Core Insights - The company is optimistic about the U.S. lodging cycle, expecting stronger demand driven by lower interest rates, AI infrastructure investments, and favorable demographic trends, alongside significant events like the 2026 World Cup [1] - The hotel pipeline is projected to be 1.7 times more accretive than the current portfolio, indicating a focus on high-quality hotel additions that enhance earnings per unit [2] - The company achieved a nearly 2.5% year-over-year increase in global rooms, with a strong emphasis on higher revenue segments, which now constitute 90% of the portfolio [3] Financial Performance - Adjusted EBITDA for the third quarter rose 7% to $190 million, reflecting growth in higher revenue brand mix and international business contributions [4] - The company generated $185 million in operating cash flow year-to-date, with $69 million in the third quarter, supporting capital allocation priorities [38] - Adjusted earnings per share for the third quarter were $2.10, down from $2.23 year-over-year, primarily due to increased amortization expenses from the acquisition of Choice Hotels Canada [37] Market Trends - The U.S. economy transient segment occupancy has improved year-to-date, indicating a potential positive turn in the cycle [5] - The occupancy index across the U.S. portfolio has increased slightly year-to-date, a positive early indicator for broader RevPAR growth [6] - The international business is positioned as the fastest-growing segment, with a 35% growth in adjusted international EBITDA and an 8% year-over-year increase in the international portfolio [8] Strategic Initiatives - The company is focusing on a higher value direct franchising model, which has grown by 22 percentage points over the past three years, now representing 40% of the international rooms portfolio [7] - Investments in technology are aimed at enhancing franchisee support, with a $6 million technology investment program nearing completion [19] - The loyalty program has grown to over 73 million members, with enhancements expected to drive member engagement and direct bookings [23] Future Outlook - The company expects U.S. RevPAR to range between -3% and -2% for the full year, with a tightening of the adjusted EBITDA outlook to between $620 million and $632 million [40] - The focus remains on capturing demand from retirees and the blue-collar workforce, with significant growth expected in these demographics [24][60] - The company anticipates continued growth in international markets and a doubling of international adjusted EBITDA by 2027 [7][68]

Financial Data and Key Metrics Changes - Adjusted EBITDA increased by 7% year-over-year to $190 million, driven by a stronger revenue brand mix and growth in small and medium business traveler revenue [4][24] - Global rooms grew by 2.3% year-over-year, with higher revenue segments expanding by 3.3% [25][28] - Adjusted earnings per share (EPS) for Q3 2025 was $2.10, down from $2.23 in the prior year, primarily due to increased amortization expenses and temporary tax impacts [31][35] Business Line Data and Key Metrics Changes - The U.S. extended stay segment saw a 12% year-over-year growth in room system size, with openings increasing by 14% [25][28] - The international business achieved a 35% growth in adjusted EBITDA, with an 8% year-over-year increase in the international portfolio [9][24] - The economy transient segment outperformed its chain-scale RevPAR by 310 basis points year-to-date [28] Market Data and Key Metrics Changes - International RevPAR increased by 9.5% year-over-year, with EMEA leading at 11% growth [28] - U.S. RevPAR declined by 3.2% year-over-year, attributed to softer government and international inbound demand [28] - Canadian operations reported a 7% increase in RevPAR for Q3 [28] Company Strategy and Development Direction - The company is focusing on expanding its higher revenue-generating segments, with 98% of its global pipeline in these brands [5][24] - A strategic shift towards a higher value direct franchising model has been implemented, with international EBITDA margins expanding to 70% [8][9] - Investments in technology and AI are aimed at enhancing franchisee success and operational efficiency [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the U.S. lodging cycle, citing favorable demographic trends and upcoming events like the 2026 World Cup as demand catalysts [6][7] - The company anticipates sustained RevPAR growth driven by strategic investments and an expanding business travel base [29][36] - The retiree demographic is expected to significantly contribute to future demand, with a projected increase in travel spending [22][49] Other Important Information - The company returned $150 million to shareholders through dividends and share repurchases year-to-date [33] - The full-year adjusted EBITDA guidance has been tightened to a range of $620 million to $632 million [35] - The company is on track to complete its technology investment program, enhancing its operational capabilities [17][23] Q&A Session Summary Question: Clarification on the EverHome joint venture and asset recycling - Management explained that the joint venture allows for longer-term hotel ownership while still focusing on asset recycling, with a net benefit of $25 million from the transaction [37][39] Question: Rationale for not buying back stock during the quarter - The decision was based on prioritizing investments in the business and the acquisition of the remaining interest in Choice Hotels Canada [41][42] Question: Long-term outlook for room growth in the U.S. - Management indicated that the focus remains on high-quality products in the pipeline, with expectations for continued growth in higher value segments [43][44] Question: Insights on the RevPAR environment and competition - Management noted that the current environment is cyclical, with signs of recovery in occupancy rates, particularly in the economy segment [46][48] Question: Expectations for 2026 and growth opportunities - Management highlighted the growing retiree demographic and the resilience of small business travelers as key drivers for future growth [50][52]

Core Insights - Choice Hotels reported revenue of $447.34 million for Q3 2025, a 4.5% year-over-year increase, with EPS of $2.10 compared to $2.23 a year ago, indicating a decline in earnings per share [1] - The revenue exceeded the Zacks Consensus Estimate of $417.29 million by 7.2%, while the EPS fell short of the consensus estimate of $2.18 by 3.67% [1] Financial Performance Metrics - RevPAR growth was 0.2%, compared to an estimated decline of 3.2% by analysts, with RevPAR at $60.33 versus the estimated $60.64 [4] - Domestic franchise rooms totaled 498,307, slightly below the estimated 500,862, while total franchise rooms were 649,677, exceeding the estimate of 646,301 [4] - Occupancy rate was 60.3%, slightly below the average estimate of 60.8, while the Average Daily Rate (ADR) was $100.03, above the estimated $99.75 [4] - Revenue from reimbursable costs from franchised and managed properties was $169.43 million, a 20.4% decrease compared to the previous year, but above the estimate of $163.78 million [4] - Franchise and management fees reached $193.78 million, surpassing the average estimate of $182.48 million [4] - Revenues from owned hotels were $33.17 million, exceeding the estimate of $31.86 million, reflecting a 3.9% year-over-year increase [4] - Partnership services and fees amounted to $28.87 million, above the estimated $25.59 million, while other revenues were $22.09 million, significantly higher than the estimated $14.31 million, representing a 59.4% year-over-year increase [4] Stock Performance - Shares of Choice Hotels have declined by 9.8% over the past month, contrasting with a 1% increase in the Zacks S&P 500 composite, and the stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance in the near term [3]

Global Expansion & Unit Economics - International adjusted EBITDA is projected to grow 4x from 2022 to 2025F, driven by direct franchising and stronger unit economics[2] - The percentage of rooms under direct franchising is expected to increase from 19% in 2022 to 41% in 2025F[3] - EBITDA per unit is projected to increase from $9,000 in 2022 to $28,000 in 2025F[3] - Adjusted EBITDA is expected to increase from $10 million in 2022 to $39 million in 2025F, a 3x increase[3] Pipeline Composition & Growth Drivers - A new MFA partnership in China is expected to add 9,500 rooms[4] - 98% of the global pipeline is comprised of higher-revenue hotels with higher room count, RevPAR, and royalty rates[5] - Midscale and Extended Stay segments constitute 34% and 39% respectively of the 3Q 2025 Global Portfolio[6] - Conversions make up 35% of the 3Q 2025 Global Pipeline, while new builds account for 65%[6] - Average rooms per unit in the global pipeline are 96, compared to 86 in the global portfolio[6] - Average RevPAR in the global pipeline is $70, compared to $54 in the global portfolio[6] - Conversions are typically opened within 3-6 months, approximately 80% faster than new construction[6]

分组1 - Choice Hotels reported quarterly earnings of $2.1 per share, missing the Zacks Consensus Estimate of $2.18 per share, and down from $2.23 per share a year ago, representing an earnings surprise of -3.67% [1] - The company posted revenues of $447.34 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 7.20%, compared to year-ago revenues of $427.96 million [2] - Over the last four quarters, Choice Hotels has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] 分组2 - Choice Hotels shares have lost about 35.6% since the beginning of the year, while the S&P 500 has gained 15.1% [3] - The current consensus EPS estimate for the coming quarter is $1.57 on revenues of $370.44 million, and for the current fiscal year, it is $7.00 on revenues of $1.55 billion [7] - The Zacks Industry Rank for Hotels and Motels is currently in the bottom 21% of over 250 Zacks industries, indicating potential underperformance compared to the top 50% of ranked industries [8]

Group 1 - Baron Focused Growth Fund reported a 4.83% appreciation in Q3 2025, underperforming the Russell 2500 Growth Index's 10.73% gain due to economic growth slowdown concerns affecting Consumer Discretionary stocks [1] - The fund's performance was negatively impacted by rising competitive pressures affecting the valuations of some holdings [1] Group 2 - Choice Hotels International, Inc. (NYSE:CHH) experienced a one-month return of -10.03% and a 52-week loss of 36.67%, closing at $91.50 per share with a market capitalization of $4.23 billion on November 4, 2025 [2] - The decline in Choice Hotels' shares by 15.6% during the quarter hurt the fund's performance by 44 basis points, driven by concerns over slowing revenue-per-available-room (RevPAR) growth [3] - Management is reducing exposure to RevPAR fluctuations by expanding higher-margin, non-RevPAR fee income and leveraging a 70-million-member loyalty database for partnerships [3] - The company is focusing on adding higher-revenue units at a low single-digit rate, emphasizing larger room sizes and premium royalty rates [3] - Revenue growth is expected to accelerate due to a robust pipeline of new projects and synergies from the Radisson Americas acquisition [3] - Choice Hotels has a strong balance sheet, positioning it to return capital to shareholders through dividends and share repurchases [3]

Financial Performance - Net income for Q3 2025 increased to $180.0 million, up from $105.7 million in Q3 2024, resulting in diluted EPS of $3.86, compared to $2.22 in the same period last year[2] - Adjusted EBITDA reached a record $190.1 million in Q3 2025, a 7% increase from $177.6 million in Q3 2024[2] - Total revenues for Q3 2025 rose by 5% to $447.3 million, with franchise and management fees increasing by 3% to $193.8 million[6] - Adjusted net income for Q3 2025 was $180.0 million, compared to $106.0 million in Q3 2024, reflecting a significant increase of 69.5%[40] - Basic earnings per share for Q3 2025 were $3.89, up from $2.24 in Q3 2024, marking an increase of 73.7%[40] - The company expects full-year 2025 net income to be between $353 million and $371 million, revised from a prior outlook of $261 million to $276 million[14] - The company projects full-year 2025 adjusted EBITDA in the range of $620,000,000 to $632,000,000[53] - Full-year 2025 adjusted net income is estimated to be between $320,000,000 and $331,000,000, with diluted EPS expected to range from $7.52 to $7.89[54] Revenue and Expenses - Total revenues for the nine months ended September 30, 2025, reached $1.21 billion, compared to $1.20 billion for the same period in 2024, indicating a year-over-year increase of 0.1%[40] - Selling, general and administrative expenses for Q3 2025 were $79.6 million, compared to $69.0 million in Q3 2024, an increase of 15.5%[40] - Revenue for reimbursable costs from franchised and managed properties was $169.4 million in Q3 2025, down from $171.8 million in Q3 2024, a decrease of 1.4%[40] - Interest expense for Q3 2025 was $23.5 million, compared to $22.0 million in Q3 2024, reflecting an increase of 6.7%[40] - The total operating expenses for the nine months ended September 30, 2025, were $859.7 million, compared to $850.5 million in the same period of 2024, an increase of 1.1%[40] Assets and Liabilities - Total assets increased to $2,907,534, up from $2,530,527, representing a growth of 14.9% year-over-year[41] - Total current liabilities increased slightly to $468,542 from $462,721, a change of 1.8%[41] - Long-term debt increased to $1,918,504 from $1,768,526, marking an increase of 8.5%[41] - Cash and cash equivalents at the end of the period were $52,583, compared to $58,565 at the end of September 30, 2024, a decrease of 10.1%[42] Room Growth and Franchise Activity - Global net rooms grew by 2.3%, with a 3.3% increase in higher revenue segments compared to September 30, 2024[2] - International net rooms increased by 8.3% year-over-year, with a 66% rise in openings, and nearly 80% of the anticipated 9,500 rooms in China onboarded[2] - Global franchise agreements awarded surged by 54% in Q3 2025 compared to the same period in 2024[5] - U.S. extended stay net rooms grew by 12%, with a 14% increase in openings compared to September 30, 2024[5] - Global net upscale rooms grew by 20.8% in Q3 2025, driven by a more than fourfold increase in global openings compared to Q3 2024[10] - The total number of U.S. franchises remained stable at 6,201, with a slight decrease in rooms to 498,307 from 495,194[46] - The company expanded its international franchises to 1,314, an increase of 6.2% year-over-year, with rooms growing by 8.3% to 151,370[46] Cash Flow and Operating Activities - As of September 30, 2025, the company had total available liquidity of $564.2 million, with a net debt-to-adjusted EBITDA ratio of 3.0x[8] - The company reported a net cash provided by operating activities of $184,757 for the nine months ended September 30, 2025, down from $236,540 in 2024, a decrease of 22%[42] Other Financial Metrics - Average Daily Rate (ADR) for the total hotel system decreased by 2.0% to $100.03 for the three months ended September 30, 2025, compared to $102.02 in 2024[44] - The effective royalty rate for the three months ended September 30, 2025, was 5.15%, up from 5.05% in 2024[44] - Share-based compensation for Q3 2025 was $6,397,000, an increase from $5,425,000 in Q3 2024[49] - The company reported a gain from an acquisition of a joint venture amounting to $100,025,000 for the nine months ended September 30, 2025[49] - Total expenses associated with legal claims were recorded as $2,430,000 for the nine months ended September 30, 2024[51]

Core Insights - Choice Hotels International reported a record profitability for the third quarter of 2025, driven by a strategic shift towards higher-value brand segments and international growth [3][4] - The company aims to double its profitability in the international market by 2027, supported by a robust pipeline of high-quality projects [3][4] Financial Performance - Total revenues increased by 5% to $447.3 million in Q3 2025 compared to Q3 2024 [5] - Net income grew to $180 million in Q3 2025 from $106 million in Q3 2024, resulting in diluted EPS of $3.86, up from $2.22 [7] - Adjusted EBITDA for Q3 2025 reached a record $190.1 million, a 7% increase from $177.6 million in Q3 2024 [7] System Size and Development - Global net rooms grew by 2.3%, with a notable 3.3% increase in higher revenue segments [7] - International net rooms increased by 8.3%, with a 66% rise in openings compared to the previous year [7] - The global franchise agreements awarded surged by 54% in Q3 2025 compared to Q3 2024 [7] Revenue and Fees - Franchise and management fees rose by 3% to $193.8 million in Q3 2025 [8] - Partnership services and fees increased by 19% to $28.9 million in Q3 2025 [8] RevPAR and Market Performance - Global RevPAR increased by 0.2% in Q3 2025, with international RevPAR growth of 9.5% offset by a 3.2% decline in U.S. RevPAR [8] - U.S. extended stay portfolio outperformed the U.S. lodging industry by 20 basis points [8] Balance Sheet and Liquidity - As of September 30, 2025, the company had total available liquidity of $564.2 million [10] - The net debt-to-adjusted EBITDA ratio was 3.0x for the trailing twelve months [10] Shareholder Returns - The company returned $150.4 million to shareholders through dividends and share repurchases during the nine months ended September 30, 2025 [11] Outlook - The net income guidance for full-year 2025 has been revised to a range of $353 million to $371 million, up from previous estimates [13] - Adjusted diluted EPS is projected to be between $6.82 and $7.05 for full-year 2025 [13]

Core Insights - Choice Hotels International is enhancing its Choice Privileges rewards program, introducing new benefits and a Titanium tier in early 2026, aimed at providing members with more rewards and faster paths to Elite status [1][2][3] Group 1: New Program Features - Members will earn rewards every five nights, including milestone rewards like bonus points and gift cards [5] - The new Titanium status will be available at 55 nights or 110,000 Elite Qualifying Credits, offering exclusive benefits such as the ability to book premium properties for half the points [5] - Elite status will be more attainable, with reduced requirements for Gold, Platinum, and Diamond tiers, now requiring five fewer nights than before [5] Group 2: Member Benefits - Members can earn Elite Qualifying Credits through hotel stays and spending on the Choice Privileges Mastercard, which can be used for everyday purchases [5] - Points will never expire for Elite status holders, and a soft landing benefit will prevent sudden loss of status [5] - Members will have the ability to transfer points to friends and family starting in late 2026 [5] Group 3: Market Position and Recognition - Choice Privileges has been recognized as the top hotel rewards program by U.S. News & World Report and WalletHub, reflecting its competitive points redemption rate and flexible options [3][4] - The program is designed based on extensive research with travelers, focusing on flexibility and frequent recognition [3][4] - Choice Hotels operates over 7,000 properties globally, catering to various travel styles and budgets, enhancing the overall travel experience for members [6][9]

Core Insights - Choice Hotels International announced that the Radisson Blu Aqua Hotel ranked fifth among the Top 10 Hotels in Chicago in Condé Nast Traveler's 2025 Readers' Choice Awards, with over 750,000 readers participating in the voting process [1][2]. Company Overview - Choice Hotels International is one of the largest lodging franchisors globally, with nearly 7,500 hotels and over 640,000 rooms across 46 countries and territories [6]. - The company operates a diverse portfolio of 22 brands, catering to various traveler needs and enhancing value for franchise owners and shareholders [6]. Hotel Features - The Radisson Blu Aqua Hotel is recognized for its guest-centric amenities and architectural design, located in the iconic Aqua Tower, offering views of Millennium Park and Navy Pier [2][3]. - The hotel features 334 rooms designed by architect Jeanne Gang, combining modern elegance with local flair, including luxurious touches like Italian linens and spa-style bathrooms [3]. - Guests can enjoy a range of amenities, including a fully equipped health club, indoor and seasonal outdoor pools, and a signature restaurant offering Midwest-inspired cuisine [4]. Guest Experience - The hotel provides a self-guided art tour through its app, showcasing art-filled spaces, including a lobby with a 50-foot-long fireplace [2]. - The Radisson Blu brand emphasizes exceptional hospitality and memorable guest experiences, as highlighted by the recognition from Condé Nast Traveler [3]. Loyalty Program - Radisson Blu guests have access to the Choice Privileges rewards program, recently recognized as the best travel loyalty program by U.S. News & World Report and WalletHub [5].