Dive Brief:
- Choice Hotels International saw global RevPAR increase 1.7% year over year in the second quarter of 2026, with U.S. RevPAR up 1.3% “reflecting improvements in both occupancy and rate,” according to an earnings report published Wednesday.
- Also during the quarter, Choice’s U.S. room openings increased 27% year over year, the highest second-quarter level since 2019, per the report. Meanwhile, portfolio exits declined 50% year over year during Q2 to their lowest second-quarter level since 2020, Choice CFO Scott Oaksmith said on a Wednesday earnings call.
- Amid improving demand fundamentals and “encouraging preliminary third-quarter trends,” Choice raised its full-year outlook for both U.S. RevPAR and global net rooms growth, per Oaksmith. The company is also optimistic about opportunities on the technology front.
Dive Insight:
U.S. RevPAR gains in the second quarter reflected “strengthening demand trends” and a boost from the 2026 FIFA World Cup, Interim CEO Dom Dragisich said during the earnings call. Dragisich assumed the role during Q2 from former CEO Patrick Pacious.
“The RevPAR improvement we saw during the second quarter, together with the trends since quarter end, show we are moving in the right direction,” Dragisich said.
The World Cup “brought in a meaningful number of first-time Choice guests and international travelers, expanding our reach into segments where we have historically been underrepresented,” Dragisich said.
On the results, Choice now anticipates U.S. RevPAR growth in the range of 0% to 1.25% for full-year 2026, per the report. The company also anticipates full-year global net rooms growth of approximately 1.5%, up from a previous forecast of approximately 1%.
In the U.S., specifically, Choice opened approximately 6,400 rooms in Q2, seeing net rooms growth improve for the second consecutive quarter. U.S. net rooms growth saw its strongest first-half performance since 2021, according to Dragisich.
Conversions remain a strong driver of openings for Choice, with conversions expected to represent approximately 90% of the company’s 2026 U.S. openings, Oaksmith said. During Q2, U.S. conversion franchise agreements increased 82% year over year, he added.
“Conversions generally enable owners to open hotels faster and with less capital than new construction, which remains important in the current development environment,” Oaksmith said.
Choice’s global pipeline, totaling approximately 77,300 rooms in Q2, was down nearly 17% compared to the prior-year quarter, though Dragisich said the decline reflects the increase in openings in the U.S.
In addition to conversions, the extended stay category “remains a key growth driver” for Choice, representing more than 40% of the company’s U.S. pipeline, per Oaksmith.
“Extended stay continues to benefit from a diverse mix of longer-stay demand drivers, including workforce-related travel, relocations, infrastructure investment and manufacturing activities,” Oaksmith said, noting that approximately 45% of Choice’s U.S. extended stay portfolio is located within 10 miles of major data centers, which present unique demand opportunities.
Choice also sees a significant opportunity to further its artificial intelligence strategy.
Franchisees “want a partner that lowers their costs, increases their revenue and helps them operate more effectively. Technology has been helping us deliver on each of those priorities,” Dragisich said. “More recently, AI has helped us move even faster.”
During the second quarter, Choice partnered with AWS on an enterprisewide AI deployment and also launched a slate of AI-powered tools for owners.
