Grows Development Pipeline by 8% and System Size by 4%
Board Increases Share Repurchase Authorization by $400 Million
PARSIPPANY, N.J. (April 24, 2024) – Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months ended March 31, 2024. Highlights include:
• Global RevPAR grew 1% in constant currency and ancillary revenues grew 8% compared to first quarter 2023.
• System-wide rooms grew 4% year-over-year.
• Opened over 13,000 rooms, representing a year-over-year increase of 27%.
• Awarded 171 development contracts, an increase of 8% year-over-year.
• Development pipeline grew 1% sequentially and 8% year-over-year to a record 243,000 rooms.
• Entered upscale extended stay segment through a strategic relationship with WaterWalk Extended Stay by Wyndham.
• Net cash provided by operating activities of $76 million and adjusted free cash flow of $102 million.
• Returned $89 million to shareholders through $57 million of share repurchases and quarterly cash dividends of $0.38 per share.
“We’re thrilled to announce another strong quarter of progress in our executions, openings, franchisee retention and net room growth around the world,” said Geoff Ballotti, president and chief executive officer. “Increased interest from hotel owners in our brands has propelled our development pipeline to a record 243,000 rooms, marking an impressive 8% increase. Our strong balance sheet and cash flow generation capabilities provide significant opportunity to continue to enhance returns to our shareholders over both the short and long-term, as evidenced by our Board of Directors’ approval of a $400 million increase in our share repurchase authorization.”
System Size and Development
The Company’s global system grew 4%, reflecting 1% growth in the U.S. and 8% internationally. As expected, these increases included strong growth in both the higher RevPAR midscale and above segments in the U.S. and the direct franchising business in China, which grew 3% and 13%, respectively. The Company remains solidly on track to achieve its net room growth outlook of 3 to 4% for the full year 2024, including an increase in its retention rate compared to 2023.
On March 31, 2024, the Company’s global development pipeline consisted of nearly 2,000 hotels and approximately 243,000 rooms, representing another record-high level and an 8% year-over-year increase. Key highlights include:
• 15th consecutive quarter of sequential pipeline growth
• 5% growth in the U.S. and 9% internationally
• Approximately 69% of the pipeline is in the midscale and above segments, which grew 4% year-over-year
• Approximately 58% of the pipeline is international
• Approximately 79% of the pipeline is new construction, of which approximately 35% has broken ground
RevPAR
First quarter global RevPAR increased 1% in constant currency compared to 2023, reflecting a 5% decline in the U.S. and growth of 14% internationally.
In the U.S., the Company lapped the most difficult year-over-year comparisons during the first quarter, resulting in a decline of 440 basis points in occupancy and 50 basis points in ADR. Notably, the Company saw improving trends in March with RevPAR improving 240 basis points compared to February. This improvement marks a significant pivot toward growth, preceding the peak leisure travel season.
Internationally, the Company generated year-over-year RevPAR growth for the first quarter in all regions primarily driven by continued pricing power, with ADR up 12% and occupancy up 2%. The largest contributors to first quarter growth were our Latin America and EMEA regions.
First Quarter Operating Results
• Fee-related and other revenues were $304 million compared to $308 million in first quarter 2023, reflecting a decline of $5 million in royalty and franchise fees, partially offset by an 8% increase in ancillary revenue streams. The decline in royalties and franchise fees was primarily driven by the decline in U.S. RevPAR and the lapping of our highest quarter of other franchise fees, partially offset by global net room growth and higher international RevPAR.
• The Company generated net income of $16 million compared to $67 million in first quarter 2023. The decrease primarily reflects transaction-related expenses resulting from the unsuccessful hostile takeover attempt by Choice Hotels, an impairment charge primarily related to development advance notes and higher interest expense.
• Adjusted EBITDA was $141 million compared to $147 million in first quarter 2023. This decrease included a $10 million unfavorable impact from marketing fund variability, excluding which adjusted EBITDA grew 3% primarily reflecting favorable timing of expenses to better match revenue seasonality.
• Diluted earnings per share was $0.19 compared to $0.77 in first quarter 2023. This decrease reflects lower net income, partially offset by the benefit of a lower share count due to share repurchase activity.
• Adjusted diluted EPS was $0.78 compared to $0.86 in first quarter 2023. This decrease included $0.09 per share related to expected marketing fund variability (after estimated taxes). On a comparable basis, adjusted diluted EPS increased 1% year-over-year as comparable adjusted EBITDA growth and the benefit of share repurchase activity were largely offset by higher interest expense.
• During first quarter 2024, the Company’s marketing fund expenses exceeded revenues by $14 million, in line with expectations; while in first quarter 2023, the Company’s marketing fund expenses exceeded revenues by $4 million, resulting in $10 million of marketing fund variability. The Company continues to expect marketing fund revenues to equal expenses during full-year 2024.
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 $76 million of net cash provided by operating activities and adjusted free cash flow of $102 million in first quarter 2024. The Company ended the quarter with a cash balance of $50 million and over $580 million in total liquidity.
The Company’s net debt leverage ratio was 3.4 times at March 31, 2024, within the lower half of the Company’s 3 to 4 times stated target range.
During the first quarter of 2024, the Company executed $275 million of new forward starting interest rate swaps on its Term Loan B Facility, which will begin in fourth quarter 2024 and expire in 2027. The fixed rate of the new swaps is 3.4%. As a result, nearly all the Company’s Term Loan B Facility now has a fixed rate through the end of 2027.
Share Repurchases and Dividends During the first quarter, the Company repurchased approximately 719,000 shares of its common stock for $57 million. The Company’s Board of Directors recently increased the Company’s share repurchase authorization by $400 million.
The Company paid common stock dividends of $32 million, or $0.38 per share, during first quarter 2024.
Full-Year 2024 Outlook The Company is updating its outlook as follows to reflect the impact of first quarter share repurchase activity:
Year-over-year growth rates for adjusted EBITDA, adjusted net income and adjusted diluted EPS are not comparable due to full-year 2023 marketing fund revenues exceeding expenses by $9 million, which substantially completed the recovery of the $49 million support the Company provided to its owners during COVID. The Company continues to expect marketing fund revenues to equal expenses during full-year 2024 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, April 25, 2024 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 April 25, 2024. A telephone replay will be available for approximately ten days beginning at noon ET on April 25, 2024 at 800 839-8531.
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 properties, with approximately 9,200 hotels across over 95 countries on six continents. Through its network of over 876,000 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®, Hawthorn Suites®, Trademark Collection® and Wyndham®. The Company’s award-winning Wyndham Rewards loyalty program offers approximately 108 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. All statements other than historical facts are forward-looking statements. Forward-looking statements include 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,” “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; global or regional health crises or pandemics (such as the COVID19 pandemic) 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; 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 between Israel and Hamas, respectively; 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.
Industry veteran to lead Wyndham’s newly unified, technology-driven commercial organization
PARSIPPANY, N.J. (April 9, 2024) – Wyndham Hotels & Resorts (NYSE: WH) appointed Scott Strickland Chief Commercial Officer reporting to the Company’s President and Chief Executive Officer, Geoff Ballotti. In this newly created leadership role, Strickland and his team will continue delivering the best value and experiences to Wyndham’s owners and guests across its 25 brands through a united commercial organization.
“Over 7 years ago we recruited Scott from the private equity world where he led the information systems, eCommerce and business transformation teams at many great companies including D+M Holdings, Nissan, and Black & Decker. Under Scott’s thoughtful and strategic guidance – including managing and deploying our $275M investment in best-in-class technology, digital, and franchisee opt-in services over the past five years – Wyndham has taken a leadership position and delivered multiple industry innovations for its owners,” said Ballotti. “In this new role, Scott and his expanded team will continue to build our brands, drive direct revenue, and advance our value proposition through a newly combined, tech-forward commercial organization.”
As Chief Commercial Officer, Strickland continues his responsibilities for enhancing and implementing Wyndham’s technology and distribution strategy and will add oversight of global sales; revenue generation; marketing; communications and the award-winning loyalty program, Wyndham Rewards.
“Combining this group of cross-functional leaders enables us to continue delivering owner-first tools, technology and marketing innovations,” said Strickland. “These tools allow our franchisees to run their hotels more efficiently and profitably today and into the future. Integrating best-in-class technology, marketing, and sales teams into a single organization enhances the Wyndham Advantage.”
With the creation of this new organization, Lisa Checchio, EVP and Chief Marketing Officer, will depart Wyndham Hotels & Resorts. During her tenure Lisa launched the Company’s “by Wyndham” endorsement strategy, played a large role in the introduction of new hotel brands, and grew Wyndham Rewards – the award-winning loyalty program, which doubled in size in five years and has surpassed 100 million members. Lisa also led the creation of the industry’s first-ever program dedicated to women’s advancement in hotel ownership, Women Own the Room, which recently celebrated 15 open hotels, more than 50 signings, and a community of more than 550 members.
“Lisa’s leadership and expertise spanning marketing, consumer engagement, digital commerce, global sales, and more has helped us better fulfill Wyndham’s mission to make hotel travel possible for all,” said Ballotti. “We are grateful for her significant contributions to Wyndham and the broader hotel industry and will miss her many talents.”
Images associated with the above release can be downloaded here.
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About Wyndham Hotels & Resorts Wyndham Hotels & Resorts (NYSE: WH) is the world’s largest hotel franchising company by the number of properties, with approximately 9,200 hotels across over 95 countries on six continents. Through its network of approximately 872,000 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®, Hawthorn®, Trademark Collection® and Wyndham®. The Company’s award-winning Wyndham Rewards loyalty program offers over 106 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally. For more information, visit www.wyndhamhotels.com.
PARSIPPANY, N.J. (March 11, 2024) – Wyndham Hotels & Resorts (NYSE: WH) (“Wyndham” or the “Company”) today commented on the expiration of Choice Hotels International, Inc.’s (NYSE: CHH) (“Choice”) exchange offer and its decision to withdraw its slate of nominees for election to Wyndham’s Board of Directors at the 2024 Annual Meeting of Shareholders:
“The Wyndham Board is pleased that Choice has ended its hostile pursuit and proxy contest, following the expiration of its unsolicited exchange offer,” said Stephen P. Holmes, Chairman of the Board. “We are confident in Wyndham’s standalone strategy and growth prospects under the leadership of our proven management team. The Board remains committed to acting in the best interests of our shareholders and driving superior long-term value creation.”
Geoff Ballotti, President and Chief Executive Officer, added, “Wyndham is focused on moving ahead with the execution of our strategic plan, building on our success and generating meaningful value. We look forward to doing so without the unnecessary distraction of this situation and disruption to our business. We would like to thank our shareholders and franchisees for their continued support and our team members for their dedication and focus throughout this process.”
About Wyndham Hotels & Resorts Wyndham Hotels & Resorts (NYSE: WH) is the world’s largest hotel franchising company by the number of properties, with approximately 9,200 hotels across over 95 countries on six continents. Through its network of approximately 872,000 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 24 hotel brands, including Super 8®, Days Inn®, Ramada®, Microtel®, La Quinta®, Baymont®, Wingate®, AmericInn®, Hawthorn Suites®, Trademark Collection® and Wyndham®. The Company’s award-winning Wyndham Rewards loyalty program offers over 106 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 as a 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 www.investor.wyndhamhotels.com. Accordingly, investors should monitor this section of the Company’s website in addition to following the Company’s press releases, filings submitted with the Securities and Exchange Commission and any public conference calls or webcasts.
Cautionary Statement on Forward-Looking Statements Certain statements either contained in or incorporated by reference into this communication, other than purely historical information, and assumptions upon which those statements are based, are “forward-looking statements.” Forward-looking statements include 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,” “intend,” “goal,” “future,” “forward,” “remain,” “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 hereof.
Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, factors relating to the expired unsolicited exchange offer by Choice Hotels International, Inc. to acquire all outstanding shares of our common stock and any ongoing cost, loss of time and disruption associated therewith; general economic conditions, including inflation, higher interest rates and potential recessionary pressures; global or regional health crises or pandemics (such as the COVID-19 pandemic) including the resulting impact on the Company’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; the performance of the financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising business; the Company’s relationships with franchisees; the impact of war, terrorist activity, political instability or political strife, including the ongoing conflicts between Russia and Ukraine and between Israel and Hamas; the Company’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 the Company’s ability to obtain financing and the terms of such financing, including access to liquidity and capital; and the Company’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 the Company’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. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, subsequent events or otherwise, except as required by law.
Urges Shareholders to Protect Their Investment and the Future of Wyndham by Supporting Only Wyndham’s Eight Highly-Qualified Director Nominees
Encourages Shareholders to Visit StayWyndham.com for More Information
PARSIPPANY, N.J. (March 11, 2024) – The Board of Directors of Wyndham Hotels & Resorts (NYSE: WH) (“Wyndham” or the “Company”), the world’s largest hotel franchising company with approximately 9,200 hotels spanning more than 95 countries, sent a letter to shareholders urging them to protect their investment and the future of Wyndham by supporting only Wyndham’s eight highly-qualified Director nominees and not the nominees from Choice Hotels International (NYSE: CHH) (“Choice”).
Wyndham has a clear path to deliver shareholder value substantially in excess of Choice’s inadequate and uncertain offer. Wyndham’s Board has evaluated Choice’s proposal carefully and in its entirety. The Board has been explicitly clear that in order to make a proposal viable for shareholders, Choice must adequately address the three key issues Wyndham has repeatedly raised: insufficient valuation, unattractive consideration mix and asymmetrical regulatory risk. Despite the Company’s efforts to engage with Choice, Choice has demonstrated that it is unable, or simply unwilling, to propose a complete offer package addressing these three issues.
Wyndham’s Board believes all eight of its nominees are more qualified with the right mix of skills and highly relevant expertise – including decades of hotel franchising, international business and public company operating experience – to oversee the successful execution of Wyndham’s global strategy and deliver the most value to shareholders. The Board’s Corporate Governance Committee, comprised solely of Independent Directors, conducted interviews with each of Choice’s eight nominees and determined that they lack the skills, expertise and background in key areas critical to Wyndham’s business and have been hand-picked by Choice with the sole objective of selling Wyndham for far less than the Company is worth.
The Company’s definitive proxy materials will be filed and mailed soon, including the WHITE proxy card with instructions for how to vote. Your vote FOR ONLY Wyndham’s eight highly-qualified Director nominees on the WHITE proxy card will be critical for our upcoming 2024 Annual Meeting of Shareholders. Wyndham’s Board also urges shareholders to discard any materials or blue proxy card they may receive from Choice. The letter to shareholders and other important information related to Wyndham’s Annual Meeting can be found at https://www.staywyndham.com.
Deutsche Bank Securities Inc. and PJT Partners are serving as financial advisors and Kirkland & Ellis LLP and Arnold & Porter Kaye Scholer LLP are legal advisors to Wyndham.
About Wyndham Hotels & Resorts Wyndham Hotels & Resorts (NYSE: WH) is the world’s largest hotel franchising company by the number of properties, with approximately 9,200 hotels across over 95 countries on six continents. Through its network of approximately 872,000 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 24 hotel brands, including Super 8®, Days Inn®, Ramada®, Microtel®, La Quinta®, Baymont®, Wingate®, AmericInn®, Hawthorn Suites®, Trademark Collection® and Wyndham®. The Company’s award-winning Wyndham Rewards loyalty program offers over 106 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 as a 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 www.investor.wyndhamhotels.com. Accordingly, investors should monitor this section of the Company’s website in addition to following the Company’s press releases, filings submitted with the Securities and Exchange Commission and any public conference calls or webcasts.
Important Additional Information This press release is not an offer to purchase or a solicitation of an offer to sell any securities or the solicitation of any vote or approval. Wyndham Hotels & Resorts, Inc. (“Wyndham” or the “Company”) has filed with the U.S. Securities and Exchange Commission (the “SEC”) a solicitation/recommendation statement on Schedule 14D-9. The Company has mailed the solicitation/recommendation statement filed by the Company to Company stockholders. COMPANY STOCKHOLDERS ARE ADVISED TO READ THE COMPANY’S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY DECISION WITH RESPECT TO ANY EXCHANGE OFFER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Company stockholders may obtain a copy of the Solicitation/Recommendation Statement on Schedule 14D-9, as well as any other documents filed by the Company in connection with any exchange offer by Choice Hotels International, Inc. or one of its affiliates, free of charge at the SEC’s website at www.sec.gov. In addition, investors and security holders will be able to obtain free copies of these documents from the Company by directing a request to Matt Capuzzi, Senior Vice President, Investor Relations at [email protected] or by calling 973.753.6453.
The Company filed a preliminary proxy statement and accompanying form of WHITE proxy card with the SEC on February 26, 2024 (as amended on March 11, 2024, the “Preliminary Proxy Statement”), with respect to the Company’s 2024 Annual Meeting of Stockholders (the “2024 Annual Meeting”). The Company will file and mail a definitive proxy statement (the “Proxy Statement”) and accompanying WHITE proxy card to stockholders of the Company. The Company’s stockholders are strongly encouraged to read the Proxy Statement (including any amendments or supplements thereto) and the accompanying WHITE proxy card as well as other documents the Company files with the SEC carefully in their entirety because they will contain important information. The Company’s stockholders may obtain copies of the Proxy Statement, any amendments or supplements to the Proxy Statement and other documents filed by the Company with the SEC free of charge at the SEC’s website at www.sec.gov. Copies will also be available free of charge at the Company’s website at https://investor.wyndhamhotels.com.
Certain Information Concerning Participants Wyndham and certain of its directors and executive officers will be participants in the solicitation of proxies from Wyndham stockholders by and on behalf of its Board in connection with the matters to be considered at the 2024 Annual Meeting. Information regarding the Company’s directors and executive officers and their respective interests in the Company by security holdings or otherwise is available in its most recent Annual Report on Form 10-K filed with the SEC on February 15, 2024, and the Preliminary Proxy Statement filed with the SEC on February 26, 2024 (and amended on March 11, 2024). To the extent holdings of the Company’s securities reported in the Preliminary Proxy Statement have changed, such changes have been or will be reflected in the Proxy Statement and on Statements of Change in Ownership on Form 4 filed with the SEC. These documents can be obtained free of charge from the sources indicated above.
Cautionary Statement on Forward-Looking Statements Certain statements either contained in or incorporated by reference into this communication, other than purely historical information, and assumptions upon which those statements are based, are “forward-looking statements.” Forward-looking statements include 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,” “intend,” “goal,” “future,” “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 hereof.
Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, factors relating to the unsolicited exchange offer by Choice Hotels International, Inc. (“Choice”) to acquire all outstanding shares of our common stock (the “Exchange Offer”), including actions taken by Choice in connection with such offer, actions taken by Wyndham or its stockholders in respect of the Exchange Offer or other actions or developments involving Choice, such as a potential proxy contest, the completion or failure to complete the Exchange Offer, the effects of such offer on our business, such as the cost, loss of time and disruption; general economic conditions, including inflation, higher interest rates and potential recessionary pressures; global or regional health crises or pandemics (such as the COVID-19 pandemic) including the resulting impact on the Company’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; the performance of the financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising business; the Company’s relationships with franchisees; the impact of war, terrorist activity, political instability or political strife, including the ongoing conflicts between Russia and Ukraine and between Israel and Hamas; the Company’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 the Company’s ability to obtain financing and the terms of such financing, including access to liquidity and capital; and the Company’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 the Company’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. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, subsequent events or otherwise, except as required by law.
Increases Quarterly Dividend by 9%; Reiterates Full-Year 2024 Outlook
PARSIPPANY, N.J. (February 14, 2024) – Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months and year ended December 31, 2023. Highlights include:
System-wide rooms grew organically by 3.5% year-over-year, a record high.
Opened a record 66,000 organic rooms, representing a year-over-year increase of 3%.
Global retention rate – including all terminations – improved another 30 basis points to a record 95.6%.
Development pipeline grew 1% sequentially and by 10% year-over-year to a record 240,000 rooms.
Grew ECHO Suites pipeline nearly 60% year-over-year with 98 new contract signings.
Signed 766 contracts for legacy brands, an increase of 8% year-over-year.
Fourth quarter diluted earnings per share of $0.60 and net income of $50 million; adjusted diluted EPS of $0.91, adjusted net income of $75 million and adjusted EBITDA of $154 million.
Full-year 2023 diluted EPS of $3.41 and net income of $289 million; adjusted diluted EPS of $4.01, adjusted net income of $341 million and adjusted EBITDA of $659 million.
Net cash provided by operating activities of $376 million and free cash flow of $339 million for the full-year.
Returned $515 million to shareholders for the full-year through $397 million of share repurchases and quarterly cash dividends of $0.35 per share.
Board of Directors recently authorized a 9% increase in the quarterly cash dividend to $0.38 per share beginning with the dividend expected to be declared in first quarter 2024.
“We are tremendously proud to report fourth quarter results that demonstrate the continued success of our global strategy and our accelerating momentum,” said Geoff Ballotti, president and chief executive officer. “Despite the distraction, uncertainty and misperceptions caused by Choice and their slanted and constant communications to our franchisee base, room openings accelerated and our global development pipeline grew by 10% to an all-time high of 240,000 rooms. Our team opened 27% more rooms than last year in the fourth quarter and we welcomed 500 new hotels to our system in 2023. This, when combined with our improving franchisee engagement and record retention rate, drove the best organic system growth we’ve ever achieved. We grew comparable adjusted EBITDA by 6% and returned over half a billion dollars to our shareholders through dividends and share repurchases. We are confident in the continued effectiveness of our growth strategy and see exceptional value-creation opportunities in the years ahead.”
System Size and Development
The Company’s global system grew 3.5%, marking 12 consecutive quarters of organic growth and reflecting 1% growth in the U.S. and 7% internationally. As expected, these increases included strong growth in both the higher RevPAR midscale and above segments in the U.S. and the direct franchising business in China, which grew 3% and 13%, respectively. The Company also increased its retention rate, which includes all terminations, by another 30 basis points year-over-year, ending the year at a record 95.6%.
On December 31, 2023, the Company’s global development pipeline consisted of over 1,950 hotels and approximately 240,000 rooms, representing another record-high level and a 10% year-over-year increase. Key highlights include:
14th consecutive quarter of sequential pipeline growth
8% growth in the U.S. and 11% internationally
Approximately 70% of the pipeline is in the midscale and above segments, which grew 6% year-over-year
Approximately 58% of the pipeline is international
Approximately 79% of the pipeline is new construction, of which approximately 34% has broken ground
The Company awarded 766 new contracts for its legacy brands in full-year 2023, an increase of 8% compared to full-year 2022. Additionally, the Company awarded 98 additional new contracts for its ECHO Suites brand and, as of December 31, 2023, the Company had awarded 268 contracts, or over 33,000 rooms, for the brand.
RevPAR
Fourth quarter global RevPAR declined 1% in constant currency compared to 2022 reflecting a 4% decline in the U.S. and growth of 7% internationally. For the full year, global RevPAR grew 5% in constant currency compared to 2022 reflecting a 1% decline in the U.S. and growth of 21% internationally.
The Company had achieved record-breaking RevPAR in the U.S. during the preceding year due to COVID-impacted travel patterns. Comparing to 2019 to neutralize for COVID-impacted travel patterns, U.S. RevPAR grew 10% in fourth quarter – a 120 basis point acceleration from third quarter 2023 growth – and 9% for the full year. Internationally, year-over-year RevPAR growth for both the fourth quarter and the full-year was primarily driven by higher occupancy levels. Compared to 2019, international RevPAR grew in fourth quarter and full-year by 44% and 36%, respectively, on a constant-currency basis.
Operating Results
Fourth Quarter
Fee-related and other revenues was $320 million compared to $310 million in fourth quarter 2022 reflecting global net room growth as well as higher license and ancillary fees.
The Company generated net income of $50 million compared to $56 million in fourth quarter 2022. The decrease was reflective of a higher effective tax rate, higher interest expense, foreign currency impact from hyper-inflation in Argentina and transaction-related expenses resulting from the unsolicited offer by Choice Hotels, partially offset by higher adjusted EBITDA.
Adjusted EBITDA grew 22% to $154 million from $126 million. This increase included a $21 million favorable impact from marketing fund variability, excluding which adjusted EBITDA grew 6% primarily reflecting higher fee-related and other revenues.
Diluted earnings per share was $0.60 compared to $0.63 in fourth quarter 2022. This decrease reflects lower net income, partially offset by the benefit of a lower share count due to share repurchase activity.
Adjusted diluted EPS grew 26% to $0.91 per share from $0.72 per share. This increase included $0.19 per share related to the favorable marketing fund variability (after estimated taxes), excluding which adjusted diluted EPS was unchanged year-over-year as adjusted EBITDA growth and the benefit from share repurchase activity was substantially offset by higher interest expense.
During fourth quarter 2023, the Company’s marketing fund revenues exceeded expenses by $9 million; while in fourth quarter 2022, the Company’s marketing fund expenses exceeded revenues by $12 million, resulting in $21 million of marketing fund variability.
Full Year
Fee-related and other revenues was $1,384 million compared to $1,354 million in full-year 2022, which included $50 million from the Company’s select service management business and owned hotels, which were exited in 2022. On a comparable basis, fee-related and other revenues increased 6% year-over-year primarily reflecting global RevPAR and net room growth, higher license and ancillary fees and pass-through revenues associated with the Company’s global franchisee conference in September, which was held for the first time since 2019.
The Company generated net income of $289 million compared to $355 million in full-year 2022, which included $37 million from the select-service managed and owned hotels. The decrease was reflective of a higher effective tax rate, higher interest expense, foreign currency impact from hyper-inflation in Argentina and transaction-related expenses resulting from the unsolicited offer by Choice Hotels, partially offset by higher adjusted EBITDA.
Adjusted EBITDA was $659 million compared to $650 million in full-year 2022, which included $18 million from the select-service managed and owned hotels. The growth in adjusted EBITDA was further impacted by $11 million of unfavorable marketing fund variability. On a comparable basis, adjusted EBITDA increased 6% reflecting higher fee-related and other revenues.
Diluted earnings per share was $3.41 compared to $3.91 in full-year 2022, which included $0.40 per share from the select-service managed and owned hotels. This decrease reflects the lower net income, partially offset by the benefit of a lower share count due to share repurchase activity.
Adjusted diluted EPS was $4.01 per share compared to $3.96 per share in full-year 2022, which included $0.15 per share from the select-service managed and owned hotels. This growth in adjusted diluted EPS was further impacted by $0.09 per share (after estimated taxes) of unfavorable marketing fund variability. On a comparable basis, adjusted diluted EPS increased 8% year-over-year reflecting the adjusted EBITDA growth and the benefit from share repurchase activity, partially offset by higher interest expense.
During full-year 2023, the Company’s marketing fund revenues exceeded expenses by $9 million; while in 2022, the Company’s marketing fund revenues exceeded expenses by $20 million, resulting in $11 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 $376 million of net cash provided by operating activities and free cash flow of $339 million in the full-year 2023. The Company ended the quarter with a cash balance of $66 million and approximately $650 million in total liquidity.
The Company’s net debt leverage ratio was 3.2 times at December 31, 2023, within the lower half of the Company’s 3 to 4 times stated target range.
Share Repurchases and Dividends
During the fourth quarter, the Company repurchased approximately 1.7 million shares of its common stock for $127 million. For the full-year 2023, the Company repurchased approximately 5.5 million shares of its common stock for $397 million, at an average price of $72.25, 8% lower than trading levels as of February 13th.
The Company paid common stock dividends of $28 million, or $0.35 per share, in the fourth quarter of 2023 for a total of $118 million, or $1.40 per share, for the full-year 2023.
For the full-year 2023, the Company returned $515 million to shareholders through share repurchases and quarterly cash dividends.
The Company’s Board of Directors authorized a 9% increase in the quarterly cash dividend to $0.38 per share, beginning with the dividend expected to be declared in first quarter 2024.
Full-Year 2024 Outlook
The Company provided the following outlook for full-year 2024:
Year-over-year growth rates for adjusted EBITDA, adjusted net income and adjusted diluted EPS are not comparable due to full-year 2023 marketing fund revenues exceeding expenses by $9 million, which substantially completed the recovery of the $49 million support the Company provided to its owners during COVID. The Company expects marketing revenues to equal expenses during full-year 2024 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 15, 2024 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 15, 2024. A telephone replay will be available for approximately ten days beginning at noon ET on February 15, 2024 at 800 839-9719.
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 properties, with approximately 9,200 hotels across over 95 countries on six continents. Through its network of approximately 872,000 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 24 hotel brands, including Super 8®, Days Inn®, Ramada®, Microtel®, La Quinta®, Baymont®, Wingate®, AmericInn®, Hawthorn Suites®, Trademark Collection® and Wyndham®. The Company’s award-winning Wyndham Rewards loyalty program offers over 106 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 as a 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 www.investor.wyndhamhotels.com. Accordingly, investors should monitor this section of the Company’s website in addition to following the Company’s press releases, filings submitted with the Securities and Exchange Commission and any public conference calls or webcasts.
For information related to Choice Hotels’ hostile offer, please visit www.staywyndham.com.
Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of the federal securities laws, including statements related to the Company’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. The Company claims the protection of the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements (other than with respect to statements made in connection with the unsolicited exchange offer by Choice to acquire all outstanding shares of our common stock (the “Exchange Offer”)). Forward-looking statements include those that convey management’s expectations as to the future based on plans, estimates and projections at the time the Company makes the statements and may be identified by words such as “will,” “expect,” “believe,” “plan,” “anticipate,” “intend,” “goal,” “future,” “outlook,” “guidance,” “target,” “objective,” “estimate,” “projection” and similar words or expressions, including the negative version of such words and expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company 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, factors relating to the Exchange Offer, including actions taken by Choice in connection with such offer, actions taken by Wyndham or its stockholders in respect of the Exchange Offer or other actions or developments involving Choice, such as a potential proxy contest, the completion or failure to complete the Exchange Offer, the effects of such offer on our business, such as the cost, loss of time and disruption; general economic conditions, including inflation, higher interest rates and potential recessionary pressures; global or regional health crises or pandemics (such as the COVID-19 pandemic) including the resulting impact on the Company’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; the performance of the financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising business; the Company’s relationships with franchisees; the impact of war, terrorist activity, political instability or political strife, including the ongoing conflicts between Russia and Ukraine and between Israel and Hamas; the Company’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 the Company’s ability to obtain financing and the terms of such financing, including access to liquidity and capital; and the Company’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 the Company’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. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, subsequent events or otherwise, except as required by law.
Newly opened Quadro Hotel joins over 200 Trademark hotels globally
Located in St. Julian’s—known for its beaches, bars and clubs—the hotel is a stone’s throw from the famed St. George’s Bay and top shops and restaurants. The hotel is the first Trademark in Malta and joins the brand’s growing portfolio of over 200 Trademark hotels globally.
A Charming Coastal Escape Nestled in a bustling seaside village, the Quadro is an escape from the everyday. Start your morning with coffee and pastries at on-site restaurant Otto or enjoy breakfast in bed with all-day room service. Fill your afternoon exploring the shops of Bay Street or hop a ferry to the capital of Valletta. Cap your day with a visit to the hotel’s seasonal rooftop pool, soaking in panoramic views of the city.
Guest rooms at the Quadro are modern and minimalist. Think light wood furnishings, playful textures and colorful accents. Each room offers complimentary high-speed Wi-Fi, mini-fridge and espresso maker. Meanwhile, bathrooms feature upscale toiletries and walk-in showers. Select rooms offer sea views.
Locally-owned and operated by STED Co., the hotel is a short drive (11 kilometers) from Malta International Airport. Additional on-site amenities include a fitness center, car and bicycle rental, laundry service and same-day dry cleaning. The hotel is smoke-free.
“St. Julian’s is a magical destination unlike anywhere in the world. Through Trademark, we’re able to celebrate what makes our town and our hotel unique – all while tapping into the power of Wyndham.”
– Edward Gauci, Director, STED Co.
“Trademark prides itself on offering distinctive accommodations in sought-after destinations. Malta is certainly no exception. The Quadro is a testament to the brand’s increasingly strong position within our industry and its growing popularity with top developers from around the world.”
– Vassilis Themelidis, Regional Director, South & East Europe, Wyndham Hotels & Resorts
Growing a Global Brand Launched in 2017, Trademark is one of Wyndham’s fastest-growing, most globally-diverse brands. Present in nearly 30 countries, in the last 18 months, the brand has added almost 90 hotels in 12 new countries.
The growth is a testament to Wyndham’s tailored approach in creating the brand. Trademark caters to independent-minded hoteliers and embraces travelers in search of distinct, one-of-a-kind experiences. Add in the Wyndham Advantage—industry-leading scale paired with world-class marketing, technology and distribution—and you’ve got a recipe designed for success.
Earn Triple Wyndham Rewards Points Trademark hotels participate in Wyndham Rewards, the #1 hotel rewards program as named by readers of USA Today and U.S. News & World Report. Through Jan. 12, 2024, program members can register to earn triple points on upcoming stays—up to 30,000 points. Stays must be completed by Jan. 15, 2024. Details, including full terms and conditions, are available at WyndhamRewards.com.
Images associated with the above release can be downloaded here.
About Trademark Collection by Wyndham Character. Charm. Individuality. These are the attributes of Trademark Collection by Wyndham. From landmark hotels in Europe, Asia, The Americas and the Caribbean, to the brand’s flagship hotel, The Galt House Hotel in Louisville, Ky., Trademark hoteliers are passionate about delivering distinct, one-of-a-kind travel experiences. Book your next stay at WyndhamHotels.com/Trademark, and follow Trademark Collection on Facebook and Instagram. For development opportunities, visit WyndhamDevelopment.com.
About Wyndham Rewards Trademark hotels are a part of Wyndham Hotels & Resorts (NYSE: WH), the world’s largest hotel franchising company, and participate in Wyndham Rewards, the #1 hotel rewards program as named by readers of USA Today. Program members—over 105 million enrolled around the world—earn a guaranteed 1,000 points with every qualified stay and can redeem for free nights starting at just 7,500 points. With more than 50,000 hotels, vacation club resorts and vacation rentals globally, no other hotel rewards program offers members more places to stay. Join for free at WyndhamRewards.com.
Company Raises Full-Year 2023 EPS Outlook, Grows Development Pipeline by Another 12%
PARSIPPANY, N.J., October 25, 2023 – Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months ended September 30, 2023. Highlights include:
Global RevPAR grew 3% compared to third quarter 2022 in constant currency.
System-wide rooms grew 3% year-over-year.
Development pipeline grew 4% sequentially and 12% year-over-year to a record 237,000 rooms.
Signed over 230 contracts, an increase of 8% year-over-year, including 60 new construction projects for ECHO Suites Extended Stay by Wyndham.
Returned $134 million to shareholders through $105 million of share repurchases and a quarterly cash dividend of $0.35 per share.
“We recently announced our Board of Directors unanimously rejected an unsolicited stock-and-cash proposal by Choice Hotels to acquire our company. Our Board of Directors, together with our financial and legal advisors, closely reviewed Choice’s latest proposal and determined, for multiple reasons, that it is not in the best interest of our shareholders. They remain confident that our standalone growth prospects offer superior, risk-adjusted returns to Wyndham shareholders,” said Geoff Ballotti, president and chief executive officer. “Supporting that belief are our third quarter results, which were highlighted by continued growth in global RevPAR, ongoing domestic and international organic net room growth and another 8% increase in hotel contracts awarded to franchisees driving our development pipeline to a record 1,930 hotels. Our economy brands gained market share domestically amidst a backdrop of normalizing U.S. leisure demand, and international occupancy continued to recover. Adjusted EBITDA grew in line with our expectations, we generated strong free cash flow and we returned significant capital to our shareholders. We remain focused on our growth strategy, which includes continued system expansion through our ECHO Suites by Wyndham brand and further improvements in franchisee retention, as well as the multi-year benefit expected from the U.S. infrastructure bill. We’re enthusiastic about our ability to deliver exceptional value to our shareholders, guests, franchisees and team members in the months and years ahead.”
Third Quarter Financial Results
Fee-related and other revenues was $400 million compared to $375 million in third quarter 2022 reflecting global RevPAR and net room growth, higher license and ancillary fees as well as the pass-through revenues associated with the Company’s global franchisee conference in September, which was held for the first time since 2019.
The Company generated net income of $103 million, or $1.21 per diluted share, compared to $101 million, or $1.13 per diluted share, in third quarter 2022. The increase was reflective of higher adjusted EBITDA in the Company’s hotel franchising segment and a lower effective tax rate, partially offset by higher interest expense. Adjusted diluted EPS grew 8% reflecting higher net income and a lower share count due to share repurchase activity. Adjusted EBITDA increased 5% to $200 million primarily reflecting higher fee-related and other revenues as well as marketing fund variability. During third quarter 2023, the Company’s marketing fund revenues exceeded expenses by $17 million; while in third quarter 2022, the Company’s marketing fund revenues exceeded expenses by $12 million.
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.
System Size
The Company’s global system grew 3%, reflecting 1% growth in the U.S. and 6% growth internationally. As expected, these increases included strong growth in both the higher RevPAR midscale and above segments in the U.S. and the direct franchising business in China, which grew 4% and 16%, respectively.
RevPAR
Third quarter global RevPAR grew by 3% in constant currency compared to 2022 reflecting a 1% decline in the U.S. and growth of 16% internationally. The Company had achieved record-breaking RevPAR in the U.S. during the preceding year due to COVID-impacted travel patterns. The Company’s U.S. economy brands gained market share of 100 basis points in the third quarter. Comparing to 2019 to neutralize for COVID-impacted travel patterns, U.S. RevPAR grew 9%, a 30 basis point acceleration from second quarter 2023 growth. International RevPAR growth was driven by higher occupancy levels and stronger pricing power in connection with COVID recovery, and compared to 2019 grew 45% on a constant-currency basis, a 120 basis point acceleration from second quarter 2023 growth.
Development
On September 30, 2023, the Company’s global development pipeline consisted of over 1,930 hotels and approximately 237,000 rooms, representing a 12% year-over-year increase, including 16% growth in the U.S.
Approximately 69% of the Company’s pipeline is in the midscale and above segments.
Approximately 58% of the Company’s development pipeline is international.
Approximately 80% of the Company’s pipeline is new construction, of which approximately 34% has broken ground.
During third quarter 2023, the Company awarded 172 new contracts for its legacy brands, an increase of 4% year-over-year. Additionally, the Company awarded 60 additional new contracts for its ECHO Suites Extended Stay by Wyndham brand and, as of September 30, 2023, the total number of contracts awarded for the brand was 265, or nearly 33,000 rooms.
Balance Sheet and Liquidity
As of September 30, 2023, the Company had $2.2 billion of long-term debt outstanding with a weighted average interest rate of 4.9%. The Company borrowed $110 million on its revolving credit facility during the third quarter and had an available borrowing capacity of $631 million after considering $9 million of outstanding letters of credit as of September 30, 2023. The Company ended the quarter with a cash balance of $79 million and approximately $710 million in total liquidity.
The Company generated net cash provided by operating activities of $77 million and free cash flow of $67 million in third quarter 2023.
The Company has pay-fixed/receive-variable interest rate swaps in place to hedge $600 million of the Term Loan B Facility, set to expire in the second quarter of 2024. During the third quarter of 2023, the Company executed $600 million of new forward starting interest rate swaps on the Term Loan B Facility, which will begin in second quarter 2024 and expire in 2028. The fixed rate of the new swaps is 3.8%.
Share Repurchases and Dividends
During the third quarter, the Company repurchased approximately 1.4 million shares of its common stock for $105 million. Year-to-date through September 30, the Company repurchased approximately 3.8 million shares of its common stock for $270 million.
The Company paid common stock dividends of $29 million, or $0.35 per share.
Rejection of Unsolicited Offer
On October 17, 2023, the Company announced that its Board of Directors unanimously rejected a highly conditional, unsolicited stock-and-cash proposal by Choice Hotels International, Inc. (“Choice”) to acquire all outstanding shares of Wyndham. Wyndham’s Board of Directors, together with its financial and legal advisors, closely reviewed Choice’s latest proposal with a nominal value of $90 per share, comprised of 45% in stock and 55% in cash, and determined that it is not in the best interest of Wyndham shareholders to accept the proposal.
Full-Year 2023 Outlook
The Company is updating its outlook as follows to reflect the impact of third quarter share repurchase activity:
Year-over-year growth rates are not comparable due to the sale of the Company’s owned hotels and the exit of its select-service management business, both of which occurred during 2022, as well as the variability in its marketing funds due to the support that the Company provided to its owners during 2020.
The Company’s expectations for full-year 2023 marketing funds contribution to adjusted EBITDA is unchanged at $10 million. The Company expects fund revenues will outpace fund expenses by approximately $11 million during the fourth quarter.
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, October 26, 2023 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 October 26, 2023. A telephone replay will be available for approximately ten days beginning at noon ET on October 26, 2023 at 800 839-6964.
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 properties, with approximately 9,100 hotels across over 95 countries on six continents. Through its network of approximately 858,000 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 24 hotel brands, including Super 8®, Days Inn®, Ramada®, Microtel®, La Quinta®, Baymont®, Wingate®, AmericInn®, Hawthorn Suites®, Trademark Collection® and Wyndham®. The Company’s award-winning Wyndham Rewards loyalty program offers approximately 105 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally. For more information, visit www.wyndhamhotels.com. The Company may use its website as a 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. Accordingly, investors should monitor this section of the Company’s website 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 the Company’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. The Company claims the protection of the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. Forward-looking statements include those that convey management’s expectations as to the future based on plans, estimates and projections at the time the Company makes the statements and may be identified by words such as “will,” “expect,” “believe,” “plan,” “anticipate,” “intend,” “goal,” “future,” “outlook,” “guidance,” “target,” “objective,” “estimate,” “projection” and similar words or expressions, including the negative version of such words and expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company 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 worsening of the effects from the coronavirus pandemic (“COVID-19”); COVID-19’s scope, duration, resurgence and impact on the Company’s business operations, financial results, cash flows and liquidity, as well as the impact on the Company’s franchisees, guests and team members, the hospitality industry and overall demand for and restrictions on travel the Company’s continued performance during the recovery from COVID-19 and any resurgence or mutations of the virus concerns with or threats of other pandemics, contagious diseases or health epidemics, including the effects of COVID-19; the performance of the financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising businesses; the Company’s relationships with franchisees; the impact of war, terrorist activity, political instability or political strife, including the ongoing conflict between Russia and Ukraine; the Company’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 the Company’s ability to obtain financing and the terms of such financing, including access to liquidity and capital; and the Company’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 the Company’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. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, subsequent events or otherwise, except as required by law.
Key openings solidify Wyndham's position as Türkiye's largest international hotel company with plans for further expansion in 2023.
ISTANBUL (5 September 2023) – Wyndham Hotels & Resorts, the world’s largest hotel franchising company with approximately 9,100 hotels spanning more than 95 countries, is further strengthening its position in Türkiye reaching approximately 105 open and operating hotels and a development pipeline of approximately 20 additional properties. The latest openings are part of Wyndham’s continued expansion plan in Türkiye, where the company is the largest international hotel group by number of properties.
Wyndham celebrated its 100th hotel milestone with the addition of the 176-room new construction Days Hotel by Wyndham Istanbul Esenyurt, followed by the opening of Ramada by Wyndham Karapinar in Central Anatolia; Istanbul New Airport Hotel, Trademark Collection by Wyndham; and the upscale Wyndham Afyonkarahisar Thermal & Spa, amongst other new hotels. Wyndham’s portfolio in Türkiye, its fifth largest market globally by hotel count, now includes hotels in more than 45 cities and sought-after destinations across the country, ranging from economy to upper-upscale accommodation options.
In 2022, Türkiye received over 51 million inbound visitors and is targeting 60 million travellers in 2023. The country remains a leading performer amongst European markets with strong occupancy rates driven by both domestic and international demand.
Dimitris Manikis, President EMEA, Wyndham Hotels & Resorts, said: “From culture-rich destinations to beautiful coastlines and buzzing cities, Türkiye has something to offer to every type of traveller. Surpassing the 100th hotel mark in the year the Republic of Türkiye celebrates its 100th anniversary makes this milestone even more special. Together with our talented team based in Istanbul, we remain committed to expanding our offerings and look forward to building on our success with our trusted hotel partners in one of the world’s most exciting destinations.”
Wyndham continues delivering on its mission of making hotel travel possible for all, recently opening several new hotels across Türkiye. Some highlights include:
Days Hotel by Wyndham Istanbul Esenyurt – The new-construction hotel offers modern interiors and convenient amenities, including an on-site restaurant, an outdoor pool and a wellness area. It is close to well-known shopping malls, the Tuyap Fair convention and congress center and the CNR Expo. It offers 176 rooms and 120 square meters of event space.
Ramada by Wyndham Karapinar – With 118 guest rooms, a roof-top restaurant and a spa, the hotel is situated near the town center and the popular Meke and Acigol volcanic lakes. Guests can easily reach the underground city of Oymali, one of the world’s oldest villages Çatalhöyük or the Sufi pilgrimage site of Konya.
Istanbul New Airport Hotel, Trademark Collection by Wyndham – Wyndham’s first Trademark Collection by Wyndham hotel in the country features 68 rooms and suites, stylish interiors and a modern spa. The new construction hotel is located in the fast-growing Arnavutkoy district, 12 km from Istanbul Airport and with easy access to the Mall of Istanbul and the Vialand Theme Park.
Wyndham Afyonkarahisar Thermal & Spa – Located in Western Türkiye, the hotel is close to many attractions like the Afyonkarahisar Castle and Afyonkarahisar Grand Mosque, as well as the Park Afyon and Afium shopping centres. It features 161 guest rooms and a large spa with six therapeutic thermal pools, a hammam and a sauna and steam room.
Ramada Encore by Wyndham Sisli – Located in Sisli, a commercial and affluent area of Istanbul with many restaurants, shops and the popular Cevahir mall, the new hotel features 101 spacious rooms, a health and fitness club and the Flame restaurant and bar, where guests can enjoy scenic views of the city.
With a development pipeline of approximately 20 additional hotels, Wyndham is focused on bringing more branded offerings to Türkiye. Some additional hotels expected to open by the end of 2023 include:
Wyndham Istanbul Old City – The new hotel will be located in the heart of Istanbul’s Old City, only a few minutes away from the world-famous Topkapi Palace Museum, Blue Mosque, Hagia Sophia, Grand Bazaar and Basilica Cistern. It will feature 138 spacious guest rooms, a contemporary spa and wellness area with indoor and outdoor pools, as well as traditional Turkish baths.
Operla Airport Hotels, Trademark Collection by Wyndham – The new hotel will be located only five km from the New Istanbul Airport in the Arnavutköy district of Istanbul, making it an ideal stop for those travelling for business or leisure. It will feature 65 spacious guest rooms combining elegant interiors and comfort, in-room dining service with an international menu, as well as an all-day restaurant.
Ramada by Wyndham Istanbul Pera – Located in a lively and historical district, close to the famous Galata Tower and Istiklal street, the 200-room hotel will feature a host of leisure amenities, including a specialty restaurant serving local delicacies, as well a Turkish Hamam and Spa. Guests staying at Ramada by Wyndham Istanbul Pera will also have easy access to the nearby Golden Horn and transport links to explore the city.
Wyndham hotels in Türkiye participate in Wyndham Rewards®, the award-winning hotel loyalty programme offering over 103 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally.
For more information on franchising opportunities with Wyndham Hotels & Resorts, visit www.whrdevelopmentemea.com.
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About Wyndham Hotels & Resorts Wyndham Hotels & Resorts (NYSE: WH) is the world’s largest hotel franchising company by the number of properties, with approximately 9,100 hotels across over 95 countries on six continents. Through its network of approximately 852,000 rooms appealing to the everyday traveller, Wyndham commands a leading presence in the economy and midscale segments of the lodging industry. The Company operates a portfolio of 24 hotel brands, including Super 8®, Days Inn®, Ramada®, Microtel®, La Quinta®, Baymont®, Wingate®, AmericInn®, Hawthorn Suites®, Trademark Collection® and Wyndham®. The Company’s award-winning Wyndham Rewards loyalty programme offers over 103 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally. For more information, visit www.wyndhamhotels.com.
Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of the federal securities laws, including statements related to Wyndham Hotels & Resorts, Inc.’s (the “Company”) current views and expectations related to rooms growth, development and consumer demand trends. Forward-looking statements include those that convey management’s expectations as to the future based on plans, estimates and projections at the time the Company makes the statements and may be identified by words such as “will,” “expect,” “believe,” “plan,” “anticipate,” “intend,” “goal,” “future,” “outlook,” “guidance,” “target,” “objective,” “estimate,” “projection” and similar words or expressions, including the negative version of such words and expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company 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 worsening of the effects from the coronavirus pandemic (“COVID-19”); COVID-19’s scope, duration, resurgence and impact on the Company’s business operations, financial results, cash flows and liquidity, as well as the impact on the Company’s franchisees, guests and team members, the hospitality industry and overall demand for and restrictions on travel; the Company’s continued performance during the recovery from COVID-19 and any resurgence or mutations of the virus; concerns with or threats of other pandemics, contagious diseases or health epidemics, including the effects of COVID-19; the performance of the financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising businesses; the Company’s relationships with franchisees; the impact of war, terrorist activity, political instability or political strife, including the ongoing conflict between Russia and Ukraine; the Company’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 the Company’s ability to obtain financing and the terms of such financing, including access to liquidity and capital; and the Company’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 the Company’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. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, subsequent events or otherwise, except as required by law.
The opening of Wyndham Grand Krakow Old Town offers guests a historical escape in one of Europe’s most beautiful and culturally rich cities
LONDON (29 August 2023) – Wyndham Hotels & Resorts, the world’s largest hotel franchising company with approximately 9,100 hotels in more than 95 countries, today announced the opening of the 60-room Wyndham Grand Krakow Old Town, the first Wyndham Grand in Poland. The hotel – which will be operated by Dobry Hotel Group, a leading hotel management company in Poland with decades of experience – is housed in a stunning, historic townhouse right in the heart of Krakow Old Town, close to many iconic landmarks like the Cloth Hall, Market Square, St. Mary’s Basilica, and other popular attractions.
Wyndham Grand is an upper-upscale ensemble of distinguished hotels that are approachable by design, representing one-of-a-kind experiences with refined accommodations, attentive service and relaxed surroundings. The opening of Wyndham Grand Krakow Old Town adds another desirable destination to the brand’s roster, including Manama, Istanbul, Athens and many others – and in Poland, adds Wyndham’s eighth hotel across cities including Warsaw, Lodz, Wroclaw and Krakow.
Dimitris Manikis, President Europe, Middle East, Eurasia and Africa, Wyndham Hotels & Resorts, said: “Our distinctive Wyndham Grand brand represents best-in class hospitality, and the opening of Wyndham Grand Krakow Old Town is a welcomed addition to our presence in Poland, while also marking an important step in our expansion plans for the country. Dobry Hotel Group is one of the top hospitality operators in the country who shares our vision for growth, making them the ideal partner to bring the Wyndham Grand brand to Poland.”
Daniel Łukaszewicz, Managing Director of Dobry Hotel Group, commented: “We are thrilled to open the first Wyndham Grand in Poland with the support of Wyndham Hotels & Resorts, the world’s largest hotel franchisor. Situated in the former royal capital, guests staying at the Wyndham Grand Krakow Old Town can enjoy the spectacular Renaissance architecture and medieval city centre. We look forward to welcoming business and leisure travellers from around the world for unforgettable stays and experiences.”
Located only 13 kilometres from Krakow Airport and just one kilometre from Krakow Main Station, Wyndham Grand Krakow Old Town offers guests an exceptional juxtaposition between a historic cultural backdrop and modern getaway experience with contemporary comforts and high-end amenities. After a day exploring the Gothic architecture and charming cobblestone streets, guests can indulge in the hotel’s relaxing wellness zone that features a heated indoor pool, a fitness centre, and spa with a sauna, hot tub, and even a salt cave. Guests can also enjoy dining at two fantastic on-site restaurants serving exquisite Italian and international cuisine, and for those staying for business, the hotel also features a well-equipped executive centre and two versatile meeting rooms that can accommodate up to 150 guests.
About Wyndham Grand Travel is the best excuse to enjoy the grand things in life. With locations in some of the world’s most sought-after vacation destinations – including Istanbul, Doha, Salzburg and Orlando – Wyndham Grand hotels transform ordinary moments into unforgettable experiences. Approachable by design, this upper-upscale hotel brand helps travellers make every moment count. Learn more at www.wyndhamgrand.com.
About Wyndham Hotels & Resorts Wyndham Hotels & Resorts (NYSE: WH) is the world’s largest hotel franchising company by the number of properties, with approximately 9,100 hotels across over 95 countries on six continents. Through its network of approximately 852,000 rooms appealing to the everyday traveller, Wyndham commands a leading presence in the economy and midscale segments of the lodging industry. The Company operates a portfolio of 24 hotel brands, including Super 8®, Days Inn®, Ramada®, Microtel®, La Quinta®, Baymont®, Wingate®, AmericInn®, Hawthorn Suites®, Trademark Collection® and Wyndham®. The Company’s award-winning Wyndham Rewards loyalty programme offers over 103 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally. For more information, visit wyndhamhotels.com/en-uk.
About Dobry Hotel Group Dobry Hotel Group has been operating in Poland for nearly 20 years. It is an expert in the management of hotel and catering facilities. Its portfolio currently includes 20 hotels in attractive tourist and business regions and cities in Poland, such as Jastarnia, Mikolajki, Poznan, Wroclaw, Warsaw, Krakow and Zakopane. The Group’s hotels are winners of prestigious awards and industry distinctions. Dobry Hotel Group employs more than a thousand people.
Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of the federal securities laws, including statements related to Wyndham Hotels & Resorts, Inc.’s (the “Company”) current views and expectations related to rooms growth, development and consumer demand trends. Forward-looking statements include those that convey management’s expectations as to the future based on plans, estimates and projections at the time the Company makes the statements and may be identified by words such as “will,” “expect,” “believe,” “plan,” “anticipate,” “intend,” “goal,” “future,” “outlook,” “guidance,” “target,” “objective,” “estimate,” “projection” and similar words or expressions, including the negative version of such words and expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company 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 worsening of the effects from the coronavirus pandemic (“COVID-19”); COVID-19’s scope, duration, resurgence and impact on the Company’s business operations, financial results, cash flows and liquidity, as well as the impact on the Company’s franchisees, guests and team members, the hospitality industry and overall demand for and restrictions on travel; the Company’s continued performance during the recovery from COVID-19 and any resurgence or mutations of the virus; concerns with or threats of other pandemics, contagious diseases or health epidemics, including the effects of COVID-19; the performance of the financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising businesses; the Company’s relationships with franchisees; the impact of war, terrorist activity, political instability or political strife, including the ongoing conflict between Russia and Ukraine; the Company’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 the Company’s ability to obtain financing and the terms of such financing, including access to liquidity and capital; and the Company’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 the Company’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. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, subsequent events or otherwise, except as required by law.
Company Grows Development Pipeline by 10% and Global RevPAR by 7% Successfully Completes Refinancing Transaction Board Increases Share Repurchase Authorization by $400 Million
PARSIPPANY, N.J. (July 26, 2023) – Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months ended June 30, 2023. Highlights include:
Global RevPAR grew 7% compared to second quarter 2022 in constant currency.
System-wide rooms grew 4% year-over-year.
Development pipeline grew 1% sequentially and 10% year-over-year.
Signings of 24,000 rooms grew 6% year-over-year and 7% compared to 2019.
Awarded 60 new construction projects for ECHO Suites Extended Stay by Wyndham in July, including its first hotels in Canada, bringing the total number of contracts to 265.
Returned $139 million to shareholders through $109 million of share repurchases and a quarterly cash dividend of $0.35 per share.
Successfully completed the refinancing of its Term Loan B Facility, extending maturity from 2025 to 2030.
“During the second quarter, we celebrated the tremendous progress we’ve made in our five-year journey as a new public company with another quarter of solid results including global RevPAR growth of 7%, net room growth of 4% and the 12th consecutive quarter of sequential growth in our development pipeline, which has never been stronger,” said Geoff Ballotti, president and chief executive officer. “International travel demand continues to accelerate, our U.S. economy brands continue to outperform the industry and our nation’s infrastructure bill spend is expected to represent a meaningful tailwind for our franchisees in the months and years ahead. We remain very confident in our ability to deliver outstanding value for our franchisees and shareholders, as does our Board of Directors who today approved a $400 million increase in our share repurchase authorization, reflecting their confidence in the ongoing strength of our business and our strong free cash flow.”
Second Quarter Financial Results
The comparability of the Company’s second quarter results is impacted by the sale of its owned hotels and the exit of its select-service management business, both of which occurred in 2022, as well as quarterly timing variances from its marketing funds. The Company’s reported results and comparable-basis results (adjusted to neutralize these impacts) are presented below to enhance transparency and provide a better understanding of the results of the Company’s ongoing operations:
Fee-related and other revenues was $358 million compared to $354 million in second quarter 2022, which included $12 million from the Company’s select-service management business and owned hotels. On a comparable basis, fee-related and other revenues increased 5% year-over-year primarily reflecting higher royalties and franchise fees resulting from global RevPAR and system growth.
The Company generated net income of $70 million, or $0.82 per diluted share, compared to $92 million, or $1.00 per diluted share, in second quarter 2022. The decline in net income was expected and reflective of the marketing fund variability, higher interest expense and transaction-related costs primarily related to the Company’s refinancing of its Term Loan B Facility. On a comparable basis, adjusted diluted earnings per share grew 10% reflecting 8% growth in comparable basis adjusted EBITDA and a lower share count due to share repurchase activity.
Adjusted EBITDA was $158 million compared to $175 million in second quarter 2022. On a comparable basis, adjusted EBITDA increased 8% year-over-year primarily reflecting higher fee-related and other revenues.
During second quarter 2023, the Company’s marketing fund expenses exceeded revenues by $15 million; while in second quarter 2022, the Company’s marketing fund revenues exceeded expenses by $12 million, resulting in $27 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.
System Size
The Company’s global system grew 4%, reflecting 1% growth in the U.S. and 9% growth internationally. As expected, these increases included strong growth in both the higher RevPAR midscale and above segments in the U.S. and the direct franchising business in China, which grew 4% and 13%, respectively, as well as 80 basis points of growth globally and 200 basis points internationally from the acquisition of the Vienna House brand. The Company remains solidly on track to achieve its net room growth outlook of 2 to 4% for the full year 2023, including an increase in its retention rate compared to 2022.
RevPAR
Second quarter global RevPAR grew by 7% in constant currency compared to 2022 reflecting a 1% decline in the U.S. and growth of 34% internationally. The Company had achieved record-breaking RevPAR in the U.S. during the preceding year due to COVID-impacted travel patterns. Comparing to 2019 to neutralize for these impacts, U.S. RevPAR grew 8%, a 30 basis point acceleration from first quarter 2023 growth. The international RevPAR growth was driven equally by stronger pricing power and higher occupancy levels.
Development
On June 30, 2023, the Company’s global development pipeline consisted of nearly 1,850 hotels and approximately 228,000 rooms, representing a 10% year-over-year increase, including 22% growth in the U.S.
Approximately 72% of the Company’s pipeline is in the midscale and above segments.
Approximately 57% of the Company’s development pipeline is international.
Approximately 81% of the Company’s pipeline is new construction, of which approximately 35% has broken ground.
During second quarter 2023, the Company awarded 179 new contracts for its legacy brands, an increase of 8% year-over-year. In July, the Company awarded 60 additional new contracts for its ECHO Suites Extended Stay by Wyndham brand to established and experienced developers, including what will be the brand’s first hotels in Canada. This brings the total number of contracts awarded for the brand to 265 since its launch, or nearly 33,000 rooms.
Cash and Liquidity
The Company generated net cash provided by operating activities of $83 million and free cash flow of $74 million in second quarter 2023. The Company ended the quarter with a cash balance of $63 million and approximately $800 million in total liquidity.
In May 2023, the Company successfully amended and extended its outstanding Senior Secured Term Loan B Facility (“Prior Term Loan B”), which was due May 2025. The new $1.1 billion Senior Secured Term Loan B Facility (“New Term Loan B”) matures in May 2030 and carries an interest rate of SOFR plus 2.25% (with a 0.10% credit spread adjustment). The net proceeds from the New Term Loan B were used to repay all outstanding principal under the Company’s Prior Term Loan B.
As a result of this transaction, the Company moved its next material debt maturity to 2027 and increased its weighted average maturity from 3.2 to 6.0 years, providing significant financial flexibility to execute on the Company’s strategic objectives of delivering outstanding value to its guests and franchisees while driving strong shareholder return.
Share Repurchases and Dividends
During the second quarter, the Company repurchased approximately 1.6 million shares of its common stock for $109 million at an average price of $68.56 per share. Year-to-date through June 30, the Company repurchased approximately 2.4 million shares of its common stock for $165 million at an average price of $69.20 per share. The Company’s Board of Directors recently increased the Company’s share repurchase authorization by $400 million.
The Company paid common stock dividends of $30 million, or $0.35 per share.
Full-Year 2023 Outlook
The Company is refining its outlook as follows:
The reduction in adjusted net income represents an increase in interest expense due, in part, to the refinancing of the Company’s Term Loan B. This impact was offset in adjusted diluted EPS by second quarter share repurchase activity.
Year-over-year growth rates are not comparable due to the sale of the Company’s owned hotels and the exit of its select-service management business, both of which occurred during 2022, as well as the variability in its marketing funds due to the support that the Company provided to its owners during 2020.
The Company’s expectations for full-year 2023 marketing funds contribution to adjusted EBITDA is unchanged at $10 million. The Company expects fund revenues will outpace fund expenses by $29 million in the second half of 2023 with approximately $10 million to $15 million per quarter.
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, July 27, 2023 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 800 267-6316 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 July 27, 2023. A telephone replay will be available for approximately ten days beginning at noon ET on July 27, 2023 at 800 839-5124.
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 properties, with approximately 9,100 hotels across over 95 countries on six continents. Through its network of approximately 852,000 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 24 hotel brands, including Super 8®, Days Inn®, Ramada®, Microtel®, La Quinta®, Baymont®, Wingate®, AmericInn®, Hawthorn Suites®, Trademark Collection® and Wyndham®. The Company’s award-winning Wyndham Rewards loyalty program offers over 103 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally. For more information, visit www.wyndhamhotels.com. The Company may use its website as a 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 www.investor.wyndhamhotels.com. Accordingly, investors should monitor this section of the Company’s website 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 the Company’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. The Company claims the protection of the Safe Harbor contained in the Private Securities Litigation Reform Act of 1995 for forward-looking statements. Forward-looking statements include those that convey management’s expectations as to the future based on plans, estimates and projections at the time the Company makes the statements and may be identified by words such as “will,” “expect,” “believe,” “plan,” “anticipate,” “intend,” “goal,” “future,” “outlook,” “guidance,” “target,” “objective,” “estimate,” “projection” and similar words or expressions, including the negative version of such words and expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company 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 worsening of the effects from the coronavirus pandemic (“COVID-19”); COVID-19’s scope, duration, resurgence and impact on the Company’s business operations, financial results, cash flows and liquidity, as well as the impact on the Company’s franchisees, guests and team members, the hospitality industry and overall demand for and restrictions on travel the Company’s continued performance during the recovery from COVID-19 and any resurgence or mutations of the virus concerns with or threats of other pandemics, contagious diseases or health epidemics, including the effects of COVID-19; the performance of the financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising businesses; the Company’s relationships with franchisees; the impact of war, terrorist activity, political instability or political strife, including the ongoing conflict between Russia and Ukraine; the Company’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 the Company’s ability to obtain financing and the terms of such financing, including access to liquidity and capital; and the Company’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 the Company’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. The Company undertakes no obligation to 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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