Wyndham Hotels & Resorts, Inc. · NYSE:WH
Wyndham Hotels & Resorts — Q4 2024 Earnings Presentation
33 slides from Wyndham Hotels & Resorts's earnings presentation, Feb 13, 2025
Slide 1: Investor Presentation
Investor Presentation February 12, 2025 Wyndham Atlanta Buckhead Hotel & Conference Center Atlanta, Georgia, USA Opened December 2024
Slide 2: Introduction to Wyndham Hotels & Resorts
Introduction to Wyndham Hotels & Resorts Asset-light Leading brands Primarily Largest business model in the resilient leisure-focused, hotel franchisor generating select-service “drive to” portfolio worldwide(a) significant free cash segment of hotels flow ~9,300 ~903,000 ~252,000 95+ Hotels Current
Slide 3: WH Investment Thesis
WH Investment Thesis ASSET-LIGHT, HIGHLY-RESILIENT, FEE-BASED FRANCHISE BUSINESS MODEL GENERATING HIGH MARGINS AND PRODIGIOUS FREE CASH FLOW Wyndham Garden Sonipat Murthal Sonipat, India 3 Opened November 2024
Slide 4: Highly-Resilient Business Model Outperforming Peers and Delivering Significant Shareholder Return
Highly-Resilient Business Model Outperforming Peers and Delivering Significant Shareholder Return WH business operates at WH leads lodging C-Corps best-in-industry margins in capital return Adj. EBITDA Margin(a) Total Five-Year Capital Return 83% as % of Market Cap(b) 75% 71% 71% 30% 25% 25% 24% 24%
Slide 5: Long-term Growth Algorithm
Long-term Growth Algorithm Three-Year Growth Plan(a) ~$2 billion ~8.5% Mid-teens Cash Available(b) for Adjusted EBITDA Enhancing Shareholder Adjusted EPS CAGR Value (Free Cash Flow + CAGR Leverage Capacity) ~$300 million ~$400 million ~$1.3 billion Development Shareholder Return / Dividends Advances
Slide 6: 2024 Performance Recap
2024 Performance Recap La Quinta Inn & Suites by Wyndham Chelsea Chelsea, Alabama, USA 6 Opened November 2024
Slide 7: Wyndham Executing Against Growth Strategy
Wyndham Executing Against Growth Strategy 2024 Highlights 16 Net Room Growth +3.6% consecutive quarters of growth Royalty Rate 3.95% +6 bps YOY growth Ancillary Fee Streams $276M +6% YOY growth +7% Adjusted EBITDA(a) $694M comparable basis YOY growth Capital Return $430M ~6% as % of Market Cap(b) 7
Slide 8: 2024: Breaking Records & Building Momentum
2024: Breaking Records & Building Momentum 2024 GOALS & KEY OBJECTIVES ACHIEVEMENTS • Grew global system 3.6% and direct franchise system 4.0% Grow direct franchise • Opened a record 68,700 rooms, representing 8% of the system at December 31, 2023 system 3-4% • Increased full-year 2024 retention rat
Slide 9: U.S. RevPAR Growth Fueled by Leisure and Infrastructure Demand
U.S. RevPAR Growth Fueled by Leisure and Infrastructure Demand . . . supported by Accelerating growth strengthening leisure . . . and growing in the U.S. . . . demand . . . infrastructure impact WH U.S. RevPAR Growth WH Weekend U.S. Occupancy Growth WH Weekday U.S. Occupancy Growth Year-Over-Year No
Slide 10: System Growth and Retention Rate Improvements In Line with Expectations
System Growth and Retention Rate Improvements In Line with Expectations 2024 organic NRG exceeds . . . while global retention . . . as FeePAR strategy historical performance . . . rate reaches new high . . . drives system expansion DOMESTIC MIDSCALE+ SYSTEM 95.7% YOY GROWTH 3.6% 3.5% 95.6% 3.2% +4%
Slide 11: Development Momentum Continues
Development Momentum Continues 285 Contracts Awarded Since Launch Plano (Gateway), TX Nashville Gallatin, TN ~75 Expected to Open by 2026(a) ~300 Expected to Open by 2032 Indianapolis, IN Richmond, VA Madison, WI 11
Slide 12: Expanding Globally in Key Markets
Wyndham Garden Westlake Ramada by Wyndham Gaziantep Origin Kansas City, a Wyndham Hotel Days Hotel by Wyndham Xianju Downtown Westlake, Ohio Gaziantep, Turkey Kansas City, Missouri, USA Zhejiang, China Opened December 2024 Opened December 2024 Opened October 2024 Opened December 2024 Expanding Globa
Slide 13: 2025 Focus
2025 Focus BUILDING BLOCKS IN PLACE TO MAXIMIZE NEAR-TERM GROWTH Reside Houston Downtown, a Wyndham Residence Houston, Texas, USA 13 Opened October 2024
Slide 14: 2025 Key Priorities
2025 Key Priorities Grow system-wide rooms Continue to establish a market-leading position 3.6% to 4.6% in the extended stay segment Continued investment in brands Capture ancillary revenue growth opportunities, targeting high FeePAR additions including credit card products and strategic marketing p
Slide 15: Accelerating Growth and Enhancing Shareholder Value in 2025
Accelerating Growth and Enhancing Shareholder Value in 2025 2025 Adjusted EBITDA Outlook Enhancing Shareholder Value (in millions) Free Cash Flow Conversion 7-9% 57 - 60% Comparable Basis Growth(b) $745 - $755 Additional Leverage Capacity $694 Dividends ~$130 million ~$550 million available for busi
Slide 16: System Projected to Increase 3.6% to 4.6%
System Projected to Increase 3.6% to 4.6% Low end anchored to WH record year in 2024, with pipeline expansion, continued openings momentum, and retention rate improvements accelerating net room growth GLOBAL ADDITIONS GLOBAL RETENTION RATE 2024 68,700 2024 95.7% 2025 ~8% Gross Openings 2025 Retentio
Slide 17: Pipeline Expanded to Another All-Time High
Pipeline Expanded to Another All-Time High TOTAL PIPELINE @ 12/31/2024 GLOBAL COMPOSITION SEGMENT MIX +5% Pipeline as a YoY midscale+ ~252K ~2,100 % of current 14% 22% growth portfolio: Global rooms Global hotels 42% 16% 28% 58% International 70% Economy Economy Brands Brands 78% 18th consecutive qu
Slide 18: RevPAR Projected to Grow 2% to 3%
RevPAR Projected to Grow 2% to 3% Global growth . . . driven by multiple . . . and consistent accelerates . . . U.S. levers . . . international growth Global RevPAR Growth U.S. RevPAR International Constant Currency Growth Components(b) RevPAR Growth Constant Currency 150- 8% 2 – 3% 200 bps Q4’24 Hy
Slide 19: Maximizing Capital Allocation For All Stakeholders
Maximizing Capital Allocation For All Stakeholders MAINTAIN STRONG RETURN EXCESS CAPITAL BALANCE SHEET INVEST IN BUSINESS TO SHAREHOLDERS $765 million of liquidity Strategic deployment of capital to accelerate Targeting mid-30s dividend payout ratio growth in higher RevPAR, midscale+ hotels Total le
Slide 20: Appendix
Appendix Wyndham Quzhou Kecheng Quzhou, China 20 Opened December 2024
Slide 21: 2025 Planning – Revenue Sensitivities
APPENDIX 2025 Planning – Revenue Sensitivities Adjusted EBITDA Sensitivities (in millions) Driver Based vs. 2024 1 Point 1 Basis Point (RevPAR & NRG) (Royalty Rate) U.S. royalties and franchise fees ~$3.4 ~$0.8 Margin of ~85% on gross revenues International royalties and franchise fees ~$0.9 ~$0.4 F
Slide 22: Compelling Value Proposition for Franchisees
APPENDIX Compelling Value Proposition for Franchisees . . . Industry-leading central reservation World’s largest hotel franchisor systems deliver ~$8 out of every $10 leverages pricing power to deliver to U.S. franchisees on-property cost savings for franchisees Industry’s #1 hotel loyalty program w
Slide 23: 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%
Slide 24: Leisure Guests Power Our Business, Infrastructure-Related Spend Further Supports Growth
APPENDIX Leisure Guests Power Our Business, Infrastructure-Related Spend Further Supports Growth ~70% LEISURE FOCUS; ~20% INFRASTRUCTURE Leisure Travel 70% Infrastructure 22% Logistics/ Other 6% Corporate Transient 2% Group Business <1% Represents percentage of U.S. gross room revenues for full-year
Slide 25: Our Domestic Guests are Middle-Class and Getting Younger
APPENDIX Our Domestic Guests are Middle-Class and Getting Younger GEN X/Y/Z GUESTS U.S. Household Income AS % OF TOTAL First Second Third Fourth Fifth Quintile Quintile Quintile Quintile Quintile 60% $33,000 - $62,000 - $101,000 - <$33,000 >$165,000 62,000 101,000 165,000 58% WH guest average househ
Slide 26: WH Footprint Well-Positioned to Capture Growing Leisure and Infrastructure Demand
APPENDIX WH Footprint Well-Positioned to Capture Growing Leisure and Infrastructure Demand Well-positioned along highways and byways . . . strong overlap of WH footprint and and in drive-to destinations . . . infrastructure spend markets 26 See footnotes in Appendix.
Slide 27: ESG Highlights
APPENDIX ESG Highlights Year in Review • Consistent recognition as a leading workplace in various regions globally by NJBIZ, Newsweek, Fair360, and by team members in 2024 • Recognized by Ethisphere as one of the World’s Most Ethical Companies® for the 4th time. • Continued promotion of diverse hote
Slide 28: Strong and Experienced Leadership Team
APPENDIX Strong and Experienced Leadership Team • Served as Executive Vice President and Treasurer of • Served as President and Chief Executive Officer of Wyndham Hotels & Resorts (2018 – 2019) Wyndham Hotel Group (2014 – 2018) • Served as Senior Vice President of Finance for Wyndham • Served as Chi
Slide 29: Wyndham Family of Brands
APPENDIX Wyndham Family of Brands Wherever people go, Wyndham will be there to welcome them. 29 Vienna House brand acquisition also included Vienna House Easy midscale brand.
Slide 30: Footnotes
APPENDIX Footnotes Page 2 Page 7 Data is approximated as of December 31, 2024. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the Appendix. (a) Largest hotel franchisor by number of franchised hotels. (a) Net income for full-yea
Slide 31: Non-GAAP Reconciliations
APPENDIX Non-GAAP Reconciliations 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 overall
Slide 32: Non-GAAP Reconciliations
APPENDIX Non-GAAP Reconciliations The following table reconciles certain non-GAAP financial measures. We believe free cash flow to be a useful operating performance measure to us and investors. This measure helps us and investors evaluate our ability to generate cash beyond what is needed to fund ca
Slide 33: Definitions & Disclaimer
APPENDIX Definitions & Disclaimer 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, separation-related items, transaction-relat
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