Company Raises Full-Year 2023 EPS Outlook
Grows Development Pipeline by Another 12%
PARSIPPANY, N.J., Oct. 27, 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.