PARSIPPANY, N.J., February 12, 2025 – Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months and year ended December 31, 2024. Highlights include:
Global RevPAR grew 5% compared to fourth quarter 2023 in constant currency, a 400 basis point improvement sequentially; full-year global RevPAR grew 2% year-over-year in constant currency.
U.S. RevPAR grew 5% compared to fourth quarter 2023, a 600 basis point improvement sequentially; full-year U.S. RevPAR was flat.
System-wide rooms grew 4% year-over-year.
Opened a record 68,700 rooms globally, representing 4% year-over-year growth, including nearly 28,000 in the U.S., which also grew 4% year-over-year.
Global retention rate reaches record level at 95.7%.
Development pipeline grew 2% sequentially and 5% year-over-year to a record 252,000 rooms.
Fourth quarter diluted earnings per share increased 80% to $1.08 and adjusted diluted EPS grew 14% to $1.04, or approximately 18% on a comparable basis; full-year 2024 diluted earnings per share increased 6% to $3.61 and adjusted diluted EPS grew 8% to $4.33, or approximately 10% on a comparable basis.
Fourth quarter net income increased 70% to $85 million and adjusted net income increased 9% to $82 million, or approximately 13% on a comparable basis; full-year 2024 net income was $289 million, or flat year-over-year, and adjusted net income increased 2% to $347 million, or approximately 4% on a comparable basis.
Fourth quarter adjusted EBITDA increased 9% to $168 million, or approximately 12% on a comparable basis; full-year 2024 adjusted EBITDA increased 5% to $694 million, or approximately 7% on a comparable basis.
Returned $430 million to shareholders for the full-year through $308 million of share repurchases and quarterly cash dividends of $0.38 per share.
Board of Directors recently authorized an 8% increase in the quarterly cash dividend to $0.41 per share beginning with the dividend expected to be declared in the first quarter 2025.
“We’re proud to report a very strong finish to 2024 with net rooms growth of 4% and comparable adjusted EBITDA growth of 7%. Our team’s focus on expanding into higher FeePAR markets, growing our extended-stay footprint and unlocking new ancillary revenue streams underscore the diverse growth opportunities inherent in our asset-light, resilient business model,” said Geoff Ballotti, president and chief executive officer. “What excites us most about our future is the developer interest in, and demand for, our brands both here and overseas, reflected in a pipeline that grew another 5% to a record quarter-of-a-million rooms that will open in the coming years with significant FeePAR premiums compared to our existing system. This, when coupled with improving customer demand we’re seeing across both our leisure and infrastructure segments, lays a solid foundation for sustained momentum and meaningful value creation for our shareholders, guests, franchisees and team members for many years to come.”
System Size and Development
The Company’s global system grew 4%. Importantly, these results included 4% growth in the higher RevPAR midscale and above segments in the U.S. as well as strong growth in the Company’s higher RevPAR EMEA and Latin America regions, which grew a combined 7%. The Company also increased its retention rate by another 10 basis points year-over-year, ending the year at a record 95.7%.
On December 31, 2024, the Company’s global development pipeline consisted of approximately 2,100 hotels and 252,000 rooms, representing another record-high level and a 5% year-over-year increase. Key highlights include:
7% growth in the U.S. and 4% internationally
18th consecutive quarter of sequential pipeline growth
Approximately 70% of the pipeline is in the midscale and above segments, which grew 5% year-over-year
Approximately 17% of the pipeline is in the extended stay segment
Approximately 58% of the pipeline is international
Approximately 78% of the pipeline is new construction and approximately 35% of these projects have broken ground
RevPAR
Fourth quarter global RevPAR increased 5% in constant currency compared to 2023, reflecting 5% growth in the U.S., which accelerated throughout the quarter, and 6% growth internationally. For the full year, global RevPAR was flat compared to 2023 on a reported basis, in line with the Company’s outlook, and grew 2% in constant currency reflecting flat growth in the U.S. and 8% growth internationally.
In the U.S., fourth quarter results included 140 basis points of favorable hurricane impacts; excluding which, RevPAR grew 4% year-over-year reflecting strength in both weekday business bookings and weekend leisure demand. Overall, U.S. RevPAR improved 620 basis points sequentially from third quarter, or 480 basis points excluding hurricane impacts.
Internationally, RevPAR strength was driven by ADR growth of 6% in constant currency, while occupancy remained flat. The Company’s EMEA and Latin America regions saw the largest increases year-over-year in the fourth quarter, collectively growing 15%. RevPAR for the Company’s China region declined 11% in the fourth quarter, driven by a 10% decrease in ADR.
Operating Results
Fourth Quarter
Fee-related and other revenues grew 7% to $341 million compared to $320 million in fourth quarter 2023, which reflects higher royalties and franchise fees.
Net income grew 70% to $85 million compared to $50 million in fourth quarter 2023, reflecting higher adjusted EBITDA, as well as a lower effective tax rate and lower foreign currency impact for highly inflationary countries, which were partially offset by higher interest expense.
Adjusted EBITDA grew 9% to $168 million compared to $154million in fourth quarter 2023. This increase included a $4 million unfavorable impact from expected marketing fund variability, excluding which adjusted EBITDA grew 12% on a comparable basis, primarily reflecting higher royalties and franchise fees and margin expansion.
Diluted earnings per share grew 80% to $1.08 compared to $0.60 in fourth quarter 2023, which primarily reflects higher net income and the benefit of a lower share count due to share repurchase activity.
Adjusted diluted EPS grew 14% to $1.04 compared to $0.91 in fourth quarter 2023. This increase included an unfavorable impact of $0.04 per share related to expected marketing fund variability (after estimated taxes). On a comparable basis, adjusted diluted EPS increased approximately 18% year-over-year reflecting comparable adjusted EBITDA growth and the benefit of share repurchase activity, partially offset by higher interest expense.
During fourth quarter 2024, the Company’s marketing fund revenues exceeded expenses by $5 million; while in fourth quarter 2023, the Company’s marketing fund revenues exceeded expenses by $9 million, resulting in $4 million of marketing fund variability.
Full Year
Fee-related and other revenues grew 1% to $1.40 billion compared to $1.38 billion in full-year 2023, which included $18 million of pass-through revenues associated with the Company’s 2023 global franchisee conference, absent which, fee-related and other revenue increased 3%. This growth primarily reflects higher royalties and franchise fees and ancillary revenues.
The Company reported net income of $289 million, consistent with 2023, as higher adjusted EBITDA was offset by higher transaction-related expenses in connection with defending an unsuccessful hostile takeover attempt. Other items include higher interest expense, restructuring costs and an impairment charge, which were offset by a lower effective tax rate, the absence of foreign currency impacts from highly inflationary countries and a benefit from the reversal of a spin-off related matter.
Adjusted EBITDA grew 5% to $694 million compared to $659million in full-year 2023. This increase included a $10 million unfavorable impact, as expected, from marketing fund variability, excluding which adjusted EBITDA grew 7% on a comparable basis, primarily reflecting higher royalties and franchise fees, increased ancillary revenues and margin expansion.
Diluted earnings per share grew 6% to $3.61 compared to $3.41 in full-year 2023, which primarily reflects the benefit of a lower share count due to share repurchase activity.
Adjusted diluted EPS grew 8% to $4.33 compared to $4.01 in full-year 2023. This increase included an unfavorable impact of $0.09 per share, as expected, related to marketing fund variability (after estimated taxes). On a comparable basis, adjusted diluted EPS increased approximately 10% year-over-year reflecting comparable adjusted EBITDA growth and the benefit of share repurchase activity, partially offset by higher interest expense.
During full-year 2024, the Company’s marketing fund expenses exceeded revenues by $1 million; while in 2023, the Company’s marketing fund revenues exceeded expenses by $9 million, resulting in $10 million of marketing fund variability.
Full reconciliations of GAAP results to the Company’s non-GAAP adjusted measures for all reported periods appear in the tables to this press release.
Balance Sheet and Liquidity
The Company generated $290 million of net cash provided by operating activities and $397 million of adjusted free cash flow in full-year 2024. The Company ended the quarter with a cash balance of $103 million and approximately $765 million in total liquidity.
The Company’s net debt leverage ratio was 3.4 times at December 31, 2024, just below the midpoint of the Company’s 3 to 4 times stated target range and in line with expectations.
Share Repurchases and Dividends
During the fourth quarter, the Company repurchased approximately 0.3 million shares of its common stock for $23 million. For the full-year 2024, the Company repurchased approximately 4.1 million shares of its common stock for $308 million.
The Company paid common stock dividends of $30 million, or $0.38 per share, during the fourth quarter 2024 for a total of $122 million, or $1.52 per share, for the full-year 2024.
For the full-year 2024, the Company returned $430 million to shareholders through share repurchases and quarterly cash dividends.
The Company’s Board of Directors authorized an 8% increase in the quarterly cash dividend to $0.41 per share, beginning with the dividend expected to be declared in first quarter 2025.
Outlook
The Company provided the following outlook for full-year 2025:
The Company continues to expect marketing fund revenues to equal expenses during full-year 2025 though seasonality of spend will affect the quarterly comparisons throughout the year.
More detailed projections are available in Table 8 of this press release. The Company is providing certain financial metrics only on a non-GAAP basis because, without unreasonable efforts, it is unable to predict with reasonable certainty the occurrence or amount of all of the adjustments or other potential adjustments that may arise in the future during the forward-looking period, which can be dependent on future events that may not be reliably predicted. Based on past reported results, where one or more of these items have been applicable, such excluded items could be material, individually or in the aggregate, to the reported results.
Conference Call Information
Wyndham Hotels will hold a conference call with investors to discuss the Company’s results and outlook on Thursday, February 13, 2025 at 8:30 a.m. ET. Listeners can access the webcast live through the Company’s website at https://investor.wyndhamhotels.com. The conference call may also be accessed by dialing 800 225-9448 and providing the passcode “Wyndham”. Listeners are urged to call at least five minutes prior to the scheduled start time. An archive of this webcast will be available on the website beginning at noon ET on February 13, 2025. A telephone replay will be available for approximately ten days beginning at noon ET on February 13, 2025 at 800 839-5127.
Presentation of Financial Information
Financial information discussed in this press release includes non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported GAAP results and are intended to illustrate what management believes are relevant period-over-period comparisons and are helpful to investors as an additional tool for further understanding and assessing the Company’s ongoing operating performance. The Company uses these measures internally to assess its operating performance, both absolutely and in comparison to other companies, and to make day to day operating decisions, including in the evaluation of selected compensation decisions. Exclusion of items in the Company’s non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring. Full reconciliations of GAAP results to the comparable non-GAAP measures for the reported periods appear in the financial tables section of this press release.
About Wyndham Hotels & Resorts
Wyndham Hotels & Resorts (NYSE: WH) is the world’s largest hotel franchising company by the number of franchised properties, with approximately 9,300 hotels across over 95 countries on six continents. Through its network of approximately 903,000 rooms appealing to the everyday traveler, Wyndham commands a leading presence in the economy and midscale segments of the lodging industry. The Company operates a portfolio of 25 hotel brands, including Super 8®, Days Inn®, Ramada®, Microtel®, La Quinta®, Baymont®, Wingate®, AmericInn®, ECHO Suites®, Registry Collection Hotels®, Trademark Collection® and Wyndham®. The Company’s award-winning Wyndham Rewards loyalty program offers approximately 114 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally. For more information, visit https://investor.wyndhamhotels.com. The Company may use its website and social media channels as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Disclosures of this nature will be included on the Company’s website in the Investors section, which can currently be accessed at https://investor.wyndhamhotels.com or on the Company’s social media channels, including the Company’s LinkedIn account which can currently be accessed at https://www.linkedin.com/company/wyndhamhotels. Accordingly, investors should monitor this section of the Company’s website and the Company’s social media channels in addition to following the Company’s press releases, filings submitted with the Securities and Exchange Commission and any public conference calls or webcasts.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the federal securities laws, including statements related to Wyndham’s current views and expectations with respect to its future performance and operations, including revenues, earnings, cash flow and other financial and operating measures, share repurchases and dividends and restructuring charges. Forward-looking statements are any statements other than statements of historical fact, including those that convey management’s expectations as to the future based on plans, estimates and projections at the time Wyndham makes the statements and may be identified by words such as “will,” “expect,” “believe,” “plan,” “anticipate,” “predict,” “intend,” “goal,” “future,” “forward,” “remain,” “confident,” “outlook,” “guidance,” “target,” “objective,” “estimate,” “projection” and similar words or expressions, including the negative version of such words and expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Wyndham to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, general economic conditions, including inflation, higher interest rates and potential recessionary pressures; the performance of the financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising business; Wyndham’s relationships with franchisees; the impact of war, terrorist activity, political instability or political strife, including the ongoing conflicts between Russia and Ukraine and conflicts in the Middle East, respectively; global or regional health crises or pandemics including the resulting impact on Wyndham’s business, operations, financial results, cash flows and liquidity, as well as the impact on its franchisees, guests and team members, the hospitality industry and overall demand for and restrictions on travel; Wyndham’s ability to satisfy obligations and agreements under its outstanding indebtedness, including the payment of principal and interest and compliance with the covenants thereunder; risks related to Wyndham’s ability to obtain financing and the terms of such financing, including access to liquidity and capital; and Wyndham’s ability to make or pay, plans for and the timing and amount of any future share repurchases and/or dividends, as well as the risks described in Wyndham’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and any subsequent reports filed with the Securities and Exchange Commission. These risks and uncertainties are not the only ones Wyndham may face and additional risks may arise or become material in the future. Wyndham undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, subsequent events or otherwise, except as required by law.
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