Choice Hotels International, Inc.

A hotel franchisor with shared service programs

Choice Hotels International, Inc. trades on the New York Stock Exchange as CHH. It earns royalties and other fees from hotel owners, provides marketing and reservation services, and owns a smaller hotel portfolio. Harvest Hosts adds an RV travel subscription platform.

Hotel activity and the latest quarter

U.S. revenue per available room rose 3.8% in Q3 2026 as room rates rose 1% and occupancy improved by 1.6 percentage points. U.S. rooms were approximately flat at 498,215, versus 498,307 a year earlier. Global rooms grew 1.7%.

Figures below cover the three months ended September 30, in millions of dollars. Reported net income follows U.S. GAAP; adjusted net income excludes selected gains, costs and the net result of reimbursable activities.

Metric	Q3 2025	Q3 2026
Reported net income	$180.0	$57.9
Adjusted net income	$98.2	$105.3

The earlier reported result included a $100 million gain from remeasuring the existing Choice Hotels Canada interest after full ownership was acquired. Current reported profit includes $24.3 million of contract termination costs and $6.0 million of hotel impairments. These items are excluded from adjusted results.

How the annual outlook changed

2026 forecast	August 5	November 2
U.S. revenue per available room growth	0% to 1.25%	1.5% to 2.5%
Reported net income	$230m to $241m	$178m to $185m
Adjusted net income	$312m to $323m	$315m to $322m
Adjusted EBITDA	$635m to $650m	$641m to $651m

EBITDA measures earnings before interest, taxes, depreciation and amortization. Choice's adjusted version also excludes selected items, including the net cost of reimbursable activities. The latest outlook includes Harvest Hosts from October 1 and two hotel sales; their combined expected contribution to adjusted EBITDA is approximately $1 million.

Expected annual reimbursable expenses increased from $695.6 million to $734.2 million, while related revenue rose from $595.7 million to $599.2 million. The resulting forecast deficit increased from $99.9 million to $135 million before tax. These programs are managed to break even over time, with spending and collections occurring in different periods.

Actual reimbursable expenses exceeded associated revenue by $92.1 million in the first nine months, versus $44.2 million a year earlier. The annual forecast also reflects higher interest costs and lower expected affiliate earnings. Adjusted overhead growth excluding Harvest Hosts is now expected to be about 9%, versus a mid-single-digit rate previously.

Cash, borrowing and completed transactions

Nine-month operating cash flow fell to $121.9 million from $184.8 million. Franchise-agreement acquisition payments, net of reimbursements, rose to $104.0 million from $62.4 million. These incentive payments are spread over the related agreements in the accounts and can be repayable on specified exits.

September 30 cash was $170.6 million, versus $45.0 million at December 31. Long-term debt carried on the balance sheet was $2.18 billion, versus $1.91 billion. September cash included borrowing ahead of the Harvest Hosts acquisition and therefore precedes its payment.

The approximately $130 million Harvest Hosts acquisition closed on October 1, funded with cash and credit-line borrowing. Two owned hotels were sold after quarter-end for estimated net proceeds of $34 million, with franchise agreements retained. The company owned 17 operating hotels as of November 2.