Choice Hotels International executives downplayed performance metrics dropping off in the first quarter of 2026 compared to last year, citing a tough comparison to a 2025 first quarter boosted by hurricane-related travel.
Revenue per available room, average daily rate, occupancy and net income were down across the board year over year for Choice in the first quarter. President and CEO Pat Pacious said on the company's 2026 first-quarter earnings call that they were pleased with the results in the quarter, remarking that of the 46 U.S. states not affected by hurricanes last year, RevPAR was up 1.8% year over year.
"About 20% of our portfolio sits in those four states that were impacted by the hurricane, so it had a very significant effect on our Q1 numbers for last year," he said. "As we look into April and beyond and that dissipates, I think it'll be a much easier comparison."
Chief Financial Officer Scott Oaksmith said while performance is trending in the right direction, Choice will leave its full-year outlook untouched from the beginning of the year for now.
"Should the economy continue to perform well and these macro risks recede, we think we're well-positioned to trend towards the higher end of our forecasted range, but for now, we believe a more measured approach is in our best interest," Oaksmith said.
Consumer sentiment has remained strong in the face of rising gas prices, and employment growth in sectors that require travel for work is benefitting Choice's extended-stay hotels, Pacious said.
"We saw higher gas prices back in 2022 and that didn't really temper demand," he said. "We've seen in the last two months a continuing strength in the consumer."
Net unit growth
In the first quarter, Choice grew its global rooms count by 1.7% compared to last year. It saw a 2.5% growth in its higher revenue segments and a 37% increase in room openings, Oaksmith said.
The brand opened nearly 6,000 gross rooms in the quarter, coupled with exits from the portfolio declining by 52% year over year.
Broken down by segment, Choice's U.S. midscale and upscale room openings stood out with year-over-year increases of 57% and 112%, respectively, compared to the first quarter of 2025. Its international net rooms grew 13% and international room openings were up 59% over last year.
Pacious said its conversion-led model has been the driver of its net unit growth. New construction has been muted, but once there's some relief with interest rates, it should benefit Choice's brands that rely on ground-up projects.
"The conversion pipeline is up 17%, franchise agreements are up 65% overall. When we look at that visibility, it gives us a lot of confidence that this sort of inflection point that we're seeing in that rooms growth is happening," he said.
He attributed some of Choice's woes in RevPAR to the additions to its portfolio.
"When you open 6,000 rooms in a quarter, the ramping of that ... has an impact on RevPAR," he said.
By the numbers
In the U.S., Choice's hotel revenue per available room decreased 2.3% to $45.18 in the first quarter from 2025 levels, according to its earnings report. Average daily rate at U.S. hotels was $88.74, down 2.1% year over year, while occupancy decreased 10 basis points to 50.9%.
Across its total system, revenue per available room decreased 0.8% year over year to $47.45 in the first quarter. Average daily rate was $90.73, down 0.6% from the first quarter last year, and occupancy was down 10 basis points to 52.3%.
Choice's adjusted earnings before interest, taxes, depreciation and amortization was $125.7 million in the first quarter, down from $129.6 million in 2025. Its total revenues for the quarter were $333 million, a slight increase from $332 million in the first quarter last year.
The company's net income for the first quarter was $20.3 million, down from $44.5 million in the first quarter of 2025.
As of publication time, Choice's stock price was trading at $102.10 per share, a 19.04% decrease year over year. The NYSE Composite Index was up 20.67% for the same time period.