Dive Brief:
- Choice Hotels International saw a roughly 2% year-over-year decrease in total revenues in the second quarter of 2025 amid a softer domestic RevPAR environment, CEO Patrick Pacious detailed in a Wednesday earnings report.
- The hotel company’s domestic RevPAR decreased 2.9% year over year in the quarter, “reflecting macroeconomic uncertainty and previously disclosed difficult comparisons due to the timing of Easter and eclipse-related travel in 2024,” according to the report. Choice lowered its full-year 2025 domestic RevPAR guidance, now expecting growth in the range of -3% to 0%, down from a previous forecast range of -1% to 1%.
- Choice’s domestic extended stay portfolio was a bright spot in the quarter, seeing solid RevPAR results and development momentum. Choice also reported international portfolio growth in Q2. The company plans to accelerate growth in Canada, specifically, through its July acquisition of the remaining 50% interest in Choice Hotels Canada.
Dive Insight:
On the heels of solid domestic extended stay performance and portfolio growth in the first quarter of this year, the segment again proved “cycle-resilient” for Choice in Q2, Pacious shared during a Wednesday earnings call. Domestic RevPAR for Choice’s extended stay portfolio outperformed the total lodging industry by 40 basis points during the quarter, per the earnings report.
On the development front, Choice’s domestic upscale, extended stay and midscale rooms portfolio increased 2.3% year over year in the quarter. And Choice’s WoodSpring Suites extended stay brand, specifically, grew its rooms 9.7% year on year in Q2.
Meanwhile, Choice’s upscale brands, which the company has strategically expanded over the last couple of years, saw 14.7% year-over-year growth in global rooms.
Choice’s international system size grew 5% year over year in the second quarter. The hotel company plans to expand on that momentum, particularly in Canada. Choice’s $112 million acquisition of the remaining interest in Choice Hotels Canada, which was made public Aug. 6, expands its offerings in the country from eight to all 22 of its brands.
Canada provides particularly strong opportunities in the extended stay segment, which will be supported by Choice’s long history with existing franchisees in the region, Pacious said on the call.
Choice’s expansion in Canada comes after several U.S. hotel operators, including Caesars Entertainment and MGM Resorts International, reported a decline in inbound Canadian tourism in the first half of 2025.
The two main headwinds causing a softer domestic RevPAR environment industrywide, Pacious said, are declines in international inbound and government travel.
As of May, the U.S. was on track to lose $12.5 billion in international visitor spending in 2025 following recent government actions, according to the World Travel & Tourism Council.
Macroeconomic volatility in Q2 resulted in less-than-stellar U.S. RevPAR results for Choice competitors Hilton, Marriott International and Wyndham Hotels & Resorts.
