Choice Hotels International Inc
Q2 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +2.54%.
Did CHH Beat Earnings? Q2 2025 Results
Choice Hotels International delivered a mixed second quarter, posting adjusted diluted EPS of $1.92, edging past the $1.90 consensus estimate by 0.97%, while revenue of $426.44 million came in slightly below the $429.84 million expectation and declined 2.0% year-over-year. The headline revenue softness was driven largely by lower reimbursable revenue from franchised properties, while domestic RevPAR fell 2.9%, weighed down by macroeconomic uncertainty and tough comparisons from Easter timing and eclipse-related travel demand in 2024. On an adjusted basis, however, the picture was more constructive, with adjusted EBITDA rising 2% to $164.97 million. Investors have shown concern over the RevPAR trajectory, and management acknowledged the pressure by widening its full-year domestic RevPAR growth range to -3% to 0%, though it held adjusted EBITDA guidance steady at $615 to $635 million, bolstered by an incremental $6 million contribution from its $112 million acquisition of the remaining stake in Choice Hotels Canada, a move that expands its Canadian brand portfolio from eight to 22 brands.
- Adjusted EBITDA grew 2% to $165 million, a second quarter record
- Adjusted diluted EPS grew 4% to $1.92
- Domestic effective royalty rate increased 8 basis points to 5.12%
- Partnership services and fees rose 7% to $27.1 million
- Adjusted SG&A declined 4% to $77.6 million (6% decline excluding $2M operating guarantee payment)
- Extended stay portfolio outperformed total lodging industry by 40 basis points in domestic RevPAR
- Economy transient portfolio outperformed economy chain scale by 320 basis points in domestic RevPAR
“Choice Hotels delivered another quarter of record financial performance despite a softer domestic RevPAR environment, underscoring the successful execution and diversification of our growth strategy. We are especially pleased with our strong international performance, where we have achieved significant growth and accelerated global expansion through a recent strategic acquisition, the signing of key partnerships, and entry into new markets. With more diversified growth avenues, enhanced product quality and value proposition driving stronger customer engagement, and a leading position in the cycle-resilient extended-stay segment, we remain well-positioned to deliver long-term returns for all our stakeholders.”
Choice Hotels CEO, on the earnings call
Forward Guidance & Outlook
Choice Hotels adjusted its full-year 2025 outlook, widening the domestic RevPAR growth range to -3% to 0% (from -1% to 1% previously) amid a changing macroeconomic backdrop. Adjusted EBITDA guidance was maintained at $615–$635 million, incorporating an incremental ~$6 million contribution from the Choice Hotels Canada acquisition. Full-year net income is expected at $261–$276 million. Diluted EPS guidance was set at $5.54–$5.86, and adjusted diluted EPS at $6.88–$7.20. Domestic effective royalty rate growth is expected at mid-single digits, and global net system rooms growth at approximately 1%. The effective income tax rate is projected at 25%.
CHH YoY Financials
CHH Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.