Maryland—Choice Hotels International, Inc. reported its second-quarter 2025 outcomes.
Highlights embody:
- Web earnings was $81.7 million for the second quarter of 2025, in comparison with $87.1 million in the identical interval of 2024, representing diluted earnings per share (EPS) of $1.75, in comparison with $1.80 within the second quarter of 2024.
- Adjusted earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) for the second quarter of 2025 grew to $165.0 million, a second-quarter document and a 2 % improve in comparison with the identical interval of 2024. Excluding the impression of a $2 million working assure fee for a portfolio of managed motels, which was acquired in reference to the corporate’s buy of Radisson Lodges Americas, second-quarter 2025 adjusted EBITDA was $167.0 million.
- Adjusted diluted EPS for the second quarter of 2025 grew to $1.92, a second-quarter document and a 4 % improve in comparison with the identical interval of 2024.
- Elevated web international rooms system dimension by 2.1 %, together with 3.0 % progress for the worldwide upscale, extended-stay, and midscale rooms portfolio, in comparison with June 30, 2024.
- Elevated web worldwide rooms system dimension by 5.0 %, highlighted by a 15 % improve in openings, in comparison with June 30, 2024.
- Accelerated worldwide growth, together with strengthening the corporate’s presence in Brazil by extending a grasp franchise settlement for over 10,000 rooms with Atlantica Hospitality Worldwide by 20 years, almost tripling the room rely in France by a direct franchise settlement with Zenitude Resort-Residences, and signing strategic agreements with SSAW Lodges & Resorts in China, together with a distribution settlement which is predicted so as to add over 9,500 rooms in 2025 and a grasp franchising settlement, which is predicted so as to add roughly 10,000 rooms over the following 5 years.
- Acquired the remaining 50 % curiosity in Alternative Lodges Canada in July for roughly $112 million, topic to customary changes for working capital and money, funded by obtainable money and present credit score amenities. The transaction paves the best way for the corporate’s accelerated progress in Canada by increasing the product providing from eight to 22 Alternative manufacturers. The portfolio contains 327 models and over 26,000 rooms, already mirrored within the firm’s system rely. Administration expects the entire Alternative Lodges Canada enterprise to generate roughly $18 million in EBITDA for the complete 12 months of 2025.
- International pipeline exceeded 93,000 rooms as of June 30, 2025, together with almost 77,000 home rooms.
- Elevated web rooms portfolio for the home extended-stay phase by 10.5 % in comparison with June 30, 2024, and the phase’s pipeline reached almost 43,000 rooms as of June 30, 2025.
“Alternative Lodges delivered one other quarter of document monetary efficiency regardless of a softer home RevPAR setting, underscoring the profitable execution and diversification of our progress technique,” mentioned Patrick Pacious, president and chief government officer. “We’re particularly happy with our robust worldwide efficiency, the place we have now achieved vital progress and accelerated international growth by a current strategic acquisition, the signing of key partnerships, and entry into new markets. With extra diversified progress avenues, enhanced product high quality and worth proposition driving stronger buyer engagement, and a number one place within the cycle-resilient extended-stay phase, we stay well-positioned to ship long-term returns for all our stakeholders.”
Monetary Efficiency
- Partnership companies and charges rose 7 % to $27.1 million within the second quarter of 2025, in comparison with the identical interval of 2024, and elevated 16 % to $52.4 million within the first half of 2025, in comparison with the identical interval of 2024.
- Adjusted promoting, common, and administrative bills (SG&A) declined 4 % to $77.6 million within the second quarter of 2025, in comparison with the identical interval of 2024. Excluding the impression of a $2 million working assure fee for a portfolio of managed motels, which was acquired in reference to the corporate’s acquisition of Radisson Lodges Americas, second-quarter 2025 adjusted SG&A was $75.6 million, 6 % decrease than the identical interval of 2024.
- The home efficient royalty charge elevated by 8 foundation factors to five.12 % for the second quarter of 2025, in comparison with the identical interval of 2024.
- Home income per obtainable room (RevPAR) decreased by 2.9 % for the second quarter of 2025, in comparison with the identical interval of 2024, reflecting macroeconomic uncertainty and beforehand disclosed troublesome comparisons because of the timing of Easter and eclipse-related journey in 2024. Excluding the Easter and eclipse impacts, home RevPAR declined roughly 1.6 % forthe second quarter of 2025, in comparison with the identical interval of 2024.
- The home RevPAR for the prolonged keep portfolio outperformed the entire lodging business by 40 foundation factors, and the financial system transient portfolio outperformed the financial system chain scale by 320 foundation factors in home RevPAR for the second quarter of 2025, in comparison with the identical interval of 2024.
System Measurement and Growth
- Home upscale, prolonged keep, and midscale web rooms portfolio grew by 2.3 % in comparison with June 30, 2024.
- The corporate’s WoodSpring Suites model grew by 9.7 % to just about 33,000 rooms since June 30, 2024
- For the upscale manufacturers, international web rooms grew by 14.7 % from June 30, 2024, and international pipeline elevated by 7 % from March 31, 2025, reaching almost 29,000 rooms.
- Elevated the home financial system transient pipeline by 8 % to over 1,700 rooms as of June 30, 2025, in comparison with June 30, 2024.
Steadiness Sheet and Liquidity
As of June 30, 2025, the corporate had whole obtainable liquidity of $587.5 million, together with obtainable borrowing capability and money and equivalents. The corporate’s web debt leverage ratio was 3.0 instances as of June 30, 2025.
Through the first half of 2025, the corporate elevated money flows from working actions by 2 % to $116.1 million, in comparison with the identical interval of 2024. The quantity included $95.6 million generated within the second quarter.
Outlook
The corporate is adjusting its RevPAR outlook to mirror a extra reasonable home expectation amidst a altering macroeconomic backdrop. The corporate’s adjusted EBITDA outlook displays an incremental contribution of roughly $6 million for the rest of 2025 from the acquisition of Alternative Lodges Canada. The outlook data beneath contains forward-looking non-GAAP monetary measures, which administration makes use of in forecasting efficiency. The adjusted numbers within the firm’s outlook beneath exclude the web surplus or deficit generated from reimbursable income from franchised and managed properties, due diligence and transition prices, further repurchases of firm inventory, and different objects. These figures embody the $2 million impression from the working assure fee associated to managed motels incurred in the course of the second quarter of 2025.
