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NORTH BETHESDA - Choice Hotels International, Inc. (NYSE:CHH), a hospitality giant with a market capitalization of $5.76 billion and impressive gross profit margins of 89.36%, has acquired the remaining 50% stake in Choice Hotels Canada from joint venture partner InnVest Hotels, the company announced Wednesday. According to InvestingPro data, the company’s strong financial health and consistent dividend payments for 22 consecutive years demonstrate its commitment to sustainable growth.
The $112 million transaction, completed in July, transitions the company from a master franchising model to a direct franchising approach in Canada. The acquisition will allow Choice to expand its Canadian operations from 8 hotel brands to its full portfolio of 22 brands. Based on InvestingPro’s Fair Value analysis, Choice Hotels is currently trading near its Fair Value, suggesting this strategic move is well-timed.
"This milestone reflects our confidence in the Canadian market and the exceptional capabilities and legacy of success of our local team," said Patrick Pacious, President & CEO of Choice Hotels International, in a press release statement.
The company expects the Canadian business to generate approximately $23 million in fee revenue and $18 million in EBITDA for full-year 2025. This projection adds to Choice Hotels’ already robust financial performance, with the company generating $533.17 million in EBITDA over the last twelve months. For deeper insights into Choice Hotels’ financial metrics and growth potential, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US equities.
As of June 30, Choice Hotels’ Canadian portfolio included 350 hotels with 30,000 rooms and more than 2,500 rooms in development, including its first Cambria Hotel, four Radisson hotels, and over 20 Comfort, Quality, and Ascend Collection properties.
Brian Leon, CEO of Choice Hotels Canada, will continue to lead Canadian operations. InnVest Hotels, while selling its stake in the joint venture, remains the largest franchisee of Choice Hotels in Canada, operating 50 Comfort hotels.
The acquisition comes amid Choice Hotels’ broader international expansion efforts. In the second quarter of 2025, the company grew its international rooms portfolio by 5% year-over-year to over 140,000 rooms. Recent expansion initiatives include extending agreements in Brazil, nearly tripling room count in France, and signing strategic agreements expected to add approximately 19,500 rooms in China. With annual revenue of $797.66 million and analysts projecting continued profitability, the company appears well-positioned to execute its growth strategy.
In other recent news, Choice Hotels International Inc. reported its first-quarter 2025 financial results, showing an adjusted earnings per share (EPS) of $1.34, which fell short of the forecasted $1.38. The company’s revenue for the quarter was $333 million, missing the anticipated $348.15 million. In related developments, shareholders approved the 2025 Long-Term Incentive Plan (LTIP), which includes provisions for stock options and awards. UBS lowered its price target for Choice Hotels from $160.00 to $149.00, maintaining a Neutral rating, due to concerns about domestic revenue per available room (RevPAR) performance for the rest of 2025. JPMorgan initiated coverage on Choice Hotels with an underweight rating and a price target of $124.00, citing a modest growth outlook and projecting adjusted EBITDA to grow in the low-single-digit range through 2027. These developments reflect the challenges and strategic moves facing Choice Hotels in the current market environment.
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