Choice Hotels International, Inc. Q4 FY2025 earnings call

• Delivered adjusted EBITDA of $626M, up 4% YOY with adjusted EPS in line. • 14% growth in global hotel openings, expanded international footprint, strengthened extended stay segment. • Higher average royalty rate in U.S. portfolio, increased 8 basis points in 2025 and 10 basis points in Q4. • Launched next evolution of Choice Privileges loyalty platform and small/midsized business digital platform. • Hotel development pipeline strong with 22% growth in global franchise agreements, 97% of rooms in higher-revenue brands. • Actively optimized U.S. portfolio, accelerated exit of underperforming hotels, expect U.S. net rooms growth to return to positive. • International business in next phase with greater scale and runway for growth. • Business travel and guest loyalty investments driving higher customer lifetime value. • Strong developer interest in midscale and economy segments.

In 2025, adjusted EBITDA was $626,000,000, up 4% year over year. International business delivered 37% growth in revenues, with directly franchised rooms over 40% of international portfolio. U.S. extended stay segment had record openings, up 8% year over year. Economy segment saw improved guest satisfaction and RevPAR outperformance. Midscale segment had strong developer interest with 14% growth in global franchise agreements. Partnership revenues grew 14% year over year, including 16% in Q4.

• Full-year 2026 global RevPAR expected in range of negative 2% to positive 1% in constant currency, U.S. RevPAR between negative 2% and positive 1%. • Average royalty rate growth in mid-single digits YOY. • Adjusted SG&A increasing in mid-single digits. • U.S. net rooms growth expected to return to positive territory, more heavily weighted towards latter part of the year. • Tax relief, gas price decline, national events provide demand catalysts.

Q: Michael Joseph Bellisario asked about key money spending, CapEx, JV investments in 2026 and buyback.

A: Scott E. Oaksmith said key money expected to increase in 2026, recyclable capital use expected to drop. Patrick S. Pacious added strategy behind lower key money per deal and recycling capital.

Q: Elizabeth Dove asked about U.S. rooms growth returning to positive and RevPAR outlook.

A: Patrick S. Pacious mentioned drivers like midscale/economy franchise growth, conversion pipeline, and tailwinds like tax relief.

Q: Daniel Brian Politzer asked about RevPAR cadence and U.S. nug.

A: Patrick S. Pacious and Scott E. Oaksmith discussed RevPAR trends, occupancy gains, and brand performance.

Q: Robin Margaret Farley asked about RevPAR guidance and international RevPAR.

A: Patrick S. Pacious and Scott E. Oaksmith explained international growth factors and royalty rate differences.

Q: Charles Patrick Scholes asked about working capital and capital outlay.

A: Scott E. Oaksmith discussed working capital reversal and capital outlay tapering.

Q: Meredith Prichard Jensen asked about conversions and lender comfort.

A: Patrick S. Pacious talked about conversion sources from independents and other branded companies.