Wyndham Hotels & Resorts(US:WH)2023-02-16 16:50Financial Data and Key Metrics Changes - The company reported global RevPAR growth of over 16% for the full year 2022, with adjusted EBITDA of $650 million and free cash flow of $360 million [7][26][34] - Adjusted diluted EPS for Q4 was $0.72, a 4% increase year-over-year, while full year adjusted diluted EPS was $3.96, a 25% increase [29][31] - The company generated $310 million in fee-related and other revenues in Q4, bringing full year total to $1.35 billion [26][27] Business Line Data and Key Metrics Changes - The franchising segment grew Q4 revenue by 12% year-over-year, with adjusted EBITDA increasing 8% to $138 million [27] - The hotel management segment saw declines in revenue and adjusted EBITDA due to the sale of select-service management and owned hotel businesses [28][30] - The corporate and other segment expenses were relatively flat compared to 2021, with $7 million of higher expenses due to inflationary pressures [28][30] Market Data and Key Metrics Changes - Domestic RevPAR finished 12% ahead of 2021 and 9% ahead of 2019, with growth accelerating to 480 basis points in Q4 [32] - Internationally, Q4 constant currency RevPAR was 46% ahead of last year and 23% above 2019 [33] - The company added 27,000 rooms in the U.S. and 37% more rooms internationally compared to the previous year [9][10] Company Strategy and Development Direction - The company aims for global net room growth of 2% to 4% and global RevPAR growth of 4% to 6% in 2023 [37][38] - The capital allocation strategy includes pursuing accretive M&A transactions and incentivizing franchisees to invest in new brand prototypes [35][36] - The company is focused on expanding its ECHO Suites brand, with expectations for significant growth in the coming years [45][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of leisure travel as a priority for discretionary spending among middle-income Americans in 2023 [21][22] - The company anticipates continued strong demand for its economy and mid-scale brands, particularly in light of infrastructure spending [22][70] - Management noted that the U.S. business has fully recovered to pre-COVID levels, while international markets still present growth opportunities [55][56] Other Important Information - The company’s loyalty program, Wyndham Rewards, grew by 8% to 99 million members, driving a 23% increase in direct bookings [24][73] - The company qualified for the 2022 Dow Jones Sustainability Index, reflecting its commitment to sustainability and environmental practices [26] Q&A Session Summary Question: Environment for tuck-in acquisitions - Management indicated that the environment for acquisitions is improving, with a focus on strategic and methodical evaluations of potential deals [42][43] Question: Impact of ECHO on room growth - Management confirmed that ECHO's impact on 2023 net room growth is minimal, with expectations for more significant contributions in 2024 [44][45] Question: Components of loan growth guidance - Management explained that 80% of the pipeline is new construction, with a typical realization period of 4 to 5 years [48] Question: Impact of government spending on infrastructure - Management expects significant revenue opportunities from government infrastructure spending, estimating over $3 billion for franchisees [69][70] Question: Loyalty membership and direct bookings - Management reported that loyalty membership grew to 99 million, with direct bookings increasing significantly [73]