Choice Hotels Q1 Revenues Hit $340.6M as Franchise Agreements Surge 72%
Choice Hotels International reported a record $340.6 million in Q1 revenues and net income of $20.3 million, delivering diluted EPS of $0.44 and adjusted diluted EPS of $1.07. Global net rooms grew 1.7% year-over-year with U.S. royalty rates up 11 basis points to 5.22%, franchise agreements awarded jumping 72%, and a pipeline swelling to roughly 71,500 rooms.
1. Financial Results
Choice Hotels achieved record first-quarter revenues of $340.6 million and net income of $20.3 million, translating to diluted EPS of $0.44 and adjusted diluted EPS of $1.07. Adjusted EBITDA totaled $125.7 million, reflecting timing-related factors and continued capital-light franchise operations.
2. System Growth and Pipeline
Global net rooms increased 1.7% over last year, driven by 2.5% growth in extended stay, midscale and upscale brands. The global pipeline reached approximately 71,500 rooms, with U.S. conversion rooms up 17% year-over-year and international agreements awarded jumping 113%.
3. U.S. Royalty Rate and RevPAR
The U.S. royalty rate expanded by 11 basis points to 5.22%, bolstered by stronger franchise unit economics. U.S. RevPAR rose 1.8% when excluding prior-year hurricane impacts, while international RevPAR climbed 2.6% on a currency-neutral basis.
4. Liquidity, Capital Recycling and Returns
Choice generated $24.6 million from capital recycling in Q1, reversing prior-year outflows and ending the quarter with $474 million in available liquidity. The company returned $75.2 million to shareholders, maintaining a net debt-to-adjusted EBITDA ratio of 3.2x.