Less than a month after Choice Hotels International reported its first-quarter numbers for the year, then-CEO Patrick Pacious stepped down and Dominic Dragisich, previously the company's chief growth & strategy officer (and CFO before that), stepped up as interim CEO. Announcing the company’s Q2 numbers, Dragisich outlined his goals for the company in his new role, with a focus on execution. “We have a meaningful opportunity to improve, and my job is to close the gap between where we are today and where I believe this business can perform,” he said.
Since taking on the new role, Dragisich said that he has spent most of his time listening to franchisees and teams across the company. “Those conversations have reinforced three priorities for me: staying close to our franchisees and the guests they serve, moving with greater urgency across the business and being disciplined about where we invest our time and capital.”
Moreover, he said, his years in the industry has given him “firsthand insight” into the company’s strengths and where better execution will make the biggest difference. “What's needed now is greater speed, discipline, and accountability to deliver stronger results for our franchisees and shareholders.”
Revenue
U.S. revenue per available room increased 1.3 percent in the second quarter, compared to the same period of 2025, driven by a 0.7 percent increase in rate and a 40-basis-point increase in occupancy, primarily reflecting strength in the East North Central, Middle Atlantic and West South Central regions.
International RevPAR increased 2.1 percent on a currency-neutral basis in the second quarter, compared to the same period of 2025, led by the Caribbean and Latin America and further supported by continued strength in Canada and Asia Pacific.
System Size
In a bid to make the company asset-lighter, Choice’s capital outlays for hotel development declined 80 percent year over year in the first half of 2026. At the same time, Dragisich told investors the company was “maintaining flexibility to make targeted investments in attractive franchise-growth opportunities.”
Global room openings increased 16 percent year over year as the company opened approximately 8,300 global rooms—a seven-year high. At the same time, exits declined 50 percent to their lowest level in six years, following Q1’s lowest franchise termination rate in 10 years. “Importantly, about 75 percent of the U.S. agreements we've signed year to date are expected to open this year, providing strong visibility into near-term growth,” Dragisich said.
Extended-stay remained a core growth engine, supported by strong unit economics and continued developer demand, with U.S. extended stay net rooms growing 13 percent year over year, marking the 12th consecutive quarter of double-digit growth.
International net rooms grew 12.5 percent year over year, led by double-digit growth in Asia Pacific and EMEA, with continued growth in Canada.
- Global franchise agreements awarded increased 20 percent in the second quarter compared to the same period of 2025, representing 11,200 new global rooms for development and reflecting continued demand for conversion-led brands.
- The company's global pipeline totaled approximately 77,300 rooms as of June 30, 2026, with 96 percent concentrated in extended stay, midscale, and upscale brands. The pipeline included:
- 71,100 U.S. rooms and 6,200 international rooms.
- 29,900 extended stay rooms, representing 39 percent of the total pipeline.
- 26,400 conversion rooms and 50,900 new-construction rooms.
During the quarter, U.S. conversion franchise agreements increased 82 percent year over year while the conversion pipeline expanded 6 percent sequentially. “We also shortened the average time from signing to opening for conversions by nearly one month,” CFO Scott Oaksmith said. “The important point is that the key stages of our U.S. development funnel are moving in the right direction.” Dragisich, in turn, said the “conversion-led development model” supports the company through “faster openings, lower owner-investment requirements and earlier royalty generation.”
Taken together, Oaksmith said, “these trends reinforce our confidence that U.S. net rooms growth will return to positive territory in 2026.”
Next Steps and Guidance
Oaksmith noted that Choice’s wholly owned hotels were originally developed to establish and scale new brands or were acquired as part of the Radisson Americas deal. Today, the company owns 19 operating hotels and has one hotel under construction. “With no additional wholly owned hotels in our pipeline, we have substantially completed the capital-intensive phase of building them,” he said, noting the 80 percent decline in capital outlays for hotel development. “As a result, future growth will be driven through our franchise model rather than hotel ownership.” The company is now “well positioned to monetize those assets while continuing to grow through our franchise model” by recycling capital from its owned-hotel portfolio, he continued. “We currently expect the first disposition to occur in the first half of 2027, subject to market conditions.”
Updating its guidance for the rest of the year, Oaksmith said that Choice’s leaders now expect full-year 2026 U.S. RevPAR growth of 0 percent to 1.25 percent, and global RevPAR growth of 0 percent to 1 percent, reflecting stronger underlying operating trends and continued commercial execution. “Consistent with that outlook, U.S. RevPAR trends remain encouraging, and we currently expect third-quarter U.S. RevPAR growth to exceed second-quarter levels before moderating in the fourth quarter,” he said.