Wyndham Hotels & Resorts, Inc. · NYSE:WH
Wyndham Hotels & Resorts — Q2 2024 Earnings Presentation
38 slides from Wyndham Hotels & Resorts's earnings presentation, Jul 25, 2024
Slide 1: Investor Presentation July 24, 2024
Investor Presentation July 24, 2024 _WYNDHAM HOTELS &|RESORTS : Sparta South Carolina, USA
Slide 2: Introduction to Wyndham Hotels & Resorts
Introduction to Wyndham Hotels & Resorts Asset-light Leading brands : Primarily pote ees cor in the resilient business model leisure-focused, worldwide select-service significant tree cash “drive to” portfolio segment flow of hotels ~9,200 ~885,000 ~245,000 95+ Hotels Current Rooms Rooms in the Coun
Slide 3: Highly-Resilient, Fee-Based Franchise Business Model Generating High Margins and Free Cash Flow
_ Conn IGHLY-RESILIENT, FEE-BASED FRAN ISE/BUSINES i DEL GENERATING HIGH MARGINS ai il 5 NOP JOUS FREE CASH FLOW Be ">.< La Quintadnn & Suites by Wyndham Chattanooga Downtown/South : Chattanooga, Tennessee WYNDHAM ~==3 Opened April 2024 Kil SSHOreLs 8 hesoRTs —— s— ——
Slide 4: World's Largest Hotel Franchisor with Minimal Exposure to Asset Risk
World’s Largest Hotel Franchisor with Minimal Exposure to Asset Risk NUMBER OF HOTELS WORLDWIDE 7,500 ; / IHG CHOICE | See footnotes in Appendix. 7,800 Hilton 2000 9,200 4.\Narriott, WYNDHAM PERCENT OF FRANCHISED HOTELS Wyden i >99% Asset-light requiring average capital expenditure spend of less tha
Slide 5: Highly-Resilient Business Model Outperforming Peers
Highly-Resilient Business Model Outperforming Peers and Delivering Significant Shareholder Return History of WH outperformance in economic downturns RevPAR Growth Global Sept. 11) Financial Crisis | a (12%) 959%) 14%) (19%) mWH Select-Service =STR Upscale+ | (58%) WH business operates at best-in-ind
Slide 6: Long-term Growth Opportunity
Long-term Growth Opportunity Adjusted EBITDA Algorithm Cin millions) 7-10% \ cage 7 | $35-$55 $795-$865 $25-$35 $85-$125 — | 2023 Comparable Business Infrastructure Ancillary 2026E Basis Adjusted Drivers Capture Growth Adjusted EBITDA® t t EBITDA Annual Assumptions, -8% CAGR includes + Syst th of 3-
Slide 7: Capital Deployment Will Further Enhance Growth
Capital Deployment Will Further Enhance Growth ~$2 billion 2024E-2026E Cash Available for Enhancing Shareholder Value from Free Cash Flow & Leverage Capacity ~$300 million Development Advances ~$400 million Dividends ~$1.3 billion Share Repurchases/ M&A Mid-teens Adjusted EPS CAGR 2023-2026E WYNDHAM
Slide 8: Long-term Growth Opportunity: System Growth Acceleration
Long-term Growth Opportunity: System Growth Acceleration History ...and continued steady ... propels of strong improvement in retention system toa gross openings... rates... 4% CAGR Room Openings Retention Rate Global System Size as a % of Beginning System +4% 96.0% CAGR 8% 8% 8% ~980,000 7% 95.6% 8
Slide 9: Long-term Growth: RevPAR Performance Over Time
Long-term Growth: RevPAR Performance Over Time Over multiple lodging cycles, U.S. select-service RevPAR grows 2-3% $80 U.S. Select-Service RevPAR Growth Year-over-Year 2.6% CAGR $70 $60 J $50 COVID-19 $40 $30 Global Sept. 11 Financial $20 Crisis $10 $O Ssogagesagesggsesgeggerxreerereegnggsg ° °° oOo
Slide 10: Long-term Growth Opportunity: Growing our Royalty Rate
Long-term Growth Opportunity: Growing our Royalty Rate Proven track record of expanding royalty rates with significant runway for continued improvement Domestic Royalty Rate International Royalty Rate ~4.75% 46% ~ 9 4.5% Sis 2.4% 2.0% 2019 2023 2026E 2019 2023 2026E Global rate increases ~5 bps, yie
Slide 11: Long-term Growth Opportunity: Infrastructure Bill
n Long-term Growth Opportunity: Infrastructure Bill Strong overlap of WH footprint and infrastructure spend markets ... ... WH well-positioned for future growth opportunity = In 2019, the federal government spent $71 billion on infrastructure; the 2021 Infrastructure Act & 2022 CHIPS Act provide a t
Slide 12: Long-term Growth Opportunity: Ancillary Fee Streams
12 Long-term Growth Opportunity: Ancillary Fee Streams Multiple opportunities propel ancillary fee growth to an ~8% CAGR 2023 Actual 2026E Revenue Revenue of $260 of ~$320 million million . Expected Margin of margi argin of y 75% ¥ “75% Adjusted Adjusted EBITDA EBITDA contribution contribution of $1
Slide 13: Wyndham Datca Perili Bay
Wyndham Datca Perili Bay Dat¢a, Turkey WYNDHAM ter TS 13 Opened June 2024 %
Slide 14: Second Quarter 2024 Performance Recap
Second Quarter 2024 Performance Recap +2% +4% Global RevPAR Net room vs. 2023 growth YOY +33% +7% New U.S. Global pipeline deals signed YOY growth YOY $178M $69M $162M Adjusted Adjusted Capital returned to EBITDA® free cash flow shareholders WYNDHAM nore ry
Slide 15: System Growth In Line with Expectations
15 System Growth In Line with Expectations Net room growth pacing ahead of historical performance... % of FY NRG Achieved through Q2 43% 2019 2022 2023 2024 Note: 2024 reflects the midpoint of our full-year 3-4% NRG outlook. ... while retention rate continues to improve ; DOMESTIC Rolling 12 Months
Slide 16: Pipeline Expanded to Another All-Time High
16 Pipeline Expanded to Another All-Time High TOTAL PIPELINE @ 6/30/2024 ~245K ~2,000 Global rooms. Global hotels 76 consecutive quarter of sequential growth YOY Growth afi Global +7% U.S. +5% Sequential Growth Global +80 bps U.S. +50 bes Covers ~60 countries, including 8 without pre-existing WH pre
Slide 17: ECHO Suites Construction Continues
ECHOSUITES ECHO Suites Construction Continues EXTENDED STAY BY WYNDHAM = ii Plano North; TX — Houston/Katy, TX Plano Gateway,_FX h 7 Nashville Gallatin, TN WYNDHAM
Slide 18: Expanding Globally in Key Markets
i Americinn.& Suites By Wyndham, Baraboo La Quinta by W4 4 Dolce by. Wyndham Versailiés Baraboo, Wisconsin Cesme, Turkey Jouy-en-Josas, France 5 Pahang; Malaysi: > Opened, June 2024 Opened:June 2024, Opened June 2024 Opened June 2024 w Expanding Globally in Key Markets WYNDHAM HOTELS & RESORTS amero
Slide 19: U.S. Q2 RevPAR Trends Normalizing
19 Indexed to 2019 U.S. Q2 RevPAR Trends Normalizing Economy RevPAR exceeded historical growth rates during COVID recovery period and is now returning to normal levels U.S. Economy Industry RevPAR Growth Year-over-Year Expected Growth: 1.5%@ 120% 105% 90% 75% 60% 45% 30% 2019 2020 2021 2022 2023 202
Slide 20: Executing on Royalty Rate Growth Strategy
20 Executing on Royalty Rate Growth Strategy U.S. RATE GROWTH INTERNATIONAL RATE GROWTH 1H ’24 v. 1H ‘23 1H °24 v. 1H ‘23 Annual Adjusted EBITDA sensitivity: Annual Adjusted EBITDA sensitivity: 1 bps = $0.7M 1 bps = $0.3M WYNDHAM “HOTELS a RESORTS
Slide 21: Asset-Light, Franchised Model Generates Strong Free Cash Flow
a Asset-Light, Franchised Model Generates Strong Free Cash Flow Cin millions) O : 54% ~~ —__[ Conversion Rate from )__— \\_ Adjusted EBITDA_7 $318 a Ms ($46) Q2 YTD Interest Cash Capital Working Adjusted Adjusting Q2 YTD Adjusted Expense, Taxes Expenditures Capital Free Cash Items) Free Cash EBITDA®
Slide 22: 2024 Key Priorities
Slide 23: Wyndham on Track for 7% Growth in 2024
Wyndham on Track for 7% Growth in 2024... in millions) ee = 3-4% Net Room Growth — — (Com cab Basie) + -8% gross openings, including higher FeePAR room \eon Cee) “/ openings from pipeline ~~ + ~96% retention, reflecting 20-30 bps retention rate improvement $40-$50 $690-$700 —- = Flat RevPAR growth +
Slide 24: Capital Deployment Will Further Enhance Growth
.., Capital Deployment Will Further Enhance Growth Cin millions) — Conversion Rate $690-$700 $330 ~$745 Allocated to Share Repurchases Q2 YTD (-$125) ($125-$127) || ; (-$N10) ~$415 ($T13-$115) enn (-$40) FY24E Interest Costs Cash Taxes Capex FY24E ecncatl Available Swidenas Savclopment —_ Go noe ‘Si
Slide 25: Maintain Strong Balance Sheet
MAINTAIN STRONG BALANCE SHEET $820 million of liquidity Total leverage at 3.5x, midpoint of 3-4x range Weighted average maturity of 6 years ~30% of debt is variable-rate Significant room under all debt covenants $2,000 $1,500 $1,000 $500 $0 m= Term Loan A m= Term Loan B mUnsecured Notes Revolving Cr
Slide 26: Appendix
Aopoendix Nee a
Slide 27: 2024 Planning - Revenue Sensitivities
27 APPENDIX 2024 Planning - Revenue Sensitivities djusted EBITDA Sensitivities Cin millions) U.S. royalties and franchise fees ~$3.4 International royalties and franchise fees ~$0.8 Marketing, reservation and loyalty fees == 1 point change in license fees ~$1.0 — 1 point change in other revenue ~$1.
Slide 28: Compelling Value Proposition for Franchisees
APPENDIX Compelling Value Proposition for Franchisees ... Wyndham’s industry-leading central reservation systems deliver nearly $8 out of every $10 to US. franchisees Industry’s #1 hotel loyalty program with approximately 110 million enrolled members On-property technology tools drive operating effi
Slide 29: That Continues to Deliver Strong Returns
APPENDIX ... That Continues to Deliver Strong Returns Cost per room ~$93,000 Loan-to-value ~70% Franchisee Investment $3,500,000 RevPAR $60.00 Revenues $2,716,000 Operating expenses $815,000 Brand fees $231,000 Interest expense @ 7.25% $585,000 Hotel EBTDA ~$1,100,000 Cash-on-Cash Return up to 31% W
Slide 30: Leisure Guests Power Our Business, Infrastructure-Related Spend Further Supports Growth
30 APPENDIX Leisure Guests Power Our Business, Infrastructure-Related Spend Further Supports Growth ~70% LEISURE FOCUS; ~20% INFRASTRUCTURE eo 7: Infrastructure PF 22% Logisti case, [sx Corporate 9, Transient | Group Business <1% Represents percentage of U.S. gross room revenues for full-year 2023.
Slide 31: Our Domestic Guests are Middle-Class and Getting Younger
APPENDIX Our Domestic Guests are Middle-Class and Getting Younger U.S. Household Income First Second Third Fourth Fifth Quintile Quintile Quintile Quintile Quintile $30,000- $58,000- $94,000 - <$30,000 "58000 94.000 -_—*153,000 t WH guest average @ household income of $104K 31 | See footnotes in App
Slide 32: ESG Highlights
ESG Highlights Published 2024 ESG Report in alignment with GRI, TCFD and SASB frameworks to better demonstrate our commitment to transparency and to operating in a socially, ethically and environmentally responsible manner Recognized by Ethisphere as one of the World's Most Ethical Companies for the
Slide 33: Strong and Experienced Leadership Team
33 APPENDIX Strong and Experienced Leadership Team | , + Served as Executive Vice President and Treasurer of + Served as President and Chief Executive Officer of ee a ier Wyndham Hotels & Resorts (2018 - 2019) + Served as Chief Executive Officer of Wyndham Destination . Saved es Senior oe presen ot
Slide 34: Wyndham Family of Brands
APPENDIX Wyndham Family of Brands Wherever people go, Wyndham will be there to welcome them. EXTENDED STAY ECONOMY MIDSCALE UPPER MIDSCALE UPSCALE UPPER UPSCALE ECHOSUITES micROtEL RAMADA WYNDHAM WYNDHAM GRAND ae . HaMnagre chain encore a DAZZLER poLce Nr wiNeatE esplonralot a= WYNDHAM do S07 GARDEN
Slide 35: Footnotes
Page 2 Page 16 Data is approximated as of June 30, 2024. (a) Expected to be open or under construction by 12/31/26. (a) Largest hotel franchisor by number of hotels. Page 19 Page 4 (a) Expected growth based upon industry historical growth rates for the period 2000-2019, as reported by STR. All data
Slide 36: Net Income to Adjusted EBITDA Reconciliation
Three Months Ended Six Months Ended Year Ended Year Ended Year Ended June 30, 2024 June 30, 2024 December 31, 2023 Three Months Ended Six Months Ended December 31, 2023 Year Ended December 31, 2022 Net income June 30, 2024 June 30, 2024 $December 31, 2023 289 $ 355 Net income $ 86 $ 102 $ 289 Net in
Slide 37: Cash Flow and Adjusted Free Cash Flow Reconciliation
Three Months Ended Six Months Ended Year Ended June 30, 2024 June 30, 2024 December 31, 2023 Year Ended Cash Flow: December 31, 2023 Adjusted free cash flow $ 411 Net cash provided by operating activities $ 1 $ 77 $ 376 Divided: Market capitalization at December 31, 2023 $ 6,545 Net cash used in inv
Slide 38: Definitions & Disclaimer
APPENDIX Definitions & Disclaimer Adjusted EBITDA: Represents net income excluding net interest expense, depreciation and amortization, eatly extinguishment of debt charges, impairment charges, restructuring and related charges, contract termination costs, sepatation-related items, transaction-relat
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