WYNDHAM HOTELS & RESORTS REPORTS STRONG FIRST QUARTER 2023 RESULTS

Company Grows Development Pipeline by 11% and Global RevPAR by 12%
Raises Full-Year 2023 Outlook

PARSIPPANY, N.J., April 26, 2023 /PRNewswire/ — Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months ended March 31, 2023.  Highlights include:

  • Global RevPAR grew 12% compared to first quarter 2022 in constant currency.
  • U.S. RevPAR grew 4% compared to first quarter 2022.
  • System-wide rooms grew 4% year-over-year, including 1% of growth in the U.S. and 9% of growth internationally.
  • Development pipeline grew 11% year-over-year to 226,000 rooms, and signings increased 7%, excluding ECHO Suites Extended Stay by Wyndham.
  • Awarded 35 new construction projects for ECHO Suites Extended Stay by Wyndham, bringing the total number to 205 since launch in March 2022.
  • Returned $87 million to shareholders through $56 million of share repurchases and a quarterly cash dividend of $0.35 per share.
  • Company raises full-year 2023 outlook.

“Our impressive first quarter results demonstrate continued momentum with global RevPAR growth of 12%, net room growth of 4% and the 11th consecutive quarter of sequential growth in our development pipeline,” said Geoffrey A. Ballotti, president and chief executive officer.  “We outperformed our adjusted EBITDA expectations, leading us to raise our full-year outlook as a result.  With our seasonally strongest summer season on the horizon and no signs of slowdown in our middle-income guests’ desire to spend on travel, we’re enthusiastic about the opportunities that lie ahead and our ability to deliver outstanding value to our shareholders, guests, franchisees and team members.”

First Quarter Financial Results

The comparability of the Company’s first 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


Net
income (a)


Adjusted
EBITDA


Reported
diluted
EPS (a)


Adjusted
diluted
EPS (a)

2022 reported


$         316


$    106


$      159


$      1.14


$   0.95

Less: CPLG/Owned asset contribution


(38)


(36)


(15)


(0.38)


(0.12)

2022 ex. CPLG/Owned asset contribution


278


70


144


0.76


0.83












2023 reported


308


67


147


0.77


0.86

Change


30


(3)


3


0.01


0.03

Less: Marketing fund variability


n/a


8


11


0.09


0.09

Comparable growth


$           30


$        5


$        14


$      0.10


$   0.12












Comparable growth rate


11 %


7 %


10 %


13 %


15 %

_____________________

Note: Growth rates may not recalculate due to rounding; see Table 7 for a reconciliation of non-GAAP metrics.

(a)     

Includes estimated tax impact for the select-service management business, owned assets and marketing fund variability.

  • Fee-related and other revenues was $308 million compared to $316 million in first quarter 2022, which included $38 million from the Company’s select-service management business and owned hotels. On a comparable basis, fee-related and other revenues increased 11% year-over-year primarily reflecting global RevPAR growth of 9%, higher franchise fees and incremental license fees.
  • The Company generated net income of $67 million, or $0.77 per diluted share, compared to $106 million, or $1.14 per diluted share, in first quarter 2022. The decline in net income was primarily due to the sale of the Company’s owned hotels and the exit of its select-service management business, partially offset by higher adjusted EBITDA in the Company’s hotel franchising segment.
  • Adjusted EBITDA was $147 million compared to $159 million in first quarter 2022, which included a $15 million contribution from the Company’s select-service management business and owned hotels. On a comparable basis – which excludes the marketing fund variability – adjusted EBITDA increased 10% year-over-year reflecting higher fee-related and other revenues.
  • During first quarter 2023, the Company’s marketing fund expenses exceeded revenues by $4 million; while in first quarter 2022, the Company’s marketing fund revenues exceeded expenses by $7 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



Rooms



March 31,
2023


March 31,
2022


YOY
Change (bps)

United States


494,400


491,900


50

International


350,400


321,400


900

Global


844,800


813,300


390

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 10%, 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



First

Quarter 2023


YOY
Constant
Currency
% Change

United States


$           43.84


4 %

International


27.99


37

Global


37.20


12

First quarter global RevPAR grew by 12% in constant currency compared to 2022 as the U.S. grew 4% and international grew 37%.  Approximately two-thirds of this increase is driven by stronger pricing power, while the remainder is driven by higher occupancy levels.

Development

  • On March 31, 2023, the Company’s global development pipeline consisted of approximately 1,800 hotels and 226,000 rooms, representing an 11% year-over-year increase, including 28% 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 and 80% is new construction, of which approximately 35% has broken ground.
  • During first quarter 2023, the Company awarded 123 new contracts for its legacy brands, an increase of 7% year-over-year, and 35 new contracts for its ECHO Suites Extended Stay by Wyndham brand, bringing the total number of contracts awarded for the brand to 205 since its launch. The pipeline includes over 25,000 rooms associated with the Company’s ECHO brand.

Cash and Liquidity

The Company generated net cash provided by operating activities of $93 million and free cash flow of $84 million in first quarter 2023.  The Company ended the quarter with a cash balance of $150 million and approximately $890 million in total liquidity.

Share Repurchases and Dividends

During the first quarter, the Company repurchased approximately 790,200 shares of its common stock for $56 million.
The Company paid common stock dividends of $31 million, or $0.35 per share.

Full-Year 2023 Outlook

The Company is increasing its outlook as follows: 



Updated Outlook


Prior Outlook

Year-over-year rooms growth


2 – 4%


2 – 4%

Year-over-year global RevPAR growth (a)


4 – 6%


4 – 6%

Fee-related and other revenues


$1.38 – $1.41 billion


$1.38 – $1.41 billion

Adjusted EBITDA


$654 – $664 million


$650 – $660 million

Adjusted net income


$340 – $352 million


$337 – $349 million

Adjusted diluted EPS


$3.92 – $4.06


$3.84 – $3.98

Free cash flow conversion rate (b)


50 – 55%


50 – 55%

________________________

(a)     

Outlook represents global RevPAR growth of 6% to 8% compared to 2019.

(b)     

Represents the percentage of adjusted EBITDA that is expected to produce free cash flow.

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.

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 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 April 27, 2023.  A telephone replay will be available for approximately ten days beginning at noon ET on April 27, 2023 at 800 695-0395.

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 845,000 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 101 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.

Table 1

WYNDHAM HOTELS & RESORTS

INCOME STATEMENT

(In millions, except per share data)

(Unaudited)






Three Months Ended
March 31,


2023


2022

Net revenues




Royalties and franchise fees

$          121


$          110

Marketing, reservation and loyalty

120


111

Management and other fees

3


35

License and other fees

23


19

Other

41


41

Fee-related and other revenues

308


316

Cost reimbursements

5


55

Net revenues

313


371





Expenses




Marketing, reservation and loyalty

124


104

Operating

20


35

General and administrative

30


29

Cost reimbursements

5


55

Depreciation and amortization

19


24

Separation-related

2


Gain on asset sale


(36)

Total expenses

200


211





Operating income

113


160

Interest expense, net

22


20





Income before income taxes

91


140

Provision for income taxes

24


34

Net income

$            67


$          106





Earnings per share




Basic

$        0.77


$        1.15

Diluted

0.77


1.14





Weighted average shares outstanding




Basic

86.5


92.5

Diluted

87.1


93.2

Table 2

WYNDHAM HOTELS & RESORTS

HISTORICAL REVENUE AND ADJUSTED EBITDA BY SEGMENT




The reportable segments presented below represent our operating segments for which separate financial information is available and is utilized on a regular basis by our chief operating decision maker to assess performance and allocate resources. In identifying our reportable segments, we also consider the nature of services provided by our operating segments. Management evaluates the operating results of each of our reportable segments based upon net revenues and adjusted EBITDA.  During the first quarter of 2023, we changed the composition of our reportable  segments to reflect the recent changes in our Hotel Management segment, including the sale of our owned assets, the exit of our select-service management business and the exit from substantially all of our U.S. full-service management business.  The remaining hotel management business, which is predominately the full-service international managed business, has been aggregated, on a prospective basis, within our Hotel Franchising segment.  We believe that adjusted EBITDA is a useful measure of performance for our segments which, when considered with GAAP measures, allows a more complete understanding of our operating performance. We use this measure internally to assess 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. Our presentation of adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.














First
Quarter


Second
Quarter


Third
Quarter


Fourth
Quarter


Full Year

Hotel Franchising (a)











Net revenues











2023

$            313


n/a


n/a


n/a


n/a


2022

272


$            335


$            367


$            303


$         1,277


2021

209


283


337


270


1,099


Adjusted EBITDA











2023

$            164


n/a


n/a


n/a


n/a


2022

155


$            185


$            201


$            138


$            679


2021

105


166


193


128


592












Hotel Management











Net revenues











2023

n/a


n/a


n/a


n/a


n/a


2022

$              99


$              51


$              40


$              31


$            221


2021

94


123


126


122


466


Adjusted EBITDA











2023

n/a


n/a


n/a


n/a


n/a


2022

$              20


$                6


$                7


$                4


$              37


2021

5


16


16


19


57












Corporate and Other











Net revenues











2023

$               —


n/a


n/a


n/a


n/a


2022


$               —


$               —


$               —


$               —


2021






Adjusted EBITDA











2023

$            (17)


n/a


n/a


n/a


n/a


2022

(16)


$            (16)


$            (17)


$            (16)


$            (66)


2021

(13)


(14)


(15)


(16)


(59)












Total Company











Net revenues











2023

$            313


n/a


n/a


n/a


n/a


2022

371


$            386


$            407


$            334


$         1,498


2021

303


406


463


392


1,565


Net income/(loss)











2023

$              67


n/a


n/a


n/a


n/a


2022

106


$              92


$            101


$              56


$            355


2021

24


68


103


48


244


Adjusted EBITDA











2023

$            147


n/a


n/a


n/a


n/a


2022

159


$            175


$            191


$            126


$            650


2021

97


168


194


131


590

____________________

NOTE: 

Amounts include the results of the Company’s Wyndham Grand Bonnet Creek Resort and Wyndham Grand Rio Mar Resort, which were sold in March 2022 and May 2022, respectively, and its select-service management business, which was exited in March 2022, through their sale/exit dates.  Amounts may not add across due to rounding. See Table 7 for reconciliations of Total Company non-GAAP measures and Table 9 for definitions.

(a)     

For 2023, the Hotel Franchising segment includes the former Hotel Management segment, which is primarily comprised of the Company’s remaining full-service management business.

Table 3

WYNDHAM HOTELS & RESORTS

CONDENSED CASH FLOWS

(In millions)

(Unaudited)






Three Months Ended
March 31,


2023


2022

Operating activities




Net income

$            67


$          106

Depreciation and amortization

19


24

Gain on asset sale


(36)

Trade receivables

4


17

Accounts payable, accrued expenses and other current liabilities

(40)


(32)

Deferred revenues

24


19

Payments of development advance notes, net

(13)


(7)

Other, net

32


44

Net cash provided by operating activities

93


135

Investing activities




Property and equipment additions

(9)


(10)

Proceeds from asset sales, net (a)


202

Net cash (used in)/provided by investing activities

(9)


192

Financing activities




Payments of long-term debt


(4)

Dividends to shareholders

(31)


(30)

Repurchases of common stock

(54)


(39)

Other, net

(10)


(9)

Net cash used in financing activities

(95)


(82)

Net (decrease)/increase in cash, cash equivalents and restricted cash

(11)


245

Cash, cash equivalents and restricted cash, beginning of period

161


171

Cash, cash equivalents and restricted cash, end of period

$          150


$          416

Free Cash Flow:




We define free cash flow to be net cash provided by operating activities less property and equipment additions, which we also refer to as capital expenditures. We believe free cash flow to be a useful operating performance measure to us and investors to evaluate the ability of our operations to generate cash for uses other than capital expenditures and, after debt service and other obligations, our ability to grow our business through acquisitions and investments, as well as our ability to return cash to shareholders through dividends and share repurchases. Free cash flow is not necessarily a representation of how we will use excess cash. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Wyndham Hotels is that free cash flow does not represent the total cash movement for the period as detailed in the condensed consolidated statement of cash flows.






Three Months Ended March 31,


2023


2022

Net cash provided by operating activities (b)

$            93


$          135

Less: Property and equipment additions

(9)


(10)

Free cash flow

$            84


$          125

____________________

(a)     

Includes proceeds of $118 million, net of transaction costs, received from the Company’s sales of the Wyndham Grand Bonnet Creek Resort and the Wyndham Grand Rio Mar Resort and $84 million of proceeds from CorePoint Lodging related to the Company’s exit of its select-service management business.

(b)     

2022 includes the select-service management business and owned hotels as well as a reduced level of marketing spend due to Omicron concerns.  While the Company will lap the sale of its owned hotels and the exit of its select-service management business by third quarter 2023, the marketing fund variability will impact the quarterly year-over-year comparisons for the remainder of 2023.

Table 4

WYNDHAM HOTELS & RESORTS

BALANCE SHEET SUMMARY AND DEBT

(In millions)

(Unaudited)










As of

March 31, 2023


As of

December 31, 2022

Assets






Cash and cash equivalents



$                               150


$                               161

Trade receivables, net



230


234

Property and equipment, net



96


99

Goodwill and intangible assets, net



3,124


3,131

Other current and non-current assets



484


498

Total assets



$                           4,084


$                           4,123







Liabilities and stockholders’ equity






Total debt



$                           2,077


$                           2,077

Other current liabilities



379


386

Deferred income tax liabilities



342


345

Other non-current liabilities



350


353

Total liabilities



3,148


3,161

Total stockholders’ equity



936


962

Total liabilities and stockholders’ equity



$                           4,084


$                           4,123







Our outstanding debt was as follows:







Net Effective
Interest Rate (a)


As of

March 31, 2023


As of

December 31, 2022

$750 million revolving credit facility (due April 2027)



$                                 —


$                                 —

$400 million term loan A (due April 2027)

6.2 %


399


399

$1.6 billion term loan B (due May 2025)

3.7 %


1,141


1,139

4.375% senior unsecured notes (due August 2028)

4.4 %


494


494

Finance leases

4.5 %


43


45

Total debt

4.4 %


2,077


2,077

Cash and cash equivalents



150


161

Net debt



$                           1,927


$                           1,916

_____________________

(a) Represents weighted average interest rates for the first quarter 2023, including the effects from hedging.

Our outstanding debt as of March 31, 2023 matures as follows:



Amount

Within 1 year

$                                   26

Between 1 and 2 years

26

Between 2 and 3 years

1,176

Between 3 and 4 years

37

Between 4 and 5 years

306

Thereafter

506

Total

$                             2,077

Table 5

WYNDHAM HOTELS & RESORTS

REVENUE DRIVERS












Three Months Ended March 31,




2023


2022


Change


% Change



Beginning Room Count (January 1)










United States

493,800


490,600


3,200


1 %



International

348,700


319,500


29,200


9



Global

842,500


810,100


32,400


4













Additions










United States

6,100


6,800


(700)


(10)



International

4,200


4,600


(400)


(9)



Global

10,300


11,400


(1,100)


(10)













Deletions










United States

(5,500)


(5,500)


0




International

(2,500)


(2,700)


200


7



Global

(8,000)


(8,200)


200


2













Ending Room Count (March 31)










United States

494,400


491,900


2,500


1



International (a)

350,400


321,400


29,000


9



Global

844,800


813,300


31,500


4 %














As of March 31,


FY 2022
Royalty
Distribution


2023


2022


Change


% Change


System Size










United States










Economy

233,600


240,400


(6,800)


(3 %)



Midscale and Upper Midscale

241,700


232,900


8,800


4



Upscale and Above

19,100


18,600


500


3



Total United States

494,400


491,900


2,500


1 %


85 %











International










Greater China 

162,100


154,900


7,200


5 %


2

Rest of Asia Pacific

30,500


29,400


1,100


4


1

Europe, the Middle East and Africa (a)

79,800


66,600


13,200


20


5

Canada

39,500


39,100


400


1


5

Latin America

38,500


31,400


7,100


23


2

Total International

350,400


321,400


29,000


9 %


15











Global

844,800


813,300


31,500


4 %


100 %

_________________________ 

(a)     

2023 includes 6,400 rooms associated with the acquisition of Vienna House in third quarter of 2022.

Table 5 (continued)

WYNDHAM HOTELS & RESORTS

REVENUE DRIVERS








Three Months
Ended

March 31, 2023


 Constant Currency

% Change (a)



Regional RevPAR Growth






United States






Economy

$                         35.64


1 %



Midscale and Upper Midscale

49.58


5



Upscale and Above

86.46


9



Total United States

$                         43.84


4 %









International






Greater China

$                         14.14


15 %



Rest of Asia Pacific

31.23


43



Europe, the Middle East and Africa

41.37


48



Canada

40.86


30



Latin America

47.54


59



Total International

$                         27.99


37 %









Global

$                         37.20


12 %










Three Months Ended March 31,




2023


2022


% Change

Average Royalty Rate






United States

4.5 %


4.6 %


(10 bps)

International

2.3 %


2.3 %


Global

3.9 %


4.0 %


(10 bps)

______________________

(a)     International excludes the impact of currency exchange movements.


Table 6


WYNDHAM HOTELS & RESORTS


HISTORICAL REVPAR AND ROOMS






First
Quarter


Second
Quarter


Third
Quarter


Fourth
Quarter


Full
Year

Hotel Franchising (a)












Global RevPAR











2023


$         37.20


n/a


n/a


n/a


n/a


2022


$         33.08


$         43.74


$         48.61


$         39.18


$         41.23


2021


$         24.02


$         35.69


$         44.67


$         34.77


$         34.85


U.S. RevPAR












2023


$         43.84


n/a


n/a


n/a


n/a


2022


$         41.01


$         54.70


$         58.45


$         45.49


$         50.00


2021


$         29.68


$         46.99


$         56.38


$         42.45


$         43.95


International RevPAR










2023


$         27.99


n/a


n/a


n/a


n/a


2022


$         21.05


$         26.80


$         33.90


$         30.16


$         28.11


2021


$         15.26


$         18.21


$         26.62


$         23.13


$         20.86


Global Rooms (b)











2023


844,800


n/a


n/a


n/a


n/a


2022


793,200


799,200


816,300


827,100


827,100


2021


748,700


752,500


758,600


769,400


769,400


U.S. Rooms












2023


494,400


n/a


n/a


n/a


n/a


2022


486,600


487,600


488,100


493,500


493,500


2021


452,500


454,200


458,000


465,100


465,100


International Rooms (b)










2023


350,400


n/a


n/a


n/a


n/a


2022


306,600


311,600


328,200


333,600


333,600


2021


296,200


298,300


300,600


304,300


304,300













Hotel Management











Global RevPAR











2023


n/a


n/a


n/a


n/a


n/a


2022


$         56.55


$         65.13


$         71.54


$         68.04


$         64.07


2021


$         38.17


$         56.08


$         64.63


$         57.57


$         53.81


U.S. RevPAR












2023


n/a


n/a


n/a


n/a


n/a


2022


$         69.92


$       135.35


$       126.34


$         98.28


$         92.66


2021


$         42.89


$         67.42


$         78.27


$         66.77


$         63.20


International RevPAR










2023


n/a


n/a


n/a


n/a


n/a


2022


$         40.26


$         40.89


$         53.57


$         59.49


$         48.61


2021


$         27.12


$         31.20


$         37.53


$         40.96


$         34.31


Global Rooms











2023


n/a


n/a


n/a


n/a


n/a


2022


20,100


19,700


19,700


15,400


15,400


2021


48,500


45,500


44,000


40,700


40,700


U.S. Rooms












2023


n/a


n/a


n/a


n/a


n/a


2022


5,300


4,800


4,800


300


300


2021


33,500


30,600


28,800


25,500


25,500


International Rooms










2023


n/a


n/a


n/a


n/a


n/a


2022


14,800


14,900


14,900


15,100


15,100


2021


15,000


14,900


15,200


15,200


15,200

Table 6 (continued)

WYNDHAM HOTELS & RESORTS

HISTORICAL REVPAR AND ROOMS
















First
Quarter


Second
Quarter


Third
Quarter


Fourth
Quarter


Full
Year

Total System












Global RevPAR











2023


$         37.20


n/a


n/a


n/a


n/a


2022


$         34.06


$         44.28


$         49.17


$         39.86


$         41.88


2021


$         24.90


$         36.92


$         45.80


$         35.99


$         35.95


U.S. RevPAR












2023


$         43.84


n/a


n/a


n/a


n/a


2022


$         42.11


$         55.57


$         59.15


$         45.96


$         50.72


2021


$         30.62


$         48.37


$         57.73


$         43.84


$         45.19


International RevPAR










2023


$         27.99


n/a


n/a


n/a


n/a


2022


$         21.95


$         27.46


$         34.79


$         31.44


$         29.05


2021


$         15.83


$         18.84


$         27.15


$         23.99


$         21.52


Global Rooms (b)











2023


844,800


n/a


n/a


n/a


n/a


2022


813,300


818,900


836,000


842,500


842,500


2021


797,200


798,000


802,600


810,100


810,100


U.S. Rooms












2023


494,400


n/a


n/a


n/a


n/a


2022


491,900


492,400


492,900


493,800


493,800


2021


486,000


484,800


486,800


490,600


490,600


International Rooms (b)











2023


350,400


n/a


n/a


n/a


n/a


2022


321,400


326,500


343,100


348,700


348,700


2021


311,200


313,200


315,800


319,500


319,500

_____________________

NOTE:

Amounts may not foot due to rounding. Results reflect the reclassification of rooms from the Hotel Management segment to the Hotel Franchising segment related to the CorePoint Lodging asset sales, including approximately 19,000 rooms in first quarter 2022.

(a)     

For 2023, the Hotel Franchising segment includes the former Hotel Management segment, which is primarily comprised of the Company’s remaining full-service management business.

(b)     

Includes 6,400 Vienna House rooms acquired in the third quarter of 2022.

Table 7

WYNDHAM HOTELS & RESORTS

NON-GAAP RECONCILIATIONS

(In millions)











The tables below reconcile certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the income statement in order to assist investors’ understanding of the overall impact of such adjustments. We believe that adjusted EBITDA, adjusted net income and adjusted EPS financial measures provide useful information to investors about us and our financial condition and results of operations because these measures are used by our management team to evaluate our operating performance and make day-to-day operating decisions and adjusted EBITDA is frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry. These measures also assist our investors in evaluating our ongoing operating performance for the current reporting period and, where provided, over different reporting periods, by adjusting for certain items which may be recurring or non-recurring and which in our view do not necessarily reflect ongoing performance. We also internally use these measures to assess our operating performance, both absolutely and in comparison to other companies, and in evaluating or making selected compensation decisions. These supplemental disclosures are in addition to GAAP reported measures. These non-GAAP reconciliation tables should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.











Reconciliation of Net Income/(Loss) to Adjusted EBITDA:




First
Quarter


Second
Quarter


Third
Quarter


Fourth
Quarter


Full
Year

2023










Net income

$             67









Provision for income taxes

24









Depreciation and amortization

19









Interest expense, net

22









Stock-based compensation expense

9









Development advance notes amortization

3









Separation-related expenses (a)

2









Foreign currency impact of highly inflationary countries (b)

1









Adjusted EBITDA

$           147



















2022










Net income

$           106


$             92


$           101


$             56


$           355

Provision for income taxes

34


31


38


16


121

Depreciation and amortization

24


17


18


19


77

Interest expense, net

20


20


21


21


80

Early extinguishment of debt (c)


2




2

Stock-based compensation expense

8


9


8


8


33

Development advance notes amortization

3


3


3


3


12

Gain on asset sale, net (d)

(36)


1




(35)

Separation-related (income)/expenses (a)


(1)


1


1


1

Foreign currency impact of highly inflationary countries (b)


1


1


2


4

Adjusted EBITDA

$           159


$           175


$           191


$           126


$           650











2021










Net income

$             24


$             68


$           103


$             48


$           244

Provision for income taxes

11


25


36


19


91

Depreciation and amortization

24


24


23


25


95

Interest expense, net

28


22


22


22


93

Early extinguishment of debt (c)


18




18

Stock-based compensation expense

5


8


7


8


28

Development advance notes amortization

2


2


3


3


11

Impairments, net (e)




6


6

Separation-related expenses (a)

2


1




3

Foreign currency impact of highly inflationary countries (b)

1





1

Adjusted EBITDA

$             97


$           168


$           194


$           131


$           590

_____________________

NOTE: Amounts may not add due to rounding.

(a)

Represents costs associated with the Company’s spin-off from Wyndham Worldwide.

(b)

Relates to the foreign currency impact from hyper-inflation, primarily in Argentina, which is reflected in operating expenses on the income statement.

(c)

Amount in 2022 relates to non-cash charges associated with the Company’s extension of its revolving credit facility and the prepayment of $400 million of its term loan B. Amount in 2021 relates to the redemption premium and non-cash expenses associated with the early redemption of the Company’s 5.375% senior unsecured notes.

(d)     

Represents net gain on sale of the Company’s owned hotel, the Wyndham Grand Bonnet Creek Resort. There was no gain or loss on sale of the Company’s Wyndham Grand Rio Mar Resort as the proceeds received approximated adjusted net book value.

(e)

Represents a non-cash charge to reduce the carrying values of the Company’s owned hotels long-lived assets to their fair value in connection with the Company’s Board approval of a plan to sell these assets in 2022.

Table 7 (continued)

WYNDHAM HOTELS & RESORTS

NON-GAAP RECONCILIATIONS

(In millions, except per share data)





Reconciliation of Net Income and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS:




Three Months Ended
March 31,


2023


2022

Diluted EPS

$       0.77


$       1.14





Net income

$           67


$         106





Adjustments:




Acquisition-related amortization expense (a)

7


12

Separation-related expenses

2


Foreign currency impact of highly inflationary countries

1


Gain on asset sale (b)


(36)

Total adjustments before tax

10


(24)

Income tax provision/(benefit) (c)

2


(6)

Total adjustments after tax

8


(18)

Adjusted net income

$           75


$           88

Adjustments – EPS impact

0.09


(0.19)

Adjusted diluted EPS

$       0.86


$       0.95





Diluted weighted average shares outstanding

87.1


93.2

_________________________

(a)     

Reflected in depreciation and amortization on the income statement.

(b)     

Represents gain on sale of the Company’s owned hotel, the Wyndham Grand Bonnet Creek Resort.

(c)     

Reflects the estimated tax effects of the adjustments.

Table 8

WYNDHAM HOTELS & RESORTS

2023 OUTLOOK

As of April 26, 2023

(In millions, except per share data)





2023 Outlook

Fee-related and other revenues

$

1,379 – 1,409

Adjusted EBITDA (a)


654 – 664

Depreciation and amortization expense (b)


48 – 50

Development advance notes amortization expense


13 – 15

Stock-based compensation expense


37 – 39

Interest expense, net


93 – 97

Adjusted income before income taxes


454 – 468

Income tax expense (c)


114 – 116

Adjusted net income

$

340 – 352




Adjusted diluted EPS

$

3.92 – 4.06




Diluted shares (d)


86.8




Marketing, reservation and loyalty funds (e)


Approx. $10




Capital expenditures


Approx. $35

Development advance notes


Approx. $60




Free cash flow conversion rate (f)


50% – 55%




Year-over-Year Growth



Global RevPAR (g)


4% – 6%

Number of rooms


2% – 4%

_____________________

(a) 

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 during 2022, as well as the variability in its marketing funds due to the recovery of the COVID support that the Company provided to its owners during 2020. 

(b)

Excludes amortization of acquisition-related intangible assets of ~$27 million.

(c)

Outlook assumes an effective tax rate of approximately 25%.

(d)

Excludes the impact of any share repurchases after March 31, 2023.

(e)

Represents the recovery of $49 million COVID support that the Company provided to its owners during 2020. The Company recovered $38 million of the $49 million support during 2021 and 2022 combined.  

(f) 

Represents the percentage of adjusted EBITDA that is expected to produce free cash flow. Free cash flow plus capital expenditures equals net cash from operating activities.

(g)

Outlook represents global RevPAR growth of 6% – 8% compared to 2019.

In determining adjusted EBITDA, interest expense, net, adjusted income before income taxes, adjusted net income, adjusted diluted EPS and free cash flow conversion rate, we exclude certain items which are otherwise included in determining the comparable GAAP financial measures. We are providing these measures on a non-GAAP basis only because, without unreasonable efforts, we are unable to predict with reasonable certainty the occurrence or amount of all 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.

Table 9
WYNDHAM HOTELS & RESORTS
DEFINITIONS

Adjusted Net Income and Adjusted Diluted EPS: Represents net income/(loss) and diluted earnings/(loss) per share excluding acquisition-related amortization, impairment charges, restructuring and related charges, contract termination costs, transaction-related items (acquisition-, disposition-, or separation-related), (gain)/loss on asset sales and foreign currency impacts of highly inflationary countries. The Company calculates the income tax effect of the adjustments using an estimated effective tax rate applicable to each adjustment.

Adjusted EBITDA: Represents net income/(loss) excluding net interest expense, depreciation and amortization, early extinguishment of debt charges, impairment charges, restructuring and related charges, contract termination costs, transaction-related items (acquisition-, disposition-, or separation-related), (gain)/loss on asset sales, foreign currency impacts of highly inflationary countries, stock-based compensation expense, income taxes and development advance notes amortization. Adjusted EBITDA is a financial measure that is not recognized under U.S. GAAP and should not be considered as an alternative to net income/(loss) or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, the Company’s definition of adjusted EBITDA may not be comparable to similarly titled measures of other companies.

During the first quarter of 2021, the Company modified the definition of adjusted EBITDA to exclude the amortization of development advance notes to reflect how the Company’s chief operating decision maker reviews operating performance beginning in 2021. The Company has applied the modified definition of adjusted EBITDA to all periods presented.

Average Daily Rate (ADR): Represents the average rate charged for renting a lodging room for one day.

Average Occupancy Rate: Represents the percentage of available rooms occupied during the period.

Comparable Basis: Represents a comparison eliminating the contribution from the Company’s owned hotels and select-service management business – both of which were exited in the first half of 2022, as well as the variability in its marketing funds due to the recovery of the COVID support that the Company provided to its owners during 2020.

Constant Currency: Represents a comparison eliminating the effects of foreign exchange rate fluctuations between periods (foreign currency translation) and the impact caused by any foreign exchange related activities (i.e., hedges, balance sheet remeasurements and/or adjustments).

Free Cash Flow: See Table 3 for definition.

Net Debt Leverage Ratio: Calculated by dividing total debt less cash and cash equivalents by trailing twelve months adjusted EBITDA.

Number of Rooms: Represents the number of rooms at the end of the period which are (i) either under franchise and/or management agreements or Company-owned and (ii) properties under affiliation agreements for which we receive a fee for reservation and/or other services provided.

RevPAR: Represents revenue per available room and is calculated by multiplying average occupancy rate by ADR.

Royalty Rate: Represents the average royalty rate earned on our franchised properties and is calculated by dividing total royalties, excluding the impact of amortization of development advance notes, by total room revenues.

SOURCE Wyndham Hotels & Resorts

Originally published at https://www.prnewswire.com/news-releases/wyndham-hotels–resorts-reports-strong-first-quarter-2023-results-301808610.html
Images courtesy of https://pixabay.com

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