Artificial Intelligence
AI winners may shift from chipmakers to users
The next phase of the AI trade may reward companies that use AI to cut costs and lift profits rather than the chipmakers and infrastructure builders that led the first leg. Travel platforms Airbnb, Booking Holdings, and Expedia have surged nearly 40% at the median since May 19, while hotels are roughly flat, as AI begins to show up in measurable business results. Airbnb says nearly 45% of customer issues that begin with its AI assistant are resolved without a human, and customer support cost per booking has fallen roughly 16% from a year ago. Booking reports customer service cost per booking falling at a double-digit rate with AI investments already producing a positive return. Choice Hotels and Wyndham are also reporting hard AI gains, including a 360-basis-point lift in group-request conversion and a more than 500-basis-point boost in direct contribution at participating hotels, yet both stocks are down since May 19 and trade around 15 times forward earnings with analyst estimates down about 7% over the past three months.
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Choice Hotels Raises Full-Year Guidance After Strong Q2
Choice Hotels International reported second-quarter adjusted EBITDA of $175 million, up 6% year over year, and raised its full-year guidance for adjusted EBITDA, RevPAR, and net rooms growth. Adjusted diluted EPS rose 5% to $2.02, while total revenue was $441 million, including $163 million in reimbursable revenue from franchised and managed properties. U.S. RevPAR grew 1.3%, driven by a 0.7% increase in average daily rate and a 40 basis point increase in occupancy, with the FIFA World Cup contributing approximately 60 basis points. Global net rooms grew 2.6% year over year, supported by 3.6% growth in higher revenue extended stay, midscale, and upscale brands, and U.S. room openings increased 27% to 6,400 rooms, the highest second-quarter level since 2019. The company now expects full-year adjusted EBITDA of $635 million to $650 million, U.S. RevPAR growth of 0% to 1.25%, global RevPAR growth of 0% to 1%, and global net rooms growth of approximately 1.5%, up from a prior expectation of approximately 1%. Adjusted diluted EPS guidance was updated to $6.86 to $7.10, reflecting higher expected interest expense and a 26% effective tax rate. Choice also said it expects the first disposition of its wholly-owned hotels to occur in the first half of 2027, subject to market conditions, as it transitions to a pure-play asset-light model.
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Choice Hotels International files shelf registration for potential stock and debt offerings
Choice Hotels International filed a universal shelf registration statement covering potential offerings of common stock, preferred stock, and debt securities. The filing allows the company to issue these securities over time as needed, subject to market conditions and corporate decisions, providing flexibility for possible capital raising including acquisitions, refinancing, or balance sheet support. In Q2 2026, revenue was US$440.76 million while net income was US$64.34 million, down from US$81.73 million a year earlier, and management lowered full-year 2026 net income guidance to a range of US$230 million to US$241 million with diluted EPS of US$5.07 to US$5.31. The company has a long history of returning capital, having spent US$2,194.11 million to repurchase 33,475,984 shares since 2004, including 468,759 shares for US$50.45 million in the latest quarter. The shelf registration does not signal an imminent equity issue but widens the range of capital allocation tools available as earnings face pressure from higher marketing, technology, interest, and tax expenses.
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Choice Hotels Stock Up 15.9% in Six Months, but Analysts Warn of Headwinds
Choice Hotels shares have risen 15.9% over the past six months to $111.19, outperforming the S&P 500 by 9.7 percentage points. Despite the rally, analysts at StockStory caution that the company faces challenges including flat revenue per available room of $47.45 in the latest quarter, a mediocre free cash flow margin averaging 8.8% over two years, and declining returns on invested capital. The stock trades at a forward price-to-earnings ratio of 15.4, which the analysts view as reasonable but not compelling, and they recommend looking at other opportunities.
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Boot Barn Shows Promise While Flowers Foods and Choice Hotels Face Headwinds
Boot Barn is highlighted as a small-cap stock with promising prospects, while Flowers Foods and Choice Hotels are flagged as facing headwinds. Boot Barn, a western-inspired apparel and footwear retailer with a market cap of $5.31 billion, is expanding its store base and seeing same-store sales growth average 6.3% over the past two years, with its free cash flow margin jumping by 5.6 percentage points last year. In contrast, Flowers Foods, a $1.65 billion packaged bakery company, has experienced shrinking unit sales and a forecasted revenue decline of 1.9%, with earnings per share falling 21.7% annually over three years. Choice Hotels, a $4.84 billion hotel franchisor, faces softer revenue per room and a weak free cash flow margin of 8.8%, limiting its ability to invest or reward shareholders.
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Choice Hotels Launches Detours Worth Taking Guide for Summer Road Trips
Choice Hotels International has launched its Great American Detour campaign, featuring an inaugural Detours Worth Taking guide that highlights hidden gems and local discoveries paired with nearby Choice Hotels. The guide spotlights destinations such as Buffalo, New York; Plymouth, Massachusetts; and Olympic National Park, Washington, among others, with additional lists to be released throughout the summer. The company will also offer limited-edition Summer Detour Kits and a Check into More Tour celebrating Route 66's centennial, engaging road trippers with games and giveaways. Choice Hotels notes that more than 4,000 of its properties are within a mile of an interstate exit, supporting the 80 percent of travelers open to visiting destinations beyond major gateway cities.
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Choice Hotels Interim CEO Dominic Dragisich Sold $2.6 Million in Shares Days After Taking the Top Job
Choice Hotels Interim CEO Dominic Dragisich sold 22,621 common shares in an open-market transaction on May 26, 2026, for approximately $2.58 million, just six days after being appointed to the role. The sale was executed under a pre-arranged Rule 10b5-1 trading plan adopted in February 2026, before Dragisich became interim CEO, and followed the exercise of 12,796 stock options. His direct holdings declined from 104,000 to 81,607 shares, representing 0.18% of outstanding shares. The transaction size exceeded all prior sales by Dragisich since July 2023 except for two earlier dispositions. Choice Hotels reported record first-quarter revenue of $340.6 million but saw net income drop to $20.3 million from $44.5 million a year earlier.
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