Wyndham Hotels & Resorts, Inc. · NYSE:WH
Wyndham Hotels & Resorts — Q4 2022 Earnings Presentation
44 slides from Wyndham Hotels & Resorts's earnings presentation, Feb 16, 2023
Slide 1: Investor Presentation
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 ~9,100 24 Hotels Brands ~843,000 95+ Current Rooms Countries | Data is approximated as of December 31, 2022. Asset-light business model generating significan
Slide 3: Days Inn by Wyndham
Days Inn by Wyndham Renovated with New Daw! Program 3 Kingsland, Georgia, USA
Slide 4: Full-Year 2022 Performance Recap
Full-Year 2022 Performance Recap +7% +9% Global RevPAR vs. 2019; U.S. RevPAR vs. 2019; +20% vs. 2021 @ +12% vs. 2021 +4% +35% +12% Net room New deals Global pipeline growth YOY signed YOY “© growth YOY $650M $3560M Adjusted EBITDA; Free cash flow ©); Comparable growth oy 55% conversion rate Data as
Slide 5: 2022 Adjusted EBITDA Grows 14% on a Comparable Basis
2022 Adjusted EBITDA Grows 14% on a Comparable Basis © ADJUSTED EBITDA +14% Comparable Basis Growth Cin millions) $77 $2 $650 $590 ($19) 2021 CPLG/ Operational Marketing Fund 2022 Owned © Growth Variability (a) Comparable basis represents year-over-year growth excluding the results of the select-ser
Slide 6: RevPAR Continues to Outpace 2019
US. RevPAR Continues to Outpace 2019 WH 2022 U.S. REVPAR INDEXED TO 2019 115% 110% 109% ; - fey) Q2 Q3 Q4 WYNDHAM HOTELS &
Slide 7: Net Room Growth in Line with Expectations
Net Room Growth in Line with Expectations More heavily weighted toward higher RevPAR domestic segments and more profitable direct franchising internationally GLOBAL DOMESTIC MIDSCALE+ INTERNATIONAL DIRECT SYSTEM SYSTEM SYSTEM tA HH Domestic +4% s10100 842,500 Ill International 258,000 , © Vienna Hou
Slide 8: Trademark Collection by Wyndham
Trade! ollection by Wyndham Razlog, Bulgaria pif = 7 Se - Expanding Globally tN x in Key Markets Senn ni it pm nn th ot WM ae TO W Hn ona a rane = I= | b WYNDHAM ey on) a a OUCO eeee Lat b HOTELS & RESORTS wyt .. fei Shanxi Xiaohe Xincheng, China
Slide 9: Pipeline Grows Sequentially for 10th Consecutive Quarter
Pipeline Grows Sequentially for 10% Consecutive Quarter TOTAL PIPELINE @ 12/31/22 GLOBAL COMPOSITION SEGMENT MIX Pipeline as a 220b ~219K 1,700+ % of current 5 YOY midscale+ Global rooms Global hotels portfolio: 27% growth 42%! 26% 58% = international 73%, 10% consecutive quarter of 7] _ sonal Hl Ec
Slide 10: Asset-Light, Franchised Model Generates Strong Free Cash Flow
10 Asset-Light, Franchised Model Generates Strong Free Cash Flow Cin millions) 55% | Conversion Rate $650 “Conversion I ($128) |S ($39) 2022 Adjusted Cash Taxes Interest Development Capital 2022 EBITDA @ Expense, Net ©) Advance Expenditures Free Cash Notes Flow © Reconelliations of non-GAAP financia
Slide 11: 2022 Accomplishments
n Drive Net Room Growth Increase Owners’ Profitability 2022 Accomplishments GOALS & KEY 2022 OBJECTIVES Grow direct franchise including 95%+ retention rate Continue investment in brands Expand portfolio reach across sent segments and isee top-line performance and market share Reduce owner labor and
Slide 12: Outlook
DORs Hea a Wyndham Grand Residences Costa del Sol _ 12 Mijas Costa, Spain ¢
Slide 13: Net Room Growth Projected to Increase to 4%
2022 2023 3 System Projected to Increase 2 to 4% Continued momentum in openings and improvements in retention rate expected to drive net room growth GLOBAL ADDITIONS 70,400 ~7-9% YOY Growth 2022 2023 GLOBAL RETENTION RATE 95.3% Retention Rate >95.3%
Slide 14: RevPAR Projected to Grow 4% to 6%
RevPAR Projected to Grow 4% to 6% Accelerated RevPAR recovery due to select-service focus REVPAR FULLY 2023 REVPAR GROWTH ... WHICH REPRESENTS RECOVERED IN 2022 PROJECTED AT 4-6%... 6-8% GROWTH VS. 2019 02%), 8D $40.92 $41.88 $4188 ~$44 $40.92 ~$44 2019 2022 2022 2023E 2019 2023E Global RevPAR Globa
Slide 15: 2023 Adjusted EBITDA Projected to Grow ~5%
2025 Adjusted EBITDA Projected to Grow ~5% on a Comparable Basis © ADJUSTED EBITDA “> Cin millions) 50, — ~5% Comparable Basis G 1, a $650-$660 $650 - ($18) 2022 CPLG/ Operational Marketing Fund 2023 Owned Growth Variability (a) Comparable basis represents year-over-year growth excluding the results
Slide 16: Maximizing Capital Allocation For All Stakeholders
Maximizing Capital Allocation For All Stakeholders MAINTAIN STRONG BALANCE SHEET >$900 million of liquidity $750 million revolver extended to April 2027 INVEST IN BUSINESS Strategic deployment of capital to accelerate growth in higher RevPAR, midscale+ hotels Continued investment in profitable and b
Slide 17: 2023 Key Priorities
Slide 18: Infrastructure Category Represents Large Growth Opportunity
Infrastructure Category Represents Large Growth Opportunity in Coming Years INCREMENTAL U.S. INFRASTRUCTURE & CHIPS ACTS SPEND (Billions) vor I sc: Power infrastructure PY $73 Passenger and freight rail PY $66 Broadband infrastructure PY $65 Manufacturing plants for chipmakers | $52 Public transit [
Slide 19: Disciplined Approach to M&A
19 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 20: Continued Significant Investment & Focus on ESG
Continued Significant Investment & Focus on ESG Forbes THE nes EMPLOYERS ror DIVERSITY Diversityine TOP 350 COMPANIES FOR DIVERSITY” NOTEWORTHY PLACES TO WORK 2022 for LGBTQ+ Equality A CULTURE OF DIVERSITY, EQUITY & INCLUSION Perfect score of 100 on Human Rights Campaign 2022 Corporate Equality Ind
Slide 21: Business Overview
Slide 22: cian
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Slide 23: Days Inn by Wyndham
Fi Days inn by Wyndham _WYNDHAM 23 ‘Bullhead City, Arizona, USA HOTELS & RESORTS:
Slide 24: World's Largest Hotel Franchisor with Minimal Exposure to Asset Risk
24 REASON 1 World’s Largest Hotel Franchisor with Minimal Exposure to Asset Risk NUMBER OF HOTELS WORLDWIDE PERCENT OF FRANCHISED HOTELS 9,059 Wyner i >99% 2.208 Choice IIT +099 7165 7,487 Hilton [a se 6,061 1S a 24% Marriott ST 73% Limited exposure to operating costs and capital requirements Geseei
Slide 25: Leisure Guests Power Our Business, Followed by Infrastructure Related Spend
REASON 2 Leisure Guests Power Our Business, Followed by Infrastructure Related Spend ~70% LEISURE FOCUS; 20% INFRASTRUCTURE -* ms 7, ve I 209 tootsie I sx Corporate | 2% Transient Group | <1% Business WYNDHAM 25 | Represents percentage of gross room revenues for full-year 2022. HOTELS a RESORTS
Slide 26: Our Domestic Guests are Middle-Class and Getting Younger
Our Domestic Guests are Middle-Class and Getting Younger U.S. Household Income First Second Third Fourth Fifth Quintile Quintile Quintile Quintile Quintile $28,000- $55,000- $90,000 - <$28,000 "55000 90,000 ~—«-149,000._~—«8/49,000 t @ = $91k Median household income of WH guest 26 | Note: Represents
Slide 27: "Drive to" Destinations Not Reliant on Air Travel or International Travelers
27 REASON 3 “Drive to” Destinations Not Reliant on Air Travel or International Travelers 87% U.S. HOTELS IN “DRIVE TO” LOCATIONS Suburban 34% Interstate 87% Small Metro Airport Urban Resorts All data based on STR census December 2022. 96% OF U.S. GUESTS ORIGINATE DOMESTICALLY US. 96% Europe |) 1% Ca
Slide 28: U.S. System Well-Positioned Along Highways and Byways
U.S. System Well-Positioned Along Highways and Byways and in Drive-to Destinations WYNDHAM WOTELS @ RESORTS —
Slide 29: 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% * costs 6,000 Higher operating margins 4000 Lower construction costs and manageable deb
Slide 30: WH Select-Service Portfolio Less Volatile During Crisis
WH Select-Service Portfolio Less Volatile During Crisis WH select-service brands more resilient through economic downturns RevPAR Growth Global Financial = n® Crisis © COVID-19 © oes cot A a (15%) 14%) (19%) (33%) (58%) m@ WH Select-Service mSTR Upscale+ WH Select-Service Outperformance: +300 BPS +5
Slide 31: Organic Net Room Growth
ORGANIC NET ROOM GROWTH Longer- Ages term 31 | REASON 5
Slide 32: 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 every leverages pricing power to deliver on- $10 to U.S. franchisees property savings for franchisees Trusted brands with segment-leading On-prop
Slide 33: New Construction Continues to Deliver Strong Returns
33 .. 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 @ 6% $221,000 Hotel EBTDA $273,000 Cash-on-Cash Return of >17%
Slide 34: Significant Growth in ECHO Suites Extended Stay Brand
34 SIGNIFICANT GROWTH IN ECHO SUITES EXTENDED STAY BRAND LIMITED PENETRATION IN EXTENDED STAY MARKET CGUUTeT Usk) U.S. Select-Service Hotels 50 25 oa TTC Extended-Stay Total* Represents brand segments based o! branded hotels in the economy, midscale and upper midscale is December 2022
Slide 35: Significant Opportunities in Conversion Market and International Direct-Franchising
Significant Opportunities in Conversion Market And International Direct-Franchising LARGE SELECT-SERVICE STRONG INTERNATIONAL CONVERSION MARKET PIPELINE EXPANSION (Thousands) (Thousands) Global Hotels WH International Rooms Pipeline 100 150 +15% 125 75 100 50 75 50 25 25 o+ 0 Wyndham Addressable* 20
Slide 36: Appendix
Slide 37: Strong and Experienced Leadership Team
37 APPENDIX 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 a
Slide 38: The Wyndham Family of Brands
38 ECONOMY az MICROTEL BY WYNDHAM ein ME dloward Johnson BY WYNDHAM ECHOSUITES | Vienna House brand acquisition also included Vienna House APPENDIX The Wyndham Family of Brands Wherever people go, Wyndham will be there to welcome them. MIDSCALE UPPER MIDSCALE UPSCALE UPPER UPSCALE Ra MADA tAQUINTA.
Slide 39: Annual Financial Impact of Select-Service Management Business and Owned Assets
APPENDIX Annual Financial Impact of Select-Service Management Business and Owned Assets 2019 2021 2022 Adjusted Adjusted Adjusted Cin millions) Revenue EBITDA Revenue EBITDA @ Revenue EBITDA @ CPLG contribution “© (41) (21) $ (24), ¢ (6) $ (3) $ qd) Termination fees from CPLG © (7) (7) (19) (19) (5)
Slide 40: Quarterly Financial Impact of Select-Service Management Business and Owned Assets
40 APPENDIX Quarterly Financial Impact of Select-Service Management Business and Owned Assets Fourth Quarter Full Year Fee-related and other revenues 2022 $ 38 $ 12 $ - $ - $$ 50 2021 19 33 34 38 125 2020 34 7 15 15 n 2019 36 34 12 34 n7 Cost reimbursements 2022 $ 29 $ - $ - $ - $ 29 2021 50 58 58 4
Slide 41: 2023 Planning - Revenue Sensitivities
APPENDIX 2025 Planning - Revenue Sensitivities Adjusted EBITDA Sensitivities Cin millions) U.S. royalties and franchise fees ~$3.3 Margin of ~85% on gross $4.7 million per point impact; assumes cost mitigation of -15% International royalties and franchise fees ~$0.6 . . Funds expected to break-even
Slide 42: Adjusted EBITDA Reconciliation
Year Ended Year Ended Year Ended December 31, 2022 December 31, 2021 December 31, 2019 Net income $ 355 $ 244 $ 157 Provision for income taxes 121 91 50 Depreciation and amortization 77 95 109 Interest expense, net 80 93 100 Early extinguishment of debt 2 18 - Stock-based compensation expense 33 28
Slide 43: Cash Flow and Free Cash Flow Reconciliation
Year Ended December 31, 2022 Cash Flow: Net cash provided by operating activities $ 399 Net cash provided by investing activities 179 Net cash used in financing activities (584) Effect of changes in exchange rates on cash, cash equivalents and restricted cash (4) Net increase in cash, cash equivalen
Slide 44: Definitions & Disclaimer
44 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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