Choice Hotels Narrows RevPAR Gap in Budget Segment While Upscale Brands Lag
Choice Hotels’ budget hotels beat the U.S. industry RevPAR growth rate, but its higher‑priced brands still fall short.
Choice Hotels showed measurable progress in its budget segment, yet its upscale brands continue to trail industry averages.
U.S. revenue per available room (RevPAR) increased 3.8% in the latest quarter, roughly 1.5 percentage points higher than analysts’ forecasts on Wall Street. CEO Dominic Dragisich noted on the earnings call that RevPAR for October was about 7%.
Data from CoStar, cited by Truist Securities, indicated that Choice’s economy‑level hotels outperformed the broader market, posting a 3.5% RevPAR gain compared with an approximate 2.5% rise for the industry.
Despite the improvement, the company still lagged in every price tier where it competes, from economy through upscale, according to the same CoStar data. Dragisich acknowledged the gap narrowed but emphasized that the upscale segment’s growth remained slower than the industry benchmark.
The mixed results highlight a divergence within Choice Hotels’ portfolio: strong momentum in low‑cost properties contrasted with continued challenges among its higher‑priced brands.
Closing the performance gap across all tiers will be crucial for Choice Hotels to sustain its overall market standing.
