Choice Hotels Has a Q1 Reality Check as RevPAR Falls to $45.18

Choice Hotels had a difficult first quarter in 2026, even as the wider US hotel market was improving.

The company’s US RevPAR fell 2.3 percent year over year to $45.18 RevPAR, or revenue per available room, shows how much room revenue a hotel earns across all available rooms, whether they were occupied or not. Choice’s US average daily rate also fell 2.1 percent to $88.74, while occupancy slipped slightly to 50.9 percent.

The weak performance stood out because the broader US hotel industry had a much stronger start to the year. CoStar said the market delivered its strongest first-quarter demand on record, while occupancy reached its highest first-quarter level since 2019.

The quarter was mixed beyond RevPAR

Choice’s first-quarter report was not weak across every measure. Total revenue reached a company-record $340.6 million, up from $332.9 million a year earlier. Revenue excluding reimbursable costs increased 3 percent to $216.7 million, which shows that the company still grew its core fee-related revenue despite softer room performance.

Profitability was weaker. Net income fell to $20.3 million from $44.5 million a year earlier, while diluted earnings per share declined to $0.44 from $0.94.

Adjusted EBITDA also slipped to $125.7 million from $129.6 million. Choice said the adjusted EBITDA decline mainly reflected timing-related factors, while adjusted diluted earnings per share fell to $1.07 from $1.34.

Last year’s hurricane demand made this year look worse

Choice said the main reason for the weaker RevPAR result was a difficult comparison with last year. In 2025, hurricanes in four US states created extra hotel demand from displaced residents, emergency workers, insurers, and recovery crews. That temporary demand lifted last year’s results, so the first quarter of 2026 looked weaker by comparison.

The company said this hurricane-related effect reduced US RevPAR by about 410 basis points. Without that impact, Choice said US RevPAR would have increased 1.8 percent. Management therefore presented the decline as a temporary and regional issue, not a sign that demand was weakening across the entire business.

Wyndham made Choice’s miss more visible

Choice’s results also looked weaker next to Wyndham, its closest large competitor in economy and midscale hotels. Wyndham said its US RevPAR was flat in the first quarter, while global RevPAR fell 1 percent in constant currency. That was a better result than Choice’s 2.3 percent US RevPAR decline.

Wyndham also gave investors a slightly more optimistic full-year view. It now expects global RevPAR to finish 2026 between down 1 percent and up 1 percent. Choice kept its own full-year US and global RevPAR guidance unchanged, with expected growth between down 2 percent and up 1 percent. That suggests Choice wants more evidence before calling for a stronger recovery.

Choice still has a development story to show investors

The quarter was not only negative. Choice said US room openings rose 32 percent year over year, reaching its strongest first-quarter opening pace since 2023. Hotel exits also fell to their lowest quarterly level since 2023, helping improve net room growth from the end of 2025.

Choice is also trying to improve the quality of its future portfolio. Global net rooms grew 1.7 percent year over year, helped by 2.5 percent growth in higher-revenue extended-stay, midscale, and upscale brands. Its US pipeline reached about 71,500 rooms, while the company said 97 percent of global pipeline rooms are in extended-stay, midscale, and upscale brands.

Hyatt’s luxury growth shows what Choice still needs to prove

While Choice is trying to prove that its weak quarter was mostly a temporary hurricane comparison issue, other hotel groups are still leaning into higher-revenue segments. Hyatt, for example, reported 5.4 percent RevPAR growth in the first quarter, led by luxury hotels and leisure demand.

For now, Choice has a mixed story. Revenue reached a first-quarter record and development trends improved, but US RevPAR fell to $45.18, occupancy remained just above 50 percent, and profit was lower than last year.

Photo by Ana Lanza on Unsplash