Wyndham Hotels & Resorts, Inc. · NYSE:WH
Wyndham Hotels & Resorts — Q3 2022 Earnings Presentation
38 slides from Wyndham Hotels & Resorts's earnings presentation, Oct 26, 2022
Slide 1: Investor Presentation, October 2022
WYNDHAM HOTELS & RESORTS- Investors Presentations October 25, 2022 4g == : a Grandoe resort & Spa, a Wyndham Grand Hotel Greensboro, North Carolina, USA
Slide 2: Introduction to Wyndham Hotels & Resorts
2 Introduction to Wyndham Hotels & Resorts Largest Leading brands Asset-light Primarily hotel franchisor in the resilient business model leisure-focused by hotels select-service generating significant “drive to” portfolio worldwide segment free cash flow of hotels ~9,100 ~856,000 ~212,000 95+ Hotels
Slide 3: = ¥ UK | Berlin)\Germany NY
‘ a = = ¥ UK | 3 Berlin)\Germany NY WYNDHAM = HOTELS & aEGORTS
Slide 4: Third Quarter 2022 Performance Recap
4 |(d) Net income for third quarter 2022 was $101 million. Third Quarter 2022 Performance Recap +11% +10% Global RevPAR vs. 2019; U.S. RevPAR vs. 2019; +12% vs. 2021 © +2% vs. 2021 +4% +42% +10% Net room New deals Global pipeline growth YOY ©) signed YOY © growth YOY $191M $321M Adjusted EBITDA “ YT
Slide 5: RevPAR Recovery Fueled by ADR Growth
RevPAR Recovery Fueled by ADR Growth with Substantial Occupancy Opportunity m ADR Q3 % OF 2019 LEVELS ™ Occupancy — — —RevPAR Global U.S. International WYNDHAM 5 | _ Note: Global and International ADR comparisons are in constant currency. HOTELS:
Slide 6: Net Room Growth Tracking Ahead of Initial Expectations
Net Room Growth Tracking Ahead of Initial Expectations ROOM ADDITIONS PACING RETENTION TRENDING NET ROOM GROWTH WELL AHEAD OF 2019 LEVELS IN LINE WITH EXPECTATIONS PACING AHEAD OF 2019 Year-to-Date Results Rolling 12 Months % of FY NRG Achieved through Q3 Organic additions Vienna House 45,700 6,400
Slide 7: Pipeline Climbs to a Record 212K Rooms
Pipeline Climbs to a Record 212K Rooms TOTAL PIPELINE @ 9/30/22 212K 1,600 Global rooms. Global hotels 9 consecutive quarter of sequential growth +1,010 bps vs. Q3’21 (YOY) +210 bps vs. Q2’22 (sequential) Covers nearly 60 Q countries, including 11 without pre-existing WH presence GLOBAL COMPOSITION
Slide 8: Asset-Light, Franchised Model Generates Strong Free Cash Flow
Asset-Light, Franchised Model Generates Strong Free Cash Flow Cin millions) __— yy 61% | Conversion Rate $524 ($75) | ($60) a - a. a $321 ($28) ($4) YTD ‘22 Cash Taxes Interest Development Capital Other Working YTD 22 Adjusted Expense, Net “) Advance Expenditures Capital Free Cash EBITDA Notes Flow
Slide 9: Notable Q3-22 Additions
| ta Mujeres, ‘on Microtel Inn & Suites by Wyndham y a ‘ Registry —: ates La-Quinta Inn & Suites by Wyndham Kanata, Ontario, Canada It =CancunjiMexico,. © Parker, CO, USA Notable Q3-22 Additions WYNDHAM HOTELS & RESORTS Sandpiper Bay All ee Wyndham Grand Vedana Tea ark Collection by,Wyndham Ninh Bin
Slide 10: La Quinta Inn & Suites by Wyndham North Olmsted
La Quinta Inn & Suites by V 10 North Olmsted, Ohio, US.
Slide 11: 2022 Key Priorities
Slide 12: Core Business Projected to Grow to 12%
Core Business Projected to Grow 10 to 12% ADJUSTED EBITDA CONTRIBUTION @ ! 10-12% growth vs. 2021 | $636-644 ' 10-11% growth vs. 2019 | $621 F $512-520 $590 | $467 $465 : ' + $113 : ' -$86 f ! $70 $28 g05 $14 $12 $12 $18 -$20 =_ = >) i 1 2019 2021 2022E ' 2019 2021 2022E 2019 2021 2022 2019 2021 202
Slide 13: System Projected to Increase 4%
3 System Projected to Increase 4% Continued momentum in openings and improvements in retention rate expected to drive net room growth above pre-pandemic growth rate GLOBAL ADDITIONS GLOBAL RETENTION RATE 2019 2019 2021 2021 2022 2022 >95% ~9% Gross 2a Openings Retention Rate *Includes 6,400 acquired
Slide 14: Ahead of development goals for Project ECHO
Ahead of development goals - initial goal was 100 by year-end, already at 120 through Q3 Continue to target at least 300 domestic hotels over next 10 years with plans for additional international expansion Expect to announce brand name November 1st YTD Contracts Awarded 120 72 50 14 At 3/31/22 At 6/
Slide 15: Simplified Business Structure Allows for Greater Focus on Direct Franchising
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 in received proceeds of $84 million
Slide 16: Maximizing Capital Allocation For All Stakeholders
Maximizing Capital Allocation For All Stakeholders MAINTAIN STRONG BALANCE SHEET >$1 billion of liquidity $750 million revolver extended to April 2027 Total leverage at 2.7x © Significant room under all debt covenants No near-term debt maturities Only ~20% of debt is variable-rate = Term Loan A $1,5
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 YN NN AN
Slide 18: Continued Significant Investment & Focus on ESG
Continued Significant Investment & Focus on ESG Diversityine \ TOP 350 Forbes THE BEST EMPLOYERS ror DIVERSITY COMPANIES FOR DIVERSITY" NOTEWORTHY PLACES TO WORK 2022 for LGBTa+ Equality 100% CORPORATE EQUALITY INDEX A CULTURE OF DIVERSITY, EQUITY & INCLUSION Perfect score of 100 on Human Rights Cam
Slide 19: WH Investment Thesis
Slide 20: Ail:
Ail: ys Inn by Wyndhi z WYNDHAM head 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 9.057 "+= a © 2% a2 Choice SI 100% 10% 7,458 Hilton a 28% 6,061 4G [NN 24% Marriott {iii 73% Limited exposure to operating costs and capital requirements GeseeieMt re
Slide 22: Leisure Guests Power Our Business
22 REASON 2 Leisure Guests Power Our Business 70% LEISURE FOCUS reisure Trevel a 70 % “Everyday” % << Business Travel 27% All Other ~3% Corporate Infrastructure -78% 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 SELECT SERVICE VS. FULL SERVICE Hotels 1% 6,000 4,000 2,000 Oo Wyndham Choice IHG Hilton Marriott mSelect-Service mFull-Service based o ‘s December 2021; CHH pro forma for Radisson acquisition. | Select-service is defin
Slide 26: 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 Sept 11 © Crisis ©) COVID-19 © i" (2%) (596) Lt (19%) (33%) (58%) ™WH Select-Service ™STR Upscale+ WH Select-Service Outperformance: +300 BPS +500
Slide 27: Multiple Levers to Drive Net Room Growth
REASON 5 Multiple Levers to Drive Net Room Growth Strategic Evolution of Business and Prioritize Investment in the Business Owner-First ORGANIC Approach NET ROOM GROWTH Innovation 2022 Longer- * ROl-focused approach to property-improvement-plans and other conversion term requirements + Strong value
Slide 28: Compelling Value Proposition for Franchisees
Compelling Value Proposition for Franchisees!.y. 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 29: New Construction Economy Hotel Delivers 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 @ 6% $221,000 Hotel EBTDA $273,000 Cash-on-Cash Return of >17% Data is not brand s
Slide 30: Strong and Experienced Leadership Team
30 Strong and Experienced Leadership Team Served as President and Chief Executive Officer of Wyndham Hotel Group (2014 - 2018) Served as Chief Executive Officer of Wyndham Destination Network (2008 - 2014) Held leadership positions of increasing responsibility at Starwood Hotels and Resorts Worldwid
Slide 31: The Wyndham Family of Brands
The Wyndham Family of Brands Wherever people go, Wyndham will be there to welcome them. ECONOMY MIDSCALE UPPER MIDSCALE UPSCALE UPPER UPSCALE LUXURY ty. MICROTEL RA MADA QUINTA WYNDHAM’ Eq WYNDHAM GRAND REGISTRY | cham CS Encore "IM DAZZLER DOLCE ; TRADEMARK ay wenbwan HOTELS Ano nESoRTS id wit@are:
Slide 32: Appendix
Slide 33: Quarterly Financial Impact of Select-Service Management Business and Owned Assets
APPENDIX Quarterly Financial Impact of Select-Service Management Business and Owned Assets Fourth Quarter Full Ye: 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 49 21
Slide 34: Annual Financial Impact of Select-Service Management Business and Owned Assets
34 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) Termination fees from CPLG © (7) (7) (19) Gs _ ® Owned assets (4 (89) (
Slide 35: 2025 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 36: Adjusted EBITDA Reconciliation
Three Months Ended Nine Months Ended Three Months Ended September 30, 2022 September 30, 2022 September 30, 2021 Net income $ 101 $ 299 $ 103 Provision for income taxes 38 104 36 Depreciation and amortization 18 58 23 Interest expense, net 21 60 22 Early extinguishment of debt - 2 - Stock-based comp
Slide 37: Free Cash Flow Reconciliation
Three Months Ended Nine Months Ended September 30, 2022 September 30, 2022 Cash Flow: Net cash provided by operating activities $ 107 $ 349 Net cash provided by/(used in) investing activities (54) 190 Net cash used in financing activities (164) (420) Effect of changes in exchange rates on cash, cash
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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