Choice Hotels Raises 2026 Adjusted EBITDA Outlook, Cuts Net Income Forecast

Choice Hotels International raised its 2026 adjusted EBITDA outlook and lowered its net income forecast Monday, as stronger room-revenue expectations and higher expenses moved the two earnings measures in opposite directions.

The company now expects adjusted EBITDA, a non-GAAP measure, of $641 million to $651 million, up from its previous range of $635 million to $650 million. Its net income forecast fell to $178 million to $185 million from $230 million to $241 million.

The update follows an Oct. 30 preview of Choice’s third-quarter estimates, published before the company released its results. Third-quarter adjusted EBITDA increased 1% year over year to $193 million.

Choice had 498,215 U.S. rooms as of Sept. 30, compared with 498,307 a year earlier. The company described the change as approximately flat year over year and expects U.S. net rooms growth to reach about 1% by year-end.

“We expect U.S. net rooms growth to accelerate to approximately 1% by year-end, and stronger demand trends support our increased full-year RevPAR outlook,” said Dom Dragisich, Choice Hotels’ president and CEO.

Choice raised its 2026 revenue per available room (RevPAR) growth forecast to 1.5% to 2.5% for both the U.S. and global markets. Its previous projections were 0% to 1.25% for the U.S. and 0% to 1% globally. U.S. RevPAR increased 3.8% in the third quarter from a year earlier.

U.S. room exits fell 23% year over year in the third quarter, while openings declined 8% to 4,400 from 4,800. For the first nine months of 2026, U.S. openings rose 17% from the same period a year earlier.

Stronger global RevPAR and higher U.S. royalty-rate expansion primarily supported the increased adjusted EBITDA outlook. Choice also included an estimated $1 million net benefit from its Harvest Hosts acquisition and two hotel sales, partly offset by higher adjusted selling, general and administrative expenses. The company bought Harvest Hosts on Oct. 1 and sold two owned hotels after the quarter ended, retaining franchise agreements for both.

Adjusted selling, general and administrative expenses, excluding Harvest Hosts, are now expected to increase about 9% year over year in 2026, compared with the prior forecast for mid-single-digit growth. Choice cited higher marketing and reservation-system expenses, a $24 million contract-termination charge, a $6 million noncash hotel impairment, lower expected equity earnings from affiliates and higher interest expense in lowering its net income forecast.