Wyndham Hotels & Resorts, Inc. · NYSE:WH

Wyndham Hotels & Resorts — Investor Presentation (February 2020)

49 slides from Wyndham Hotels & Resorts's investor presentation, February 2020

  1. Slide 1: Wyndham Hotels & Resorts Investor Presentation February 2020

    WYNDHAM HOTELS & RESORTS y « y ine a Wt Cosh ‘ : ud t/ & ? r = vee inves SEP eae Ong a LISTED y February’ 2020 a hee ees TZ ‘Cee /) ‘oncan ofinet Creek - Orlando, FL Bs \\ ¥ Oe & aw |i’

  2. Slide 2: Disclaimer

    Disclaimer This presentation and the information contained herein are solely for informational purposes. This presentation does not constitute a recommendation regarding the securities of Wyndham Hotels & Resorts. This presentation or any related oral presentation does not constitute any offer to se

  3. Slide 3: Who We Are

    Who We Are wa mL Guayaquil; Ecuador. We our We are the We boast a hotel brands to remarkably hotel owners hotel franchise to helo them company in business attract guests the world model

  4. Slide 4: Mission

    Mission We make hotel travel possible for all. Wherever people go, Wyndham will be there to welcome them. To be the world’s leading provider of select-service hotel brands by delivering the best value to owners and guests.

  5. Slide 5: Strategic Goals

    Strategic Goals Grow property-level market share Drive net room growth Elevate the Foster a _ economy and values-driven midscale experience culture Shareholder Return WYNDHAM HOTELS & RESORTS

  6. Slide 6: We Franchise More Hotels than Other Leading Lodging Companies

    We Franchise More Hotels than Other Leading Lodging Companies 9,280 IHS Hilton] 2CHOICE 4\)\arnott, _WYNDHAM InterContinental Hotel Group HOTELS & RESORTS WYNDHAM HOTELS & RESORTS

  7. Slide 7: Balanced Portfolio of Well-Known Brands with Select-Service Focus

    Balanced Portfolio of Well-Known Brands with Select-Service Focus ale ; MICROTEL RAMADA WYNDHAM: — KA.WYNDHAM GRAND’ BY WYNDHAM LtAQUINTA By WYNDHAM - wee. "IM DAZZLER DOLCE cerem 4 OWINGATE. = trapewarx DAZZLER DOLCE an. A L, f HAWTHORN’ BOUTIQUE HOTELS LE 7. o dloward Johnson AmericInn WYNDHAM BY

  8. Slide 8: We are the Global Leader in Attractive Economy and Midscale Segments

    “We are the Global Leader in Attractive Economy and Midscale Segments Choice 25% G6 Hospitality (Motel 6) 9% Red Lion 7% Best Western 7% Other 18% Based on the number of U.S. branded hotels as reported to STR. . WYNDHAM HOTELS & RESORTS

  9. Slide 9: We work through our franchisees

    We work through our franchisees

  10. Slide 10: Focus: Attract, Develop and Retain Franchisees

    Focus: Attract, Develop and Retain Franchisees ial il Brand Quality Loyalty, Sales Maximize and Footprint and Marketing Franchisee Profitability WYNDHAM HOTELS & RESORTS

  11. Slide 11: Introducing New Prototypes

    Introducing New Prototypes aw * x MICROTEL AmericInn BY WYNDHAM ‘Dawn’ interior redesign ‘Gen-4” interior redesign N07. tAQUINTA HAWTHORN’ WYNDHAM ay wrnowam SUITES BY WYNDHAM GARDEN © ‘Del Sol” prototype New dual-branded prototype ‘Arbor” prototype

  12. Slide 12: Our Brands are Known for Quality

    Our Brands are Known for Quality 07. WINGATE’ BY WYNDHAM Wingate led the midscale segment for the fifth consecutive year 7. MICROTEL BY WYNDHAM Microtel has been the leading brand in the economy segment 16 of the last 18 years WYNDHAM HOTELS & RESORTS

  13. Slide 13: Progress on Quality Initiatives

    Progress on Quality Initiatives * Four out of the top five online review scores among national chains in the U.S. economy segment as ranked by @ MEDALLIA ¢ Microtel leading all other brands as evidenced by its RevPAR Index of 126% * Total domestic online review scores have increased in each of the p

  14. Slide 14: La Verkin, Utah

    La Verkin, Utah

  15. Slide 15: Consumer-Value Loyalty Program Delivers Significant Bookings for Franchisees

    Consumer-Value Loyalty Program Delivers Significant Bookings for Franchisees Best Hotel Loyalty Program More than 81 million enrolled members WYNDHAM walle REWARDS’ 4 You’ve earned this: we Wyndham Rewards Over 40% of U.S. hotel stays by Wyndham Rewards Members Best Hotel Loyalty Program: \Wyndham R

  16. Slide 16: Global Sales Organization

    Global Sales Organization New Field Organization * One Sales Team of 300 globally ¢ Partnerships and Field Support - Hotel Sales Services (Gitgo) and Property Support (Jacaruso) ¢ Business Development - grow market share from small business accounts WYNDHAM |, HOTELS & RESORTS

  17. Slide 17: New Marketing Campaign

    New Marketing Campaign Chances are, you’re about 10 Minutes from a hotel by Wyndham

  18. Slide 18: Our Brands Generate Strong Returns

    Our Brands Generate Strong Returns Cost per room $68,000 RevPAR $44.00 Number of rooms 85 Hotel revenue $1.4 million Total cost $5.8 million Operating expenses $588,000 Loan-to-value 70% Brand fees $134,000 Loan amount $4.1 million Interest expense $287,000 Franchisee investment $1.7 million Cash-on

  19. Slide 19: Actual Example Hawthorn Suites by Wyndham

    Or. . Actual Example HAWTHORN SUITES BY WYNDHAM Cost per room @ $112,000 RevPAR $74.53 Number of rooms 104 Hotel revenue $2.8 million Total cost $11.6 million Operating expenses $1.5 million Loan-to-value 78% Brand fees $210,000 Loan amount $9.1 million Interest expense $383,000 Franchisee investmen

  20. Slide 20: Actual Example Microtel by Wyndham

    at f- Actual Example MICROTEL BY WYNDHAM Cost per room $63,000 RevPAR $78.29 Number of rooms 85 Hotel revenue $2.4 million Total cost $5.4 million Operating expenses $1.2 million Loan-to-value 78% Brand fees $193,000 Loan amount $4.2 million Interest expense $218,000 Franchisee investment $1.2 milli

  21. Slide 21: Industry Leading Retention Rates

    Industry Leading Retention Rates Economy Midscale 96.0% 95.9% 95.6% 95.5% 95.2% 94.3% 93.3% 93.3% 3-year average 2019 3-year average 2019 M@lndustry including WH Wyndham Hotels & Resorts Based on the number of U.S. branded rooms as reported to STR. WYNDHAM 21 HOTELS & RESORTS

  22. Slide 22: Retention Trends Improving with Additional Opportunity

    Retention Trends Improving with Additional Opportunity United States International 95.5% Ob 94.5% . % % 94.3% 93.7% 93.6% a Z a 2017 2018 2019 2017 2018 2019 HOTELS & RESORTS

  23. Slide 23: Slide 23

  24. Slide 24: We Have a System

    We Have a System Concentration Upscale 7% Diversified, Regional Concentration All Other 20% Stable Franchisee Base Customer Segmentation Location Airports 6% Suburban/ Rural WYNDHAM HOTELS & RESORTS

  25. Slide 25: Economy Midscale Upscale

    •                                                                                                                                       

  26. Slide 26: i ae

    \ KK i ae eo! Kong Harbour Vi. Bewaewe waza

  27. Slide 27: Stable and Resilient Business Model

    Stable and Resilient Business Model Loyal franchisee base Recurring fee- based income Minimal capital requirements More than 6,000 franchisees in approximately 90 countries on six continents Franchise agreements typically 10-20 years 95% global retention rate 90% of revenue is fee-for-service 90% ma

  28. Slide 28: Principled Allocation of Capital

    Principled Allocation of Capital Maintain healthy, efficient balance sheet Invest for growth Return capital to shareholders Preserve liquidity and manage leverage Maintain flexibility to invest in growth Organic opportunities Invest in technology to drive efficiency Tuck-in acquisitions Dividends ($

  29. Slide 29: Predominately a Cash Business with Minimal Cash Needs

    Predominately a Cash Business with Minimal Cash Needs ($ in millions) ~60% $613 nee conversion || + ($100) $360 2019 Adjusted Cash interest Cash taxes Capital Working capital Adjusted Free EBITDA” expenditures and and other Cash Flow development advances @ Net income was $157 million for full-year 2

  30. Slide 30: y wae

    y wae HAWTAO©O

  31. Slide 31: Full-Year 2019 Results

    Full-Year 2019 Results WYNDHAM HOTELS &*RESORTAS IS*THE LARGEST HOTEL FRANCHISING COMPANY IN THE ‘WORLD. Net Rooms G + + Highlights a + Adjusted EBITDA ©? Adjusted Diluted EPS © Pipeline Approximately $613MM : $3.28 : 193,000 rooms 70% New Construction Up 21% Up 21% 57% international Adjusted Free C

  32. Slide 32: Full-Year 2019 Results

    Full-Year 2019 Results ($ in millions) Adjusted EBITDA® $613 2018 2019 2018 2019 |EY19 Year-over-Year Growth Number of Rooms 3% Organic Global RevPAR (1%) © Represents incremental revenues and adjusted EBITDA from La Quinta through June 30, 2079. © Net income was $157 million and $162 million for fu

  33. Slide 33: Delivering Shareholder Return

    Delivering Shareholder Return SiINce Spin... ¥ Returned over $550 million to shareholders: ¥ Repurchased 6.8 million shares, or 7%, of our common stock for $364 million ¥ Paid common stock dividends of $189 million During 2019... ¥ Returned over $350 million to shareholders: ¥ Repurchased 4.5 millio

  34. Slide 34: Georgetown, Delaware

    Mic = oes: -R & OT aaem Georgetown, Delaware

  35. Slide 35: Numerous Sources of Earnings Growth

    Numerous Sources of Earnings Growth OuKRWD = Rooms growth RevPAR growth International expansion Hotel management Tuck-in acquisitions Share repurchases \ WYNDHAM .. HOTELS & RESORTS

  36. Slide 36: Long-Term Growth Opportunity

    Long-Term Growth Opportunity Impact on EPS Rooms growth 2-4% RevPAR growth 2-3% International expansion O-2% Hotel management O-1% Cash flow deployment 3-5% Long-term EPS growth potential WYNDHAM HOTELS & RESORTS

  37. Slide 37: —_— ar

    —_— ar

  38. Slide 38: Core Strengths

    Core Strengths World’s largest hotel franchisor Strong portfolio of well-known brands Market-leading position in the attractive economy and midscale segments Industry-leading loyalty and technology platforms Proven ability to create value through acquisitions OuR WD = Strong and experienced manageme

  39. Slide 39: Key Investment Highlights

    Key Investment Highlights Baas WYNDHAM ., HOTELS & RESORTS

  40. Slide 40: Comparison to Other Leading Lodging Companies

    Comparison to Other Leading Lodging Companies We serve the majority of needs of the majority of travelers We are more geographically diversified and less dependent on major markets We have a highly diversified owner base, with limited concentration Our brands reside primarily in value segments, whic

  41. Slide 41: a rr cipal

    a rr cipal ar bia Se WYNDHAM HOTELS & RESORTS A di - — me PPenalx LISTED ¥ ‘od TRYP by Wyndham - Fortitude Valley, Australia NYS E

  42. Slide 42: Growth in the United States

    Growth in the United States * Increase economy density with new-construction prototypes Pipeline * Aggressively develop open market tracts for midscale brands 47% New Construction * Capture soft-branding opportunities * Continually enhance franchisee 84,000 rooms value proposition _WYNDHAM HOTELS &

  43. Slide 43: International Growth

    International Growth * Introduce existing brands to new markets Pipeline ¢ Rapidly growing middle class > driving demand Conversion « Leverage significant brand aye 88% awareness and recognition NE Construction * Expand hotel management and franchise opportunities in Asia, 109,000 rooms Latin Americ

  44. Slide 44: Continued Robust Growth in China

    Continued Robust Growth in China ° Weare the largest international hotel franchisor in China, with nearly 1,600 properties and 155,000 rooms in our system « We expect to open about 500 hotels in China over the next three years +———._ 10% growth year-over-year Direct Franchise 33% 4% growth year-over

  45. Slide 45: We Generate over 80% of Our EBITDA from Recurring Royalty Fees

    We Generate over 80% of Our EBITDA from Recurring Royalty Fees ($in millions) Adjusted Adjusted EBITDA Revenue Margin Contribution Royalty $436 x 90% = $392 Wyndham Destinations royalty $113 x 95% = $107 Marketing reservations & loyalty $562 x 0% = $0 Cost reimbursement revenue $623 x 0% = $O Other

  46. Slide 46: Ability to Grow Rooms through Recession

    “Ability to Grow Rooms through Recession & 627,400 612,700 613,100 597,700 592,900 580,200* 2007 2008 2009 2010 2011 2012 *Pro forma for 2008 acquisition of Microtel and Hawthorn. WYNDHAM HOTELS & RESORTS

  47. Slide 47: Wyndham Green - "Go Green" Programs

    Wyndham Green - “Go Green” Programs @) ¢ Wyndham Green Certification - Program that addresses energy, water and operational efficiencies * Nearly 500 Green Certified properties as of year-end 2019 « Wyndham Green Housekeeping - Program for Wyndham Rewards points in lieu of housekeeping « Nearly 200

  48. Slide 48: Non-GAAP Reconciliations and Definitions

    Non-GAAP Reconciliations and Definitions The following tables 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

  49. Slide 49: Non-GAAP Reconciliations and Definitions (continued)

    Non-GAAP Reconciliations and Definitions (continued) Net income Provision for income taxes Depreciation and amortization Interest expense, net Stock-based compensation expense Impairment, net Contract termination costs Transaction-related expenses, net Separation-related expenses Transaction-related

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