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