Wyndham Hotels & Resorts reports strong Q3, boosts annual EPS forecast

Wyndham Hotels & Resorts announced robust third-quarter results for 2024, driven by expansion in its room offerings and development pipeline. The New Jersey-based hotel giant has raised its full-year 2024 earnings-per-share (EPS) forecast, citing a seven per cent increase in adjusted EBITDA on a comparable basis to $208 million, underscoring the company’s commitment to growth despite economic challenges.

Wyndham’s room portfolio grew by four per cent year-over-year, with notable strength in international markets where its room count surged eight per cent compared to one per cent growth in the United States. The brand added over 17,000 rooms globally this quarter, nearly 7,000 of which were in the U.S., representing a 15 per cent year-over-year increase. CEO Geoff Ballotti attributes the gains to the company's "long-term growth strategy," pointing out that higher royalty rates and an eight per cent boost in ancillary revenues were key drivers for the company’s performance.

In a period where hotel brands are keenly focused on expansion, Wyndham awarded 197 new development contracts worldwide, including 95 in the U.S., reflecting a 10 per cent rise compared to Q3 2023. The company’s development pipeline hit a record high of 248,000 rooms, marking a five per cent increase from the same period last year. Approximately 79 per cent of Wyndham’s projects are new constructions, and 35 per cent of these have broken ground. Notably, Wyndham’s ECHO Suites Extended Stay by Wyndham brand, launched recently, now represents 14 per cent of the company’s pipeline, a testament to the growing demand for extended-stay options.

Wyndham’s RevPAR reflected modest overall gains with global RevPAR increasing by one per cent in constant currency. In the U.S., RevPAR for midscale and above segments held steady, while international RevPAR grew by seven per cent, driven by a combination of higher pricing and occupancy rates, particularly in EMEA and Latin America, where the latter recorded an 11 per cent increase. Canada contributed to these international gains, showcasing the company’s strategy to prioritize growth in midscale and above categories across its global footprint.

The company’s balance sheet remains solid, ending the quarter with $72 million in cash and a liquidity position of $750 million. Wyndham maintained a net debt leverage ratio of 3.5 times, aligning with its target range of three to four times. Additionally, Wyndham returned $126 million to shareholders through $97 million in share repurchases and quarterly dividends of $0.38 per share. Year-to-date, Wyndham has returned nearly $380 million to shareholders, reinforcing Ballotti’s focus on delivering "outstanding value to our guests, franchisees, and shareholders."

Wyndham expects continued stability in RevPAR trends and projects three to four per cent growth in rooms year-over-year, aligning with its overall system growth. The company’s full-year outlook for adjusted diluted EPS has been revised upwards to between $4.22 and $4.34, reflecting confidence in ongoing demand in key segments.

As Wyndham pursues its growth strategy, Ballotti signalled optimism for the quarters ahead, buoyed by resilient infrastructure demand and stabilizing comparisons within the industry. "Our teams once again delivered exceptional results, executing our long-term growth strategy," he states, underscoring Wyndham's goal to sustain value for all stakeholders in the years ahead.