Wyndham Hotels & Resorts(US:WH)2023-04-27 15:44Financial Data and Key Metrics Changes - The company reported a 10% increase in adjusted EBITDA on a comparable basis, exceeding expectations [6][24] - Free cash flow generated was $84 million, with a conversion rate from adjusted EBITDA of approximately 57% [7][27] - Adjusted diluted EPS was $0.86, reflecting a 15% increase on a comparable basis [24][32] Business Line Data and Key Metrics Changes - Domestic RevPAR grew by 4% year-over-year, while international RevPAR saw a significant increase of 37% [6][24] - The company opened over 10,000 rooms globally, maintaining a retention rate of 95.3% [8][10] - The development pipeline grew by 11% year-over-year, reaching a record of 226,000 rooms [10][12] Market Data and Key Metrics Changes - U.S. unemployment is at its lowest level since the 1960s, with consumer savings at $1.6 trillion, driving increased travel spending [7][24] - International occupancy improved to 84% of 2019 levels, with notable growth in China [26][81] - Latin America experienced a 60% increase in RevPAR, leading the international growth [58] Company Strategy and Development Direction - The company is focusing on high-margin franchising, transitioning away from select service management [19][20] - There is a strong emphasis on the extended stay sector, with 205 ECHO Suites contracts awarded since launch [11][12] - The company aims to leverage infrastructure spending opportunities, estimating over $150 million in incremental royalties [14][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model, expecting continued growth despite potential economic challenges [32][70] - The company anticipates a strong summer travel season, with 93% of guests planning trips in the next six months [68][72] - The outlook for 2023 has been updated, projecting fee-related revenues of $1.38 billion to $1.41 billion [32][34] Other Important Information - The Wyndham Rewards Loyalty program was recognized as the best hotel loyalty program for the fifth consecutive year [15] - The company ended the quarter with approximately $900 million in total liquidity and a net leverage ratio of 3.0x [28][29] Q&A Session Summary Question: Financing for new construction and conversions - Management indicated that most new construction additions in 2023 already have financing in place, and the majority of conversions also have financing secured [39][40] Question: Share buyback strategy - The company plans to deploy over $200 million for share buybacks this year, with flexibility to leverage if stock is trading at a discount [46][47] Question: Competitive environment and development opportunities - Management noted no significant changes in the competitive landscape, with strong interest in economy and mid-scale brands [50][51] Question: International market recovery - The company reported strong growth in international RevPAR, particularly in Latin America and China, with occupancy levels improving [58][81] Question: ECHO brand potential - The ECHO brand is expected to contribute significantly, with plans for 300 new constructions in the first 10 years [90]