CHOICE HOTELS INTERNATIONAL REPORTS SECOND QUARTER 2026 RESULTS (Form 8-K)

CHOICE HOTELS INTERNATIONAL REPORTS SECOND QUARTER 2026 RESULTS

U.S. Net Rooms Growth Improved for the Second Consecutive Quarter, Supporting 2.6% Global Net Rooms Growth

NORTH BETHESDA, Md., August 5, 2026 - Choice Hotels International, Inc. ("Choice" or "the Company") (NYSE: CHH), a leading global lodging franchisor with an asset-light model, today reported results for the second quarter ended June 30, 2026.

Highlights include:

•Net income was $64 million, or $1.41 per diluted share, for the second quarter.

•Adjusted EBITDA totaled $175 million, and adjusted diluted EPS reached $2.02 for the second quarter.

•U.S. room openings increased 27% in the second quarter compared to the same period of 2025, as the Company opened approximately 6,400 U.S. rooms-the highest second-quarter level since 2019, while exits declined to their lowest second-quarter level since 2020, supporting continued improvement in U.S. net rooms growth.

•Global net rooms grew 2.6% compared to June 30, 2025, driven by 3.6% growth in the higher revenue extended stay, midscale, and upscale brands.

•U.S. RevPAR increased 1.3% in the second quarter, compared to the same period of 2025, reflecting improvements in both occupancy and rate.

•U.S. franchise agreements awarded increased 30% in the second quarter compared to the same period of 2025, representing approximately 9,400 new U.S. rooms for development.

•The Company's U.S. conversion rooms pipeline grew 24% to 24,100 rooms, compared to June 30, 2025, and 6% sequentially from March 31, 2026.

•The U.S. royalty rate expanded 11 basis points to 5.2% in the second quarter, compared to the same period of 2025.

•The Company returned $139 million to shareholders through dividends and share repurchases year-to-date through June 30, 2026.

•The Company raised several full-year 2026 guidance ranges.

"Our second quarter results reflect encouraging progress across our key priorities, with U.S. net rooms growth improving for the second consecutive quarter to its strongest first-half performance since 2021 and U.S. RevPAR trends strengthening," said Dom Dragisich, Interim Chief Executive

Officer. "Over the past several years, we've built a stronger commercial engine and technology platform, and we continue to invest in both. Our biggest opportunity now is sharpening execution-leveraging those capabilities to further enhance franchisee economics by increasing the number and quality of the guests we deliver while lowering operating costs. While we still have work to do, this business has significantly more potential, and I'm confident we can realize it. The progress we delivered this quarter reinforces that confidence."

Financial Performance

($ in millions, except per-share amounts)			Three Months Ended June 30,						Six Months Ended June 30,
			2026			2025			2026			2025
Total revenues			$441			$426			$781			$759
Revenue excl. revenue for reimbursable costs from franchised and managed properties1			$277			$259			$494			$469
Net income			$64			$82			$85			$126
Adjusted net income			$92			$90			$142			$153
Diluted EPS			$1.41			$1.75			$1.84			$2.68
Adjusted diluted EPS			$2.02			$1.92			$3.09			$3.25
Adjusted EBITDA			$175			$165			$301			$295

•Net income was $64 million for the second quarter, a 21% decline compared to the same period of 2025. The year-over-year decrease primarily reflected a higher net reimbursable deficit from franchised and managed properties related to investments in franchisee-related tools and guest delivery capabilities, timing of SG&A expenses, and increased depreciation and amortization associated with owned hotels and the prior year acquisition of Choice Hotels Canada. These items were partially offset by higher franchise and management fees.2

•Adjusted EBITDA increased 6%, and adjusted diluted EPS increased 5% compared to the same period of 2025.

•Franchise and management fees increased 6% to $188 million for the second quarter, compared to the same period of 2025, reflecting higher international royalty fees, higher franchisee programs and services revenue, along with U.S. RevPAR and U.S. royalty rate improvement.

•Partnership services and fees increased 6% to $29 million for the second quarter, compared to the same period of 2025, primarily reflecting growth in procurement services revenue.

RevPAR

(% change on a currency-neutral basis)			Change vs. Prior Year Period
			Three months ended June 30, 2026
U.S.			1.3%
International			2.1%
Global			1.7%

1 Calculated as total revenues excluding reimbursable revenues. Reimbursable revenues totaled $163 million and $167 million for second quarter 2026 and 2025, respectively, and $287 million and $291 million year-to-date through June 30, 2026 and June 30, 2025, respectively.

2 Selling, general and administrative expenses for the three months ended June 30, 2026 included $0.2 million of expense related to the post-employment benefits announced on May 20, 2026. The Company expects to recognize approximately $2.7 million of total post-employment benefits through August 31, 2026.

•U.S. RevPAR increased 1.3% in the second quarter, compared to the same period of 2025, driven by a 0.7% increase in rate and a 40-basis-point increase in occupancy, primarily reflecting strength in the East North Central, Middle Atlantic, and West South Central regions.

•International RevPAR increased 2.1% on a currency-neutral basis in the second quarter, compared to the same period of 2025, led by the Caribbean and Latin America and further supported by continued strength in Canada and Asia Pacific.

System Size and Development

(Rooms)
			June 30, 2026			June 30, 2025			Change
U.S.			499,226			500,562			-0.3%
U.S. upscale, extended stay, and midscale			442,676			439,744			0.7%
International			161,863			143,838			12.5%
Global			661,089			644,400			2.6%
Global upscale, extended stay, and midscale			599,207			578,226			3.6%

•Global room openings increased 16% in the second quarter of 2026 compared to the same period of 2025, as the Company opened approximately 8,300 global rooms.

•Extended stay remained a core growth engine, supported by strong unit economics and continued developer demand, with U.S. extended stay net rooms growing 13.0% compared to June 30, 2025, marking the 12th consecutive quarter of double-digit growth.

•International net rooms grew 12.5% compared to June 30, 2025, led by double-digit growth in Asia Pacific and EMEA, with continued growth in Canada.

•Global franchise agreements awarded increased 20% in the second quarter compared to the same period of 2025, representing 11,200 new global rooms for development and reflecting continued demand for conversion-led brands.

•The Company's global pipeline totaled approximately 77,300 rooms as of June 30, 2026, with 96% concentrated in extended stay, midscale, and upscale brands. The pipeline included:

◦71,100 U.S. rooms and 6,200 international rooms.

◦29,900 extended stay rooms, representing 39% of the total pipeline.

◦26,400 conversion rooms and 50,900 new-construction rooms.

Balance Sheet and Liquidity

As of June 30, 2026, Choice had total available liquidity of $475 million, comprised of cash and cash equivalents and available borrowing capacity. The Company's net debt-to-adjusted EBITDA ratio was 3.1x for the trailing twelve months ended June 30, 2026, within the Company's target range of 3.0x to 4.0x.

During the six months ended June 30, 2026, the Company generated $67 million in cash flows from operating activities, compared to $116 million in the prior-year period, primarily reflecting higher franchise agreement acquisition costs associated with a 27% increase in U.S. room openings and higher marketing and reservation system reimbursable expenses.

During the six months ended June 30, 2026, net capital outlays for hotel development and lending activities declined 80% to $15 million, from $76 million in the prior-year period.3

The Company expects to enter the next phase of its asset-light strategy by recycling capital from its owned hotel portfolio. As of August 5, 2026, the Company owned 19 operating hotels, with one additional hotel under construction. The Company expects the first asset sales to occur during the first half of 2027, subject to market conditions.

Shareholder Returns

During the six months ended June 30, 2026, the Company returned $26 million to shareholders through dividends and $113 million in share repurchases.4

As of June 30, 2026, 1.8 million shares of common stock remained available under the Company's current share repurchase authorization.

Outlook

The Company is updating certain aspects of its full-year 2026 outlook. The following outlook includes forward-looking non-GAAP measures used by management to assess expected performance. Adjusted metrics exclude the net surplus or deficit from reimbursable revenue from franchised and managed properties, due diligence and transition costs, and other items.

			Full-Year 2026			Prior Outlook
Net income			$230 to $241 million			$265 to $275 million
Adjusted net income			$312 to $323 million			$320 to $330 million
Adjusted EBITDA			$635 to $650 million			$632 to $647 million
Adjusted SG&A			Mid-single digits			Mid-single digits
Diluted EPS			$5.07 to $5.31			$5.72 to $5.94
Adjusted diluted EPS			$6.86 to $7.10			$6.92 to $7.14
Effective tax rate			26%			25%
			Full-Year 2026 vs. 2025			Full-Year 2026 vs. 2025
Global RevPAR growth			0% to 1%			-2% to 1%
U.S. RevPAR growth			0% to 1.25%			-2% to 1%
U.S. royalty rate growth			7 bps to 9 bps			Mid-single digits
Global net system rooms growth			Approximately 1.5%			Approximately 1%

The net income guidance range has been revised from the Company's prior outlook primarily to reflect higher expected marketing and reservation system reimbursable expenses, driven by increased investment in franchisee-facing tools and guest delivery capabilities, as well as higher interest expense and a higher effective tax rate.

The adjusted net income guidance range has been revised from the Company's prior outlook primarily to reflect higher expected interest expense and a higher effective tax rate.

3 Net capital outlays include investments in owned hotel properties, investments in affiliates, notes receivable issued, net of collections, proceeds from asset sales, and distributions from sales of affiliates.

4 Share repurchases include repurchases under the Company's stock repurchase program and repurchases from employees in connection with tax withholding and option exercises relating to awards under the Company's equity incentive plans.

Adjusted EBITDA guidance has been raised from the Company's prior outlook, primarily reflecting improvement in U.S. RevPAR, global net rooms growth, and U.S. royalty rate.

Net capital outlays for hotel development-related activities are expected to decline from $103.4 million in 2025 to a range of $20 million to $45 million in 2026.3

Webcast and Conference Call

Choice will host a conference call to discuss second quarter 2026 results on August 5, 2026, at 10:00 a.m. ET. A live webcast will be available on the Company's Investor Relations website at www.investor.choicehotels.com/events-and-presentations. Participants may also dial (833) 461-5787 (U.S.) or (585) 542-9983 (international) and reference conference ID 558894687. A replay and transcript will be available within 24 hours on the Company's Investor Relations website.

About Choice Hotels®

Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world, with over 7,500 hotels, representing more than 650,000 rooms, in 49 countries and territories. A wide-ranging portfolio of 22 brands that includes full-service upper upscale, midscale, extended stay, and economy properties enables Choice® to meet travelers' needs in more places and for more occasions while driving more value for franchise owners and shareholders. The award-winning Choice Privileges® rewards program and co-brand credit card options provide members with a fast and easy way to earn reward nights and personalized perks. For more information, visit www.choicehotels.com.