olivLaw · US equity research
Choice Hotels International, Inc. CHH
Hotels & Motels · SIC 7011 · Vertical: Hotels & Motels (SIC 7011)
Choice Hotels International is primarily a global hotel franchisor that licenses its brands and reservation systems to independent owners and earns fees based on room revenues. At a time when U.S. net room growth has returned and the conversion pipeline is expanding, its asset-light model remains in focus for investors, and the company has updated part of its 2026 outlook. As of June 30, 2026 it operated 7,608 hotels with 661,089 rooms open, and its global pipeline totaled 77,300 rooms.
The AI analysis may be outdated: new filings came after its sources (see the «AI analysis» section).
At the close of 04 Nov 2026, Choice Hotels International, Inc. (CHH) stock was 120.33 USD (+1.17% on the day), with market capitalisation 5.4 bn USD, P/E 26.7 on diluted EPS of 4.51 USD over the last 12 months, dividend yield 0.96%, beta 0.67, 52-week range 84.40–122.08 USD. Latest reported quarter (Q3 2026): revenue of 458.3 m USD (+2.5% YoY), net income of 57.9 m USD (−67.8% YoY), diluted EPS 1.28 USD.
Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.
Price history
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Technical reading
- RSI (14)
- 72.3
- overbought (≥ 70)
- Bollinger (20, 2)
- 100.34 – 120.05
- above the upper band · %B 1.01 · band width 17.9%
- SMA 50 / 200
- 104.79 / 107.17
- mixed trend
- MACD (12, 26, 9)
- 3.61 / 2.61
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | S&P 500 | vs S&P 500 | Vertical median | |
|---|---|---|---|---|
| 1 month | +20.8% | −1.1% | +21.9 pp | — |
| 3 months | +7.6% | −0.5% | +8.1 pp | — |
| 6 months | +14.4% | +4.4% | +10.0 pp | — |
| Year to date | +26.3% | +12.3% | +14.0 pp | — |
| 1 year | +31.5% | +13.5% | +18.0 pp | +1.1% |
| 3 years | +4.6% | +76.4% | −71.9 pp | +9.3% |
| 5 years | −19.1% | +63.7% | −82.8 pp | — |
Price returns, dividends excluded.
Quarterly results
Latest quarter: Q3 2026 · 30 Sept 2026
Quarterly margins
Quarterly statements · USD
| Fiscal year | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 | Q3 '26 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 389.8 m | 332.9 m | 426.4 m | 447.3 m | 390.2 m | 340.6 m | 440.8 m | 458.3 m |
| SG&A | 82.4 m | 74.2 m | 89.3 m | 79.6 m | 85.8 m | 78.0 m | 96.2 m | 81.3 m |
| Operating income | 119.2 m | 79.9 m | 124.6 m | 142.4 m | 101.5 m | 60.0 m | 104.1 m | 106.5 m |
| Depreciation & amortisation | 13.4 m | 13.7 m | 13.4 m | 15.8 m | 16.8 m | 16.8 m | 16.8 m | 16.9 m |
| Interest expense | 21.1 m | 21.2 m | 22.7 m | 23.5 m | 23.7 m | 24.0 m | 24.3 m | 25.6 m |
| Pre-tax income | 101.7 m | 59.8 m | 108.6 m | 210.9 m | 77.6 m | 30.3 m | 85.9 m | 75.0 m |
| Income tax | 25.9 m | 15.2 m | 26.9 m | 30.9 m | 13.9 m | 10.0 m | 21.5 m | 17.1 m |
| Net income | 75.8 m | 44.5 m | 81.7 m | 180.0 m | 63.7 m | 20.3 m | 64.3 m | 57.9 m |
| Diluted EPS | 1.60 ≈ | 0.94 | 1.75 | 3.86 | 1.38 ≈ | 0.44 | 1.41 | 1.28 |
| Operating cash flow | 82.9 m | 20.5 m | 95.6 m ≈ | 68.7 m ≈ | 85.7 m | -23.2 m | 90.5 m ≈ | 54.6 m ≈ |
| Dividends paid | 13.0 m | 13.5 m | 13.4 m ≈ | 13.3 m ≈ | 13.3 m | 13.1 m | 13.2 m ≈ | 13.0 m ≈ |
| Share repurchases | 31.8 m | 64.6 m | 48.1 m ≈ | 202.0 k ≈ | 25.3 m | 56.5 m | 51.0 m ≈ | 58.7 m ≈ |
≈ derived quarter (cumulative difference / share-days average)
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 73 percentile of its own 40-quarter history (min 12.0, median 22.8, max 141.0; quarters with earnings only).
Fiscal years
| Fiscal year | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 1.0 bn | 1.1 bn | 774.1 m | 1.1 bn | 1.4 bn | 1.5 bn | 1.6 bn | 1.6 bn |
| Revenue YoY | +10.6% | +7.1% | −30.6% | +38.1% | +31.1% | +10.1% | +2.6% | +0.8% |
| Net income | 216.4 m | 222.9 m | 75.4 m | 289.0 m | 332.2 m | 258.5 m | 299.7 m | 369.9 m |
| Net income YoY | +76.9% | +3.0% | −66.2% | +283.3% | +14.9% | −22.2% | +15.9% | +23.5% |
| Diluted EPS | unavailable | 3.98 | 1.35 | 5.15 | 5.99 | 5.07 | 6.20 | 7.90 |
| Diluted EPS YoY | unavailable | unavailable | −66.1% | +281.5% | +16.3% | −15.4% | +22.3% | +27.4% |
| net % | 20.8% | 20.0% | 9.7% | 27.0% | 23.7% | 16.7% | 18.9% | 23.2% |
| Free cash flow | 195.2 m | 213.2 m | unavailable | unavailable | unavailable | unavailable | unavailable | unavailable |
Reported results vs expectations
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Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 45.0 m USD
- Financial debt
- 1.9 bn USD
- Net debt
- 1.9 bn USD
- Equity
- 181.2 m USD
- Total assets
- 2.9 bn USD
- Debt / equity
- 10.52x
- Current ratio
- 0.87x
- ROE
- unavailable
- ROA
- 13.6%
- FCF margin
- unavailable
Financial statements (source on every figure)
Revenue and net income (USD)
Margins
Income statement · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Revenue | 774.1 m | 1.1 bn | 1.4 bn | 1.5 bn | 1.6 bn | 1.6 bn | SEC (XBRL)· 19 Feb 2026verified |
| SG&A | 148.9 m | 145.6 m | 167.7 m | 312.7 m | 312.4 m | 329.0 m | SEC (XBRL)· 19 Feb 2026verified |
| Operating income | 121.7 m | 428.9 m | 478.6 m | 375.0 m | 463.8 m | 448.4 m | SEC (XBRL)· 19 Feb 2026verified |
| Depreciation & amortisation | 25.8 m | 24.8 m | 30.4 m | 45.0 m | 52.0 m | 59.7 m | SEC (XBRL)· 19 Feb 2026verified |
| EBITDA | 147.5 m ≈ | 453.7 m ≈ | 509.0 m ≈ | 420.1 m ≈ | 515.7 m ≈ | 508.1 m ≈ | SEC (XBRL)· 19 Feb 2026derived |
| Interest expense | 49.0 m | 46.7 m | 43.8 m | 63.8 m | 87.1 m | 91.1 m | SEC (XBRL)· 19 Feb 2026verified |
| Pre-tax income | 53.0 m | 376.5 m | 436.8 m | 337.0 m | 395.6 m | 456.9 m | SEC (XBRL)· 19 Feb 2026verified |
| Income tax | -22.4 m | 87.5 m | 104.7 m | 78.4 m | 96.0 m | 86.9 m | SEC (XBRL)· 19 Feb 2026verified |
| Net income | 75.4 m | 289.0 m | 332.2 m | 258.5 m | 299.7 m | 369.9 m | SEC (XBRL)· 19 Feb 2026verified |
| Diluted EPS | 1.35 | 5.15 | 5.99 | 5.07 | 6.20 | 7.90 | SEC (XBRL)· 19 Feb 2026verified |
| Weighted average diluted shares | 55.5 m | 55.9 m | 55.1 m | 50.7 m | 48.1 m | 46.6 m | SEC (XBRL)· 19 Feb 2026verified |
| Dividend per share | — | — | 0.95 | 1.15 | 1.15 | 1.15 | SEC (XBRL)· 19 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating income + Depreciation & amortisation.
Balance sheet · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Cash | 234.8 m | 511.6 m | 41.6 m | 26.8 m | 40.2 m | 45.0 m | SEC (XBRL)· 19 Feb 2026verified |
| Receivables | 149.9 m | 153.1 m | 216.6 m | 195.9 m | 176.7 m | 207.5 m | SEC (XBRL)· 19 Feb 2026verified |
| Current assets | 432.9 m | 761.7 m | 347.9 m | 296.5 m | 339.1 m | 406.0 m | SEC (XBRL)· 19 Feb 2026verified |
| Property, plant & equipment, net | 334.9 m | 377.4 m | 427.3 m | 493.5 m | 604.3 m | 649.3 m | SEC (XBRL)· 19 Feb 2026verified |
| Goodwill | 159.2 m | 159.2 m | 218.7 m | 220.2 m | 220.2 m | 305.8 m | SEC (XBRL)· 19 Feb 2026verified |
| Intangibles (excl. goodwill) | 303.7 m | 312.4 m | 742.2 m | 811.1 m | 884.0 m | 1.1 bn | SEC (XBRL)· 19 Feb 2026verified |
| Total assets | 1.6 bn | 1.9 bn | 2.1 bn | 2.4 bn | 2.5 bn | 2.9 bn | SEC (XBRL)· 19 Feb 2026verified |
| Accounts payable | 83.3 m | 81.2 m | 118.9 m | 131.3 m | 134.9 m | 156.3 m | SEC (XBRL)· 19 Feb 2026verified |
| Short-term debt | 0 | 216.4 m | 3.0 m | 499.3 m | 0 | — | SEC (XBRL)· 20 Feb 2025verified |
| Long-term debt | 1.1 bn | 844.1 m | 1.2 bn | 1.1 bn | 1.8 bn | 1.9 bn | SEC (XBRL)· 19 Feb 2026verified |
| Current liabilities | 255.8 m | 570.3 m | 435.9 m | 942.7 m | 462.7 m | 467.3 m | SEC (XBRL)· 19 Feb 2026verified |
| Total liabilities | 1.6 bn | 1.7 bn | 1.9 bn | 2.4 bn | 2.6 bn | 2.7 bn | SEC (XBRL)· 19 Feb 2026verified |
| Equity | -5.8 m † | 265.9 m † | 154.7 m † | 35.6 m † | -45.3 m † | 181.2 m † | SEC (XBRL)· 19 Feb 2026verified |
† equity attributable to the parent's shareholders: in these years the issuer no longer reports the total including non-controlling interests.
Cash flow · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Operating cash flow | 110.1 m | 383.7 m | 367.1 m | 296.6 m | 319.4 m | 270.4 m | SEC (XBRL)· 19 Feb 2026verified |
| Investing cash flow | -24.5 m | -78.9 m | -442.4 m | -265.6 m | -84.6 m | -218.3 m | SEC (XBRL)· 19 Feb 2026verified |
| Financing cash flow | 115.4 m | -27.7 m | -394.2 m | -45.9 m | -221.7 m | -50.1 m | SEC (XBRL)· 19 Feb 2026verified |
| Dividends paid | 25.3 m | 25.0 m | 52.5 m | 56.5 m | 55.5 m | 53.5 m | SEC (XBRL)· 19 Feb 2026verified |
| Share repurchases | 55.5 m | 13.4 m | 434.8 m | 362.8 m | 380.7 m | 138.3 m | SEC (XBRL)· 19 Feb 2026verified |
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
Score: 52 / 100
A scoring methodology on indicators and valuation, not investment advice.
Closing price
04 Nov 2026Source: olivLaw, closing series
Market cap: 5.4 bn USD
Key indicators
Coverage and freshness
Score by group
- Valuation48
- Returns65
- Quality67
- Balance sheet39
- Growth51
Estimated value range
The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 14.86 – 184.18 USD.
Valuation assumptions are editorial choices, not measured; beta is not measured.
Method ranges (USD per share)
— — Mid · ▏ Price
Valuation methods
- DCF (discounted cash flow)unavailable · the input exists, but its latest figure is far older than the latest reported period: not used
- Peers: EV/EBITDA14.86 – 107.41 (Mid 55.29)14 companies used · median multiple 10.2x · quartiles 6.1x – 15.4xBYD, CNTY, CZR, FLL, HLT, IHG, LVS, MGM, MLCO, PK, TNL, WH, WYNN, XHR
- Peers: P/E82.92 – 184.18 (Mid 132.93)14 companies used · median multiple 29.5x · quartiles 18.4x – 40.8xATAT, BYD, HLT, IHG, LVS, MAR, MCRI, MGM, MLCO, RRR, SHO, TNL, WH, WYNN
- Dividend discount (DDM)15.11 – 20.32 (Mid 17.33)
Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.
Assumptions (illustrative, editorial)
- Risk-free rate
- 4.3%
- Equity risk premium
- 5.0%
- Beta (default)
- 1.00
- Cost of equity
- 9.3%
- Terminal growth
- 2.5%
Factor scorecard
Neutral profile · Score 52/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | 13.7% | 64 (vs peers) | 13% |
| Net margin · Quality | 12.7% | 72 (vs peers) | 8% |
| FCF conversion · Quality | unavailable | unavailable | — |
| Revenue CAGR 3Y · Growth | 4.4% | 37 (on a fixed band) | 10% |
| EPS CAGR 3Y · Growth | 9.7% | 64 (on a fixed band) | 10% |
| Net debt / EBITDA · Balance sheet | 4.6x | 42 (vs peers) | 13% |
| Interest coverage · Balance sheet | 3.8x | 36 (on a fixed band) | 8% |
| Current ratio · Balance sheet | 1.3x | 38 (on a fixed band) | 5% |
| P/E (TTM) · Valuation | 26.7x | 65 (vs peers) | 13% |
| EV/EBITDA · Valuation | 16.8x | 31 (vs peers) | 13% |
| FCF yield · Valuation | unavailable | unavailable | — |
| Shareholder yield (distributions) · Returns | 4.6% | 65 (on a fixed band) | 8% |
| Payout ratio (FCF) · Returns | unavailable | unavailable | — |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet39/100 · 3/3 factors with a value
- Growth51/100 · 2/2 factors with a value
- Quality67/100 · 2/3 factors with a value
- Returns· partial65/100 · 1/2 factors with a value
- Valuation48/100 · 2/3 factors with a value
A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.
Memo
CHOICE HOTELS INTERNATIONAL INC /DE (CHH). Latest full fiscal year: 2025; data up to 2026-09-30.
Figures computed from the financial statements: revenue 1.6 bn USD in 2025; YoY growth 0.8%; net margin 12.7%; ROE 146.5%; net debt/EBITDA 4.6x.
The estimated value range is 15.11–107.41 USD per share (median of 3 methods, agreement: low); assumptions are illustrative. Against the central value of 55.29 USD, the price of 120.33 USD leaves a potential of -54.0% (value / price − 1) and a margin of safety of -117.6% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 52/100, methodological classification: neutral profile (score, margin of safety and method agreement together; not a judgement of the right price). Groups assessed only in part: returns. Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- Net margin: 12.7%
What contradicts it
- The price is above the estimated value range
- The valuation methods diverge
Not assessed (insufficient data or a ratio without meaning): FCF conversion, FCF yield, Payout ratio (FCF).
Versus the vertical median
Hotels & Motels (SIC 7011) · same industry (4-digit SIC) · compared with 26 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| HTHTH World Group Ltd | 154.3 bn | 218.4 | 41.5% | 20.1% | +10.5% | +9% / +37% |
| MARMarriott International Inc | 109.4 bn | 42.4 | — | 9.7% | +4.3% | +39% / +110% |
| HLTHilton Worldwide Holdings Inc. | 83.8 bn | 50.8 | — | 13.4% | +7.7% | +32% / +125% |
| IHGInterContinental Hotels Group PLC | 29.0 bn | 36.2 | — | 14.6% | +5.4% | +31% / +124% |
| LVSLas Vegas Sands Corp. | 25.5 bn | 16.7 | 262.8% | 11.8% | +15.2% | −40% / −12% |
| ATATAtour Lifestyle Holdings Limited | 14.5 bn | 63.7 | 50.5% | 16.6% | +41.0% | −9% / +97% |
| WYNNWynn Resorts, Limited | 8.5 bn | 19.7 | — | 6.1% | +0.1% | −36% / −2% |
| MGMMGM Resorts International | 8.3 bn | 12.7 | 26.8% | 3.9% | +1.7% | −7% / −17% |
| CZRCaesars Entertainment, Inc. | 6.0 bn | — | -15.1% | -4.5% | +2.1% | +26% / −34% |
| WHWyndham Hotels & Resorts, Inc. | 5.9 bn | 29.8 | 38.2% | 14.0% | +1.5% | +10% / +4% |
| MLCOMelco Resorts & Entertainment Limited | 5.7 bn | 30.6 | — | 3.6% | +11.3% | −48% / −33% |
| BYDBoyd Gaming Corp | 5.5 bn | 11.7 | 19.6% | 12.3% | +4.1% | −7% / +32% |
| CHHChoice Hotels International Inc | 5.4 bn | 26.7 | 146.5% | 12.7% | +0.8% | +32% / +5% |
| TNLTravel & Leisure Co. | 4.7 bn | 20.7 | — | 5.7% | +4.1% | +13% / +118% |
| PKPark Hotels & Resorts Inc. | 3.4 bn | — | -5.0% | -6.4% | −2.2% | +57% / +14% |
| SHOSunstone Hotel Investors, Inc. | 2.4 bn | 54.7 | 2.8% | 5.3% | +6.0% | +39% / +32% |
| PENNPenn Entertainment, Inc. | 2.3 bn | — | -37.4% | -12.7% | +5.8% | +18% / −29% |
| XHRXenia Hotels & Resorts, Inc. | 2.0 bn | 628.9 | 0.3% | 0.3% | +3.8% | +57% / +79% |
| MCRIMonarch Casino & Resort, Inc. | 2.0 bn | 17.9 | 20.4% | 20.4% | +4.4% | +17% / +80% |
| BALYBally’s Corporation | 680.3 m | — | — | — | +0.1% | −23% / unavailable |
| FLLFull House Resorts Inc | 29.1 m | — | -936.4% | -12.1% | +3.5% | −70% / −84% |
| CNTYCentury Casinos, Inc. | 16.9 m | — | — | -9.6% | −0.5% | −61% / −86% |
| MRNOMurano Global Investments Plc | — | — | -54.7% | -488.8% | +154.6% | −88% / −98% |
| HHyatt Hotels Corporation | — | 98.6 | 5.6% | 2.6% | +6.8% | +16% / +66% |
| GHGGreenTree Hospitality Group Ltd. | — | — | 11.2% | 15.2% | −14.7% | −50% / −74% |
1- and 3-year price returns: for CHH from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (USD)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 73.03 Total return -39% · Per year -39% | 129.12 Total return 8% · Per year 8% | 194.50 Total return 63% · Per year 63% |
| 3 years | 70.78 Total return -39% · Per year -15% | 140.82 Total return 20% · Per year 6% | 232.92 Total return 98% · Per year 25% |
| 5 years | 68.61 Total return -39% · Per year -9% | 153.58 Total return 33% · Per year 6% | 278.94 Total return 139% · Per year 19% |
- Exit P/E± 35.21
- Net margin± 24.64
- Annual revenue growth± 20.24
- Annual dilution± 2.07
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 05 Aug 2026; since then the company filed 8-K (02 Nov 2026 · results), 10-Q (02 Nov 2026).
In brief
Choice Hotels International is primarily a global hotel franchisor that licenses its brands and reservation systems to independent owners and earns fees based on room revenues. At a time when U.S. net room growth has returned and the conversion pipeline is expanding, its asset-light model remains in focus for investors, and the company has updated part of its 2026 outlook 123. As of June 30, 2026 it operated 7,608 hotels with 661,089 rooms open 2, and its global pipeline totaled 77,300 rooms 3.
SWOT
Strengths
- The asset-light model, based on franchise fees, gives high operating leverage, and the cost of adding a new hotel to the system is typically small 1.
- The brand portfolio covers new construction and conversions at several price points, which lets the company stay relevant across cycle phases 1.
- The conversion and extended stay pipelines grew visibly in 2026, supporting system growth 3.
Weaknesses
- The reimbursable deficit from franchisee tools and guest delivery capabilities weighed on net income and led to a lower net income outlook 3.
- Debt and interest costs are a sensitive factor, since part of the borrowing carries variable rates and rising rates would raise expenses 23.
- Revenue is concentrated in the U.S., so domestic performance strongly influences results 1.
Opportunities
- If the conversion and extended stay pipelines keep expanding, the room count in the system and the related fees could rise 3.
- Recycling capital from owned hotels could free funds for buybacks and dividends, subject to market conditions 3.
- International expansion, particularly in Asia Pacific and EMEA, could add royalty income 13.
Threats
- A drop in business or leisure travel due to economic conditions could reduce RevPAR and revenue-linked fees 1.
- Litigation, reputational damage or franchisee actions, including alleged human trafficking at hotels, could add costs 1.
- Regulatory changes on climate, wages or international compliance could raise costs for the system and its franchisees 1.
Risks
- Dependence on franchised hotel performancehigh
The company's fees are tied to room revenues and room counts at franchised hotels, so weaker demand or rates would directly affect results 1.
- Indebtedness and variable interest ratesmedium
Part of the debt carries variable rates, and rising rates or refinancing on harsher terms could increase financial expenses 12.
- Litigation and brand reputationmedium
Claims by franchisees, employees or customers, as well as allegations of human trafficking, could affect reputation and financial results 1.
- International and currency riskmedium
Operations outside the U.S. are exposed to political, sanctions and currency risks, and limits on repatriating earnings could restrict cash flows 1.
- Investment in artificial intelligencelow
The company is incorporating artificial intelligence into processes and franchisee tools, which brings compliance, reputational and legal risks 1.
Investment thesis
What would need to be true (bull case)
- If U.S. net room growth consolidates and the conversion pipeline keeps expanding, the fee model could generate more predictable revenue and expanding profitability 3.
- Improvement in the U.S. royalty rate and international RevPAR growth could support revenue without large capital outlays 3.
- Recycling owned hotel assets could release capital for shareholders, which could support dividends and buybacks in coming years 3.
What would break the thesis
- If costs for franchisee tools keep rising, net income margins could remain under pressure, as the revised outlook suggests 3.
- A slowdown in demand from an economic downturn could reduce RevPAR and fee income, especially in the U.S., where most activity is concentrated 1.
- Higher interest rates or a higher effective tax rate could further reduce profit if debt is not hedged 23.
What to watch
- U.S. RevPAR and royalty rate development against the 2026 outlook rangesQ3 2026
- Pace of U.S. room openings and net room growthQ3 2026
- Reimbursable deficit from franchisee tools and its effect on net incomeQ4 2026
- Timing and proceeds of the first sales of owned hotels under the asset-light strategy2027
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 05 Aug 2026; since then the company filed 8-K (02 Nov 2026 · results), 10-Q (02 Nov 2026).
The business
Choice Hotels International, Inc., incorporated in Delaware in 1980, operates primarily as a hotel franchisor, deriving revenue mainly from franchise fees calculated on room revenues or the number of rooms 1. The company deploys 22 brands and brand extensions covering both new construction and conversions of existing hotels 1. Revenue depends on hotel performance across the system, unit growth and royalty rates, and variable costs of growing an established system have historically been lower than the incremental fees from new franchises 1. The company also owns a few hotels, which it views as support for newly introduced brands and intends to transfer to franchisees over time 23.
Revenue also comes from partnership services with qualified vendors and travel partners, from owned hotels and from other ancillary sources, while franchise and management fees follow seasonality with lower results in the first and fourth quarters 1. Reimbursable costs from franchised and managed properties are excluded from the company's operating analysis because marketing and reservation fees must be spent according to franchise agreements 1. In the first half of 2026, U.S. room openings rose 27% and the company returned 139 million dollars to shareholders through dividends and share repurchases 3. It also said it would start the next phase of its asset-light strategy by recycling capital from its owned hotels, with first asset sales expected in the first half of 2027, subject to market conditions 3.
Segments
Franchise and management fees
The main segment, covering franchise, royalty and management fees, generated 673.2 million dollars in fiscal 2025 1. In the second quarter of 2026 these fees rose 6% to 188 million dollars, helped by higher international royalties and U.S. RevPAR and royalty rate improvement 3.
Market context
The lodging industry is cyclical: in expansion phases occupancy and rates rise and development accelerates, while in downturns rates fall and construction slows 1. The franchise model is considered more resilient through these cycles because fees track hotel revenues and unit growth can offset weaker RevPAR 1. Conversion brands particularly benefit from periods when independent hotels seek affiliation, while new-construction brands benefit from favourable financing conditions 1. As a benchmark, 96% of the global pipeline is concentrated in extended stay, midscale and upscale brands 3.
In the second quarter of 2026, international RevPAR rose 2.1% on a currency-neutral basis, while U.S. RevPAR rose 1.3% 3. The 2026 outlook includes global RevPAR growth between 0% and 1% and U.S. RevPAR growth between 0% and 1.25% 3. These ranges point to a moderate recovery in demand rather than a strong acceleration in rates.
Trends
- Recovery in U.S. room growthtailwind
U.S. room openings rose and exits fell, improving net growth; if this pace holds it could support fee income 3. Extended stay remains the main growth engine, with double-digit net growth for the 12th consecutive quarter 3.
- Expanding conversion pipelinetailwind
The U.S. conversion pipeline grew 24% year on year, which could accelerate system expansion without heavy construction costs 3. Conversions also benefit from the phase of the cycle in which independent hotels seek affiliation 1.
- Investment in franchisee toolsheadwind
Higher reimbursable spending on franchisee tools and guest delivery capabilities widened the reimbursable deficit and reduced net income in the second quarter 3. If these investments do not translate into better hotel performance, margin pressure could persist.
- Cost of financing and tax ratemixed
The outlook for net income was revised down mainly because of higher interest expense and a higher effective tax rate 3. Net debt to adjusted EBITDA sits within the target range, but sensitivity to interest rates remains relevant 23.
Competitive position
The sources do not name direct competitors, but they describe national hotel chains and brands in the economy, midscale and upscale segments as competing for the same owners and franchisees 1. The company cites its large number of hotels and bargaining power with suppliers as advantages that raise brand awareness and lower costs 1. It also competes with independent hotels, which can choose between chain affiliation and staying independent 1.
Beyond direct comparison with chains, the company's position depends on attracting franchisees to the segments with the highest returns. The sources point to performance in upscale, extended stay and midscale segments as a key indicator of commercial success 3. A competitor offering better franchise terms could affect the pace of new agreements.
- Upscale and midscale hotel chains
The sources do not name competing companies; they refer to brand categories in upscale and midscale segments that compete for the same owners.
- Economy and midscale chains
Brands in the economy and midscale segments compete for independent hotels seeking affiliation, according to the sector description in the filing.
- Independent hotels
Independent hotels are an important source of conversions for the company but also an alternative to chain affiliation.
- Luxury hotel brands
The luxury segment is not directly comparable with the company's portfolio but competes for owners' attention within the same industry category.
Links, dependencies and risks
Who the company is tied to, from its own SEC filings (customers, suppliers, production, partners, competitors, countries, regulation), from the 5 %+ holders' statements (13D/13G) and from what other companies say about it. Click a node for its evidence; on a listed company the graph moves to it.
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News & filings
In the press
- Beaten at home, Trump faces stark choice on Iran: deal or escalationThe Japan Times · 04 Nov 2026 · EN
- Choice Paid $24 Million to Walk Away From Buying Spain’s SercotelSkift · 04 Nov 2026 · EN
- Michigan voters face crucial choice as Trump’s grip on Congress is testedAl Jazeera English · 03 Nov 2026 · EN
- Ticket sellers, Virgin flight credits and a 25-hour laundry cycle: meet Choice’s 2026 Shonky award winnersThe Guardian World · 03 Nov 2026 · EN
- Choice Hotels Narrows Its Revenue Gap, but Its Upscale Brands Still TrailSkift · 02 Nov 2026 · EN
- Sovereignty in the AI era: Choice, control, and autonomyRed Hat Blog · 02 Nov 2026 · EN
- What is ranked-choice voting and how does it work in US elections?Al Jazeera English · 31 Oct 2026 · EN
- Editors’ Choice: What did Putin really say on that call?Euractiv · 30 Oct 2026 · EN
- Editor's Choice: What the US midterms mean for AsiaNikkei Asia · 30 Oct 2026 · EN
- The Best Islands in the World: 2026 Readers’ Choice AwardsConde Nast Traveler · 29 Oct 2026 · EN
- Amid uncertainty over EU aid, Vitalii Kim insists Ukraine has no choice but to fight for motherlandFrance24 — Europe · 28 Oct 2026 · EN
- Israel’s choice: Netanyahu remaining in power or a Palestinian-backed coalitionThe Guardian World · 28 Oct 2026 · EN
- Russia may not give Oleshky evacuees a free choice to return to Ukraine, ISW warns, after Putin called the town a “Russian settlement”Euromaidan Press (UA, EN) · 28 Oct 2026 · EN
- Too late, too far, too little choice: Why surplus food apps face challenges matching meals with takersCNA (Channel NewsAsia) · 27 Oct 2026 · EN
- In Florida’s Gubernatorial Race, a Choice Between New Climate Policy or the Status QuoInside Climate News · 27 Oct 2026 · EN
- Analysis: No Elon Musk, Russian soldiers in Ukraine are not 'kids' who have 'no choice but to fight and die'Kyiv Independent (UA, EN) · 26 Oct 2026 · EN
- Russia doing its best to ensure safe choice for Alyoshki residents during evacuationTASS (RU, EN) · 26 Oct 2026 · EN
- Trump calls Murkowski a ‘disgrace’ to Alaska, criticizes ranked choice votingThe Hill · 25 Oct 2026 · EN
- Serbians face a choice between the populist right and the student protest movementSurge — GDELT DOC · 25 Oct 2026 · RO
- The Best Islands in the United States: 2026 Readers’ Choice AwardsConde Nast Traveler · 23 Oct 2026 · EN
SEC filings
- Quarterly report02 Nov 2026
- Current report02 Nov 2026Results of operations · Financial statements and exhibits
- Current report01 Oct 2026Departure or appointment of officers
- Current report31 Aug 2026Departure or appointment of officers · Financial statements and exhibits
- Current report28 Aug 2026Material agreement · Creation of a direct financial obligation · Financial statements and exhibits
- Quarterly report05 Aug 2026
- Current report05 Aug 2026Results of operations · Financial statements and exhibits
- Current report01 Jul 2026Departure or appointment of officers · Financial statements and exhibits
- Current report21 May 2026Amendments to articles or bylaws · Shareholder vote · Financial statements and exhibits
- Current report20 May 2026Departure or appointment of officers · Financial statements and exhibits
Sources
- [1] Form 10-K, fiscal year ended 2025-12-31 · SEC / Choice Hotels International, Inc. · 19 Feb 2026
- [2] Form 10-Q, quarter ended 2026-06-30 · SEC / Choice Hotels International, Inc. · 05 Aug 2026
- [3] Form 8-K, results release (exhibit 99.1) · SEC / Choice Hotels International, Inc. · 05 Aug 2026
Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.