Wyndham Hotels & Resorts, Inc. · NYSE:WH
Wyndham Hotels & Resorts — Q4 2021 Earnings Presentation
40 slides from Wyndham Hotels & Resorts's earnings presentation, Feb 16, 2022
Slide 1: alae
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Slide 2: Introduction to Wyndham Hotels & Resorts
2 Introduction to Wyndham Hotels & Resorts Largest Leading brands hotel franchisor in the resilient by hotels select-service worldwide segment 9,000 810,100 Hotels Current Rooms 92M+ 22 Loyalty Members Brands | Data is approximated as of December 31, 2021. Asset-light business model with significant
Slide 3: La Quinta Inn & Suites by Wyndham, Greensboro
La Quinta Inn & Suites by Wyn: i BE WYNDHAM 3 Greensboro, North Carolina HOTELS & RESORTS:
Slide 4: WH Leads the Industry's COVID Recovery
WH Leads the Industry’s COVID Recovery $590M +450 bos $389M Adjusted EBITDA; Margin expansion Free cash flow; 66% 95% of 2019 vs. 2019 conversion from Adjusted EBITDA © +350 bps +280 bps +1,.8% RevPAR Index ADR Index ® Net room growth YOY; gains vs. 2019 gains vs. 2019 1% in the U.S., 4% internation
Slide 5: WH Brands Gained Significant Market Share
WH Brands Gained Significant Market Share 2021 U.S. INDEX CHANGE VS. 2019 Achieved a more balanced distribution between Occupancy and ADR in Q4 a4 130 210 340 Q3 260 Hie) 280 Q2 350 ye) 370 al 390 40 Bf) 10) 100 200 300 400 500 MADR Index # Occupancy Index 5 | Based on STR property competitive set.
Slide 6: Net Room Growth in Line with Expectations
Net Room Growth in Line with Expectations Net Room Growth More Heavily Weighted Toward Higher RevPAR Domestic Segments and More Profitable Direct Franchising Internationally Global Domestic International System Midscale+ System Direct System 42% — ME Domestic +5% 795,900 810,100 = International 247,
Slide 7: Highest Pipeline on Record
Highest Pipeline on Record TOTAL PIPELINE @ 12/31/21 194k 1,500 Global rooms Global hotels 6 consecutive quarter of sequential growth +520bps vs. YE’20 (yoy) +100bps vs. Q3’21 (sequential) Covers 60 countries, including 11 without pre-existing WH presence 35%! Hi international Hus. 24% of current po
Slide 8: Adjusted EBITDA Nearly Recovered to 2019 Levels
8 Adjusted EBITDA Nearly Recovered to 2019 Levels 2021 ADJUSTED EBITDA CONTRIBUTION vs. 2019 ($ Millions) 95% ™ ©99%>) 62% | Total Core License Adjusted Business Fees EBITDA ® 2021 2019 CPLG Marketing Funds 2019 Adjusted EBITDA ©) COVID-19 cost savings 12% RevPAR decline vs. 2019 Not in the RevPAR p
Slide 9: Asset-Light, Franchised Model Generates Strong Free Cash Flow
Asset-Light, Franchised Model Generates Strong Free Cash Flow Cin millions) _— —— 66% —— Rate $590 oo S73 $309 93) ll aa | ($93) ($37) a ($30) 2021 Adjusted Cash Taxes Interest Capital Development Other Working 2021 EBITDA ® Expense, Net Expenditures Advance Notes Capital Free Cash Flow Fe Stations
Slide 10: Disciplined Capital Allocation Maximizes Value for All Stakeholders
10 Disciplined Capital Allocation Maximizes Value for All Stakeholders Throughout COVID and the recovery, WH has deployed cash to drive value for all stakeholders 2020-2021 Incremental Cash on Balance Sheet Debt Reduction Business Investments ~$570 million Dividend Payments gee) \ Mer er ‘ ap Share
Slide 11: Hotel photos
Registry Collection La‘Quinta-byswyndhanig eh Wyndha 2 >) Ramada by Wyndham Windsot Panama City, Panama Middletown, New York M Windsor Locks, Connecticut WYNDHAM HOTELS & RESORTS Wyndham Garden Hangzhou Yuhang Super 8 by Wyndham Trademark Collection by Wyndham Hangzhou, China Carizzo, Texas, Thessal
Slide 12: Wyndham Newport Hotel Middletown, Rhode Island
Wyndham Newport Hotel 12 Middletown, Rhode Island
Slide 13: 2022 Key Priorities
Slide 14: Core Business Projected to Grow 6-10% vs. 2019
14 Core Business Projected to Grow 6-10% vs. 2019 7-11% growth vs. 2021 6-10% growth vs. 2019 $510-530 $481 $477 2019 2021 2022E ADJUSTED EBITDA CONTRIBUTION @ $113 ~$80 fi : 2019 2021 2022E $28 $25 285 2019 2021 2022E $18 -$10 ($) = 2019 2021 2022E $605-625 $621 | 2019 2021 2022E Core Business Lice
Slide 15: System Projected to Increase to 4%
System Projected to Increase 2 to 4% Continued momentum in openings and improvements in retention rate expected to drive net room growth back to pre-pandemic growth rate GLOBAL ADDITIONS GLOBAL RETENTION RATE 2019 2019 2021 53,100 2021 2022 2022 U J t J 90% " 110% +30bps' +50bps Expectation Expectat
Slide 16: Maximizing Capital Allocation For All Stakeholders
16 Maximizing Capital Allocation For All Stakeholders MAINTAIN STRONG BALANCE SHEET >$900 million of liquidity Total leverage at 3.2x - within our 3-4x target range Significant room under all debt covenants No near-term debt maturities =Term Loan $1,500 mUnsecured Notes $1,000 $500 $0 2022-2024 2025
Slide 17: Disciplined Approach to M&A
7 Disciplined Approach to M&A Strong strategic fit Significant growth potential in existing and adjacent markets Asset-light and a preference for franchise Accretive to earnings and net room growth in the near-term Manageable impact on net leverage YN NN AN
Slide 18: Continued Significant Investment & Focus on ESG
Continued Significant Investment & Focus on ESG PLACES TO WORK 2022 for LGBTQ+ Equality Forbes AMERICA'S 2022 EMPLOYERS = DIVERSITY NOTEWORTHY A CULTURE OF DIVERSITY, EQUITY & INCLUSION Perfect score of 100 on Human Rights Campaign 2022 Corporate Equality Index for 4th consecutive year ~55% of globa
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Slide 20: Drive Share
CLEAR saa DRIVE SHARE B TRYP by ee Fort Lauderdal game | 20 Fort Lauderdale, Florida, USA
Slide 21: Days Inn by Wyndham Bullhead City
Ail: ys Inn by Wyndham Bullhead City 4 WYNDHAM llhead City, Arizona, USA HOTELS & RESORTS:
Slide 22: World's Largest Hotel Franchisor with Minimal Exposure to Asset Risk
REASON 1 World’s Largest Hotel Franchisor with Minimal Exposure to Asset Risk NUMBER OF HOTELS WORLDWIDE PERCENT OF FRANCHISED HOTELS HED Choice SI 100% 7,102 6.758 Hitomi NNN 284 6,031 4G [NN 24% Meni ili 7224 Limited exposure to operating costs and capital requirements essere requiring less than $
Slide 23: Leisure Guests Power Our Business
23 REASON 2 Leisure Guests Power Our Business 70% LEISURE FOCUS reisure Trevel a 70 % “Everyday” % << Business Travel 27% All Other 1% Corporate Infrastructure ~21% Transient 2% Group Business | 1% WYNDHAM | All data based on 2021 results, HOTELS & RESORTS —
Slide 24: Thursday & Sunday Nights Drove Longer Long Weekends
24 Thursday & Sunday Nights Drove Longer “Long Weekends”, Further Increasing Leisure Demand 2021 REVPAR VS 2019 o% 14% || G2 1% mc: mc = =z (3%) (24%) GS) Weekend (Fri/Sat) Extended Weekend (Sun/Thu) _WYNDHAM -
Slide 25: Drive-to Destinations Not Reliant on Air Travel or International Travelers
25 REASON 3 “Drive to” Destinations Not Reliant on Air Travel or International Travelers 87% U.S. HOTELS IN “DRIVE TO” LOCATIONS Suburban 35% Interstate 87% Small Metro Airport Urban Resorts All data based on STR census December 2021. 96% OF U.S. GUESTS ORIGINATE DOMESTICALLY US. 96% Europe |) 1% Ca
Slide 26: U.S. System Well Positioned Along Highways and Byways
26 U.S. System Well Positioned Along Highways and Byways and in Drive-to Destinations WYNDHAM
Slide 27: Wyndham Choice IHG Hilton Marriott
Wyndham Choice IHG Hilton Marriott
Slide 28: WH Select-Service Brands Outperform
WH Select-Service Brands Outperform Higher-end Chainscales MONTHLY U.S. REVPAR CHANGE VS. 2019 16% 12% 9% 10% 6%) (22%) (27%) 17%) (22%) (35%) Economy/Midscale Advantage (65%) (46%) (65%) GE) @ WH Select-service brands lf STR Higher-end chainscale brands ©) (89%) Jan’20 Feb Mar Apr May Jun Jul Aug S
Slide 29: Multiple Levers to Drive Net Room Growth
REASON 5 Multiple Levers to Drive Net Room Growth Strategic Evolution of Business and Innovation Prioritize Investment in the Business Owner-First Approach NET ROOM GROWTH 2022 Longer- Proven + 350 bps of RevPAR index improvement since 2019 term Conversion + ROl-focused approach to property improvem
Slide 30: Compelling Value Proposition for Franchisees
Compelling Value Proposition for Franchisees!... Wyndham’s industry-leading central World’s largest hotel franchisor reservation systems deliver $7 out of leverages pricing power to deliver on- every $10 to U.S. franchisees property savings for franchisees Trusted brands with segment-leading consume
Slide 31: Economy Hotel Development Continues to Deliver Strong Returns
.. Phat Continues to Deliver Strong Returns Cost per room ~$75,000 Loan-to-value ~70% Franchisee Investment $1,575,000 RevPAR $53.00 Revenues $1,354,000 Operating expenses $745,000 Brand fees $115,000 Interest expense $184,000 Hotel EBTDA $310,000 Cash-on-Cash Return of ~20% Data is not brand specif
Slide 32: Strong and Experienced Leadership Team
Strong and Experienced Leadership Team + Served as President and Chief Executive Officer of + Served as Executive Vice President and Treasurer of Wyndham Hotel Group (2014 - 2018) Wyndham Hotels & Resorts (2018 - 2019) + Served as Chief Executive Officer of Wyndham Destination + Served as Senior Vic
Slide 33: The Wyndham Family of Brands
33 ECONOMY Nn MICROTEL ofan aN Howard Johnson BY WYNDHAM Travelodge The Wyndham Family of Brands Wherever people go, Wyndham will be there to welcome them. MIDSCALE UPPER MIDSCALE UPSCALE UPPER UPSCALE RAMADA QUINTA WYNDHAM Ea WYNDHAM GRAND DAZZLER DOLCE HOTELS AND RESORTS S Bitine Ne. WINGATE’ BY W
Slide 34: Wyndham Sitges Barcelona
by Wyndham Sitges Barcelona jes, Spain
Slide 35: Financial Impact of Select-Service Management Business Exit
APPENDIX Financial Impact of Select-Service Management Business Exit 2019 2021 Adjusted Adjusted Cin millions) Revenue EBITDA Revenue EBITDA Estimated CPLG contribution from assets sold ‘») $ (18) $ (12) $ (6) $ (2) Sate coarser neat tobe ao @ wm @ Termination fees from CPLG © 7) (7) (19) (19) Cost
Slide 36: 2022 Adjusted EBITDA Outlook
APPENDIX 2022 Adjusted EBITDA Outlook 2021 Reconciliation to 2022 Outlook Gin millions) 2021 Adjusted EBITDA @) $590 Royalty growth 89) = SY) License fees ©) ~10 Marketing, reservation and loyalty funds ~(8) CPLG © ~(20) Inflationary increases ~(10) Ancillary fee streams/bad debt expense ~4 2022 Adj
Slide 37: Net income to Adjusted EBITDA reconciliation
Year Ended Year Ended December 31, 2021 December 31, 2019 Net income $ 244 $ 157 Provision for income taxes 91 50 Depreciation and amortization 95 109 Interest expense, net 93 100 Early extinguishment of debt 18 - Stock-based compensation expense 28 15 Development advance notes amortization 11 8 Imp
Slide 38: Free cash flow reconciliation
Year Ended December 31, 2021 Net cash provided by operating activities $ 426 Less: Property and equipment additions (37) Free cash flow $ 389
Slide 39: Hotel Franchising segment margin reconciliation
Year Ended Year Ended Year Ended Year Ended December 31, 2021 December 31, 2019 December 31, 2021 December 31, 2019 Hotel Franchising segment revenues $ 1,099 $ 1,279 Fee-related and other revenues $ 1,245 $ 1,450 Hotel Franchising segment adjusted EBITDA 592 629 Segment margin 54% 49% Adjusted EBIT
Slide 40: Definitions & Disclaimer
40 APPENDIX Definitions & Disclaimer Definitions: Adjusted EBITDA: Represents net income excluding net interest expense, depreciation and amortization, early extinguishment of debt charges, impairment charges, restructuring and related charges, contract termination costs, transaction- related items
Wyndham Hotels & Resorts — Q4 2021 Earnings Presentation on 6ix