Dive Brief:
- Choice Hotels International saw U.S. RevPAR increase 3.8% year over year in the third quarter of 2026, with growth “ahead of expectations and a clear step up from the second quarter, driven primarily by higher occupancy, with rate growth also accelerating,” newly appointed CEO Dom Dragisich said during a Monday earnings call.
- On the results, and supported by “stronger demand trends” continuing into the fourth quarter, Choice raised its full-year 2026 RevPAR growth outlook to a range between 1.5% and 2.5%, according to a Monday earnings report.
- Choice also saw development gains in Q3, led by its higher-revenue extended stay, midscale and upscale brands, per the report.
Dive Insight:
Business travel led Q3 demand growth, while leisure trends improved throughout the quarter, “reflecting the resilience of the value-minded travelers we serve,” Dragisich said. This summer’s World Cup tournament contributed to RevPAR growth, he noted.
Choice also “continued to benefit from infrastructure-related demand, including data center development,” Dragisich said. “Approximately 30% of our U.S. hotels are located within 10 miles of a major data center, and those hotels delivered more than 400 basis points higher RevPAR growth than the rest of our system during the quarter.”
Choice’s extended stay portfolio is particularly well-positioned to capture infrastructure-related demand, Matt McElhare, vice president and extended stay segment lead at Choice Hotels, told Hotel Dive earlier this year.
Extended stay “remains a key growth driver” for Choice, delivering 13 consecutive quarters of double-digit rooms growth as of Q3 and representing more than 40% of the company’s U.S. pipeline, CFO Scott Oaksmith said on the call.
At the end of Q3, Choice’s global pipeline totaled 78,200 rooms, with 96% concentrated in extended stay, midscale and upscale brands, per the report.
Choice continued its push in the upscale segment, in particular, with multiple Cambria and Ascend Collection openings in the quarter.
Overall, the company expects strong growth in U.S. room openings for the full year, after seeing U.S. room openings increase 17% YOY for the first nine months of 2026, Dragisich said.
Conversions remain an “important advantage” when it comes to net rooms growth, per the CEO. Choice’s U.S. conversion pipeline grew 29% year over year in Q3, he said.
Also during the quarter, Choice acquired RV travel membership company Harvest Hosts, “expanding our opportunities for asset-light growth,” Dragisich said.
Additionally, Choice made progress on its enterprisewide artificial intelligence deployment strategy in Q3. The company is “adapting our digital content strategy as travelers increasingly use AI-powered search tools,” Dragisich said.
