Financial Data and Key Metrics Changes - Adjusted EBITDA grew 9% on a comparable basis and adjusted EPS increased 20% [6][24] - Global RevPAR grew 2% in constant currency, with U.S. RevPAR starting strong but softening in February and March [7][9] - Free cash flow was $80 million, converting from adjusted EBITDA at approximately 55% [24] Business Line Data and Key Metrics Changes - Fee-related and other revenues increased by $12 million year over year, driven by a 9% increase in royalties and franchise fees [22] - Ancillary revenue growth was primarily driven by higher credit card and partnership fees [22][19] - The company opened 15,000 rooms, a 13% increase from the previous year, and signed 6% more deals than a year ago [15][17] Market Data and Key Metrics Changes - International RevPAR grew in all regions except China, with Latin America seeing a 25% increase [8] - EMEA RevPAR rose 6%, while Southeast Asia and the Pacific Rim posted 8% growth [8] - In China, RevPAR declined 8% year over year due to pricing pressure [8] Company Strategy and Development Direction - The company focuses on growing its system and supporting franchisees, with a record first quarter for room additions [14][20] - The strategy includes prioritizing development in higher fee par geographies and expanding direct franchising [18] - The company aims to capture trade down demand from both leisure and business travelers seeking value [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the summer travel months despite recent softness in demand [10][41] - The outlook for full-year constant currency global RevPAR is revised to range between down 2% to up 1% [25][26] - Management remains confident in the long-term growth strategy and the resilience of the business model [29][21] Other Important Information - The company returned nearly $110 million to shareholders through share repurchases and dividends [24] - Wyndham was named one of the world's most ethical companies for the third straight year [20] Q&A Session Summary Question: Can you elaborate on the changes in the U.S. RevPAR outlook? - Management noted that normalized April demand improved, with RevPAR running about a full point ahead of the prior year, indicating potential positive momentum [39][40] Question: What is the long-term outlook for net room growth? - Management reaffirmed a long-term net room growth outlook of 3% to 5%, with a record first quarter for room openings [52][56] Question: How is the company managing development costs amid rising prices? - Management highlighted efforts to shift sourcing and negotiate with suppliers to manage increased costs effectively [67][69] Question: What is the company's strategy regarding key money? - The company is being selective with key money allocations, focusing on high-quality revenue accretive opportunities [78][80] Question: How is the company addressing the recent trends in infrastructure demand? - Management reported a gradual resumption of infrastructure fund disbursements, with expectations of continued growth driven by private investment [106][110]

Financial Data and Key Metrics Changes - RevPAR in the same store portfolio increased by 1.5% year over year, driven by a mix of rate and occupancy growth [4] - EBITDA margin contracted by less than 50 basis points compared to the first quarter of the previous year, with pro forma operating expenses increasing by 1.5% year over year [4][19] - Adjusted EBITDA for the first quarter was $45 million, a modest decline compared to the prior year, primarily due to net effective asset sales completed in 2024 [20] - Adjusted FFO was $27.4 million or $0.22 per share, benefiting from lower interest expenses due to deleveraging efforts [21] Business Line Data and Key Metrics Changes - Urban portfolio RevPAR increased nearly 3%, outperforming the total industry by approximately 80 basis points [16] - Suburban and small town metro portfolios generated average RevPAR growth of 1.2%, driven by hotels in specific regions [18] - Resort location type accounts for only 11% of total guest rooms, with significant renovations expected to boost performance [18] Market Data and Key Metrics Changes - Demand softening was noted in early March, particularly in government and international travel segments, with March RevPAR declining by 1.6% in the same store portfolio [5][10] - The company expects April RevPAR to decline by approximately 45% year over year, influenced by difficult calendar comparisons [7][12] - The first quarter saw a 2% decline in average daily rate (ADR) despite absolute ADRs increasing year over year across most demand segments [6] Company Strategy and Development Direction - The company announced a $50 million share repurchase program to return capital to shareholders and drive value creation [14][24] - Continued investment in renovations is expected to enhance the quality of the portfolio and drive future profitability [21][25] - The company is focused on managing expenses effectively in a lower revenue growth environment, with a strong emphasis on cost controls [11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term prospects for the portfolio despite near-term macroeconomic uncertainties [10][14] - The company anticipates a modest recovery in government and international travel segments as the year progresses [30] - Management noted that leisure demand is expected to remain resilient during economic uncertainty, with expectations for group demand to remain strong [11][39] Other Important Information - The company has a total liquidity of over $300 million and no significant debt maturities until 2027 [23] - The average interest rate on the company's debt is approximately 4.6%, with 71% of pro rata share of debt fixed [23] - The company reduced its full-year capital expenditure guidance to $60 million to $70 million, allowing for flexibility in response to market conditions [25] Q&A Session Summary Question: Trends in government and international travel segments - Management noted that both segments experienced the most acute impact in March but have stabilized at lower levels, with optimism for recovery as the year progresses [30][31] Question: Business transient customer trends - The midweek negotiated business segment has held up reasonably well, with no significant downward trend observed [32] Question: Impact on shorter booked weekend leisure trips - Management indicated that leisure demand is expected to be resilient, with potential shifts towards more domestic travel [39] Question: Expense management and potential brand negotiations - Management stated that proactive expense management has been effective, and they have not yet needed to implement deeper cuts seen in prior downturns [55] Question: Share repurchase program and capital allocation - The company plans to fund the buyback through a combination of reduced CapEx and opportunistic asset sales, while maintaining a healthy balance sheet [61] Question: Joint venture partner's capital deployment view - Management indicated that their joint venture partner is well-capitalized and prepared to take advantage of market dislocations, though transaction activity is expected to slow [64]

Financial Data and Key Metrics Changes - Adjusted EBITDA grew 9% on a comparable basis and adjusted EPS increased 20% [6][24] - Global RevPAR grew 2% in constant currency, with U.S. RevPAR starting strong but softening in February and March [7][9] - Free cash flow was $80 million, converting from adjusted EBITDA at approximately 55% [24] Business Line Data and Key Metrics Changes - Fee related and other revenues increased by $12 million year over year, driven by a 9% increase in royalties and franchise fees [23] - Ancillary revenue growth was primarily driven by higher credit card and partnership fees [23][19] - The company opened 15,000 rooms, a 13% increase from the previous year, and signed 6% more deals than a year ago [15][17] Market Data and Key Metrics Changes - International RevPAR grew in all regions except China, with Latin America seeing a 25% increase [8] - EMEA RevPAR rose 6%, while Southeast Asia and the Pacific Rim posted 8% growth [8] - In China, RevPAR declined 8% year over year due to pricing pressure [8] Company Strategy and Development Direction - The company focuses on growing its system and supporting franchisees, with a record first quarter for room additions [14][20] - The strategy includes prioritizing development in higher fee par geographies and expanding direct franchising [18] - The company aims to capture trade down demand from both leisure and business travelers seeking value [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the summer travel months despite current uncertainties [10][40] - The outlook for full year constant currency global RevPAR is revised to range between down 2% to up 1% [25][26] - Management highlighted the resilience of their business model, which is asset-light and designed to perform through economic cycles [29] Other Important Information - The company returned nearly $110 million to shareholders through share repurchases and dividends [7][24] - Wyndham was named one of the world's most ethical companies for the third straight year [20] Q&A Session Summary Question: Changes in U.S. RevPAR outlook - Management noted that normalized April demand improved, with RevPAR running about a full point ahead of the prior year [38][39] - They expect leisure transient demand to pick up into the summer months, with pricing holding firm [40][41] Question: Long-term outlook and sensitivities - Management confirmed that the long-term growth algorithm remains intact, with net room growth expected to continue [50][52] Question: Development backdrop and conversion business - Management expressed confidence in the development pipeline, with a significant increase in new construction openings [60][62] Question: Trends in infrastructure and macro impact - Management noted a slight slowdown in infrastructure demand but expects continued growth driven by federal allocations [102][106] Question: Ancillary revenue growth expectations - Management continues to expect low teen growth for ancillary revenues, driven by contract-based income [96][97]

Financial Data and Key Metrics Changes - Adjusted EBITDA grew 9% on a comparable basis and adjusted EPS increased 20% [5][21] - Global RevPAR grew 2% in constant currency, with U.S. RevPAR starting strong but softening in February and March [6][8] - Free cash flow was $80 million, converting from adjusted EBITDA at approximately 55% [22] - The company returned nearly $110 million to shareholders through share repurchases and dividends [6][22] Business Line Data and Key Metrics Changes - Fee-related and other revenues increased by $12 million year over year, driven by a 9% increase in royalties and franchise fees [21] - Ancillary revenue growth was primarily driven by higher credit card and partnership fees [21][18] - The company opened 15,000 rooms, a 13% increase from the previous year, and signed 6% more deals than a year ago [14][15] Market Data and Key Metrics Changes - Latin America RevPAR grew by 25% excluding Argentina's hyperinflation, while EMEA RevPAR rose 6% [7] - International RevPAR grew in all regions except China, where it declined by 8% year over year [7] - U.S. RevPAR is expected to decline about 3% for the remainder of the year based on recent trends [24][42] Company Strategy and Development Direction - The company focuses on growing its system and supporting franchisees, with a strategic emphasis on higher fee par hotels [12][17] - The development pipeline reached a record 254,000 rooms, with a significant increase in net room growth across all regions [14][15] - The company is prioritizing development in higher RevPAR markets and is selective about capital deployment [72][73] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the resilience of their business model during economic downturns, citing historical outperformance [10][11] - The outlook for 2025 has been refined to reflect a more cautious view of industry-wide RevPAR performance, with expectations ranging from down 2% to up 1% [24][25] - Management noted that consumer sentiment is currently weighing on leisure occupancy, but there are signs of positive momentum as summer approaches [41][42] Other Important Information - The company was named one of the world's most ethical companies for the third consecutive year [19] - The company continues to invest in technology innovations to enhance service and operational efficiency [109] Q&A Session Summary Question: Can you elaborate on the changes in the U.S. RevPAR outlook? - Management noted that normalized April demand improved, with RevPAR running about a full point ahead of the prior year, indicating potential for a positive summer [35][36] Question: What is the long-term outlook for net room growth? - Management reaffirmed a long-term net room growth outlook of 3% to 5%, with a record first quarter in room openings and strong signings [47][49] Question: How is the company managing development costs amid rising prices? - Management highlighted efforts to shift sourcing closer to home and negotiate with suppliers to mitigate cost increases, particularly in construction materials [61][62] Question: What is the outlook for ancillary revenue growth? - Management continues to expect low teen growth for ancillary revenues, driven by contract-based income and a strong co-branded credit card program [92][94] Question: How is the company addressing infrastructure demand? - Management reported a steady demand for infrastructure-related travel, with expectations for continued growth driven by federal spending on infrastructure projects [100][102]

Core Insights - Wyndham Hotels & Resorts reported strong first-quarter results for 2025, achieving record openings and a robust development pipeline despite macroeconomic uncertainties [1][2][3] - The company’s asset-light, franchise-only business model has shown resilience during economic downturns, positioning it for long-term shareholder value [1] System Size and Development - As of March 31, 2025, Wyndham's global system comprised 907,200 rooms, reflecting a 4% year-over-year growth [2] - The U.S. system grew to 502,600 rooms, a 1% increase, while international rooms reached 404,600, a 7% increase [2][31] - The development pipeline included approximately 2,140 hotels and 254,000 rooms, marking a 5% year-over-year increase [3][6] Revenue Performance - Global RevPAR increased by 2% in constant currency, with U.S. RevPAR at $42.37 (up 2%) and international RevPAR at $28.73 (up 3%) [3][5] - Fee-related and other revenues grew by 4% year-over-year to $316 million, driven by higher royalties and franchise fees [15][25] Financial Results - Net income for the first quarter was $61 million, compared to $16 million in the prior year, with adjusted net income increasing by 5% to $67 million [15][25] - Adjusted EBITDA rose by 3% year-over-year to $145 million, reflecting higher fee-related revenues and margin expansion [15][25] - Diluted earnings per share increased to $0.78 from $0.19 in the prior year, with adjusted diluted EPS growing 10% to $0.86 [15][25] Shareholder Returns - The company returned $109 million to shareholders through share repurchases of $76 million and quarterly cash dividends of $0.41 per share [13][15] - During the first quarter, approximately 797,000 shares were repurchased [13] Outlook for 2025 - The company refined its full-year outlook, anticipating a softer RevPAR environment, with global RevPAR growth projected between -2% and 1% [14][39] - The net room growth outlook remains at 3.6% to 4.6% for the full year [16][39]

Core Insights - Hilton Worldwide Holdings Inc. reported first-quarter adjusted earnings per share of $1.72, exceeding the street view of $1.61 [1] - Quarterly sales reached $2.69 billion, which fell short of the analyst consensus estimate of $2.72 billion [1] - Adjusted EBITDA for the first quarter was $795 million, an increase from $750 million a year ago, with an expanded adjusted EBITDA margin of 73.7% compared to 70.4% in the previous year [1] Financial Performance - System-wide comparable RevPAR increased by 2.5% on a currency-neutral basis for the first quarter compared to the same period in 2024 [2] - Quarterly net income margin improved to 11.1% from 10.4% [2] - The company opened 186 hotels, adding a total of 20,100 rooms, resulting in 14,000 net room additions during the first quarter of 2025 [2] Strategic Developments - The company expanded its pipeline of lifestyle properties, introducing the Tempo by Hilton brand in the U.K., marking its first hotel outside the U.S., along with new hotels in Greece and Utah [3] - As of March 31, the company had $11.2 billion in outstanding debt, excluding deferred financing costs and discounts [3] Cash Management - Total cash and equivalents amounted to $807 million as of March 31, 2025, which included $76 million of restricted cash [4] - The firm repurchased 3.7 million shares of common stock during the first quarter, leading to a total capital return of $927 million for the quarter and $1,157 million year-to-date through April [4] - The board of directors authorized a regular quarterly cash dividend of $0.15 per share to be paid on June 27 [4] Future Outlook - Hilton raised its full-year 2025 adjusted EPS guidance to a range of $7.76–$7.94, up from the previous range of $7.71–$7.82, which compares favorably to the $7.93 analyst estimate [5] - For the second quarter, the company expects adjusted EPS between $1.97 and $2.02, which is below the $2.11 estimate [5] - HLT shares were trading lower by 1.30% to $224.27 at the last check on Tuesday [5]

Core Viewpoint - Hilton Worldwide Holdings Inc. (HLT) is trading at a premium compared to its industry peers and the broader market, indicating strong market confidence in its growth potential and financial performance [1][3][19] Valuation Comparison - HLT has a forward 12-month price-to-earnings (P/E) ratio of 27.60X, higher than the Zacks Hotels and Motels industry average of 21.65X, the S&P 500 index at 20.52X, and the Consumer Discretionary sector at 17.62X [1] - Compared to similar companies, HLT's valuation is also premium, with Choice Hotels International, Inc. (CHH) at 18.75X, Marriott International, Inc. (MAR) at 22.61X, and Hilton Grand Vacations Inc. (HGV) at 10.06X [2] Financial Performance - HLT's stock has increased by 7.1% over the past year, while the industry has seen a decline of 0.3% [3] - The company is experiencing growth in revenue per available room (RevPAR), with a 2.7% year-over-year increase in 2024, driven by a 0.8% rise in occupancy and a 1.6% increase in average daily rate [7] Expansion Efforts - Hilton is focused on expanding its global presence, adding 973 hotels and nearly 100,000 rooms in 2024, marking a net unit growth of 7.3%, the largest in its history [9] - The company anticipates a net unit growth of 6-7% for 2025, supported by strong travel demand and ongoing expansion efforts [10] Growth Prospects - For 2025, Hilton expects RevPAR growth between 2% and 3%, with positive outlooks across all major segments, including corporate travel and conventions [10][11] - Analysts project an 11.1% year-over-year growth in earnings per share (EPS) for 2025, reflecting confidence in the company's performance despite its premium valuation [12] Challenges - Macroeconomic challenges, including rising interest rates and limited capital availability, are impacting business operations and growth [13] - Increased costs have affected profitability, with total expenses as a percentage of revenues rising to 78.8% in 2024, primarily due to higher payroll and procurement costs [15]