NORTH BETHESDA, Maryland—Choice Hotels International, Inc. reported its first-quarter 2025 results.
Highlights include:
- Net income increased 44 percent to $44.5 million for the first quarter of 2025, representing diluted earnings per share (EPS) of $0.94, a 52 percent increase compared to the same period of 2024.
- Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first quarter of 2025 grew to $129.6 million, a first-quarter record and a 4 percent increase compared to the same period of 2024.
- Adjusted diluted EPS for the first quarter of 2025 grew to $1.34, a first-quarter record and a 5 percent increase compared to the same period of 2024.
- Increased net global rooms system size by 2.8 percent, including 3.9 percent growth for global upscale, extended stay, and midscale rooms portfolio, compared to March 31, 2024.
- Increased net rooms portfolio for the domestic extended stay segment by 10.8 percent compared to March 31, 2024, and the segment’s pipeline reached over 40,000 rooms as of March 31, 2025.
- Increased domestic revenue per available room (RevPAR) by 2.3 percent for the first quarter of 2025, compared to the same period of 2024, outperforming the chain scales in which the company competes by 60 basis points.
- Increased domestic RevPAR for the extended stay portfolio by 6.8 percent for the first quarter of 2025, compared to the same period of 2024, outperforming the industry by 410 basis points.
- Increased domestic RevPAR for midscale and economy portfolios by 1.7 percent and 7.1 percent for the first quarter of 2025, respectively, compared to the same period of 2024, outperforming their respective chain scales by 30 basis points and 440 basis points.
“Choice Hotels generated another quarter of record financial performance and RevPAR outperformance, demonstrating the successful execution of our growth strategy,” said Patrick Pacious, president and chief executive officer. “Our unique positioning has enabled us to outperform our peers, gain market share, and emerge stronger even in periods of economic uncertainty. Today, with our more diversified avenues of growth, a more resilient customer profile, and a meaningfully strengthened brand portfolio, including our larger presence in the cycle-resilient extended-stay segment, we have established an even stronger foundation for near-term stability and long-term growth.”
Financial Performance
| ($ in millions, except per share amounts) | Three months ended March 31 | ||
| 2025 | 2024 | ||
| Total Revenues | $333 | $332 | |
| Revenue excluding revenue for reimbursable costs from franchised and managed properties1 | $209 | $203 | |
| Net Income | $45 | $31 | |
| Adjusted Net Income | $64 | $64 | |
| Diluted Earnings per Share | $0.94 | $0.62 | |
| Adjusted Diluted Earnings per Share | $1.34 | $1.28 | |
| Adjusted EBITDA | $130 | $124 | |
Partnership services and fees increased 28 percent to $25.4 million for the first quarter of 2025, compared to the same period of 2024.
Domestic average daily rate (ADR) grew by 1.7 percent and occupancy levels increased by 30 basis points for the first quarter of 2025.
The domestic effective royalty rate increased by 8 basis points to 5.11 percent for the first quarter of 2025, compared to the same period of 2024.
System Size and Development
| Rooms | |||
| March 31, 2025 | March 31, 2024 | Change | |
| Domestic | 505,601 | 494,096 | 2.3 percent |
| Domestic Upscale, Extended Stay, and Midscale | 444,230 | 428,713 | 3.6 percent |
| International | 141,986 | 136,032 | 4.4 percent |
| Global | 647,587 | 630,128 | 2.8 percent |
Calculated as total revenues net of reimbursable revenues. Reimbursable revenues were $123 million and $129 million for the first quarter of 2025 and the first quarter of 2024, respectively.
During the first quarter of 2025, the company reclassified certain revenues into Partnership services and fees (formerly known as Platform and procurement services fees).
- Domestic upscale, extended stay, and midscale net rooms portfolio grew by 3.6 percent compared to March 31, 2024.
- International net rooms portfolio grew by 4.4 percent compared to March 31, 2024, and its pipeline increased by 13 percent from December 31, 2024.
- Global upscale net rooms portfolio grew by 16.2 percent from March 31, 2024, and its pipeline increased by 8 percent from December 31, 2024, reaching over 26,000 rooms.
- The global pipeline was over 95,000 rooms as of March 31, 2025, of which nearly 79,000 were domestic rooms.
Balance Sheet and Liquidity
As of March 31, 2025, the company had a total available liquidity of $593.8 million, including available borrowing capacity and cash and equivalents. The company’s net debt leverage ratio was 3.0 times as of March 31, 2025.
During the first quarter of 2025, the company generated cash flows from operating activities of $20.5 million, an $18.7 million increase compared to the same period of 2024.
Shareholder Returns
During the first quarter of 2025, the company paid cash dividends totaling $13.5 million and repurchased 456,000 shares of common stock for $64.6 million under its stock repurchase program and through repurchases from employees in connection with tax withholding and option exercises relating to awards under the company’s equity incentive plans.
As of March 31, 2025, the company had 3.4 million shares of common stock remaining under the current share repurchase authorization.
Outlook
The company is adjusting its outlook to reflect a more moderate domestic RevPAR growth expectation amidst a changing macro backdrop. The outlook information below includes forward-looking non-GAAP financial measures, which management uses in forecasting performance. The adjusted numbers in the company’s outlook below exclude the net surplus or deficit generated from reimbursable revenue from franchised and managed properties, additional repurchases of company stock, and other items:
| Full-Year 2025 | Prior Outlook | |
| Net Income | $275 – $290 million | $288 – $300 million |
| Adjusted Net Income | $324 – $339 million | $333 – $345 million |
| Adjusted EBITDA | $615 – $635 million | $625 – $640 million |
| Diluted EPS | $5.86 – $6.18 | $6.04 – $6.29 |
| Adjusted Diluted EPS | $6.90 – $7.22 | $6.98 – $7.24 |
| Effective Income Tax Rate | 25 percent | 25 percent |
| Full-Year 2025 vs. Full-Year 2024 | Prior Outlook | |
| Domestic RevPAR Growth | -1 percent to 1percent | 1 percent to 2 percent |
| Domestic Effective Royalty Rate Growth | Mid-single digits | Mid-single digits |
| Global Net System Rooms Growth | Approximately 1 percent | -1 percent to 1 percent |
