Choice Hotels International Inc CHH

Choice's Hotel Portfolio Exposure to US Interstates Stands to Benefit From Infrastructure Spending

With about 90% of Choice Hotels' US portfolio within one mile of an interstate, the company is positioned to benefit from US AI, onshoring, and infrastructure activity. Also, 2026 demand should be helped by easier comparisons (2025's government shutdown and the April 2 tariffs) and the tailwinds of this year's FIFA World Cup and US economic stimulus. Long term, we expect Choice to gradually expand room share in the hotel industry in the next decade, with its keys increasing more than 2% on average annually, above the 1%-2% supply lift we estimate for the US industry over that time. Room growth points to higher quality units, as Choice's pipeline is expected to generate revenue that is on average 70% above its existing base, and the company removed rooms in 2025 that produced 20% less revenue than the consolidated average. The expansion of its higher-scale and extended-stay portfolio stands to buoy the company’s brand intangible asset and switching cost advantages. Specifically, growth is supported by a rejuvenated Comfort brand (27% of 2025 total global rooms), the newer Everhome concept and extended-stay brand WoodSpring (6% combined), the acquisition of the higher-scale Radisson brand in 2022, new Canada and China franchise relationships in 2025, and a solid loyalty program with 74 million members as of Dec. 31, 2025, up from 44 million in 2019. Choice holds a 1.6% global hotel revenue share, ranking it eighth in the industry, and 5.6% US share, ranking it fourth in the industry.