Choice Hotels International Inc
Q1 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +6.73%.
Did CHH Beat Earnings? Q1 2025 Results
Choice Hotels International delivered a mixed first quarter for 2025, missing on both the top and bottom lines as revenue of $332.86 million came in 3.97% below the $346.63 million consensus and adjusted diluted EPS of $1.34 fell short of the $1.37 estimate by 1.97%, even as total revenue was essentially flat, up just 0.3% year-over-year. The primary drag was a decline in reimbursable revenue that offset genuine momentum elsewhere, including a 28% surge in partnership services and fees to $25.38 million and a 2.3% rise in domestic RevPAR. Net income climbed 44% to $44.53 million, largely because business combination costs collapsed from $15.84 million to just $99,000 following the prior year's attempted Wyndham acquisition. Adjusted EBITDA reached $129.64 million, up 4%. Looking ahead, management trimmed its full-year outlook, guiding domestic RevPAR growth to a range of negative 1% to positive 1% and cutting adjusted EBITDA guidance to $615 million to $635 million, citing a more cautious macroeconomic view that short sellers have also flagged as a concern for the stock.
- Domestic RevPAR growth of 2.3% outperforming competitive chain scales by 60 basis points
- Extended stay RevPAR growth of 6.8% outperforming the industry by 410 basis points
- Economy RevPAR growth of 7.1% outperforming chain scale by 440 basis points
- Domestic ADR grew 1.7% with occupancy up 30 basis points
- Domestic effective royalty rate increased 8 basis points to 5.11%
- Partnership services and fees grew 28% year-over-year
- Near-elimination of business combination costs ($99K vs $15.8M year ago)
“Choice Hotels generated another quarter of record financial performance and RevPAR outperformance, demonstrating the successful execution of our growth strategy. Our unique positioning has enabled us to outperform our peers, gain market share, and emerge stronger even in periods of economic uncertainty. Today, with our more diversified avenues of growth, a more resilient customer profile, and a meaningfully strengthened brand portfolio, including our larger presence in the cycle-resilient extended-stay segment, we have established an even stronger foundation for near-term stability and long-term growth.”
Choice Hotels CEO, on the earnings call
Forward Guidance & Outlook
Choice Hotels adjusted its full-year 2025 outlook downward to reflect more moderate domestic RevPAR growth expectations amid a changing macroeconomic backdrop. Domestic RevPAR growth is now expected at -1% to 1% (previously 1% to 2%). Full-year net income guidance is $275–$290 million (from $288–$300 million). Adjusted EBITDA is projected at $615–$635 million (from $625–$640 million). Adjusted diluted EPS is expected at $6.90–$7.22 (from $6.98–$7.24). Diluted EPS is guided to $5.86–$6.18 (from $6.04–$6.29). Domestic effective royalty rate growth remains at mid-single digits. Global net system rooms growth is expected at approximately 1%. Effective income tax rate is expected at 25%.
CHH YoY Financials
CHH Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.