Wyndham Hotels & Resorts, Inc. · NYSE:WH
Wyndham Hotels & Resorts — Q1 2022 Earnings Presentation
38 slides from Wyndham Hotels & Resorts's earnings presentation, Apr 27, 2022
Slide 1: Investor Presentation
Slide 2: Introduction to Wyndham Hotels & Resorts
Introduction to Wyndham Hotels & Resorts Largest Leading brands Asset-light Primarily hotel franchisor in the resilient business model leisure-focused by hotels select-service with significant cash “drive to” portfolio worldwide segment generation capabilities of hotels ~9,000 815,000+ ~204,000 95+
Slide 3: Clear Intent & Priorities to Drive Shareholder Value
© O12 aw Performance ReECAaD CLEAR INTENT & PRIORITIES TO DRIVE SHAREHOLDER VALUE Days Inn by Wyndham WYNDHAM 3 Parsippany, New Jersey, USA HOTELS # RESORTS
Slide 4: First Quarter 2022 Performance Recap
First Quarter 2022 Performance Recap +4% +11% U.S. RevPAR vs. 2019; U.S. Economy RevPAR +38% vs. 2021 vs. 2019; +28% vs. 2021 +2% +47% +9% Net room growth YOY; New deals Growth in 1% in the U.S., signed YOY (@) global pipeline YOY 3% internationally $159M $125M Adjusted EBITDA; Free cash flow; +64%
Slide 5: Leisure and Everyday Business Travel Fuels U.S. RevPAR Growth
Leisure and Everyday Business Travel Fuels U.S. RevPAR Growth LEISURE DEMAND INCREASED DEMAND NO IMPACT FROM REMAINS STRONG FROM INFRASTRUCTURE GAS PRICE SURGE US RevPAR % of 2019 Infrastructure % of 2019 Gas Price Versus Rolling 4 Weeks =QI'21 =Ql'22 mQ1'21 =Q1'22 WH Select Service Occupancy WHR SS
Slide 6: Net Room Growth Tracking in Line with Expectations
Net Room Growth Tracking in Line with Expectations RETENTION TRENDING NET ROOM GROWTH ROOM ADDITIONS MOMENTUM IN LINE WITH EXPECTATIONS PACING AHEAD OF 2019 Rolling 12 Months % of FY NRG First Quarter Results Achieved through Q1 2 TTT 1.400 oer 92% 2021 (I 7.600 2019 11,700 13% Remainder of Year 10%
Slide 7: Pipeline Climbs to a Record 204K Rooms
Pipeline Climbs to a Record 204K Rooms with Faster Growth in Higher Revenue Generating Segments TOTAL PIPELINE @ 3/31/22 GLOBAL COMPOSITION SEGMENT MIX +310bps 204K 1,600 20% oF 22% YOY midscale+ Global rooms Global hotels portfolio growth Hi International 7 consecutive quarter of Mus. AY WE Economy
Slide 8: Asset-Light, Franchised Model Generates Strong Free Cash Flow
Asset-Light, Franchised Model Generates Strong Free Cash Flow Cin millions) eee 79% Conversion Rate $159 oo = $5 8125 ($10) ~ 2 ($7) ($2) Ql amounts lower than expected quarterly pace for the remainder of the year Ql Adjusted Interest Capital Development Cash Taxes Other Working Ql Free Cash EBITDA
Slide 9: Notable Q1-22 Additions
Co : 7 Ge Plea Bote! Taxslo, nial Hotel La Quinta by Wyndham Tryp by Wyndham a Quinta by Wyndham Deg MS; US? Weifang, China IstanbukeTurkey ‘4, Galveston, TX, USA Notable Q1-22 Additions WYNDHAM HOTELS & RESORTS ‘Colléction-by Wyndham ~ Wingate by Wyndham Ezhou Airport Sperone CA, USA Ezhou,-China W
Slide 10: Drive Shareholder Value
~ DRIVE-SHAREHOLDER VALI eee Se, it, é 4 “ig Keae:8 = i 10 Shanxi, China
Slide 11: 2022 Key Priorities
Slide 12: Business Projected to Grow 7-11% vs. 2019
8-12% growth vs. 2021 7-11% growth vs. 2019 $500-520 $467 $465 | Business Projected to Grow 7-11% vs. 2019 ADJUSTED EBITDA CONTRIBUTION @ $621 $605-625 $590 $3 ~$80 $70 $28 g95 $14 $12 -$10 $6 $18 -$10 = = s _ 2019 2021 2022E 2019 2021 2022E 2019 2021 2022E 2019 2021 2022 2019 2021 2022E 2019 2021 2
Slide 13: System Projected to Increase to 4%
3 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 2021 2022 2022 L J 90% " 110% +30bps’ +S0bps Expectation Expectation vs. 2
Slide 14: WH Unveils Developer-Driven, All New Construction Economy Extended-Stay Brand
Slide 15: Simplified Business Structure Allows for Greater Focus on Highly Profitable Direct Franchising Business
15 Simplified Business Structure Allows for Greater Focus on Highly Profitable Direct Franchising Business EXIT SELECT-SERVICE SALE OF MANAGEMENT BUSINESS OWNED ASSETS * Completed the exit of CPLG management business and + Completed sale of Wyndham Grand Bonnet Creek received proceeds of $84 million
Slide 16: Maximizing Capital Allocation For All Stakeholders
Maximizing Capital Allocation For All Stakeholders MAINTAIN STRONG BALANCE SHEET ~$1.2 billion of liquidity $750 million revolver extended to April 2027 Total leverage at 2.6x @ Significant room under all debt covenants No near-term debt maturities = Term Loan A $1,500 = Term Loan B INVEST IN BUSINE
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 KY N\ NN AN
Slide 18: Continued Significant Investment & Focus on ESG
Continued Significant Investment & Focus on ESG PLACES TO WORK 2022 for LGBTa+ Equality Forbes EZ] THE BEST EMPLOYERS ror DIVERSITY AMERICA'S EMPLOYERS A CULTURE OF DIVERSITY, EQUITY & INCLUSION Perfect score of 100 on Human Rights Campaign 2022 Corporate Equality Index for 4 consecutive year -55% o
Slide 19: Highly resilient business model
~ Highly res business n Ramada by Wyndham WYNDHAM 19 Chenzhou Dongjjang Lake, China Horeis a Resorts
Slide 20: Ail:
Ail: ys Inn by Wyndhi z WYNDHAM llhead City, Arizona, USA HOTELS & RESORTS:
Slide 21: 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 8,937 Wyndham i 99% 8.048 Choice SI 100% 6,996 . e082 Hilton AN 23 6,028 HG [NNN 24% Marriott {iii 73% Limited exposure to operating costs and capital requirements Ce
Slide 22: Leisure Guests Power Our Business
22 REASON 2 Leisure Guests Power Our Business 70% LEISURE FOCUS reisure Tevel a 70 % “Everyday” % ————— Business Travel 27% All Other 1% Corporate Infrastructure ~21% Transient 2% Group Business | 1% WYNDHAM | All data as of December 31, 2021 HOTELS a ResoRTS
Slide 23: "Drive to" Destinations Not Reliant on Air Travel or International Travelers
23 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 24: U.S. System Well Positioned Along Highways and Byways
U.S. System Well Positioned Along Highways and Byways and in Drive-to Destinations WYNDHAM 24 | All data as of December 31, 2021
Slide 25: Leader in the Attractive Select-Service Space
REASON 4 Leader in the Attractive Select-Service Space PERCENT OF U.S. HOTELS IN ADVANTAGEOUS FEATURES OF SELECT SERVICE VS. FULL SERVICE SELECT-SERVICE HOTELS Hotels Less labor-intensive and lower operating 1% 4% costs 6,000 Higher operating margins 4000 Lower construction costs and manageable debt
Slide 26: WH Select-Service Brands Outperform
WH Select-Service Brands Outperform Higher-end Chainscales QUARTERLY U.S. REVPAR CHANGE VS. 2019 9% 1% 5% +20 pts (16%) (15%) (20%) Economy/Midscale Advantage (38%) (57%) (65%) (65%) @ WH Select-service brands (82%) @ STR Higher-end chainscale brands “) ai20 220 320 420 ai2i Q221 Q321 421 qi22 WYNDH
Slide 27: WH Select-Service Portfolio Less Volatile During Crisis
27 WH Select-Service Portfolio Less Volatile During Crisis WH Select-Service More Resilient Inflation Not Expected to Materially Through Economic Downturns Impact Go-Forward Demand RevPAR Growth Global Financial * “Nearly 9 out of 10 Americans are Sept 1 Crisis ©) COVID-19 © expecting to travel this
Slide 28: 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 NET ROOM Approach GROWTH Longer- Aga term + ROl-focused approach to property-improvement-plans and other conversion requirements + Strong value propositi
Slide 29: Compelling Value Proposition for Franchisees
Compelling Value Proposition for Franchisees!.y. Wyndham’s industry-leading central reservation systems deliver $7 out of every $10 to U.S. franchisees Trusted brands with segment-leading consumer awareness and market share Industry’s #1 hotel loyalty program with ~94 million enrolled members Global
Slide 30: Project ECHO 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 31: 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 32: The Wyndham Family of Brands
32 ECONOMY az MICROTEL BY WYNDHAM ein ME dloward Johnson BY WYNDHAM The Wyndham Family of Brands Wherever people go, Wyndham will be there to welcome them. MIDSCALE RAMADA BY WYNOHAM RAMADA encore n0z. WINGATE’ ‘BY WYNDHAM xr. HAWTHORN’ SUITES BY WYNDHAM 4x AmericInn BY WYNDHAM ~— BAYMONT “BY WYNDHA
Slide 33: Super by Wyndham WYND
Me y ; Super 8 by Wyndham 4 WYND Chemnitz, Germany he Hore # Res y
Slide 34: Financial Impact of Select-Service Management Business Exit and Sale of Owned Assets
34 APPENDIX Financial Impact of Select-Service Management Business Exit and Sale of Owned Assets 2019 2021 2022 Adjusted Adjusted Adjusted Cin millions) Revenue EBITD. Revenue EBITDA Revenue EBITDA © Estimated CPLG contribution from assets $ as. $ «a2 $ 6) | $ . Estimated CPLG contribution from asse
Slide 35: Net income to Adjusted EBITDA reconciliation
Three Months Ended Three Months Ended March 31, 2022 March 31, 2021 Net income $ 106 $ 24 Provision for income taxes 34 11 Depreciation and amortization 24 24 Interest expense, net 20 28 Stock-based compensation expense 8 5 Development advance notes amortization 3 2 Gain on asset sale (36) - Separat
Slide 36: Cash Flow and Free Cash Flow reconciliation
Three Months Ended Three Months Ended March 31, 2022 March 31, 2021 Cash Flow: Net cash provided by operating activities $ 135 $ 64 Net cash provided by/(used in) investing activities 192 (5) Net cash used in financing activities (82) (21) Net increase in cash, cash equivalents and restricted cash $
Slide 37: Hotel Franchising segment revenues and adjusted EBITDA
Three Months Ended Three Months Ended Three Months Ended Three Months Ended March 31, 2022 March 31, 2021 March 31, 2022 March 31, 2021 Hotel Franchising segment revenues $ 272 $ 209 Fee-related and other revenues $ 316 $ 233 Hotel Franchising segment adjusted EBITDA 155 105 Segment margin 57% 50% A
Slide 38: Definitions & Disclaimer
38 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
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