Choice Hotels Opens 6,400 U.S. Rooms in Q2 Surge

Choice Hotels International expanded second-quarter U.S. room openings by 27% year over year to approximately 6,400 rooms, reaching its highest second-quarter opening volume since 2019 [[1], [2]]. Growth was driven by rapid brand conversions, a 50% plunge in portfolio exits, and steady demand for extended-stay properties, prompting leadership to raise full-year RevPAR and net rooms guidance [[2], [3]].

What propelled the surge in Choice Hotels' room openings?

Conversions accounted for the primary momentum behind the company's domestic expansion, with management expecting conversions to represent roughly 90% of total 2026 U.S. openings, according to Hotel Dive [3]. Hotel owners leaned heavily toward brand conversions because they allow properties to open faster and require less capital than ground-up construction [3]. Choice CFO Scott Oaksmith noted on an earnings call that U.S. conversion franchise agreements surged 82% year over year during the second quarter [3]. In total, the group opened about 8,300 rooms globally, marking a 16% rise over the prior-year period [[1], [2]].

Simultaneously, Choice preserved its existing footprint. Domestic portfolio exits declined 50% year over year in the quarter, settling at their lowest second-quarter rate since 2020 [[2], [3]]. This combination of faster onboarding and reduced turnover drove U.S. net rooms growth to its strongest first-half performance since 2021, Lodging Magazine reported [4].

How did extended-stay and conversion pipelines perform?

Choice's extended-stay portfolio maintained uninterrupted momentum, logging a 13% year-over-year increase in U.S. net rooms as of June 30, 2026, which marked its 12th consecutive quarter of double-digit expansion [[1], [2]]. The segment continues to attract developers due to unit economics supported by infrastructure investments, corporate relocations, and manufacturing activity [[2], [3]]. Oaksmith pointed out that around 45% of Choice's domestic extended-stay hotels operate within 10 miles of major data centers [3].

The company's overall development pipeline reflects this operational focus on conversions and long-term lodging formats:

Across the entire 77,300-room global pipeline, 96% of rooms sit within the extended-stay, midscale, and upscale tiers [[1], [2]]. Although the total global pipeline contracted nearly 17% compared to the prior-year period, interim CEO Dom Dragisich clarified that the decrease was a byproduct of delivering rooms into the active system through faster domestic openings [3].

What drove RevPAR and financial results in Q2 2026?

Domestic RevPAR increased 1.3% during the quarter, supported by a 0.7% lift in average rate and a 40-basis-point increase in occupancy, asianhospitality.com reported [1]. Operations saw notable regional strength throughout the East North Central, Middle Atlantic, and West South Central markets [[2], [4]]. The 2026 FIFA World Cup delivered an incremental boost, bringing first-time guests and international visitors into properties where Choice historically had lighter penetration [3]. Globally, RevPAR rose 1.7% year over year, while international RevPAR grew 2.1% on a currency-neutral basis, led by Latin America, the Caribbean, Canada, and Asia-Pacific [[2], [3]].

Total franchise and management fees grew 6% to $188 million, aided by an 11-basis-point expansion in the domestic royalty rate to 5.2% [[2], [4]]. Adjusted EBITDA climbed 6% to $175 million, and adjusted diluted earnings per share increased 5% to $2.02 [[2], [4]]. However, net income fell 21% year over year to $64 million, or $1.41 per diluted share [[1], [2]]. The net earnings compression stemmed from higher net reimbursable deficits linked to franchisee tools and guest delivery systems, general and administrative expense timing, and elevated depreciation and amortization tied to owned hotels and the Choice Hotels Canada acquisition [[1], [2]].

What changes were made to full-year guidance and asset plans?

Citing improving room demand and firm third-quarter booking signals, Choice upgraded its top-line operational guidance for full-year 2026 [[2], [3]]. Global RevPAR is now projected at 0% to 1%, compared to prior projections of -2% to 1% [2]. U.S. RevPAR guidance shifted to 0% to 1.25%, raised from an earlier band of -2% to 1% [2]. Projected full-year global net rooms growth was raised to approximately 1.5% from roughly 1.0% [[2], [3]]. Adjusted EBITDA expectations moved upward to between $635 million and $650 million, while full-year net income guidance was adjusted down to $230 million to $241 million [2].

Choice closed the quarter with $475 million in total available liquidity and a net debt-to-adjusted EBITDA ratio of 3.1x, sitting within its target leverage corridor of 3.0x to 4.0x [4]. Net capital outlays for hotel development and lending fell 80% to $15 million during the first half of the year [4]. To advance its asset-light model, Choice plans to begin selling operating hotels in the first half of 2027 [4]. The company owned 19 operating hotels with one under construction as of August 5, 2026 [4]. On the executive front, Dominic Dragisich took over leadership during the quarter as interim CEO after longtime chief Patrick Pacious departed in May [[1], [3]].