Choice Hotels Q1 2025: Navigating Contradictions in Revenue Growth, Consumer Trends, and International Expansion

Revenue growth and ancillary revenue opportunities, economy and consumer trends, ancillary revenue growth and sustainability, and international expansion strategy are the key contradictions discussed in Choice Hotels International's latest 2025Q1 earnings call.



Revenue and Earnings Growth:
- Choice Hotels International reported adjusted EBITDA of $129.6 million for Q1 2025, representing a 4% year-over-year increase, and adjusted earnings per share of $1.34, a 5% increase year-over-year.
- The growth was driven by strong global rooms growth, strong RevPAR performance, and robust effective royalty rate growth, despite a weaker-than-anticipated macroeconomic environment.

Global Room System Expansion:
- The global rooms increased by 3.9% year-over-year, with a 2.8% increase in total worldwide rooms.
- The company expanded its pipeline with 98% of the rooms within more revenue-intense brands, contributing significantly to growth in the more revenue-intense segments.

Business Travel and Extended-Stay Growth:
- Business travel segment grew by 10% year-over-year in Q1 2025, with a revenue increase of over 50% from group travel business.
- This growth was driven by the capture of longer-term opportunities related to infrastructure investments and genAI technology, as well as increased investment in the expanding upscale and extended-stay portfolio.

Ancillary Revenue and Partnership Growth:
- Partnership services and fees increased by 28% year-over-year in Q1 2025.
- This growth was attributed to increased revenues from qualified vendors and co-brand credit card fees, reflecting Choice Hotels' strategic focus on expanding its partnership business to drive revenue growth.