World's largest hotel franchisor recognized for third consecutive year PARSIPPANY, N.J., March 11, 2025 /PRNewswire/ -- Wyndham Hotels & Resorts was once again named one of the World's Most Ethical Companies® by Ethisphere, honoring companies that demonstrate business integrity through robust ethics, compliance and governance practices. This award marks the third consecutive year Wyndham has been recognized and fifth time overall. "At Wyndham, we believe that you do well by doing good. That's why our busine ...

Core Viewpoint - Wyndham Hotels & Resorts, Inc. has announced an 8% increase in its quarterly dividend payout, reflecting the company's commitment to enhancing shareholder returns through the utilization of free cash [1][2]. Dividend Increase Details - The quarterly dividend has been raised to 41 cents per share (or $1.64 annually) from the previous 38 cents (or $1.52 annually) [2]. - The new dividend will be paid on or around March 31, 2025, to shareholders on record as of March 17, 2025 [2]. - Based on the closing price of $104.37 per share, the stock now has a dividend yield of 1.6% [2]. Shareholder Return Focus - The increase in dividends underscores the company's focus on improving shareholder returns, as investors typically favor stocks that generate returns, particularly those with a history of consistent dividend payments [3]. Performance Metrics - Wyndham's shares have increased by 41.2% over the past six months, outperforming the Zacks Hotels and Motels industry's growth of 20.4% [4]. - In the fourth quarter of 2024, global RevPAR (Revenue per Available Room) rose by 5% year over year in constant currency, with a 5% increase in the U.S. and 6% internationally [5]. - The company's retention rate improved by 10 basis points year over year, reaching a record 95.7% by the end of 2024 [5]. Expansion and Strategy - Wyndham is focused on expanding its geographic footprint and product offerings across all segments, leveraging a diversified brand portfolio [6]. - The company opened 68,700 rooms globally in 2024, marking a 4% year-over-year increase, including approximately 28,000 rooms in the U.S. [7]. - As of December 31, 2024, Wyndham's global development pipeline included around 2,100 hotels and 252,000 rooms, indicating a 5% year-over-year growth [7].

Group 1 - Wyndham Rewards members can earn 7,500 bonus points for staying two qualifying nights, with a maximum of 15,000 points available for two stays [1] - Members with a Wyndham Rewards Earner Visa card can earn an additional 7,500 points for the same stay conditions [1] - The promotion is part of a broader celebration of Member Month, highlighting the program's generosity and commitment to rewarding members [2] Group 2 - Every Wednesday, new exclusive offers will be available for members, allowing them to maximize their rewards throughout the month [3] - Previous Member Months have included discounts on points purchases, special partner offers, and access to trip sweepstakes [3] - Member Month provides opportunities for various types of getaways, catering to families, couples, and solo travelers [4] Group 3 - Wyndham Rewards is recognized as the 1 hotel rewards program, with approximately 114 million members globally [6] - Members earn a guaranteed 1,000 points with every qualified stay and can redeem free nights starting at just 7,500 points [6] - Wyndham Hotels & Resorts operates more than 60,000 hotels and vacation rentals worldwide, emphasizing the program's extensive reach and generosity [6]

Financial Performance - Hotel Franchising adjusted EBITDA for 2024 was $767 million, up from $727 million in 2023, reflecting a growth of 5.5%[30] - The company reported a net income of $628 million for Hotel Franchising in 2024, compared to $606 million in 2023, indicating a year-over-year increase of 3.6%[30] Franchise Operations - The company licensed its brands to approximately 6,200 franchisees globally, with franchise agreements typically lasting 10 to 20 years, providing significant visibility into future cash flows[31] - Wyndham Hotels & Resorts operates approximately 9,300 hotels across 25 brands in more than 95 countries, making it the world's largest hotel franchisor by number of franchised properties[32] - The company operates approximately 6,200 franchisees, with one master franchisor in China accounting for 12% of its hotels, while no other franchisee exceeds 2%[66] Growth Strategy - The company aims to grow its direct franchising system by 3.6-4.6% in 2025, targeting high FeePAR growth through attractive RevPAR and royalty rates[36] - Wyndham plans to enhance franchisee profitability by optimizing top-line performance and lowering operating costs through continuous digital innovation[45] Sustainability Initiatives - The company is committed to reducing greenhouse gas emissions and promoting sustainability through its Wyndham Green Program, which includes best practices for energy and water conservation[62] - Wyndham Rewards members have donated over 200 million points to various non-profit organizations, supporting humanitarian causes and providing temporary safe housing for victims of human trafficking[55] Employee Information - As of December 31, 2024, Wyndham had approximately 2,200 employees, with around 1,000 employees located outside the United States[41] Financial Risks - The company has a total outstanding balance of variable-rate borrowings, net of swaps, amounting to $531 million as of December 31, 2024[222] - A hypothetical 10% change in the effective weighted average interest rate on variable-rate borrowings would result in a $2 million increase or decrease in annual long-term debt interest expense[222] - The company has foreign currency rate exposure, particularly with the Canadian Dollar, Chinese Yuan, Euro, Brazilian Real, British Pound, and Argentine Peso[224] - The absolute notional amount of outstanding foreign exchange hedging instruments was $186 million as of December 31, 2024[225] - Foreign currency exchange losses related to Argentina were immaterial, totaling $14 million and $4 million during 2024 and 2023, respectively[226] - The company uses interest swap contracts and foreign currency forwards to manage interest rate and currency exchange rate risks[220] - The fair values of cash and cash equivalents, trade receivables, and accounts payable approximate their carrying values due to their short-term nature[223] - The company assesses its interest rate exposure using sensitivity analysis, indicating potential impacts on earnings and cash flows based on hypothetical interest rate changes[222] Market Trends - The hotel industry experiences seasonal revenue fluctuations, with higher revenues typically occurring in the second and third quarters due to increased leisure travel[67]

Financial Data and Key Metrics Changes - The company reported a strong finish for the year with net room growth of 4% and comparable adjusted EBITDA and EPS growth of 7% and 10% respectively [9] - Adjusted EBITDA increased 12% on a comparable basis, driven by higher fee-related revenues and ongoing margin expansion [36] - Adjusted diluted EPS grew 18% on a comparable basis to $1.04, reflecting adjusted EBITDA growth and share repurchase activity [37] Business Line Data and Key Metrics Changes - The company opened a record 69,000 rooms, the largest number of annual organic room additions in its history, representing a 4% increase from last year [10] - The ECHO Suites brand showed strong performance in new markets, with operating performance exceeding owner expectations [11] - The extended stay market is projected to grow nearly 30% from $21 billion in 2024 to $27 billion by 2028, with ECHO Suites, Hawthorn Suites, WaterWalk, and Wyndham Residences representing nearly one-third of the domestic development pipeline [12] Market Data and Key Metrics Changes - U.S. RevPAR in the fourth quarter grew by 5.3%, with a 140 basis point contribution from hurricane impacts [16] - Internationally, RevPAR grew by 6% year-over-year in constant currency, with Latin America seeing a 32% increase [22] - In China, RevPAR declined 11%, but the direct franchising system grew 16% with over 60 openings in the quarter [23][15] Company Strategy and Development Direction - The company is focusing on accelerating the growth of its direct franchising brands internationally, which are expected to drive sustainable growth [16] - The development strategy targets significantly higher FeePAR additions to the portfolio, with a focus on midscale and above properties [40] - The marketing strategy aims to attract younger and more affluent customers, with a growing share of check-ins from higher-income guests [25] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 goals, highlighting strong development momentum and continued royalty rate expansion [32] - The outlook for 2025 includes global net room growth of 3.6% to 4.6% and RevPAR growth of 2% to 3% on a constant currency basis [44] - Management noted that U.S. leisure travel intentions have increased year-over-year across all income brackets, reflecting broad-based confidence in travel and the economy [21] Other Important Information - The company returned $430 million to shareholders in 2024, representing 6% of its market cap [42] - The Board of Directors authorized an 8% increase to the quarterly cash dividend, raising it to $0.41 per share [43] - The company expects adjusted EBITDA growth of 7% to 9% in 2025, with adjusted net income projected at $369 million to $379 million [49] Q&A Session Summary Question: Development guidance and net unit growth - Management indicated that the net room growth guidance reflects expectations to accelerate growth, with new construction expected to be a larger portion of net room growth in 2025 [56][58] Question: Key money investments and returns - Management confirmed that they are seeing higher returns on key money investments, with those properties bringing in FeePAR premiums of 40% compared to those without [62] Question: Pipeline and FeePAR premium impact - Management stated that the higher FeePAR strategy is expected to contribute to RevPAR growth and outperformance in 2025 [66][68] Question: Credit card fee stream growth - Management expects ancillary revenue growth to be in the low teens range in 2025, driven by the renewal of the Barclays credit card agreement [78] Question: RevPAR environment needed for growth - Management indicated that they expect RevPAR to improve from flat last year to up about three points this year, which is necessary for achieving the 8.5% adjusted EBITDA CAGR [96] Question: Hurricane impact on RevPAR guidance - Management clarified that they have adjusted hurricane benefits out of their RevPAR guidance for 2025, accounting for a 30 basis point headwind [90][93]

Core Insights - Wyndham Hotels reported revenue of $341 million for the quarter ended December 2024, reflecting a year-over-year increase of 6.2% [1] - The earnings per share (EPS) for the quarter was $1.04, up from $0.91 in the same quarter last year, resulting in an EPS surprise of +4.00% against the consensus estimate of $1.00 [1] - The reported revenue was slightly below the Zacks Consensus Estimate of $343.57 million, showing a surprise of -0.75% [1] Financial Metrics - Total rooms available were 903,000, slightly below the average estimate of 904,267 from four analysts [4] - Total Revenue per Available Room (RevPAR) was reported at $40.01, compared to the estimated $40.09 [4] - Fee-related and other revenues from royalties and franchise fees reached $136 million, exceeding the average estimate of $129.14 million, marking a year-over-year increase of +16.2% [4] - Marketing, reservation, and loyalty revenues were $135 million, slightly below the estimated $139.47 million, with a year-over-year change of +1.5% [4] - Management and other fees were reported at $3 million, in line with the average estimate of $3.46 million, showing no change year-over-year [4] - License and other fees amounted to $30 million, surpassing the estimated $29.71 million, reflecting a +3.5% change from the previous year [4] - Other fee-related revenues were $37 million, below the estimated $40.53 million, indicating a year-over-year decrease of -2.6% [4] Stock Performance - Wyndham's shares have returned +6.1% over the past month, outperforming the Zacks S&P 500 composite's +4.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Wyndham Hotels reported quarterly earnings of $1.04 per share, exceeding the Zacks Consensus Estimate of $1 per share, and showing an increase from $0.91 per share a year ago, indicating a 4% earnings surprise [1] - The company posted revenues of $341 million for the quarter ended December 2024, which was a 6.24% increase from $321 million year-over-year but missed the Zacks Consensus Estimate by 0.75% [2] Group 1: Earnings Performance - Wyndham has surpassed consensus EPS estimates for the last four quarters, with the latest earnings surprise being 4% [1][2] - The company’s earnings for the previous quarter were $1.39 per share, slightly above the expected $1.37, resulting in a 1.46% surprise [1] Group 2: Revenue Performance - The revenue of $341 million for the latest quarter represents a year-over-year increase of approximately 6.24% from $321 million [2] - Wyndham has not been able to beat consensus revenue estimates over the last four quarters [2] Group 3: Stock Performance and Outlook - Wyndham shares have increased by about 6.6% since the beginning of the year, outperforming the S&P 500's gain of 3.2% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] Group 4: Earnings Estimates and Industry Outlook - The current consensus EPS estimate for the upcoming quarter is $0.91 on revenues of $321.86 million, while for the current fiscal year, it is $4.81 on $1.5 billion in revenues [7] - The Hotels and Motels industry, to which Wyndham belongs, is currently ranked in the bottom 46% of over 250 Zacks industries, which may impact stock performance [8]

Financial Performance - Fourth quarter diluted EPS rose 80% to $1.08, while adjusted diluted EPS grew 14% to $1.04, reflecting higher net income and share repurchase activity[2] - Full-year 2024 adjusted EBITDA increased by 5% to $694 million, with a comparable growth of 7% when excluding marketing fund variability[15] - The company reported a net income of $289 million for 2024, consistent with the previous year, despite higher transaction-related expenses[15] - Net revenues for the year ended December 31, 2024, were $1,408 million, a 0.8% increase from $1,397 million in 2023[30] - Basic earnings per share for the year ended December 31, 2024, were $3.64, up from $3.43 in 2023[30] - Adjusted EBITDA for the full year 2024 was $767 million, an increase from $727 million in 2023[32] - The company reported operating income of $495 million for the year ended December 31, 2024, compared to $503 million in 2023[30] - Adjusted net income for Q4 2024 was $82 million, compared to $75 million in Q4 2023, reflecting a 9.3% increase[52] Revenue Per Available Room (RevPAR) - Global RevPAR increased by 5% in Q4 2024 compared to Q4 2023, with a full-year growth of 2% year-over-year in constant currency[2] - The U.S. RevPAR grew 5% in Q4 2024, with a sequential improvement of 620 basis points from Q3 2024[7] - Global RevPAR for the full year 2024 was $42.91, a decrease of 0.4% compared to 2023[46] - The company expects 2025 global RevPAR growth of 2% to 3%[19] - The company anticipates a year-over-year growth of 2% to 3% in global RevPAR for 2025[54] Room Growth and Development - The company opened a record 68,700 rooms globally in 2024, representing a 4% year-over-year growth, including nearly 28,000 rooms in the U.S.[2] - The development pipeline reached a record 252,000 rooms, growing 5% year-over-year, with approximately 70% in midscale and above segments[5] - The global room count increased by 31,200 rooms, reaching 903,000 as of December 31, 2024, representing a 4% growth year-over-year[41] - The number of rooms is expected to grow by 3.6% to 4.6% in 2025[54] - The company added 68,700 rooms globally in 2024, with 4% growth in both the United States and international markets[41] Shareholder Returns - The company returned $430 million to shareholders in 2024 through share repurchases and dividends, with an 8% increase in quarterly cash dividend to $0.41 per share starting Q1 2025[18] Cash Flow and Assets - Free cash flow for the year ended December 31, 2024, was $350 million, compared to $411 million in 2023[35] - Cash and cash equivalents increased to $113 million as of December 31, 2024, from $66 million in 2023[37] - The company’s cash and cash equivalents increased to $103 million as of December 31, 2024, compared to $66 million in 2023[38] - Total assets increased to $4,223 million as of December 31, 2024, from $4,033 million in 2023[37] Debt and Financial Obligations - Total debt rose to $2,463 million as of December 31, 2024, up from $2,201 million in 2023[37] - Total outstanding debt as of December 31, 2024, was $2.463 billion, with a weighted average interest rate of 4.8%[38] - Net debt as of December 31, 2024, was $2.360 billion, resulting in a net debt leverage ratio of 3.4x[38] - The company incurred $47 million in payments related to hostile takeover defense during the year[34] Future Outlook - The company expects adjusted EBITDA for 2025 to be in the range of $745 million to $755 million[54] - Projected adjusted diluted EPS for 2025 is estimated to be between $4.66 and $4.78[54] - The company plans to allocate approximately $40 to $45 million for capital expenditures in 2025[54] - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency[48]

Core Insights - Wyndham Hotels & Resorts reported a strong finish to 2024, with a 4% net rooms growth and a 7% increase in comparable adjusted EBITDA, highlighting the company's focus on expanding into higher FeePAR markets and growing its extended-stay footprint [1][4][5] - The company announced an 8% increase in its quarterly cash dividend to $0.41 per share, effective from the first quarter of 2025, reflecting its commitment to returning value to shareholders [4][16] Financial Performance - Fourth quarter diluted earnings per share increased by 80% to $1.08, while adjusted diluted EPS grew 14% to $1.04, indicating strong profitability [4][12] - Full-year 2024 net income was reported at $289 million, consistent with the previous year, while adjusted net income increased by 2% to $347 million [4][12] - The company generated $290 million in net cash from operating activities and $397 million in adjusted free cash flow for the full year 2024 [14][29] Development and Growth - The global development pipeline reached a record 2,100 hotels and 252,000 rooms, representing a 5% year-over-year increase [3][4] - The company opened a record 68,700 rooms globally in 2024, achieving a 4% year-over-year growth [4][5] - Approximately 70% of the pipeline is in the midscale and above segments, which grew 5% year-over-year, indicating a strategic focus on higher revenue segments [5][17] Revenue and Market Performance - Global RevPAR grew by 5% in the fourth quarter compared to the previous year, with U.S. RevPAR also increasing by 5% [4][6] - The company reported fee-related and other revenues of $341 million in the fourth quarter, reflecting a 7% increase year-over-year [4][13] - The retention rate improved to a record 95.7%, showcasing the company's ability to maintain its customer base [2][4] Outlook for 2025 - The company provided a 2025 outlook projecting year-over-year rooms growth of 3.6% to 4.6% and global RevPAR growth of 2% to 3% [17][18] - Adjusted EBITDA is expected to be in the range of $745 million to $755 million, indicating continued operational strength [17][18]

Core Insights - Wyndham Hotels (WH) is expected to report quarterly earnings of $1 per share, reflecting a 9.9% increase year-over-year, with revenues forecasted at $343.78 million, a 7.1% increase from the previous year [1] - Analysts have revised the consensus EPS estimate upward by 0.2% over the past 30 days, indicating a collective reassessment of projections [1][2] Financial Metrics - Analysts estimate 'Net revenues- Fee-related and other revenues- Royalties and franchise fees' to reach $129.14 million, a 10.4% increase from the prior-year quarter [4] - 'Net revenues- Fee-related and other revenues- Marketing, reservation and loyalty' are projected to be $139.47 million, reflecting a 4.9% increase year-over-year [4] - 'Net revenues- Fee-related and other revenues- Management and other fees' are expected to arrive at $3.46 million, indicating a 15.3% increase from the year-ago quarter [5] - 'Net revenues- Fee-related and other revenues- License and other fees' are estimated at $29.71 million, a 2.5% increase from the prior-year quarter [5] - 'Net revenues- Fee-related and other revenues- Other' is forecasted to reach $40.53 million, reflecting a 6.7% increase year-over-year [6] - The total number of rooms is projected to be 904,267, compared to 871,800 in the previous year [6] - The consensus for 'Total RevPAR' is $40.09, up from $38.90 in the same quarter last year [6] Market Performance - Over the past month, Wyndham shares have returned +7.9%, outperforming the Zacks S&P 500 composite's +2.1% change [6] - Based on its Zacks Rank 3 (Hold), WH is expected to perform in line with the overall market in the upcoming period [6]