Wyndham Hotels & Resorts, Inc. · NYSE:WH
Wyndham Hotels & Resorts — Q1 2023 Earnings Presentation
44 slides from Wyndham Hotels & Resorts's earnings presentation, Apr 27, 2023
Slide 1: Investor Presentation April 26, 2023
WYNDHAM HOTELS & RESORTS Investor | Presentation April 26, 2023 Microtel Inn & Suites by Wyndham Rehoboth Beach, Delaware, USA Opened January-2023
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 ~845,000 95+ Current Rooms Countries | Data is approximated as of March 31, 2023. Asset-light business model generating significant f
Slide 3: Days Inn by Wyndham Demopolis
Days Inn by Wyndham Demopolis 5 Demopolis, Alabama, USA
Slide 4: First Quarter 2023 Performance Recap
First Quarter 2023 Performance Recap +12% +4% Global RevPAR vs. 2022; U.S. RevPAR vs. 2022; +11% vs. 2019 +8% vs. 2019 +4% +7% +11% Net room New deals Global pipeline growth YOY ©) signed YOY © growth YOY $147M $84M Adjusted EBITDA; Free cash flow ©); Comparable growth oy 57% conversion rate Data as
Slide 5: First Quarter 2023 Adjusted EBITDA Grows 10% on a Comparable Basis
First Quarter 2023 Adjusted EBITDA Grows 10% on a Comparable Basis ADJUSTED EBITDA “> Cin millions) a 0, +10% Comparable Basis Growth $159 $14 || } | $147 ($15) ($11) 2022 CPLG/ Operational Marketing Fund 2023 Owned Growth Variability (a) Comparable basis represents year-over-year growth excluding t
Slide 6: Continued Momentum in U.S. RevPAR Growth
Continued Momentum in U.S. RevPAR Growth US RevPAR % of 2019 117% Ql1'22 mQl'23 110% 110% 104% Weekend Ext. Weekend (Fri/Sat) (Thu/Sun) 104% 98% Mid Week (Mon-Wed) WYNDHAM HOTELS @ RESORTS ——
Slide 7: Net Room Growth Tracking in Line with Expectations
Net Room Growth Tracking in Line with Expectations NET ROOM GROWTH PACING IN LINE RETENTION CONTINUES WITH HISTORICAL PERFORMANCE TO IMPROVE DOMESTIC % of FY NRG Rolling 12 Months MIDSCALE+ SYSTEM Achieved through Q1 YOY GROWTH ~10% ~10% ~10% 94.9% 95.3% INTERNATIONAL DIRECT SYSTEM YOY GROWTH 2019 2
Slide 8: Expanding Globally in Key Markets
tQUINTA Athens Key Hotel, Trademark Collection La Quinta Int by Wyndham agla-by el Jackson, MO, USA "Athens, Greece ga, Brazil ~ A, Opened March 2023 Opened March 2023 pewed March 2023 MC Opened February 2023 ae Expanding Globally in Key Markets WYNDHAM HOTELS & RESORTS >= TRYP by Wyndham, a Days In
Slide 9: Pipeline Grows Sequentially for 11th Consecutive Quarter
Pipeline Grows Sequentially for 11t? Consecutive Quarter TOTAL PIPELINE @ 3/31/23 ~226K ~1,800 Global rooms. Global hotels 71? consecutive quarter of sequential growth YOY Growth Global +11% U.S. +28% Sequential Growth Global +3% U.S. +5% Covers ~60 countries, including 11 without pre-existing WH pr
Slide 10: Asset-Light, Franchised Model Generates Strong Free Cash Flow
10 Asset-Light, Franchised Model Generates Strong Free Cash FIOW Cin millions) — 57% | Conversion Rate $147 oO ($22) ay — | ry ($15) Ql Adjusted Interest Cash Taxes Development Capital Working Capital Ql Free Cash EBITDA ® Expense, Net Advance Expenditures Timing © Flow © Notes Reconciliations of no
Slide 11: Award-Winning Wyndham Rewards Loyalty Program
Award-Winning Wyndham Rewards Loyalty Program Continues to Drive Value to Owners NUMBER OF ENROLLED MEMBERS GROWTH IN DIRECT CONTRIBUTION NEARLY DOUBLES SINCE SPIN FOR OUR OWNERS SINCE SPIN U.S. Member Occupancy FY 2018 38% FY 2022 49% June 2018 March 2023
Slide 12: AR INTENT & PRI
ae AR INTENT & PRI — Hore as RESORTS
Slide 13: 2023 Key Priorities
Slide 14: System Projected to Increase to 4%
2022 2023 14 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 15: 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%), $40.92 $41.88 $4188 ~$44 ~$44 d $40.92 2019 2022 2022 2023E 2019 2023E Global RevPAR Global
Slide 16: 2023 Adjusted EBITDA Projected to Grow ~6% on a Comparable Basis
2025 Adjusted EBITDA Projected to Grow ~6% on a Comparable Basis © ADJUSTED EBITDA “> Cin millions) ~6% Comparable Basis Growth | $32-$42 a $054-$664 2022 CPLG/ Operational Marketing Fund 2023 Owned Growth Variability (a) Comparable basis represents year-over-year growth excluding the results of the
Slide 17: Maximizing Capital Allocation For All Stakeholders
Maximizing Capital Allocation For All Stakeholders MAINTAIN STRONG BALANCE SHEET ~$900 million of liquidity INVEST IN BUSINESS Strategic deployment of capital to accelerate growth in higher RevPAR, midscale+ hotels Total leverage at 3.0x Continued investment in profitable and brand-enhancing prototy
Slide 18: Infrastructure Category Represents Large Growth Opportunity in Coming Years
Infrastructure Category Represents Large Growth Opportunity in Coming Years INCREMENTAL U.S. INFRASTRUCTURE WH WELL-POSITIONED & CHIPS ACTS SPEND FOR FUTURE OPPORTUNITY (Billions) Roads, bridges, mejor projects [ans $110 = In 2019, the federal government spent $71 Weter TT so; billion on infrastruct
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 KY N\ NN AN
Slide 20: Continued Significant Investment & Focus on ESG
Continued Significant Investment & Focus on ESG Diversityine TOP 350 COMPANIES FOR DIVERSITY" Forbes THE nes EMPLOYERS ror DIVERSITY GREATEST WORKPLACES DIVERSITY NOTEWORTHY DIVERSITY, EQUITY & INCLUSION Perfect score of 100 on Human Rights Campaign 2022 Corporate Equality Index for 4th consecutive
Slide 21: Wyndham Duchally Country Estate
Wyndham Duchally Country Estate 21 Auchterarder, United Kingdom
Slide 22: Wyndham Residences Kusadasi Golf & Spa
22 Wyndham Residences Kusadasi Golf & Spa Soke, Aydin ree cash flow
Slide 23: Days Inn by Wyndham Bullhead City
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
REASON 1 World’s Largest Hotel Franchisor with Minimal Exposure to Asset Risk NUMBER OF HOTELS WORLDWIDE PERCENT OF FRANCHISED HOTELS 9,060 Wyden i >99% aise Choice IIT +099 7215 7,467 eine Hilton [a es SE Marriott ST 73% Limited exposure to operating costs and capital requirements Asset-light requi
Slide 25: Leisure Guests Power Our Business, Followed by Infrastructure Related Spend
REASON 2 Leisure Guests Power Our Business, Followed by Infrastructure Related Spend STRONG OVERLAP OF WH FOOTPRINT ~70% LEISURE FOCUS; 20% INFRASTRUCTURE AND INFRASTRUCTURE SPEND MARKETS 753 Infrastructure | 20% Logisti oases, fl sx Corporate 9, Transient | 2% Group Business | <1% WYNDHAM 25 | Repr
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 Average t household income of @ WH guest is $91K or ~30% > U.S. median >$149,000
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 5 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 Select-service hotels historically outperform full-service hotels in economic downturns RevPAR Growth Global Financial (19%) = n® Crisis COVID-19 © oes cot A a (15%) 14%) (33%) (58%) m@ WH Select-Service mSTR Upscale+ WH Select-Service Outperfo
Slide 31: Organic Net Room Growth
31 ORGANIC NET ROOM GROWTH Longer- Ages term REASON 5
Slide 32: Compelling Value Proposition for Franchisees
32 Compelling Value Proposition for Franchisees!.y. Wyndham’s industry-leading central reservation systems deliver $7 out of every $10 to U.S. franchisees Trusted brands with segment-leading consumer awareness and market share Industry’s #1 hotel loyalty program with ~101 million enrolled members Gl
Slide 33: Franchisee Returns Continue 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 $55.00 Revenues $1,405,000 Operating expenses $773,000 Brand fees $119,000 Interest expense @ 7% $257,000 Hotel EBTDA ~$256,000 Cash-on-Cash Return of >16%
Slide 34: Significant Growth in ECHO Suites Extended Stay Brand
34 SIGNIFICANT GROWTH IN ECHO LIMITED PENETRATION IN SUITES EXTENDED STAY BRAND EXTENDED STAY MARKET CGUUTeT Usk) U.S. Select-Service Hotels 50 25 _ o! Extended-Stay Total* 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 100 150 125 75 100 50 75 50 25 25 0! o! Wyndham Addressable* Decemb
Slide 36: dt hme: 2s
dt hme: 2s S ’ GARDEN ‘ae Me q! maniHt Uf ae | | | a | G , UAOaEEEAE 1 a } oy yin
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
ECONOMY az MICROTEL BY WYNDHAM ein ME dloward Johnson BY WYNDHAM ECHOSUITES 38 | 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 RAMADA BY WYNOHAM RAMADA encore n0z. WINGATE’ ‘BY WYNDH
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 First Quarter Second Quarter hird rter 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 $ - $ -
Slide 41: 2023 Planning - Revenue Sensitivities
APPENDIX 20235 Planning - Revenue Sensitivities Adjusted EBITDA Sensitivities Cin millions) U.S. royalties and franchise fees GES 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 u
Slide 42: Adjusted EBITDA Reconciliation
Three Months Ended Three Months Ended March 31, 2023 March 31, 2022 Net income $ 67 $ 106 Provision for income taxes 24 34 Depreciation and amortization 19 24 Interest expense, net 22 20 Stock-based compensation expense 9 8 Development advance notes amortization 3 3 Gain on asset sale - (36) Separat
Slide 43: Three Months Ended March 31, 2023 Cash Flow and Free Cash Flow
Three Months Ended March 31, 2023 Cash Flow: Net cash provided by operating activities $ 93 Net cash used in investing activities (9) Net cash used in financing activities (95) Net decrease in cash, cash equivalents and restricted cash $ (11) Three Months Ended March 31, 2023 Net cash provided by op
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
Wyndham Hotels & Resorts — Q1 2023 Earnings Presentation on 6ix