WYNDHAM HOTELS & RESORTS REPORTS STRONG FIRST QUARTER 2022 RESULTS

Rhea-AI Summary

Wyndham Hotels & Resorts (WH) reported strong Q1 2022 results, with Global RevPAR rising 39% year-over-year in constant currency. Diluted EPS increased to $1.14 from $0.26, and net income soared to $106 million compared to $24 million a year prior. The company's development pipeline expanded by 9%, reaching 204,000 rooms, and free cash flow reached $125 million. Notably, Wyndham exited its select-service management business, bolstering its financial position. The outlook for 2022 remains stable, with RevPAR growth projected at 12%-16% and adjusted EBITDA around $605-$625 million.

Positive

• Global RevPAR increased 39% year-over-year.
• Diluted EPS rose to $1.14 from $0.26.
• Net income grew to $106 million compared to $24 million.
• Free cash flow reached $125 million, up from $59 million.
• Development pipeline expanded by 9%, totaling 204,000 rooms.

Negative

• Global RevPAR compared to 2019 levels showed a decrease of 4%.
• Cost-reimbursement revenues in Hotel Management decreased by $16 million.

Global Development Pipeline and First Quarter Domestic RevPAR Grow to Record Levels

PARSIPPANY, N.J., April 26, 2022 /PRNewswire/ -- Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months ended March 31, 2022. Highlights include:

• Global RevPAR grew 39% compared to first quarter 2021 in constant currency.
• System-wide rooms grew 200 basis points year-over-year, including 120 basis points of growth in the U.S. and 330 basis points of growth internationally.
• Diluted earnings per share of $1.14 compared to $0.26 in the first quarter 2021; adjusted diluted earnings per share increased to $0.95 compared to $0.36 in first quarter 2021.
• Net income of $106 million compared to $24 million in first quarter 2021; adjusted net income of $88 million compared to $33 million in first quarter 2021.
• Adjusted EBITDA of $159 million compared to $97 million in first quarter 2021.
• Net cash provided by operating activities of $135 million compared to $64 million in first quarter 2021; free cash flow of $125 million compared to $59 million in first quarter 2021.
• Completed the exit of its select-service management business.
• Completed the sale of the Wyndham Grand Bonnet Creek Resort; the Wyndham Grand Rio Mar Resort is under contract and expected to close in May 2022.
• Returned $68 million to shareholders through $38 million of share repurchases and a quarterly cash dividend of $0.32 per share.

"Our exemplary first quarter results demonstrate the power of our brands and the value we are driving to our owners, guests, and shareholders," said Geoffrey A. Ballotti, president and chief executive officer. "Strong leisure and everyday business travel demand drove RevPAR 4% above 2019 levels domestically and we continued to simplify our operations by exiting our select-service management business and selling one of our two owned assets. Our development pipeline increased 9% to a record 204,000 rooms, including the first 50 deals for our new extended-stay product, and our room openings grew 50% more than last year, putting us solidly on track with our full year net-room growth guidance."

Fee-related and other revenues increased 36% year-over-year to $316 million primarily reflecting strong ADR growth in the U.S.

The Company generated net income of $106 million, or $1.14 per diluted share, an increase of $82 million, or $0.88 per diluted share, reflecting higher adjusted EBITDA, a gain on the sale of the Wyndham Grand Bonnet Creek Resort and lower net interest expense. Adjusted EBITDA increased $62 million, or 64%, versus 2021 to $159 million reflecting higher revenue and a favorable timing benefit from the marketing fund, partially offset by higher variable expenses at the Company's owned hotels.

During the first quarter 2022, the Company's marketing fund revenues exceeded expenses by $7 million; while in first quarter 2021, the Company's marketing fund expenses exceeded revenues by $7 million.

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.

System Size

						March 31, 2022						March 31, 2021						YOY Change (bps)
United States						491,900						486,000						120
International						321,400						311,200						330
Global						813,300						797,200						200

The Company's global system grew 200 basis points, reflecting 120 basis points of growth in the U.S. and 330 basis points of growth 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 6% and 12%, respectively. The Company remains solidly on track with its goal of achieving a retention rate above 95% and its net room growth outlook of 2 to 4% for the full year 2022.

RevPAR

						First Quarter 2022						YOY Constant Currency % Change					Constant Currency % Change vs. 2019
United States						$	42.11					38	%				4	%
International						21.95						46					(17)
Global						34.06						39					(4)

First quarter RevPAR grew 39% globally in constant currency, including 38% growth in the U.S. and 46% growth internationally. The increase is approximately two-thirds driven by stronger pricing power and one-third driven by higher occupancy levels.

Business Segment Discussion

			Revenue																	Adjusted EBITDA
			First Quarter 2022						First Quarter 2021						% Change					First Quarter 2022						First Quarter 2021						% Change
Hotel Franchising			$	272					$	209					30	%				$	155					$	105					48	%
Hotel Management			99						94						5					20						5						n/a
Corporate and Other			—						—						—					(16)						(13)						(23)
Total Company			$	371					$	303					22					$	159					$	97					64

Hotel Franchising revenues increased 30% year-over-year to $272 million primarily due to the global RevPAR increase. Hotel Franchising adjusted EBITDA increased 48% to $155 million reflecting the growth in revenues and a timing benefit from the marketing fund.

Hotel Management revenues increased 5% year-over-year to $99 million, including a $16 million decrease in cost-reimbursement revenues, which have no impact on adjusted EBITDA. Absent cost-reimbursements, Hotel Management revenues increased $21 million, or 91%, to $44 million primarily due to the global RevPAR increase and improved performance at the Company's owned hotels. Hotel Management adjusted EBITDA increased $15 million year-over-year reflecting the revenue increases, partially offset by higher variable expenses at the Company's owned hotels.

Development

The Company awarded 165 new contracts this quarter, including 50 new construction projects for the Company's new extended-stay brand, compared to 112 in the first quarter 2021. On March 31, 2022, the Company's global development pipeline consisted of approximately 1,600 hotels and approximately 204,000 rooms, of which approximately 80% is in the midscale and above segments (nearly 70% in the U.S.). The pipeline grew 9% year-over-year, including 12% domestically and 7% internationally. Approximately 63% of the Company's development pipeline is international and 79% is new construction, of which approximately 35% has broken ground.

Exit of Select-Service Management Business

On March 3, 2022, the Company completed the exit of its select-service management business and received proceeds of $84 million from CorePoint Lodging ("CPLG"). The franchise agreements for these hotels remained in-place at their stated fee structure with CPLG's buyer, Highgate Holdings, Inc. The proceeds received were offset on the Company's income statement by the non-cash write-off of the remaining balance of the management contract intangible asset that was created upon the acquisition of La Quinta Holdings in 2018.

Sale of Owned Hotels

On March 24, 2022, the Company completed the sale of the Wyndham Grand Bonnet Creek Resort in Orlando for gross proceeds of approximately $121 million and recognized a $36 million gain on sale, which has been excluded from Adjusted EBITDA. The Company entered into a 20-year franchise agreement with the buyer.

The Company is under contract and expects to complete the sale of the Wyndham Grand Rio Mar Resort in Puerto Rico in May 2022. The Company expects to enter into a 20-year franchise agreement with the buyer in connection with the sale.

Balance Sheet and Liquidity

The Company generated $135 million of net cash provided by operating activities in the first quarter of 2022 and $125 million of free cash flow. The Company ended the quarter with a cash balance of $416 million, including $84 million of proceeds received in connection with the Company's exit of its select-service management business and gross proceeds of approximately $121 million received in connection with its sale of the Wyndham Grand Bonnet Creek Resort. These inflows are reflected within the investing section of the Statement of Cash Flows and therefore not included in the Company's free cash flow.

At March 31, 2022, the Company had approximately $1.2 billion in total liquidity and its net debt leverage ratio was 2.6 times, below the Company's 3 to 4 times stated target range. Excluding the proceeds received in connection with the exit of its select-service management business and the sale of the Wyndham Grand Bonnet Creek Resort, which are expected to be redeployed, the net debt leverage ratio was 2.9 times.

In April 2022, the Company amended its $750 million revolving credit facility, extending the maturity from May 2023 to April 2027 on similar terms as the previous facility, and issued a new $400 million senior secured Term Loan A facility, which matures in April 2027. The proceeds from the Term Loan A were used to repay a portion of the Company's existing Term Loan B facility, which is scheduled to mature in May 2025. There was no increase in rates from the Term Loan B to the new Term Loan A.

Share Repurchases and Dividends

During the first quarter of 2022, the Company repurchased approximately 455,100 shares of its common stock for $38 million at an average price of $83.72 per share.

The Company paid common stock dividends of $30 million, or $0.32 per share, in the first quarter of 2022.

Full-Year 2022 Outlook

The Company is updating its outlook as follows:

Updated Outlook

Prior Outlook

Year-over-year rooms growth

2% - 4%

2% - 4%

Year-over-year global RevPAR growth

12% - 16%

12% - 16%

Fee-related and other revenues (a)

$1.28 - $1.31 billion

$1.34 - $1.37 billion

Adjusted EBITDA

$605 - $625 million

$605 - $625 million

Adjusted net income (b)

$317 - $329 million

$308 - $320 million

Adjusted diluted EPS

$3.39 - $3.51

$3.28 - $3.40

Free cash flow conversion rate (c)

~55%

~55%

(a)	Reflects the removal of post-sale revenues related to the Wyndham Grand Bonnet Creek and Wyndham Grand Rio Mar from prior projections.
(b)	Reflects the removal from prior projections of depreciation related to the Wyndham Grand Bonnet Creek and Wyndham Grand Rio Mar.
(c)	Represents the percentage of adjusted EBITDA that is expected to produce free cash flow.

More detailed projections are available in Table 8 of this press release. The Company is providing certain financial metrics only on a non-GAAP basis because, without unreasonable efforts, it is unable to predict with reasonable certainty the occurrence or amount of all of the adjustments or other potential adjustments that may arise in the future during the forward-looking period, which can be dependent on future events that may not be reliably predicted. Based on past reported results, where one or more of these items have been applicable, such excluded items could be material, individually or in the aggregate, to the reported results.

Conference Call Information

Wyndham Hotels will hold a conference call with investors to discuss the Company's results and outlook on Wednesday, April 27, 2022 at 8:30 a.m. ET. Listeners can access the webcast live through the Company's website at www.investor.wyndhamhotels.com. The conference call may also be accessed by dialing 866 831-8713 and providing the passcode "Wyndham". Listeners are urged to call at least five minutes prior to the scheduled start time. An archive of this webcast will be available on the website beginning at noon ET on April 27, 2022. A telephone replay will be available for approximately ten days beginning at noon ET on April 27, 2022 at 800 839-4992.

Presentation of Financial Information

Financial information discussed in this press release includes non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported GAAP results and are intended to illustrate what management believes are relevant period-over-period comparisons and are helpful to investors as an additional tool for further understanding and assessing the Company's ongoing operating performance. The Company uses these measures internally to assess its 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. Exclusion of items in the Company's non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring. Full reconciliations of GAAP results to the comparable non-GAAP measures for the reported periods appear in the financial tables section of this press release.

About Wyndham Hotels & Resorts

Wyndham Hotels & Resorts (NYSE: WH) is the world's largest hotel franchising company by the number of properties, with over 8,900 hotels across over 95 countries on six continents. Through its network of over 813,000 rooms appealing to the everyday traveler, Wyndham commands a leading presence in the economy and midscale segments of the lodging industry. The Company operates a portfolio of 22 hotel brands, including Super 8®, Days Inn®, Ramada®, Microtel®, La Quinta®, Baymont®, Wingate®, AmericInn®, Hawthorn Suites®, Trademark Collection® and Wyndham®. The Company's award-winning Wyndham Rewards loyalty program offers approximately 94 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally. For more information, visit www.wyndhamhotels.com. The Company may use its website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Disclosures of this nature will be included on the Company's website in the Investors section, which can currently be accessed at www.investor.wyndhamhotels.com. Accordingly, investors should monitor this section of the Company's website in addition to following the Company's press releases, filings submitted with the Securities and Exchange Commission and any public conference calls or webcasts.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the federal securities laws, including statements related to the Company's current views and expectations with respect to its future performance and operations, including revenues, earnings, cash flow and other financial and operating measures, share repurchases and dividends, restructuring charges and statements related to the coronavirus pandemic ("COVID-19"). Forward-looking statements include those that convey management's expectations as to the future based on plans, estimates and projections at the time the Company makes the statements and may be identified by words such as "will," "expect," "believe," "plan," "anticipate," "intend," "goal," "future," "outlook," "guidance," "target," "objective," "estimate," "projection" and similar words or expressions, including the negative version of such words and expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, general economic conditions; the continuation or worsening of the effects from COVID-19, its scope, duration, resurgence and impact on the Company's business operations, financial results, cash flows and liquidity, as well as the impact on the Company's franchisees and property owners, guests and team members, the hospitality industry and overall demand for travel; the success of the Company's mitigation efforts in response to COVID-19; the Company's performance during the recovery from COVID-19 and any resurgence or mutations of the virus; various actions governments, businesses and individuals continue to take in response to the pandemic, including stay-in-place directives (including, for instance, quarantine and isolation guidelines and mandates), safety mitigation guidance, as well as the timing, availability and adoption rates of vaccinations, booster shots and other treatments for COVID-19; concerns with or threats of other pandemics, contagious diseases or health epidemics, including the effects of COVID-19; the performance of the financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising and management businesses; the Company's relationships with franchisees and property owners; the impact of war, terrorist activity, political instability or political strife; risks related to restructuring or strategic initiatives; the Company's ability to satisfy obligations and agreements under its outstanding indebtedness, including the payment of principal and interest and compliance with the covenants thereunder; risks related to the Company's ability to obtain financing and the terms of such financing, including access to liquidity and capital; and the Company's ability to make or pay, plans for, and the timing and amount of any future share repurchases and/or dividends, as well as the risks described in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and any subsequent reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, subsequent events or otherwise.

Contacts Investors: Matt Capuzzi Senior Vice President, Investor Relations 973 753-6453 ir@wyndham.com

Media:  Maire Griffin Senior Vice President, Global Communications   973 753-6590  WyndhamHotelsNews@wyndham.com

 

Table 1
WYNDHAM HOTELS & RESORTS
INCOME STATEMENT
(In millions, except per share data)
(Unaudited)
			Three Months Ended March 31,
			2022						2021
Net revenues
Royalties and franchise fees			$	110					$	78
Marketing, reservation and loyalty			111						85
Management and other fees			35						19
License and other fees			19						20
Other			41						30
Fee-related and other revenues			316						232
Cost reimbursements			55						71
Net revenues			371						303
Expenses
Marketing, reservation and loyalty			104						92
Operating			35						27
General and administrative			29						24
Cost reimbursements			55						71
Depreciation and amortization			24						24
Gain on asset sale			(36)						—
Separation-related			—						2
Total expenses			211						240
Operating income			160						63
Interest expense, net			20						28
Income before income taxes			140						35
Provision for income taxes			34						11
Net income			$	106					$	24
Earnings per share
Basic			$	1.15					$	0.26
Diluted			1.14						0.26
Weighted average shares outstanding
Basic			92.5						93.4
Diluted			93.2						93.8

 

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. 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. During the first quarter of 2021, we modified the definition of adjusted EBITDA to exclude the amortization of development advance notes to reflect how our chief operating decision maker reviews operating performance beginning in 2021. We have applied the modified definition of adjusted EBITDA to all periods presented.
						First Quarter						Second Quarter						Third Quarter						Fourth Quarter						Full Year
Hotel Franchising
			Net revenues
			2022			$	272					n/a						n/a						n/a						n/a
			2021			209						$	283					$	337					$	270					$	1,099
			2020			243						182						236						202						863
			2019			269						331						379						300						1,279
			Adjusted EBITDA (a)
			2022			$	155					n/a						n/a						n/a						n/a
			2021			105						$	166					$	193					$	128					$	592
			2020			110						86						119						77						392
			2019			115						164						197						153						629
Hotel Management
			Net revenues
			2022			$	99					n/a						n/a						n/a						n/a
			2021			94						$	123					$	126					$	122					$	466
			2020			167						76						101						94						437
			2019			197						201						180						190						768
			Adjusted EBITDA
			2022			$	20					n/a						n/a						n/a						n/a
			2021			5						$	16					$	16					$	19					$	57
			2020			17						(4)						2						(1)						13
			2019			16						16						13						21						66
Corporate and Other
			Net revenues
			2022			$	—					n/a						n/a						n/a						n/a
			2021			—						$	—					$	—					$	—					$	—
			2020			—						—						—						—						—
			2019			2						1						1						2						6
			Adjusted EBITDA
			2022			$	(16)					n/a						n/a						n/a						n/a
			2021			(13)						$	(14)					$	(15)					$	(16)					$	(59)
			2020			(18)						(16)						(18)						(18)						(69)
			2019			(18)						(19)						(18)						(19)						(74)
Table 2 (continued)
WYNDHAM HOTELS & RESORTS
HISTORICAL REVENUE AND ADJUSTED EBITDA BY SEGMENT
						First Quarter						Second Quarter						Third Quarter						Fourth Quarter						Full Year
Total Company
			Net revenues
			2022			$	371					n/a						n/a						n/a						n/a
			2021			303						$	406					$	463					$	392					$	1,565
			2020			410						258						337						296						1,300
			2019			468						533						560						492						2,053
			Net income/(loss)
			2022			$	106					n/a						n/a						n/a						n/a
			2021			24						$	68					$	103					$	48					$	244
			2020			22						(174)						27						(7)						(132)
			2019			21						26						45						64						157
			Adjusted EBITDA (a)
			2022			$	159					n/a						n/a						n/a						n/a
			2021			97						$	168					$	194					$	131					$	590
			2020			109						66						103						58						336
			2019			113						161						192						155						621

NOTE:	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)	Adjusted EBITDA for 2019 and 2020 has been recast to exclude the amortization of development advance notes to be consistent with the presentation adopted in 2021.

 

Table 3
WYNDHAM HOTELS & RESORTS
CONDENSED CASH FLOWS
(In millions)
(Unaudited)
			Three Months Ended March 31,
			2022						2021
Operating activities
Net income			$	106					$	24
Depreciation and amortization			24						24
Trade receivables			17						10
Accounts payable, accrued expenses and other current liabilities			(32)						(24)
Deferred revenues			19						9
Payments of development advance notes			(7)						(8)
Other, net			8						29
Net cash provided by operating activities			135						64
Investing activities
Property and equipment additions			(10)						(5)
Proceeds from asset sales, net (a)			202						—
Net cash provided by/(used in) investing activities			192						(5)
Financing activities
Payments of long-term debt, net			(4)						(4)
Dividends to shareholders			(30)						(15)
Repurchases of common stock			(39)						—
Other, net			(9)						(2)
Net cash used in financing activities			(82)						(21)
Net increase in cash, cash equivalents and restricted cash			245						38
Cash, cash equivalents and restricted cash, beginning of period			171						493
Cash, cash equivalents and restricted cash, end of period			$	416					$	531

(a)	Includes proceeds of $118 million, net of transaction costs, received from the Company's sale of the Wyndham Grand Bonnet Creek Resort and $84 million of proceeds from CPLG related to the Company's exit of its select-service management business.

Free Cash Flow:

We define free cash flow to be net cash provided by operating activities less property and equipment additions, which we also refer to as capital expenditures. We believe free cash flow to be a useful operating performance measure to us and investors to evaluate the ability of our operations to generate cash for uses other than capital expenditures and, after debt service and other obligations, our ability to grow our business through acquisitions and investments, as well as our ability to return cash to shareholders through dividends and share repurchases. Free cash flow is not necessarily a representation of how we will use excess cash. A limitation of using free cash flow versus the GAAP measure of net cash provided by operating activities as a means for evaluating Wyndham Hotels is that free cash flow does not represent the total cash movement for the period as detailed in the condensed consolidated statement of cash flows.

			Three Months Ended March 31,
			2022						2021
Net cash provided by operating activities			$	135					$	64
Less: Property and equipment additions				(10)						(5)
Free cash flow			$	125					$	59

 

Table 4
WYNDHAM HOTELS & RESORTS
BALANCE SHEET SUMMARY AND DEBT
(In millions)
(Unaudited)
			As of March 31, 2022				As of December 31, 2021
Assets
Cash and cash equivalents			$	416			$	171
Trade receivables, net			229				246
Assets held for sale			67				154
Property and equipment, net			106				106
Goodwill and intangible assets, net			3,104				3,200
Other current and non-current assets			370				392
Total assets			$	4,292			$	4,269
Liabilities and stockholders' equity
Total debt			$	2,079			$	2,084
Other current liabilities			359				376
Deferred income tax liabilities			350				366
Other non-current liabilities			345				354
Total liabilities			3,133				3,180
Total stockholders' equity			1,159				1,089
Total liabilities and stockholders' equity			$	4,292			$	4,269
Our outstanding debt was as follows:
			As of March 31, 2022				As of December 31, 2021
$750 million revolving credit facility (due May 2023) (a)			$	—			$	—
Term loan (due May 2025) (a)			1,537				1,541
4.375% senior unsecured notes (due August 2028)			493				493
Finance leases			49				50
Total debt			2,079				2,084
Cash and cash equivalents			416				171
Net debt			$	1,663			$	1,913
Our outstanding debt matures as follows:
			As of March 31, 2022				As of April 26, 2022 (b)
Within 1 year			$	21			$	5
Between 1 and 2 years			22				26
Between 2 and 3 years			22				26
Between 3 and 4 years			1,495				1,173
Between 4 and 5 years			7				37
Thereafter			512				812
Total			$	2,079			$	2,079

(a)	In April 2022, the Company amended its credit agreement, which extended the maturity of the revolving credit facility from May 2023 to April 2027 and issued a new $400 million term loan A, which also matures in April 2027. The proceeds from the new term loan were used to pay down a portion of the existing term loan B, which matures in May 2025.
(b)	Reflects impact to maturity schedule from issuance of new $400 million term loan A and use of proceeds to repay a portion of existing term loan B.

 

Table 5
WYNDHAM HOTELS & RESORTS
REVENUE DRIVERS
			Three Months Ended March 31,
			2022						2021						Change						% Change
Beginning Room Count (January 1)
United States			490,600						487,300						3,300						1%
International			319,500						308,600						10,900						4
Global			810,100						795,900						14,200						2
Additions
United States			6,800						3,500						3,300						94
International			4,600						4,100						500						12
Global			11,400						7,600						3,800						50
Deletions
United States			(5,500)						(4,800)						(700)						(15)
International			(2,700)						(1,500)						(1,200)						(80)
Global			(8,200)						(6,300)						(1,900)						(30)
Ending Room Count (March 31)
United States			491,900						486,000						5,900						1
International			321,400						311,200						10,200						3
Global			813,300						797,200						16,100						2%
			As of March 31,																								FY 2019 Royalty Contribution (a)
			2022						2021						Change						% Change
System Size
United States
Economy			240,400						249,200						(8,800)						(4%)
Midscale and Upper Midscale			232,900						220,200						12,700						6
Upscale and Above			18,600						16,600						2,000						12
Total United States			491,900						486,000						5,900						1%						86%
International
Greater China			154,900						146,500						8,400						6%						3
Rest of Asia Pacific			29,400						27,900						1,500						5						1
Europe, the Middle East and Africa			66,600						66,500						100						—						4
Canada			39,100						40,500						(1,400)						(3)						5
Latin America			31,400						29,800						1,600						5						1
Total International			321,400						311,200						10,200						3%						14
Global			813,300						797,200						16,100						2%						100%

(a)	FY 2019 provided to illustrate pre-pandemic results.

 

Table 5 (continued)
WYNDHAM HOTELS & RESORTS
REVENUE DRIVERS
				Three Months Ended March 31, 2022						Constant Currency % Change (a)						Three-Year Basis % Change (b)
Regional RevPAR Growth
United States
Economy				$	35.14					28%						11%
Midscale and Upper Midscale				47.23						41						(1)
Upscale and Above				79.54						81						(14)
Total United States				$	42.11					38%						4%
International
Greater China				$	13.31					(5%)						(29%)
Rest of Asia Pacific				22.85						16						(37)
Europe, the Middle East and Africa				30.26						123						(18)
Canada				33.64						61						(6)
Latin America				32.56						132						33
Total International				$	21.95					46%						(17%)
Global				$	34.06					39%						(4%)
				Three Months Ended March 31,
				2022						2021						% Change
Average Royalty Rate
United States				4.6%						4.6%						—
International				2.3%						2.0%						30 bps
Global				4.0%						4.0%						—

(a)	International excludes the impact of currency exchange movements.
(b)	Compares 2022 to 2019; international 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
			Global RevPAR
			2022									$	33.08					n/a						n/a						n/a						n/a
			2021									$	24.02					$	35.69					$	44.67					$	34.77					$	34.85
			2020									$	25.90					$	17.05					$	28.83					$	23.19					$	23.74
			2019									$	33.76					$	42.04					$	45.23					$	34.51					$	38.91
			U.S. RevPAR
			2022									$	41.01					n/a						n/a						n/a						n/a
			2021									$	29.68					$	46.99					$	56.38					$	42.45					$	43.95
			2020									$	31.43					$	23.19					$	36.06					$	27.28					$	29.50
			2019									$	37.69					$	48.65					$	51.93					$	37.96					$	44.09
			International RevPAR
			2022									$	21.05					n/a						n/a						n/a						n/a
			2021									$	15.26					$	18.21					$	26.62					$	23.13					$	20.86
			2020									$	17.39					$	7.66					$	17.39					$	16.71					$	14.75
			2019									$	27.56					$	31.59					$	34.79					$	29.15					$	30.80
			Global Rooms
			2022									793,200						n/a						n/a						n/a						n/a
			2021									748,700						752,500						758,600						769,400						769,400
			2020									769,000						754,700						748,200						746,500						746,500
			2019									745,300						751,300						758,400						770,200						770,200
			U.S. Rooms
			2022									486,600						n/a						n/a						n/a						n/a
			2021									452,500						454,200						458,000						465,100						465,100
			2020									463,900						460,200						459,600						452,600						452,600
			2019									454,900						457,600						460,100						464,600						464,600
			International Rooms
			2022									306,600						n/a						n/a						n/a						n/a
			2021									296,200						298,300						300,600						304,300						304,300
			2020									305,100						294,500						288,600						293,900						293,900
			2019									290,400						293,700						298,300						305,600						305,600
Hotel Management
			Global RevPAR
			2022									$	56.55					n/a						n/a						n/a						n/a
			2021									$	38.17					$	56.08					$	64.63					$	57.57					$	53.81
			2020									$	50.00					$	20.67					$	34.34					$	32.91					$	34.67
			2019									$	63.25					$	66.67					$	66.65					$	59.19					$	64.01
			U.S. RevPAR
			2022									$	69.92					n/a						n/a						n/a						n/a
			2021									$	42.89					$	67.42					$	78.27					$	66.77					$	63.20
			2020									$	54.35					$	23.21					$	39.12					$	34.14					$	37.97
			2019									$	65.58					$	71.61					$	70.75					$	60.89					$	67.32
			International RevPAR
			2022									$	40.26					n/a						n/a						n/a						n/a
			2021									$	27.12					$	31.20					$	37.53					$	40.96					$	34.31
			2020									$	38.07					$	13.78					$	23.16					$	29.86					$	26.21
			2019									$	55.12					$	49.53					$	52.49					$	53.67					$	52.69
			Global Rooms
			2022									20,100						n/a						n/a						n/a						n/a
			2021									48,500						45,500						44,000						40,700						40,700
			2020									59,300						58,200						55,800						49,400						49,400
			2019									66,800						65,200						63,400						60,800						60,800
			U.S. Rooms
			2022									5,300						n/a						n/a						n/a						n/a
			2021									33,500						30,600						28,800						25,500						25,500
			2020									42,900						41,800						38,100						34,700						34,700
			2019									51,700						50,700						49,100						45,600						45,600
			International Rooms
			2022									14,800						n/a						n/a						n/a						n/a
			2021									15,000						14,900						15,200						15,200						15,200
			2020									16,400						16,400						17,700						14,700						14,700
			2019									15,100						14,500						14,300						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
			2022									$	34.06					n/a						n/a						n/a						n/a
			2021									$	24.90					$	36.92					$	45.80					$	35.99					$	35.95
			2020									$	27.68					$	17.31					$	29.23					$	23.84					$	24.51
			2019									$	36.21					$	44.06					$	46.94					$	36.36					$	40.92
			U.S. RevPAR
			2022									$	42.11					n/a						n/a						n/a						n/a
			2021									$	30.62					$	48.37					$	57.73					$	43.84					$	45.19
			2020									$	33.45					$	23.19					$	36.31					$	27.80					$	30.20
			2019									$	40.56					$	50.98					$	53.79					$	40.09					$	46.39
			International RevPAR
			2022									$	21.95					n/a						n/a						n/a						n/a
			2021									$	15.83					$	18.84					$	27.15					$	23.99					$	21.52
			2020									$	18.45					$	7.96					$	17.72					$	17.37					$	15.35
			2019									$	28.92					$	32.47					$	35.63					$	30.29					$	31.85
			Global Rooms
			2022									813,300						n/a						n/a						n/a						n/a
			2021									797,200						798,000						802,600						810,100						810,100
			2020									828,300						812,900						804,000						795,900						795,900
			2019									812,100						816,600						821,800						831,000						831,000
			U.S. Rooms
			2022									491,900						n/a						n/a						n/a						n/a
			2021									486,000						484,800						486,800						490,600						490,600
			2020									506,800						502,000						497,700						487,300						487,300
			2019									506,600						508,300						509,200						510,200						510,200
			International Rooms
			2022									321,400						n/a						n/a						n/a						n/a
			2021									311,200						313,200						315,800						319,500						319,500
			2020									321,500						310,900						306,300						308,600						308,600
			2019									305,500						308,300						312,600						320,800						320,800

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.

 

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/(Loss) to Adjusted EBITDA:
			First Quarter						Second Quarter						Third Quarter						Fourth Quarter						Full Year
2022
Net income			$	106
Provision for income taxes			34
Depreciation and amortization			24
Interest expense, net			20
Stock-based compensation expense			8
Development advance notes amortization (a)			3
Gain on asset sale (b)				(36)
Adjusted EBITDA			$	159
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 (c)			—						18						—						—						18
Stock-based compensation expense			5						8						7						8						28
Development advance notes amortization (a)			2						2						3						3						11
Impairments, net (d)			—						—						—						6						6
Separation-related expenses (e)			2						1						—						—						3
Foreign currency impact of highly inflationary countries (f)			1						—						—						—						1
Adjusted EBITDA			$	97					$	168					$	194					$	131					$	590
2020
Net income/(loss)			$	22					$	(174)					$	27					$	(7)					$	(132)
Provision for/(benefit from) income taxes			9						(48)						15						(2)						(26)
Depreciation and amortization			25						25						24						24						98
Interest expense, net			25						28						29						30						112
Stock-based compensation expense			4						5						5						5						19
Development advance notes amortization (a)			2						2						2						2						9
Impairments, net (d)			—						206						—						—						206
Restructuring costs (g)			13						16						—						5						34
Transaction-related expenses, net (h)			8						5						—						—						12
Separation-related expenses (e)			1						—						—						1						2
Foreign currency impact of highly inflationary countries (f)			—						—						1						—						2
Adjusted EBITDA			$	109					$	66					$	103					$	58					$	336
Table 7 (continued)
WYNDHAM HOTELS & RESORTS
NON-GAAP RECONCILIATIONS
(In millions)
			First Quarter						Second Quarter						Third Quarter						Fourth Quarter						Full Year
2019
Net income			$	21					$	26					$	45					$	64					$	157
Provision for income taxes			5						10						21						14						50
Depreciation and amortization			29						27						26						28						109
Interest expense, net			24						26						25						25						100
Stock-based compensation expense			3						4						4						4						15
Development advance notes amortization (a)			2						2						2						2						8
Impairment, net (i)			—						45						—						—						45
Contract termination costs (j)			—						9						34						(1)						42
Restructuring costs (k)			—						—						—						8						8
Transaction-related expenses, net (h)			7						11						12						10						40
Separation-related expenses (e)			21						1						—						—						22
Transaction-related item (l)			—						—						20						—						20
Foreign currency impact of highly inflationary countries (f)			1						—						3						1						5
Adjusted EBITDA			$	113					$	161					$	192					$	155					$	621

NOTE:	Amounts may not add due to rounding.
(a)	Represents the non-cash amortization of development advance notes, which is now excluded from adjusted EBITDA to reflect how the Company's chief operating decision maker reviews operating performance.
(b)	Represents gain on sale of the Company's owned hotel, the Wyndham Grand Bonnet Creek Resort.
(c)	Relates to the redemption premium and non-cash expenses associated with the early redemption of the Company's 5.375% senior unsecured notes. These expenses were recorded in interest expense, net on the Company's income statement.
(d)	2021 represents a non-cash charge to reduce the carrying values of the Company's owned hotels long-lived assets to their fair value in connection with the Company's Board approval of a plan to sell these assets in 2022. 2020 represents a non-cash charge to reduce the carrying values of certain intangible assets to their fair values principally attributable to higher discount rates primarily resulting from increased share price volatility, partially offset by $3 million of cash proceeds from a previously impaired asset.
(e)	Represents costs associated with the Company's spin-off from Wyndham Worldwide.
(f)	Relates to the foreign currency impact from hyper-inflation in Argentina, which is reflected in operating expenses on the income statement.
(g)	Represents charges associated with restructuring initiatives implemented in response to the effects on travel demand as a result of COVID-19.
(h)	Primarily relates to integration costs incurred in connection with the Company's acquisition of La Quinta.
(i)	Represents a non-cash charge associated with the termination of certain hotel-management arrangements.
(j)	Represents costs associated with the termination of certain hotel-management arrangements.
(k)	Represents a charge related to enhancing the Company's organizational efficiency and rationalizing our operations.
(l)	Represents the one-time fee credit related to the Company's agreement with CorePoint Lodging, which is reflected as a reduction to hotel management revenues on the income statement.

 

Table 7 (continued)

WYNDHAM HOTELS & RESORTS

NON-GAAP RECONCILIATIONS

(In millions, except per share data)

Reconciliation of Net Income and Diluted Earnings Per Share to Adjusted Net Income and Adjusted Diluted EPS:

			Three Months Ended March 31,
			2022			2021
Diluted earnings per share			$	1.14		$	0.26
Net income			$	106		$	24
Adjustments:
Acquisition-related amortization expense (a)			12			9
Gain on asset sale (b)			(36)			—
Separation-related expenses			—			2
Foreign currency impact of highly inflationary countries			—			1
Total adjustments before tax			(24)			12
Income tax (benefit)/provision (c)			(6)			3
Total adjustments after tax			(18)			9
Adjusted net income			$	88		$	33
Adjustments - EPS impact			(0.19)			0.10
Adjusted diluted EPS			$	0.95		$	0.36
Diluted weighted average shares outstanding			93.2			93.8

(a)	Reflected in depreciation and amortization on the income statement.
(b)	Represents gain on sale of the Company's owned hotel, the Wyndham Grand Bonnet Creek Resort.
(c)	Reflects the estimated tax effects of the adjustments.

 

Table 8
WYNDHAM HOTELS & RESORTS
2022 OUTLOOK
As of April 26, 2022
(In millions, except per share data)
			2022 Outlook (b)							2021									2019
Fee-related and other revenues			$	1,280 - 1,310						$			1,245						$	1,430
Adjusted EBITDA (a)				605 - 625									590							621
Depreciation and amortization expense (c)				46 - 48									57							72
Development advance notes amortization expense				12 - 14									11							8
Stock-based compensation expense				36 - 38									28							15
Interest expense, net				81 - 83									93							100
Adjusted income before income taxes				426 - 444									401							426
Income tax expense (d)				109 - 115									104							109
Adjusted net income (a)			$	317 - 329						$			297						$	317
Adjusted diluted EPS			$	3.39 - 3.51						$			3.16						$	3.28
Diluted shares (e)				93.6									93.9							96.6
Marketing, reservation and loyalty funds				Approx. $10						$			18						$	(1)
Capital expenditures				Approx. $40						$			37						$	50
Development advance notes				Approx. $55						$			32						$	19
Free cash flow conversion rate (f)				Approx. 55%									66%							8%
Year-over-Year Growth
Global RevPAR (g)				12% - 16%									47%							0%
Number of rooms				2% - 4%									2%							3%

(a)	Net income for full-year 2021 and 2019 was $244 million and $157 million, respectively. Please see Table 7 for reconciliation.
(b)	Updated, where applicable, to remove the future projections related to the Company's owned hotels subsequent to their sale dates.
(c)	Excludes amortization of acquisition-related intangible assets of $32 - $34 million.
(d)	Outlook assumes an effective tax rate of approximately 26%.
(e)	Excludes the impact of any share repurchases after March 31, 2022.
(f)	Represents the percentage of adjusted EBITDA that is expected to produce free cash flow. Free cash flow plus capital expenditures equals net cash from operating activities. Net cash provided by operating activities was $426 million and $100 million during 2021 and 2019, respectively.
(g)	Outlook represents global RevPAR consistent with 2019 levels.

In determining adjusted EBITDA, interest expense, net, adjusted income before income taxes, adjusted net income, adjusted diluted EPS and free cash flow conversion rate, we exclude certain items which are otherwise included in determining the comparable GAAP financial measures. We are providing these measures on a non-GAAP basis only because, without unreasonable efforts, we are unable to predict with reasonable certainty the occurrence or amount of all the adjustments or other potential adjustments that may arise in the future during the forward-looking period, which can be dependent on future events that may not be reliably predicted. Based on past reported results, where one or more of these items have been applicable, such excluded items could be material, individually or in the aggregate, to the reported results.

 

Table 9

WYNDHAM HOTELS & RESORTS

DEFINITIONS

Adjusted Net Income and Adjusted Diluted EPS: Represents net income/(loss) and diluted earnings/(loss) per share excluding acquisition-related amortization, impairment charges, restructuring and related charges, contract termination costs, transaction-related items (acquisition-, disposition-, or separation-related), gain/(loss) on asset sales and foreign currency impacts of highly inflationary countries. The Company calculates the income tax effect of the adjustments using an estimated effective tax rate applicable to each adjustment.

Adjusted EBITDA: Represents net income/(loss) excluding net interest expense, depreciation and amortization, early extinguishment of debt charges, impairment charges, restructuring and related charges, contract termination costs, transaction-related items (acquisition-, disposition-, or separation-related), gain/(loss) on asset sales, foreign currency impacts of highly inflationary countries, stock-based compensation expense, income taxes and development advance notes amortization. Adjusted EBITDA is a financial measure that is not recognized under U.S. GAAP and should not be considered as an alternative to net income/(loss) or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, the Company's definition of adjusted EBITDA may not be comparable to similarly titled measures of other companies.

During the first quarter of 2021, the Company modified the definition of adjusted EBITDA to exclude the amortization of development advance notes to reflect how the Company's chief operating decision maker reviews operating performance beginning in 2021. The Company has applied the modified definition of adjusted EBITDA to all periods presented.

Average Daily Rate (ADR): Represents the average rate charged for renting a lodging room for one day.

Average Occupancy Rate: Represents the percentage of available rooms occupied during the period.

Constant Currency: Represents a comparison eliminating the effects of foreign exchange rate fluctuations between periods (foreign currency translation) and the impact caused by any foreign exchange related activities (i.e., hedges, balance sheet remeasurements and/or adjustments).

Free Cash Flow: See Table 3 for definition.

Net Debt Leverage Ratio: Calculated by dividing total debt less cash and cash equivalents by trailing twelve months adjusted EBITDA.

Number of Rooms: Represents the number of rooms at the end of the period which are (i) either under franchise and/or management agreements or Company-owned and (ii) properties under affiliation agreements for which we receive a fee for reservation and/or other services provided.

RevPAR: Represents revenue per available room and is calculated by multiplying average occupancy rate by ADR.

Royalty Rate: Represents the average royalty rate earned on our franchised properties and is calculated by dividing total royalties, excluding the impact of amortization of development advance notes, by total room revenues.

 

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SOURCE Wyndham Hotels & Resorts

FAQ

What were Wyndham Hotels & Resorts' Q1 2022 earnings results?

Wyndham Hotels reported diluted EPS of $1.14 and net income of $106 million for Q1 2022.

How much did Global RevPAR grow in Q1 2022 for Wyndham?

Global RevPAR grew 39% year-over-year in constant currency.

What is the current development pipeline for Wyndham Hotels?

Wyndham's development pipeline increased 9% to a record 204,000 rooms.

What impact did the exit of select-service management have on Wyndham's financials?

The exit generated $84 million in proceeds but caused a non-cash write-off on the income statement.

What is the updated outlook for Wyndham Hotels for 2022?

Wyndham's outlook for 2022 includes 12%-16% global RevPAR growth and adjusted EBITDA of $605-$625 million.