Dive Brief:
- Choice Hotels International saw its U.S. RevPAR rise 1.8% year over year during the first quarter of 2026, in line with expectations, according to a Thursday earnings report.
- U.S. room openings increased 32% year over year for the period, marking the highest first-quarter level since 2023, CEO Patrick Pacious said on an earnings call. The U.S. development pipeline grew to 71,500 rooms, buoyed by an improved conversion rooms pipeline, which increased 17% year over year.
- Pacious said the Q1 results signaled an “inflection point in underlying trends toward room growth, RevPAR improvement and lower capital intensity.” The company maintained its 2026 outlook of approximately 1% global net room growth.
Dive Insight:
Growth, particularly in the U.S., was largely driven by a conversion-led development model, with first-quarter U.S. room conversion openings growing 59% year over year, Pacious said. Globally, net rooms increased 1.7%.
“The work we have done over the past several years has now positioned us as a more accretive, asset-light growth model, with significantly lower capital intensity and stronger unit economics,” Pacious said.
He added that Choice’s Q1 hotel openings are at a five-year high, bolstered by growth in its international portfolio, “providing greater visibility into future growth.” Meanwhile, exits were at their lowest level since 2023. The company is working to enhance its value proposition in international markets after facing three previous consecutive quarters of U.S. RevPAR declines, including in the fourth quarter of 2025.
The extended stay segment remains a “key growth driver,” representing more than 40% of Choice’s U.S. pipeline, with 11 consecutive quarters of double-digit room growth, Pacious said. Demand for the sector remains stable, with employees in the healthcare, construction and utilities sectors fueling bookings, as well as road trippers and “repeat stays from the rising number of retirees.”
“We are also seeing a shift in guest expectations toward accommodations that feel more like home, supporting strong demand for our extended stay portfolio,” Pacious said. “Importantly, these are not future tailwinds. They are trends we are seeing in the business today, contributing to a stable and diversified demand base across cycles.”
He added that Choice’s loyalty program is driving repeat stays and customer demand, while Choice Privileges now has more than 75 million members, up 7% year over year.
To improve franchisee returns, Pacious said Choice reduced the cost of building and converting hotels. This includes lowering prototype costs by up to 25% across key midscale brands and simplifying property improvement requirements.
Like some of its competitors, Choice is investing heavily in artificial intelligence. The company recently partnered with Amazon Web Services on an enterprisewide AI deployment, which will impact bookings, franchisee management and distribution ecosystems.
Pacious said AI deployment and the AWS partnership will allow Choice to experiment with technology and improve quickly.
“We just see an opportunity here to really drive higher productivity out of our current workforce in a way that's going to bring some pretty … significant change to our franchisees’ operating models,” Pacious said on the call.
