Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months and year ended December 31, 2023. Highlights include:
- System-wide rooms grew organically by 3.5% year-over-year, a record high.
- Opened a record 66,000 organic rooms, representing a year-over-year increase of 3%.
- Global retention rate – including all terminations – improved another 30 basis points to a record 95.6%.
- Development pipeline grew 1% sequentially and by 10% year-over-year to a record 240,000 rooms.
- Grew ECHO Suites pipeline nearly 60% year-over-year with 98 new contract signings.
- Signed 766 contracts for legacy brands, an increase of 8% year-over-year.
- Fourth quarter diluted earnings per share of $0.60 and net income of $50 million; adjusted diluted EPS of $0.91, adjusted net income of $75 million and adjusted EBITDA of $154 million.
- Full-year 2023 diluted EPS of $3.41 and net income of $289 million; adjusted diluted EPS of $4.01, adjusted net income of $341 million and adjusted EBITDA of $659 million.
- Net cash provided by operating activities of $376 million and free cash flow of $339 million for the full-year.
- Returned $515 million to shareholders for the full-year through $397 million of share repurchases and quarterly cash dividends of $0.35 per share.
- Board of Directors recently authorized a 9% increase in the quarterly cash dividend to $0.38 per share beginning with the dividend expected to be declared in first quarter 2024.
“We are tremendously proud to report fourth quarter results that demonstrate the continued success of our global strategy and our accelerating momentum,” said Geoff Ballotti, president and chief executive officer. “Despite the distraction, uncertainty and misperceptions caused by Choice and their slanted and constant communications to our franchisee base, room openings accelerated and our global development pipeline grew by 10% to an all-time high of 240,000 rooms. Our team opened 27% more rooms than last year in the fourth quarter and we welcomed 500 new hotels to our system in 2023. This, when combined with our improving franchisee engagement and record retention rate, drove the best organic system growth we’ve ever achieved. We grew comparable adjusted EBITDA by 6% and returned over half a billion dollars to our shareholders through dividends and share repurchases. We are confident in the continued effectiveness of our growth strategy and see exceptional value-creation opportunities in the years ahead.”
System Size and Development
|
Rooms |
||||||
|
December 31, 2023 |
December 31, 2022 |
YOY Change (bps) |
||||
|
United States |
497,600 |
493,800 |
80 |
|||
|
International |
374,200 |
348,700 |
730 |
|||
|
Global |
871,800 |
842,500 |
350 |
|||
The Company’s global system grew 3.5%, marking 12 consecutive quarters of organic growth and reflecting 1% growth in the U.S. and 7% internationally. As expected, these increases included strong growth in both the higher RevPAR midscale and above segments in the U.S. and the direct franchising business in China, which grew 3% and 13%, respectively. The Company also increased its retention rate, which includes all terminations, by another 30 basis points year-over-year, ending the year at a record 95.6%.
On December 31, 2023, the Company’s global development pipeline consisted of over 1,950 hotels and approximately 240,000 rooms, representing another record-high level and a 10% year-over-year increase. Key highlights include:
- 14th consecutive quarter of sequential pipeline growth
- 8% growth in the U.S. and 11% internationally
- Approximately 70% of the pipeline is in the midscale and above segments, which grew 6% year-over-year
- Approximately 58% of the pipeline is international
- Approximately 79% of the pipeline is new construction, of which approximately 34% has broken ground
- The Company awarded 766 new contracts for its legacy brands in full-year 2023, an increase of 8% compared to full-year 2022. Additionally, the Company awarded 98 additional new contracts for its ECHO Suites brand and, as of December 31, 2023, the Company had awarded 268 contracts, or over 33,000 rooms, for the brand.
RevPAR
|
Fourth Quarter 2023 |
YOY Constant Currency % Change |
Full-Year 2023 |
YOY Constant Currency % Change |
|||||
|
United States |
$ 44.06 |
(4 %) |
$ 50.42 |
(1 %) |
||||
|
International |
32.12 |
7 |
33.21 |
21 |
||||
|
Global |
38.90 |
(1) |
43.10 |
5 |
Fourth quarter global RevPAR declined 1% in constant currency compared to 2022 reflecting a 4% decline in the U.S. and growth of 7% internationally. For the full year, global RevPAR grew 5% in constant currency compared to 2022 reflecting a 1% decline in the U.S. and growth of 21% internationally.
The Company had achieved record-breaking RevPAR in the U.S. during the preceding year due to COVID-impacted travel patterns. Comparing to 2019 to neutralize for COVID-impacted travel patterns, U.S. RevPAR grew 10% in fourth quarter – a 120 basis point acceleration from third quarter 2023 growth – and 9% for the full year. Internationally, year-over-year RevPAR growth for both the fourth quarter and the full-year was primarily driven by higher occupancy levels. Compared to 2019, international RevPAR grew in fourth quarter and full-year by 44% and 36%, respectively, on a constant-currency basis.
Operating Results
Fourth Quarter
- Fee-related and other revenues was $320 million compared to $310 million in fourth quarter 2022 reflecting global net room growth as well as higher license and ancillary fees.
- The Company generated net income of $50 million compared to $56 million in fourth quarter 2022. The decrease was reflective of a higher effective tax rate, higher interest expense, foreign currency impact from hyper-inflation in Argentina and transaction-related expenses resulting from the unsolicited offer by Choice Hotels, partially offset by higher adjusted EBITDA.
- Adjusted EBITDA grew 22% to $154 million from $126 million. This increase included a $21 million favorable impact from marketing fund variability, excluding which adjusted EBITDA grew 6% primarily reflecting higher fee-related and other revenues.
- Diluted earnings per share was $0.60 compared to $0.63 in fourth quarter 2022. This decrease reflects lower net income, partially offset by the benefit of a lower share count due to share repurchase activity.
- Adjusted diluted EPS grew 26% to $0.91 per share from $0.72 per share. This increase included $0.19 per share related to the favorable marketing fund variability (after estimated taxes), excluding which adjusted diluted EPS was unchanged year-over-year as adjusted EBITDA growth and the benefit from share repurchase activity was substantially offset by higher interest expense.
- During fourth quarter 2023, the Company’s marketing fund revenues exceeded expenses by $9 million; while in fourth quarter 2022, the Company’s marketing fund expenses exceeded revenues by $12 million, resulting in $21 million of marketing fund variability.
Full Year
- Fee-related and other revenues was $1,384 million compared to $1,354 million in full-year 2022, which included $50 million from the Company’s select service management business and owned hotels, which were exited in 2022. On a comparable basis, fee-related and other revenues increased 6% year-over-year primarily reflecting global RevPAR and net room growth, higher license and ancillary fees and 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 $289 million compared to $355 million in full-year 2022, which included $37 million from the select-service managed and owned hotels. The decrease was reflective of a higher effective tax rate, higher interest expense, foreign currency impact from hyper-inflation in Argentina and transaction-related expenses resulting from the unsolicited offer by Choice Hotels, partially offset by higher adjusted EBITDA.
- Adjusted EBITDA was $659 million compared to $650 million in full-year 2022, which included $18 million from the select-service managed and owned hotels. The growth in adjusted EBITDA was further impacted by $11 million of unfavorable marketing fund variability. On a comparable basis, adjusted EBITDA increased 6% reflecting higher fee-related and other revenues.
- Diluted earnings per share was $3.41 compared to $3.91 in full-year 2022, which included $0.40 per share from the select-service managed and owned hotels. This decrease reflects the lower net income, partially offset by the benefit of a lower share count due to share repurchase activity.
- Adjusted diluted EPS was $4.01 per share compared to $3.96 per share in full-year 2022, which included $0.15 per share from the select-service managed and owned hotels. This growth in adjusted diluted EPS was further impacted by $0.09 per share (after estimated taxes) of unfavorable marketing fund variability. On a comparable basis, adjusted diluted EPS increased 8% year-over-year reflecting the adjusted EBITDA growth and the benefit from share repurchase activity, partially offset by higher interest expense.
- During full-year 2023, the Company’s marketing fund revenues exceeded expenses by $9 million; while in 2022, the Company’s marketing fund revenues exceeded expenses by $20 million, resulting in $11 million of marketing fund variability.
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.
Balance Sheet and Liquidity
The Company generated $376 million of net cash provided by operating activities and free cash flow of $339 million in the full-year 2023. The Company ended the quarter with a cash balance of $66 million and approximately $650 million in total liquidity.
The Company’s net debt leverage ratio was 3.2 times at December 31, 2023, within the lower half of the Company’s 3 to 4 times stated target range.
Share Repurchases and Dividends
During the fourth quarter, the Company repurchased approximately 1.7 million shares of its common stock for $127 million. For the full-year 2023, the Company repurchased approximately 5.5 million shares of its common stock for $397 million, at an average price of $72.25, 8% lower than trading levels as of February 13th.
The Company paid common stock dividends of $28 million, or $0.35 per share, in the fourth quarter of 2023 for a total of $118 million, or $1.40 per share, for the full-year 2023.
For the full-year 2023, the Company returned $515 million to shareholders through share repurchases and quarterly cash dividends.
The Company’s Board of Directors authorized a 9% increase in the quarterly cash dividend to $0.38 per share, beginning with the dividend expected to be declared in first quarter 2024.
Full-Year 2024 Outlook
The Company provided the following outlook for full-year 2024:
|
2024 Outlook |
||
|
Year-over-year rooms growth |
3 – 4% |
|
|
Year-over-year global RevPAR growth |
2 – 3% |
|
|
Fee-related and other revenues |
$1.43 – $1.46 billion |
|
|
Adjusted EBITDA |
$690 – $700 million |
|
|
Adjusted net income |
$341 – $351 million |
|
|
Adjusted diluted EPS |
$4.11 – $4.23 |
|
|
Free cash flow conversion rate |
~60% |
|
NOTE: |
Outlook for adjusted EBITDA, adjusted net income, adjusted diluted EPS and free cash flow conversion rate excludes all expenses and cash outlays associated with the unsolicited offer by Choice Hotels, which are currently anticipated to approximate $75 million before taxes. |
|||||
Year-over-year growth rates for adjusted EBITDA, adjusted net income and adjusted diluted EPS are not comparable due to full-year 2023 marketing fund revenues exceeding expenses by $9 million, which substantially completed the recovery of the $49 million support the Company provided to its owners during COVID. The Company expects marketing revenues to equal expenses during full-year 2024 though seasonality of spend will affect the quarterly comparisons throughout the year.
About Wyndham Hotels & Resorts
Wyndham Hotels & Resorts (NYSE: WH) is the world’s largest hotel franchising company by the number of properties, with approximately 9,200 hotels across over 95 countries on six continents. Through its network of approximately 872,000 rooms appealing to the everyday traveler, Wyndham commands a leading presence in the economy and midscale segments of the lodging industry.
|
Table 1 |
|||||||
|
WYNDHAM HOTELS & RESORTS |
|||||||
|
INCOME STATEMENT |
|||||||
|
(In millions, except per share data) |
|||||||
|
(Unaudited) |
|||||||
|
Three Months Ended December 31, |
Year Ended December 31, |
||||||
|
2023 |
2022 |
2023 |
2022 |
||||
|
Net revenues |
|||||||
|
Royalties and franchise fees |
$ 117 |
$ 118 |
$ 532 |
$ 512 |
|||
|
Marketing, reservation and loyalty |
133 |
128 |
578 |
544 |
|||
|
Management and other fees |
3 |
3 |
14 |
57 |
|||
|
License and other fees |
29 |
26 |
112 |
100 |
|||
|
Other |
38 |
35 |
148 |
141 |
|||
|
Fee-related and other revenues |
320 |
310 |
1,384 |
1,354 |
|||
|
Cost reimbursements |
1 |
24 |
13 |
144 |
|||
|
Net revenues |
321 |
334 |
1,397 |
1,498 |
|||
|
Expenses |
|||||||
|
Marketing, reservation and loyalty |
124 |
140 |
569 |
524 |
|||
|
Operating |
30 |
22 |
94 |
106 |
|||
|
General and administrative |
37 |
35 |
130 |
123 |
|||
|
Cost reimbursements |
1 |
24 |
13 |
144 |
|||
|
Depreciation and amortization |
20 |
19 |
76 |
77 |
|||
|
Transaction-related |
5 |
— |
11 |
— |
|||
|
Separation-related |
— |
1 |
1 |
1 |
|||
|
Gain on asset sale, net |
— |
— |
— |
(35) |
|||
|
Total expenses |
217 |
241 |
894 |
940 |
|||
|
Operating income |
104 |
93 |
503 |
558 |
|||
|
Interest expense, net |
29 |
21 |
102 |
80 |
|||
|
Early extinguishment of debt |
— |
— |
3 |
2 |
|||
|
Income before income taxes |
75 |
72 |
398 |
476 |
|||
|
Provision for income taxes |
25 |
16 |
109 |
121 |
|||
|
Net income |
$ 50 |
$ 56 |
$ 289 |
$ 355 |
|||
|
Earnings per share |
|||||||
|
Basic |
$ 0.61 |
$ 0.64 |
$ 3.43 |
$ 3.93 |
|||
|
Diluted |
0.60 |
0.63 |
3.41 |
3.91 |
|||
|
Weighted average shares outstanding |
|||||||
|
Basic |
82.0 |
87.8 |
84.4 |
90.3 |
|||
|
Diluted |
82.6 |
88.3 |
84.9 |
90.8 |
|||
|
Table 2 |
||||||||||
|
WYNDHAM HOTELS & RESORTS |
||||||||||
|
HISTORICAL REVENUE AND ADJUSTED EBITDA BY SEGMENT |
||||||||||
|
The reportable segments presented below represent our operating segments for which separate financial information is available and is utilized on a regular basis by our chief operating decision maker to assess performance and allocate resources. In identifying our reportable segments, we also consider the nature of services provided by our operating segments. Management evaluates the operating results of each of our reportable segments based upon net revenues and adjusted EBITDA. During the first quarter of 2023, we changed the composition of our reportable segments to reflect the recent changes in our Hotel Management segment, including the sale of our owned assets, the exit of our select-service management business and the exit from substantially all of our U.S. full-service management business. The remaining hotel management business, which is predominately the full-service international managed business, has been aggregated, on a prospective basis, within our Hotel Franchising segment. We believe that adjusted EBITDA is a useful measure of performance for our segments which, when considered with GAAP measures, allows a more complete understanding of our operating performance. We use this measure internally to assess operating performance, both absolutely and in comparison to other companies, and to make day to day operating decisions, including in the evaluation of selected compensation decisions. Our presentation of adjusted EBITDA may not be comparable to similarly-titled measures used by other companies. |
||||||||||
|
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
Full Year |
||||||
|
Hotel Franchising (a) |
||||||||||
|
Net revenues |
||||||||||
|
2023 |
$ 313 |
$ 362 |
$ 402 |
$ 321 |
$ 1,397 |
|||||
|
2022 |
272 |
335 |
367 |
303 |
1,277 |
|||||
|
2021 |
209 |
283 |
337 |
270 |
1,099 |
|||||
|
Adjusted EBITDA |
||||||||||
|
2023 |
$ 164 |
$ 175 |
$ 215 |
$ 173 |
$ 727 |
|||||
|
2022 |
155 |
185 |
201 |
138 |
679 |
|||||
|
2021 |
105 |
166 |
193 |
128 |
592 |
|||||
|
Hotel Management |
||||||||||
|
Net revenues |
||||||||||
|
2023 |
n/a |
n/a |
n/a |
n/a |
n/a |
|||||
|
2022 |
$ 99 |
$ 51 |
$ 40 |
$ 31 |
$ 221 |
|||||
|
2021 |
94 |
123 |
126 |
122 |
466 |
|||||
|
Adjusted EBITDA |
||||||||||
|
2023 |
n/a |
n/a |
n/a |
n/a |
n/a |
|||||
|
2022 |
$ 20 |
$ 6 |
$ 7 |
$ 4 |
$ 37 |
|||||
|
2021 |
5 |
16 |
16 |
19 |
57 |
|||||
|
Corporate and Other |
||||||||||
|
Net revenues |
||||||||||
|
2023 |
$ — |
$ — |
$ — |
$ — |
$ — |
|||||
|
2022 |
— |
— |
— |
— |
— |
|||||
|
2021 |
— |
— |
— |
— |
— |
|||||
|
Adjusted EBITDA |
||||||||||
|
2023 |
$ (17) |
$ (17) |
$ (15) |
$ (19) |
$ (68) |
|||||
|
2022 |
(16) |
(16) |
(17) |
(16) |
(66) |
|||||
|
2021 |
(13) |
(14) |
(15) |
(16) |
(59) |
|||||
|
Total Company |
||||||||||
|
Net revenues |
||||||||||
|
2023 |
$ 313 |
$ 362 |
$ 402 |
$ 321 |
$ 1,397 |
|||||
|
2022 |
371 |
386 |
407 |
334 |
1,498 |
|||||
|
2021 |
303 |
406 |
463 |
392 |
1,565 |
|||||
|
Net income |
||||||||||
|
2023 |
$ 67 |
$ 70 |
$ 103 |
$ 50 |
$ 289 |
|||||
|
2022 |
106 |
92 |
101 |
56 |
355 |
|||||
|
2021 |
24 |
68 |
103 |
48 |
244 |
|||||
|
Adjusted EBITDA |
||||||||||
|
2023 |
$ 147 |
$ 158 |
$ 200 |
$ 154 |
$ 659 |
|||||
|
2022 |
159 |
175 |
191 |
126 |
650 |
|||||
|
2021 |
97 |
168 |
194 |
131 |
590 |
|||||
|
NOTE: |
Amounts include the results of the Company’s Wyndham Grand Bonnet Creek Resort and Wyndham Grand Rio Mar Resort, which were sold in March 2022 and May 2022, respectively, and its select-service management business, which was exited in March 2022, through their sale/exit dates. Amounts may not add across due to rounding. See Table 7 for reconciliations of Total Company non-GAAP measures and Table 9 for definitions. |
||||
|
(a) |
For 2023, the Hotel Franchising segment includes the former Hotel Management segment, which is primarily comprised of the Company’s remaining full-service management business. |
||||
|
Table 3 |
|||
|
WYNDHAM HOTELS & RESORTS |
|||
|
CONDENSED CASH FLOWS |
|||
|
(In millions) |
|||
|
(Unaudited) |
|||
|
Year Ended December 31, |
|||
|
2023 |
2022 |
||
|
Operating activities |
|||
|
Net income |
$ 289 |
$ 355 |
|
|
Depreciation and amortization |
76 |
77 |
|
|
Deferred income taxes |
(17) |
(39) |
|
|
Gain on asset sale, net |
— |
(35) |
|
|
Payments of development advance notes, net |
(72) |
(48) |
|
|
Working capital and other, net |
100 |
89 |
|
|
Net cash provided by operating activities |
376 |
399 |
|
|
Investing activities |
|||
|
Property and equipment additions |
(37) |
(39) |
|
|
Proceeds from asset sales, net (a) |
— |
263 |
|
|
Acquisition of hotel brand |
— |
(44) |
|
|
Other, net |
(29) |
(1) |
|
|
Net cash (used in)/provided by investing activities |
(66) |
179 |
|
|
Financing activities |
|||
|
Proceeds from long-term debt |
1,378 |
400 |
|
|
Payments of long-term debt |
(1,245) |
(404) |
|
|
Dividends to shareholders |
(118) |
(116) |
|
|
Repurchases of common stock |
(393) |
(448) |
|
|
Other, net |
(24) |
(16) |
|
|
Net cash used in financing activities |
(402) |
(584) |
|
|
Effect of changes in exchange rates on cash, cash equivalents and restricted cash |
(3) |
(4) |
|
|
Net decrease in cash, cash equivalents and restricted cash |
(95) |
(10) |
|
|
Cash, cash equivalents and restricted cash, beginning of period |
161 |
171 |
|
|
Cash, cash equivalents and restricted cash, end of period |
$ 66 |
$ 161 |
|
|
Free Cash Flow: |
|||||||
|
Year Ended December 31, |
|||||||
|
2023 |
2022 |
||||||
|
Net cash provided by operating activities (b) |
$ 376 |
$ 399 |
|||||
|
Less: Property and equipment additions |
(37) |
(39) |
|||||
|
Free cash flow |
$ 339 |
$ 360 |
|||||
|
(a) |
Includes proceeds of $179 million, net of transaction costs, received from the Company’s sales of the Wyndham Grand Bonnet Creek Resort and the Wyndham Grand Rio Mar Resort and $84 million of proceeds from CorePoint Lodging related to the Company’s exit of its select-service management business. |
||||
|
(b) |
The year-over-year comparability is impacted by the absence of $13 million due to the exit of the select-service management business and owned hotels. Excluding which, free cash flow decreased $8 million as higher cash earnings were offset by $24 million of incremental development advances and $22 million of higher interest expense. |
||||
|
Table 4 |
|||||
|
WYNDHAM HOTELS & RESORTS |
|||||
|
BALANCE SHEET SUMMARY AND DEBT |
|||||
|
(In millions) |
|||||
|
(Unaudited) |
|||||
|
As of December 31, 2023 |
As of December 31, 2022 |
||||
|
Assets |
|||||
|
Cash and cash equivalents |
$ 66 |
$ 161 |
|||
|
Trade receivables, net |
241 |
234 |
|||
|
Property and equipment, net |
88 |
99 |
|||
|
Goodwill and intangible assets, net |
3,104 |
3,131 |
|||
|
Other current and non-current assets |
534 |
498 |
|||
|
Total assets |
$ 4,033 |
$ 4,123 |
|||
|
Liabilities and stockholders’ equity |
|||||
|
Total debt |
$ 2,201 |
$ 2,077 |
|||
|
Other current liabilities |
422 |
386 |
|||
|
Deferred income tax liabilities |
325 |
345 |
|||
|
Other non-current liabilities |
339 |
353 |
|||
|
Total liabilities |
3,287 |
3,161 |
|||
|
Total stockholders’ equity |
746 |
962 |
|||
|
Total liabilities and stockholders’ equity |
$ 4,033 |
$ 4,123 |
|||
|
Our outstanding debt was as follows: |
|||||
|
Weighted Average Interest Rate (a) |
As of December 31, 2023 |
As of December 31, 2022 |
|||
|
$750 million revolving credit facility (due April 2027) |
7.2 % |
$ 160 |
$ — |
||
|
$400 million term loan A (due April 2027) |
7.2 % |
384 |
399 |
||
|
$1.6 billion term loan B (due May 2025) |
— |
1,139 |
|||
|
$1.1 billion term loan B (due May 2030) |
4.1 % |
1,123 |
— |
||
|
$500 million 4.375% senior unsecured notes (due August 2028) |
4.4 % |
495 |
494 |
||
|
Finance leases |
4.5 % |
39 |
45 |
||
|
Total debt |
4.9 % |
2,201 |
2,077 |
||
|
Cash and cash equivalents |
66 |
161 |
|||
|
Net debt |
$ 2,135 |
$ 1,916 |
|||
|
Net debt leverage ratio |
3.2x |
2.9x |
|||
|
(a) |
Represents weighted average interest rates for the fourth quarter 2023, including the effects from hedging. |
||||
|
Our outstanding debt as of December 31, 2023 matures as follows: |
|||
|
Amount |
|||
|
Within 1 year |
$ 37 |
||
|
Between 1 and 2 years |
45 |
||
|
Between 2 and 3 years |
48 |
||
|
Between 3 and 4 years |
485 |
||
|
Between 4 and 5 years |
514 |
||
|
Thereafter |
1,072 |
||
|
Total |
$ 2,201 |
|
Table 5 |
|||||||||
|
WYNDHAM HOTELS & RESORTS |
|||||||||
|
REVENUE DRIVERS |
|||||||||
|
Year Ended December 31, |
|||||||||
|
2023 |
2022 |
Change |
% Change |
||||||
|
Beginning Room Count (January 1) |
|||||||||
|
United States |
493,800 |
490,600 |
3,200 |
1 % |
|||||
|
International |
348,700 |
319,500 |
29,200 |
9 |
|||||
|
Global |
842,500 |
810,100 |
32,400 |
4 |
|||||
|
Additions |
|||||||||
|
United States |
26,700 |
26,700 |
— |
— |
|||||
|
International |
39,300 |
43,700 |
(4,400) |
(10) |
|||||
|
Global |
66,000 |
70,400 |
(4,400) |
(6) |
|||||
|
Deletions |
|||||||||
|
United States |
(22,900) |
(23,500) |
600 |
3 |
|||||
|
International |
(13,800) |
(14,500) |
700 |
5 |
|||||
|
Global |
(36,700) |
(38,000) |
1,300 |
3 |
|||||
|
Ending Room Count (December 31) |
|||||||||
|
United States |
497,600 |
493,800 |
3,800 |
1 |
|||||
|
International |
374,200 |
348,700 |
25,500 |
7 |
|||||
|
Global |
871,800 |
842,500 |
29,300 |
3 % |
|||||
|
As of December 31, |
FY 2023 Royalty Contribution |
||||||||
|
2023 |
2022 |
Change |
% Change |
||||||
|
System Size |
|||||||||
|
United States |
|||||||||
|
Economy |
230,800 |
235,800 |
(5,000) |
(2 %) |
|||||
|
Midscale and Upper Midscale |
247,600 |
239,000 |
8,600 |
4 |
|||||
|
Upscale and Above |
19,200 |
19,000 |
200 |
1 |
|||||
|
Total United States |
497,600 |
493,800 |
3,800 |
1 % |
80 |
||||
|
International |
|||||||||
|
Greater China |
171,100 |
161,100 |
10,000 |
6 % |
3 |
||||
|
Rest of Asia Pacific |
34,600 |
30,400 |
4,200 |
14 |
2 |
||||
|
Europe, the Middle East and Africa |
88,700 |
79,200 |
9,500 |
12 |
7 |
||||
|
Canada |
39,900 |
39,500 |
400 |
1 |
5 |
||||
|
Latin America |
39,900 |
38,500 |
1,400 |
4 |
3 |
||||
|
Total International |
374,200 |
348,700 |
25,500 |
7 % |
20 |
||||
|
Global |
871,800 |
842,500 |
29,300 |
3 % |
100 % |
||||
|
Table 5 (continued) |
|||||
|
WYNDHAM HOTELS & RESORTS |
|||||
|
REVENUE DRIVERS |
|||||
|
Three Months Ended December 31, 2023 |
Constant Currency % Change (a) |
||||
|
Regional RevPAR Growth |
|||||
|
United States |
|||||
|
Economy |
$ 35.83 |
(7 %) |
|||
|
Midscale and Upper Midscale |
49.47 |
(4) |
|||
|
Upscale and Above |
89.85 |
5 |
|||
|
Total United States |
$ 44.06 |
(4 %) |
|||
|
International |
|||||
|
Greater China |
$ 16.58 |
44 % |
|||
|
Rest of Asia Pacific |
33.28 |
2 |
|||
|
Europe, the Middle East and Africa |
52.15 |
5 |
|||
|
Canada |
44.75 |
4 |
|||
|
Latin America |
43.91 |
(12) |
|||
|
Total International |
$ 32.12 |
7 % |
|||
|
Global |
$ 38.90 |
(1 %) |
|||
|
Three Months Ended December 31, |
|||||
|
2023 |
2022 |
% Change |
|||
|
Average Royalty Rate |
|||||
|
United States |
4.6 % |
4.6 % |
— |
||
|
International |
2.3 % |
2.0 % |
30 bps |
||
|
Global |
3.8 % |
3.8 % |
— |
||
|
Year Ended December 31, 2023 |
Constant Currency % Change (a) |
||||
|
Regional RevPAR Growth |
|||||
|
United States |
|||||
|
Economy |
$ 41.76 |
(2 %) |
|||
|
Midscale and Upper Midscale |
56.27 |
— |
|||
|
Upscale and Above |
97.14 |
4 |
|||
|
Total United States |
$ 50.42 |
(1 %) |
|||
|
International |
|||||
|
Greater China |
$ 16.76 |
33 % |
|||
|
Rest of Asia Pacific |
32.58 |
15 |
|||
|
Europe, the Middle East and Africa |
52.02 |
21 |
|||
|
Canada |
54.35 |
12 |
|||
|
Latin America |
44.53 |
15 |
|||
|
Total International |
$ 33.21 |
21 % |
|||
|
Global |
$ 43.10 |
5 % |
|||
|
Year Ended December 31, |
|||||
|
2023 |
2022 |
% Change |
|||
|
Average Royalty Rate |
|||||
|
United States |
4.6 % |
4.6 % |
— |
||
|
International |
2.4 % |
2.1 % |
30 bps |
||
|
Global |
3.9 % |
3.9 % |
— |
||
|
(a) |
International and global excludes the impact of currency exchange movements. |
||
|
Table 6 |
|||||||||||
|
WYNDHAM HOTELS & RESORTS |
|||||||||||
|
HISTORICAL REVPAR AND ROOMS |
|||||||||||
|
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
Full Year |
|||||||
|
Hotel Franchising (a) |
|||||||||||
|
Global RevPAR |
|||||||||||
|
2023 |
$ 37.20 |
$ 46.47 |
$ 49.71 |
$ 38.90 |
$ 43.10 |
||||||
|
2022 |
$ 33.08 |
$ 43.74 |
$ 48.61 |
$ 39.18 |
$ 41.23 |
||||||
|
2021 |
$ 24.02 |
$ 35.69 |
$ 44.67 |
$ 34.77 |
$ 34.85 |
||||||
|
U.S. RevPAR |
|||||||||||
|
2023 |
$ 43.84 |
$ 55.26 |
$ 58.46 |
$ 44.06 |
$ 50.42 |
||||||
|
2022 |
$ 41.01 |
$ 54.70 |
$ 58.45 |
$ 45.49 |
$ 50.00 |
||||||
|
2021 |
$ 29.68 |
$ 46.99 |
$ 56.38 |
$ 42.45 |
$ 43.95 |
||||||
|
International RevPAR |
|||||||||||
|
2023 |
$ 27.99 |
$ 34.44 |
$ 38.05 |
$ 32.12 |
$ 33.21 |
||||||
|
2022 |
$ 21.05 |
$ 26.80 |
$ 33.90 |
$ 30.16 |
$ 28.11 |
||||||
|
2021 |
$ 15.26 |
$ 18.21 |
$ 26.62 |
$ 23.13 |
$ 20.86 |
||||||
|
Global Rooms (b) |
|||||||||||
|
2023 |
844,800 |
851,500 |
858,000 |
871,800 |
871,800 |
||||||
|
2022 |
793,200 |
799,200 |
816,300 |
827,100 |
827,100 |
||||||
|
2021 |
748,700 |
752,500 |
758,600 |
769,400 |
769,400 |
||||||
|
U.S. Rooms |
|||||||||||
|
2023 |
494,400 |
495,100 |
495,700 |
497,600 |
497,600 |
||||||
|
2022 |
486,600 |
487,600 |
488,100 |
493,500 |
493,500 |
||||||
|
2021 |
452,500 |
454,200 |
458,000 |
465,100 |
465,100 |
||||||
|
International Rooms (b) |
|||||||||||
|
2023 |
350,400 |
356,400 |
362,300 |
374,200 |
374,200 |
||||||
|
2022 |
306,600 |
311,600 |
328,200 |
333,600 |
333,600 |
||||||
|
2021 |
296,200 |
298,300 |
300,600 |
304,300 |
304,300 |
||||||
|
Hotel Management |
|||||||||||
|
Global RevPAR |
|||||||||||
|
2023 |
n/a |
n/a |
n/a |
n/a |
n/a |
||||||
|
2022 |
$ 56.55 |
$ 65.13 |
$ 71.54 |
$ 68.04 |
$ 64.07 |
||||||
|
2021 |
$ 38.17 |
$ 56.08 |
$ 64.63 |
$ 57.57 |
$ 53.81 |
||||||
|
U.S. RevPAR |
|||||||||||
|
2023 |
n/a |
n/a |
n/a |
n/a |
n/a |
||||||
|
2022 |
$ 69.92 |
$ 135.35 |
$ 126.34 |
$ 98.28 |
$ 92.66 |
||||||
|
2021 |
$ 42.89 |
$ 67.42 |
$ 78.27 |
$ 66.77 |
$ 63.20 |
||||||
|
International RevPAR |
|||||||||||
|
2023 |
n/a |
n/a |
n/a |
n/a |
n/a |
||||||
|
2022 |
$ 40.26 |
$ 40.89 |
$ 53.57 |
$ 59.49 |
$ 48.61 |
||||||
|
2021 |
$ 27.12 |
$ 31.20 |
$ 37.53 |
$ 40.96 |
$ 34.31 |
||||||
|
Global Rooms |
|||||||||||
|
2023 |
n/a |
n/a |
n/a |
n/a |
n/a |
||||||
|
2022 |
20,100 |
19,700 |
19,700 |
15,400 |
15,400 |
||||||
|
2021 |
48,500 |
45,500 |
44,000 |
40,700 |
40,700 |
||||||
|
U.S. Rooms |
|||||||||||
|
2023 |
n/a |
n/a |
n/a |
n/a |
n/a |
||||||
|
2022 |
5,300 |
4,800 |
4,800 |
300 |
300 |
||||||
|
2021 |
33,500 |
30,600 |
28,800 |
25,500 |
25,500 |
||||||
|
International Rooms |
|||||||||||
|
2023 |
n/a |
n/a |
n/a |
n/a |
n/a |
||||||
|
2022 |
14,800 |
14,900 |
14,900 |
15,100 |
15,100 |
||||||
|
2021 |
15,000 |
14,900 |
15,200 |
15,200 |
15,200 |
||||||
|
Table 6 (continued) |
|||||||||||
|
WYNDHAM HOTELS & RESORTS |
|||||||||||
|
HISTORICAL REVPAR AND ROOMS |
|||||||||||
|
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
Full Year |
|||||||
|
Total System |
|||||||||||
|
Global RevPAR |
|||||||||||
|
2023 |
$ 37.20 |
$ 46.47 |
$ 49.71 |
$ 38.90 |
$ 43.10 |
||||||
|
2022 |
$ 34.06 |
$ 44.28 |
$ 49.17 |
$ 39.86 |
$ 41.88 |
||||||
|
2021 |
$ 24.90 |
$ 36.92 |
$ 45.80 |
$ 35.99 |
$ 35.95 |
||||||
|
U.S. RevPAR |
|||||||||||
|
2023 |
$ 43.84 |
$ 55.26 |
$ 58.46 |
$ 44.06 |
$ 50.42 |
||||||
|
2022 |
$ 42.11 |
$ 55.57 |
$ 59.15 |
$ 45.96 |
$ 50.72 |
||||||
|
2021 |
$ 30.62 |
$ 48.37 |
$ 57.73 |
$ 43.84 |
$ 45.19 |
||||||
|
International RevPAR |
|||||||||||
|
2023 |
$ 27.99 |
$ 34.44 |
$ 38.05 |
$ 32.12 |
$ 33.21 |
||||||
|
2022 |
$ 21.95 |
$ 27.46 |
$ 34.79 |
$ 31.44 |
$ 29.05 |
||||||
|
2021 |
$ 15.83 |
$ 18.84 |
$ 27.15 |
$ 23.99 |
$ 21.52 |
||||||
|
Global Rooms (b) |
|||||||||||
|
2023 |
844,800 |
851,500 |
858,000 |
871,800 |
871,800 |
||||||
|
2022 |
813,300 |
818,900 |
836,000 |
842,500 |
842,500 |
||||||
|
2021 |
797,200 |
798,000 |
802,600 |
810,100 |
810,100 |
||||||
|
U.S. Rooms |
|||||||||||
|
2023 |
494,400 |
495,100 |
495,700 |
497,600 |
497,600 |
||||||
|
2022 |
491,900 |
492,400 |
492,900 |
493,800 |
493,800 |
||||||
|
2021 |
486,000 |
484,800 |
486,800 |
490,600 |
490,600 |
||||||
|
International Rooms (b) |
|||||||||||
|
2023 |
350,400 |
356,400 |
362,300 |
374,200 |
374,200 |
||||||
|
2022 |
321,400 |
326,500 |
343,100 |
348,700 |
348,700 |
||||||
|
2021 |
311,200 |
313,200 |
315,800 |
319,500 |
319,500 |
||||||
|
NOTE: |
Amounts may not foot due to rounding. Results reflect the reclassification of rooms from the Hotel Management segment to the Hotel Franchising segment related to the CorePoint Lodging asset sales, including approximately 19,000 rooms in first quarter 2022. |
|||||
|
(a) |
For 2023, the Hotel Franchising segment includes the former Hotel Management segment, which is primarily comprised of the Company’s remaining full-service management business. |
|||||
|
(b) |
Includes 6,400 Vienna House rooms acquired in the third quarter of 2022. |
|||||
|
Table 7 |
|||||||||
|
WYNDHAM HOTELS & RESORTS |
|||||||||
|
NON-GAAP RECONCILIATIONS |
|||||||||
|
(In millions) |
|||||||||
|
The tables below reconcile certain non-GAAP financial measures. The presentation of these adjustments is intended to permit the comparison of particular adjustments as they appear in the income statement in order to assist investors’ understanding of the overall impact of such adjustments. We believe that adjusted EBITDA, adjusted net income and adjusted EPS financial measures provide useful information to investors about us and our financial condition and results of operations because these measures are used by our management team to evaluate our operating performance and make day-to-day operating decisions and adjusted EBITDA is frequently used by securities analysts, investors and other interested parties as a common performance measure to compare results or estimate valuations across companies in our industry. These measures also assist our investors in evaluating our ongoing operating performance for the current reporting period and, where provided, over different reporting periods, by adjusting for certain items which may be recurring or non-recurring and which in our view do not necessarily reflect ongoing performance. We also internally use these measures to assess our operating performance, both absolutely and in comparison to other companies, and in evaluating or making selected compensation decisions. These supplemental disclosures are in addition to GAAP reported measures. These non-GAAP reconciliation tables should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP. |
|||||||||
|
Reconciliation of Net Income to Adjusted EBITDA: |
|||||||||
|
First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
Full Year |
|||||
|
2023 |
|||||||||
|
Net income |
$ 67 |
$ 70 |
$ 103 |
$ 50 |
$ 289 |
||||
|
Provision for income taxes |
24 |
26 |
33 |
25 |
109 |
||||
|
Depreciation and amortization |
19 |
19 |
19 |
20 |
76 |
||||
|
Interest expense, net |
22 |
24 |
27 |
29 |
102 |
||||
|
Early extinguishment of debt (a) |
— |
3 |
— |
— |
3 |
||||
|
Stock-based compensation |
9 |
9 |
10 |
11 |
39 |
||||
|
Development advance notes amortization |
3 |
4 |
4 |
5 |
15 |
||||
|
Transaction-related (b) |
— |
4 |
1 |
5 |
11 |
||||
|
Separation-related (c) |
2 |
(2) |
— |
— |
1 |
||||
|
Foreign currency impact of highly inflationary countries (d) |
1 |
1 |
3 |
9 |
14 |
||||
|
Adjusted EBITDA |
$ 147 |
$ 158 |
$ 200 |
$ 154 |
$ 659 |
||||
|
2022 |
|||||||||
|
Net income |
$ 106 |
$ 92 |
$ 101 |
$ 56 |
$ 355 |
||||
|
Provision for income taxes |
34 |
31 |
38 |
16 |
121 |
||||
|
Depreciation and amortization |
24 |
17 |
18 |
19 |
77 |
||||
|
Interest expense, net |
20 |
20 |
21 |
21 |
80 |
||||
|
Early extinguishment of debt (a) |
— |
2 |
— |
— |
2 |
||||
|
Stock-based compensation |
8 |
9 |
8 |
8 |
33 |
||||
|
Development advance notes amortization |
3 |
3 |
3 |
3 |
12 |
||||
|
(Gain)/loss on asset sale, net (e) |
(36) |
1 |
— |
— |
(35) |
||||
|
Separation-related (c) |
— |
(1) |
1 |
1 |
1 |
||||
|
Foreign currency impact of highly inflationary countries (d) |
— |
1 |
1 |
2 |
4 |
||||
|
Adjusted EBITDA |
$ 159 |
$ 175 |
$ 191 |
$ 126 |
$ 650 |
||||
|
2021 |
|||||||||
|
Net income |
$ 24 |
$ 68 |
$ 103 |
$ 48 |
$ 244 |
||||
|
Provision for income taxes |
11 |
25 |
36 |
19 |
91 |
||||
|
Depreciation and amortization |
24 |
24 |
23 |
25 |
95 |
||||
|
Interest expense, net |
28 |
22 |
22 |
22 |
93 |
||||
|
Early extinguishment of debt (a) |
— |
18 |
— |
— |
18 |
||||
|
Stock-based compensation |
5 |
8 |
7 |
8 |
28 |
||||
|
Development advance notes amortization |
2 |
2 |
3 |
3 |
11 |
||||
|
Impairments, net (f) |
— |
— |
— |
6 |
6 |
||||
|
Separation-related (c) |
2 |
1 |
— |
— |
3 |
||||
|
Foreign currency impact of highly inflationary countries (d) |
1 |
— |
— |
— |
1 |
||||
|
Adjusted EBITDA |
$ 97 |
$ 168 |
$ 194 |
$ 131 |
$ 590 |
||||
|
NOTE: |
Amounts may not add due to rounding. |
||||
|
(a) |
Amount in 2023 relates to non-cash charges associated with the Company’s refinancing of its term loan B. Amount in 2022 relates to non-cash charges associated with the Company’s extension of its revolving credit facility and the prep |
||||