Core Insights - Choice Hotels International reported record financial performance in Q2 2025 despite a softer domestic RevPAR environment, highlighting successful execution and diversification of its growth strategy [3][6] - The company achieved significant international growth through strategic acquisitions and partnerships, enhancing its product quality and customer engagement [3][6] Financial Performance - Total revenues for Q2 2025 were $426 million, a decrease from $435 million in Q2 2024 [5] - Net income for Q2 2025 was $82 million, down from $87 million in the same period of 2024, with diluted EPS at $1.75 compared to $1.80 [6][42] - Adjusted EBITDA for Q2 2025 reached $165 million, a 2% increase from Q2 2024 [6] - The company’s adjusted diluted EPS grew to $1.92, a 4% increase compared to the same period in 2024 [6] System Size and Development - The net global rooms system size increased by 2.1% to 644,400 rooms as of June 30, 2025, with a 5.0% increase in international rooms [8][18] - The domestic extended stay segment's net rooms portfolio grew by 10.5% compared to June 30, 2024 [6] - The global pipeline exceeded 93,000 rooms as of June 30, 2025, including nearly 77,000 domestic rooms [6] International Expansion - The company strengthened its presence in Brazil with a 20-year master franchise agreement for over 10,000 rooms [6] - In France, the room count nearly tripled through a direct franchise agreement, while strategic agreements in China are expected to add over 19,500 rooms [6] Balance Sheet and Liquidity - As of June 30, 2025, the company had total available liquidity of $587.5 million, with a net debt leverage ratio of 3.0 times [10] - Cash flows from operating activities increased by 2% to $116.1 million in the first half of 2025 compared to the same period in 2024 [10] Shareholder Returns - The company paid cash dividends totaling $26.9 million and repurchased 811,000 shares for $110 million in the first half of 2025 [11] - As of June 30, 2025, there were 3.0 million shares remaining under the current share repurchase authorization [11] Outlook - The company adjusted its RevPAR outlook to reflect a more moderate domestic expectation, with net income projected between $261 million and $276 million for the full year 2025 [12][13] - The adjusted EBITDA outlook includes an incremental contribution of approximately $6 million from the acquisition of Choice Hotels Canada [12]

Core Insights - Choice Hotels Canada has a legacy since 1955 and the recent acquisition marks a significant milestone in its 70-year history, positioning the company for accelerated growth in Canada [1][2] - The acquisition, valued at approximately $112 million, was completed in July 2025 and is expected to generate around $23 million in fee revenue and $18 million in EBITDA for the full year 2025 [2][6] - The Canadian hospitality market is projected to grow at an average annual rate exceeding 5% through 2030, reaching over $50 billion, which presents a strong opportunity for Choice Hotels to expand its market share across its 22 brands [2] Company Operations - Brian Leon, CEO of Choice Hotels Canada, will continue to lead the Canadian operations, with InnVest Hotels remaining a key partner, owning and operating 50 Comfort hotels nationwide [3] - The company aims to expand its owner success system from 8 hotel brands to a full portfolio of 22 brands, creating remarkable opportunities for franchisees and guests [2] Global Expansion - The investment accelerates Choice Hotels' growth outside the United States, with a 5% increase in its net international rooms portfolio to over 140,000 rooms as of Q2 2025 [4] - Major developments include extending a master franchise agreement in Brazil for over 10,000 rooms, nearly tripling room count in France, and signing agreements in China expected to add over 19,500 rooms in the next five years [4] Company Overview - Choice Hotels International, Inc. is one of the largest lodging franchisors globally, with nearly 7,500 hotels and approximately 650,000 rooms across 46 countries and territories [5] - The company offers a diverse portfolio of 22 brands, catering to various traveler needs and driving value for franchise owners and shareholders [5]

Group 1 - Choice Hotels has partnered with Learfield to allow members to use Choice Privileges points to bid on 40 VIP packages during the 2025 college football season, including access to 15 teams such as Ohio State University and University of Michigan [1][3] - The Choice Privileges program has been recognized as the 1 hotel rewards program by U.S. News & World Report and WalletHub, enhancing its appeal to members [2] - Last season, members redeemed nearly 6 million points for gameday experiences, indicating strong engagement with the program [3] Group 2 - The Platinum VIP Experience includes a two-night hotel stay, pre-game hospitality and sideline passes, game tickets, a parking pass, and gift cards, providing significant value to members [6][7] - The Silver VIP Experience offers similar benefits but with fewer perks, catering to a broader range of fans [5][6] - Members can earn points through hotel stays and everyday purchases, with special promotions available for new Choice Privileges Mastercard holders [7][8] Group 3 - The Choice Privileges program allows members to earn and redeem points at over 7,000 hotels globally, with options to exchange points for airline miles or gift cards [9] - Choice Hotels International operates over 7,500 hotels across 46 countries, offering a diverse portfolio of brands to meet various traveler needs [10]

Core Viewpoint - The market anticipates that Choice Hotels (CHH) will report a year-over-year increase in earnings despite a decline in revenues when it releases its quarterly results for June 2025 [1][3]. Earnings Expectations - The upcoming earnings report is expected to show earnings of $1.90 per share, reflecting a +3.3% change year-over-year, while revenues are projected to be $427.08 million, down 1.9% from the previous year [3]. - The earnings report is scheduled for release on August 6, and better-than-expected results could lead to a stock price increase, whereas disappointing results may cause a decline [2]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised down by 0.38%, indicating a reassessment by analysts regarding the company's earnings prospects [4]. - The Most Accurate Estimate for Choice Hotels is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.32% [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive or negative reading indicates the likely deviation of actual earnings from the consensus estimate, with a strong predictive power for positive readings [9][10]. - Choice Hotels currently holds a Zacks Rank of 4, which complicates the prediction of an earnings beat [12]. Historical Performance - In the last reported quarter, Choice Hotels was expected to post earnings of $1.38 per share but delivered only $1.34, resulting in a surprise of -2.90% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates two times [14]. Industry Comparison - Marriott International (MAR), another player in the hotel industry, is expected to report earnings of $2.64 per share for the same quarter, indicating a +5.6% year-over-year change, with revenues projected at $6.67 billion, up 3.5% [18][19].

Core Insights - Choice Hotels International has launched two innovative campaigns, "Stay in Your Rhythm" and "The WoodSpring Way," to promote its extended stay brands, emphasizing the importance of maintaining routines for guests during long-term stays [1][2][5] - The company operates over 550 extended stay locations, with 51 under construction and more than 350 in the pipeline, positioning itself as a leader in the long-term lodging market [1][5] Group 1: Campaign Details - "Stay in Your Rhythm" focuses on the amenities available at all extended stay brands, allowing guests to maintain their daily routines, such as cooking and exercising [2][5] - "The WoodSpring Way" highlights the exceptional hospitality provided by WoodSpring Suites staff, creating a home-like atmosphere for guests [3][5] Group 2: Brand Recognition - WoodSpring Suites was ranked the 1 economy extended stay brand in the J.D. Power 2025 North America Hotel Guest Satisfaction Index Study, achieving top rankings across six evaluated dimensions for four consecutive years [4][5] - The brand's commitment to guest service is reflected in its consistent recognition for guest satisfaction, including being the 1 overall economy hotel brand in 2022 [4] Group 3: Market Positioning - Choice Hotels aims to educate the growing population of extended stay travelers on the value offered by its brands, emphasizing efficiency, cleanliness, good value, and flexibility [5] - The campaigns will be promoted through various channels, including social media and digital platforms, throughout 2025 and into 2026 [5]

Group 1: Choice Privileges Program Overview - Choice Privileges is a rewards program that allows members to earn and redeem points for stays at over 7,000 hotels in 46 countries and territories, with additional earning opportunities through partners [7] - The program has been refreshed to provide greater value to its 70 million members, offering more ways to use points, including a sweepstakes for members [1][5] - Members can earn additional entries in the sweepstakes by staying qualifying nights during the promotion period, which runs until October 7, 2025 [1] Group 2: Travel Opportunities and Points Usage - Members can use their points for various travel experiences, including stays near national parks, cultural tours, and beach vacations in the Caribbean and Latin America [3][4] - Specific travel routes and the corresponding points required include a national park route starting at 375,000 points, a cultural tour starting at 425,000 points, and a beach vacation starting at 570,000 points [3][4] - A grand prize winner in the sweepstakes will receive 1 million Choice Privileges points, enabling luxury stays and experiences, along with additional prizes for other winners [5] Group 3: Company Background - Choice Hotels International, Inc. is one of the largest lodging franchisors globally, with over 7,500 hotels and nearly 650,000 rooms across 46 countries and territories [8] - The company operates a diverse portfolio of 22 brands, catering to various traveler needs and driving value for franchise owners and shareholders [8] - The Choice Privileges program and co-brand credit card options facilitate earning reward nights and personalized perks for members [8]

Group 1 - Choice Privileges has been recognized as the No. 1 Hotel Rewards Program by U.S. News & World Report, following a similar ranking by WalletHub, indicating its increasing popularity among travelers [1][2] - The program's evolution focuses on simplicity and clear value for members, making it easier to earn and redeem rewards, which has positively influenced customer response [2][3] - U.S. News highlighted that Choice Privileges allows members to quickly earn free nights and has expanded its offerings through the acquisition of Radisson and partnerships with Preferred Hotels & Resorts, catering to both budget and luxury segments [3] Group 2 - Choice Hotels International, Inc. operates over 7,500 hotels with nearly 650,000 rooms across 46 countries, offering a diverse portfolio of 22 brands to meet various traveler needs [4] - The Choice Privileges rewards program enables members to earn and redeem points at over 7,000 hotels and through partnerships with various distribution platforms, enhancing the value proposition for members [5]

Company Overview - WoodSpring Suites has been recognized as the 1 economy extended stay brand for four consecutive years in the J.D. Power North America Hotel Guest Satisfaction Index Study, ranking 1 in 2024 and 2023, and 1 overall economy hotel brand in 2022 [1][4] - The brand focuses on providing a welcoming environment with spacious suites featuring in-room kitchens at affordable weekly and monthly rates [1][4] - As of Q1 2025, WoodSpring Suites operates 265 locations across the U.S. and is one of four extended stay brands under Choice Hotels, which has surpassed 500 extended stay hotel properties [2] Industry Insights - The J.D. Power North America Hotel Guest Satisfaction Index Study measures customer satisfaction based on six factors: communications and connectivity, food and beverage, guest room, hotel facility, staff service, and value for price [3] - The 2025 study evaluated 102 brands across nine market segments, based on responses from 39,219 hotel guests for stays between May 2024 and May 2025 [3] Brand Strategy - WoodSpring Suites recently launched a new marketing campaign titled "The WoodSpring Way," emphasizing the exceptional hospitality provided by its staff [1] - The brand's offerings include fully equipped kitchens, on-site laundry facilities, free Wi-Fi, and flexible payment options, catering to longer-term guests [4] Parent Company Overview - Choice Hotels International, Inc. is one of the largest lodging franchisors globally, with over 7,500 hotels and nearly 650,000 rooms in 46 countries and territories [5] - The company has a diverse portfolio of 22 brands, including full-service, upper upscale, midscale, extended stay, and economy properties, aimed at meeting various traveler needs [5]

Group 1 - The hotel industry is experiencing a slowdown, with some companies being more adversely affected than others [1]

Core Insights - Choice Hotels International, Inc. (CHH) is expanding its Everhome Suites brand with six new hotel openings and three groundbreakings in key U.S. markets, reflecting a growing demand for midscale, purpose-built accommodations for longer stays [1][5] Expansion Plans - Currently, there are 14 Everhome Suites open, 19 under construction, and over 60 in the development pipeline, with a target of nearly 25 locations operating by year-end [2] - Texas is a primary focus for this growth, with recent openings in Bastrop, Waco, Brownsville, and El Paso, strategically located near major employers [3] - Additional expansions include a new property in Yuma, AZ, set to open in July, and a Salem, OR location under construction, aimed at serving government and healthcare guests [4] Market Positioning - The expansion of Everhome Suites highlights CHH's strategic positioning in a resilient and underserved market, capitalizing on demand and developer interest [5] - The company has experienced a 17.9% share price increase over the past year, slightly outperforming the industry growth of 17% [6] Financial Performance - CHH is benefiting from domestic RevPAR growth, unit expansion, and franchising efforts, with a 2.8% increase in total worldwide rooms in Q1 2025 [8] - The company has a trailing four-quarter earnings surprise of 30.9% on average, indicating strong financial performance [10]