WH - Earnings call transcript Q3 2018 | Wyndham Hotels & Resorts, Inc.

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Operator

Good day, and welcome to the Wyndham Hotels & Resorts Third Quarter 2018 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode and the floor will be open for your questions following the presentation. [Operator Instructions] I would now like to turn the call over to Matt Capuzzi, Vice President of Investor Relations. Please go ahead.

Matt Capuzzi

Good morning and thank you for joining us. Geoff CEO; are our David today CFO. me Ballotti, and our Wyshner, With

started, remind These Form subject filings want remarks we those in actual I Before get our materially differ to are that cause forward-looking the from with discussed These results detail to factors or today statements. other you factors statements XX risk are implied. and to expressed may SEC. our risk contain our that in

reflect measures. to had metrics have like I'd website referring available measures the a our be of Corresponding With also information what to non-GAAP non-GAAP our GAAP shared GAAP like Investor our at a in of to completed La earnings Xst. Geoff. will turn the with with are acquisition that of reconciliation you results Relations We if Consistent Quinta on our looked is metrics August, and and we number that, we and to in adjusted our the www.investor.wyndhamhotels.com. spin-off release, measures which January integration over on provided would call further

Geoffrey Ballotti

size. Thanks, importantly, company significant in start record La the quality industry and of off both tremendous the and a both of guidance, full growth as high opportunity network. $XXX independent both Matt. us we our see company, for brands thanks the grew organic in adjusted million. at XXX,XXX Quinta. public development We results And reported ahead system strengthen million we with our domestically our newest Global EBITDA quarter progress adjusted we further as to year-over-year to both sequentially pipeline rooms. strong EBITDA made end and public and delivered strong an and our In of integration internationally. Good the and RevPAR $XXX We're We to in today. morning, first Most we our joining of a and of our continue hotel

Wyndham select strategy, our Hotels hotel guests. see grow to through address Wyshner to we capital results allocation seamless of rooms to driving time spend shareholders. the to returning discussing which forward, world's like objectives, continuing company continuing capital we're our integration three of of focus a and and strategic on In to looking David the both and will the the service CFO, continue as excess brands & and financial that. of enhance successful our Going provider our Resorts will walk franchise upscale the moment, brands my I'd progress largest and strength making on today our growth, and to owners

First this on continue the of to net growth range expect driven X% lower rooms of year, X% system stabilizing growth and size. more room to domestic to growth, of half international the room organic by X% likely in X% we

system at a brand, was exclude ago. Our excluding XXX, from September increase and increase increase, further total XXX,XXX divestitures last which our which a year our October. over A acquired acquisitions and rooms, XXth XXXX we we XX% American represented if X% a X%

size steady continuing real where growth, on. milestone franchise focus licensee by long-term more to years the see we've internationally. important an while basis. on This quality shrinkage. domestic areas adding domestic a you we progress focusing organic peel nearly held our path X,XXX net rooms told focused the our improving quality growth quality to numbers, you We our net on of to again across As in United In you, opposed several size last system portfolio. in positive represents master stability direct these and we're System as growth back States, had year, that franchising U.S. in before

from improving two from in fact, months first the of to is XX% year, reflecting nearly this interest we ago, nine last up the rooms in years which XX% what we've growing over opened In be performance our year in XX,XXX believe Internationally, by brands U.S. growing countries the and organic grew that have to we before. been by four our our basis of a direct never We net on X% X% of brands. sold three year-over-year. quality introduced and franchise system

As franchisees lower expected, retention of the a our year terminations we rate quarter, rate, moderated. on by property XX% rate international global significant XXX also terminations also quarter saw as this full and to basis and improvement domestic by points were since retention run significantly improved our basis has master end our a last

lower Balancing due priority. in Our levels quarters by each terminations and XX% the quality will franchisees. to of our while were significantly terminations master brands our QX consistent across attrition the of again retention below prior remain four International our average of ensuring

team rooms brands focused adding new the on the of drivers Our including rooms of and openings world to growth around is all countries. new

Greece third today Wyndham introduced by the brings brand TRYP the For to and like and we in recognition Portugal first and that our Wyndham Donche first to And in Wyndham and to Georgia power brand our I'd country the of example, trip during Ramada by the both by Wyndham objective, quarter, the we discuss Malaysia. by Peru the opened and me to key second our brands. of

continue Our deliver the brands our value strengthen proposition to for they franchisees.

XX% OTAs. direct contribution growth to the outpacing from our grew the our we quarter, third channels with our from by contribution globally the proprietary in growth During franchisees

signature and increased our best - Wyndham the calls by XXXX average now behalf global new lift XXX now along and with to domestic and strong owners. XX% Our front on XX% and XXXX program from launch our are Rewards Brand.com of both our strong are in benefiting to experiencing point us call a bookings continued websites reservation strong being managed enrollments. our performance. are franchise of in reservation are digital Rewards call Over ADR their basis an centers website bookings desk services benefiting to servicing of our increase class in rates routing hotels volumes Wyndham center driven our call websites. Online Call contribution enhancements where from on new very center are

continue that growth further program As This rate. you Wyndham of we've call our At the the about guests halo ROI The also this in effect elevating a all digital decision endorsement. see direct for and our brands a banner. and the time, Rewards very X our searches now brand.com our the franchisees. we by both our brand connect our that increase appears helps owners, from told the online in participation business economy in believe all drive to not under retention to will endorsement advertising, we by belong Since they loyalty our % will On in and to April by of mid-scale to marketing our Wyndham our and Wyndham overall our our announced winning our in we of did last meaningful of Wyndham our same of all awareness. franchise previously to the this program simple cross driving websites Wyndham April, as demonstrate yet Wyndham we of efforts, initiative searches. brands brands understand brands presence which all our is branding more carry better seen to proposition increases

of of benefit property to next continue Wyndham expect We transition overtime our to the few the since build to over will cross years. occur and branding highway signage by

to new members approximately members enrolled. Rewards XX Wyndham of and also million strengthen brands. million continues X program the now power loyalty added have Our our We've

In Quinta members year. next Wyndham addition the of returns La millions to to Rewards welcoming

and Our occupancy company at tour continues our and it sister to to Wyndham Wyndham long-term former destinations continues increase rental sales increase nights Rewards affiliated vacation share in Rewards. of Wyndham as Wyndham ownership also volume room partner

the importantly, to up well. by me quarter highs. had Let and strong [indiscernible], the Promoter points basis wrap industry which proceeding Most outpacing Net brand Scores growing is RevPAR its record another very XXX

by joined impressed franchise team franchise its sales by and together all new grew the design team Quinta for to rooms, of the to opened nine XXXX marketing includes performing Quinta acquisition, La we quarter, rooms high La of synergies and del be sales as X% first proud Quintas who Sol team, with full award-winning estimated La We members $XX along our we we Quinta announced XX,XXX we company. over quarter. operation construction $XX prototypes. million. rooms and pre-tax La in to which open to new the pipeline continue new When agreements million the XXX architecture In the plan we signed owner its La phenomenal sequentially construction fourth Quinta have that We over

systems track increased and into migration. to we expectations opportunities La on reservation identified Our achieve property associated these remain same. for the this We're of have our integration cost central and with our savings and distribution cloud-based synergies IT Quinta

points returns the La We loyalty steps the also and two merging end exchanging Rewards took providing programs the status Wyndham programs. in Quinta this summer between by first matching.

value our we ability that, execute proposition are summary, key and we're the have the of integration will our of to are And to Quinta of We over that strong and progress by forward. with key value provide pleased continue going first call we on the the shareholder In Quinta and growth I'll initiatives, now in satisfied. substantially expect La earnings long-term the La focused successful our namely turn we half these on with XXXX. drivers potential the our brands to David. owners the remain integration our we to to objectives be We confident completed while never made continue

David Wyshner

the to the third comments reconciliations further can and which metrics reflect our adjusted outlook. as look Quinta morning of you walk well all downs will end and amounts allocation occurred had adjusted and our capital including to were of My on off XXXX if X. complete acquisition good focused our primarily our January GAAP in our as integration sheet, our on our our quarter that high results metrics our release business and like and would Geoff Thanks, spin like everyone. earnings La numbers amounts what strong at adjusted I'd to of of Today, and find be discuss results adjusted expectations balance

In of and business that As are adjusted it on performed will we spin results providing Worldwide. acquisition reflect we and off our mid-year context, look how last our mid-year figures basis. from Wyndham believe La understanding how in quarter, go we're a mentioned Quinta the helpful forward that our our

grew of La Quinta. total the quarter in million third XX% Our revenues including revenues incremental $XXX from

X% XX.X from XX% of fees. our in in grew or Wyndham million Destinations growth $XX franchise increased fees contribution as Royalty $XX timing and and higher as royalties Excluding Quinta. revenues divestitures. higher the of from million EBITDA million franchise third primarily The EBITDA spends X% $XX marketing were quarter increased muted our compared to and La third quarter. X% the in and XXXX. License to revenues due or including a the fee other XXXX fees constant acquisition, excluding license currency acquisitions XX% and Adjusted well

of quarter XXXX, in Excluding La to Quinta, EBITDA did to expenses by reservation difference marketing marketing a timing $XX suppress and our reservation $X million compared This exceeded million. third XXXX. third wasn't and it in revenues quarter $X quarter million but by third surprise growth us, the

currency Our grew the of La global the X quarter, and Quinta XX% La points points constant Knights grew quarter RevPAR points RevPAR Inn. from in the including XX% X from in in Domestic Quinta. reflecting third divestiture X from

Excluding down growth U.S. by these to related of roughly This X.X we our that lapping pull RevPAR was X.X%. growth in quarter due last benefit brands, the was third year. the point saw hurricane a

we we third the growth benefit our second and and constant as Canada, driven first and of primarily hurricane the quarter, became quarter QX range International which all first increased which of anniversary half out in Brazil. U.S. quarter, RevPAR performance was strong the of and quarter. QX currency them. including being third year from geographies in a X% sequential X.X% In Turkey progression, in seeing the RevPAR acquisitions X.X% were impacts, headwind and in XXXX is fact, in third RevPAR was When the hurricane the we're the effects to in the quarter back organic, in X.X% reflecting in divestitures, a by

our Hurricanes RevPAR basis full fourth X%. During year U.S. growth as RevPAR year's approximately expect headwind of we global lap global reflected RevPAR is points currency and XXX a the benefits. projection constant we approximately This approximately XXX in from of quarter, in last in and basis points

As size Geoff up XX% divestitures. system X% our mentioned, acquisitions the excluding impact year-over-year net was of or XXXX and

at X%. over construction. rooms, new stands pipeline stands which of global now are international are which XX% at second Quinta of pipeline rooms, are to the new quarter, compared La total XX% XXX,XXX increased and construction. our pipeline XX,XXX Sequentially now Our XX% over

Excluding our again third global XXXX year-over-year pipeline XXXX up acquisitions year-over-year. royalty and rate divestitures, our is our transactions Globally, excluding quarter. was our average in X% unchanged the

the from $XX in benefit and with and savings. timing synergy million expect of total also mentioned, of La the achieve salary to synergies continue to our target As Geoff are realization $XX on we Quinta million we amount to both expected acquisition,

virtually quarter, We synergies - reminder, synergies $XX our As puts million. Quinta of projected we La which $X at a the savings. at of all annual puts rate our million run are cost realized of which annual in the synergies

this at million million We deliver during associated it synergy to to year expect $X quarter. of increase million end. actual us with this that to million to benefits math allow $X will $XX The $XX to the fourth is to

second We continue half all XXXX. positioning and our of of La the full substantially target half Quinta us add of of run work to we rate onto in reach to technology first XXXX integration completion as loyalty our in platforms the synergies programs,

around to XX, integrated. million acquisition subject by late conjunction with million of to a had $XX started our cash lodging of Tax we Quinta. you quarter to La million $XXX business we expect on to to will month per paid our is Quinta of in million XXXX, some XXXX the sheet, At in EBITDA to cash September authorities and million $X about fully should growing million As reminder, $XX as that point $XX $XXX seasonality per month core we La the ultimately holding balance of contribute

September sheet. million our on $XXX still this cash had As of temporary balance XX, we

$XX the which flow generated payment we million Excluding we during the tax dividends. we share used for and made, of primarily $XX cash repurchase free million quarter,

billion of remained debt of interest credit to outstanding weighted facility. borrowings is fixed. rate There carrying balance our average rate quarters fixed $X.X Our under Three swap debt X.X%. were no or our at approximately revolving a

Excluding times adjusted the to leverage net lower times $XXX further million was target. to leverage net EBITDA were in of temporary of cash, XXXX our our X.X the of midpoint forecast X half our X

goal a cash business in As we deploy opportunities. and is we for portion our organically similar our our of primary August, development and grow to will free flow mentioned advances

cash to continue We also free to will deploy pay dividends.

allocate $XX we amount in the paid share our with our flow quarterly million On available. to will that, repurchases going each second note, Beyond acquisitions to on dividend at opportunities shares September, plan are flow to tuck-in months quarter. we per and or and strategic XXX,XXX accretive to deploy and X of that company. largely share $XX in for our third the repurchases cash both fourth depending common that in quarter. we share repurchased first four retired and of the million cash an stock than in as for to $X.XX million We've independent dividends We shares the more continue

outlook, anticipated like turn need let our reimbursement billion. to I'd to we increase to prior of items details expected $X.XX Revenue be reflects more is release. to EBITDA. the which on Now, cost now no from earnings impact The had revenue $X.XX me our the as into are billion then previously record in projection with

EBITDA is adjusted Our $XXX million forecast $XXX million. now to

compensation and forecasted diluted depreciation, our our is consistent with midpoint reflecting is amortization, our the $X.XX Adjusted $X.XXX to stock-based largely at from $X.XX. net prior to Total higher EPS in the prior aggregate and quarter the third projection. midpoint now before share interest remains outlook. repurchases. So, be unchanged expense

Our provided. forecast spinoff on assumes and had is acquisition previously and further completed XXXX what which to our adjusted similar integration all the we very been La January that Xst, Quinta

reflect cost Quinta reimbursement revenues, reflects remaining as that ranges La the only a year. incremental quarter now With this having exception well tightening of it to one as

Rooms adjusted RevPAR growth adjusted billion. growth outlook $XXX to to of divestitures. to excluding million million $XXX $X.XX to including net to of of X% out to EBITDA $XXX XXXX Adjusted approximately X% XX% of for X% X% which to organic of further XX% of works and X% acquisitions calls Our billion million. our growth income revenues $XXX million, $X.XX and

that third me dollars unchanged? favorability to quarters answer currency million. proactively quarter million the the in a is working by been and surplus negatively was is $X exceeded of results can you and due results. third EBITDA guidance the around address EBITDA one timing We've the The by offset the year questions Since $X our guidance movements few midpoint to our Let which QX have. quarter you third of adjusted between effects full have fourth see Why may million. of in currency impacted adjusted

anything significantly whole. we total, a as in year our the So, of haven't that changes seen view

Lastly, want I to business the to two take highlight about and opportunity additional our our industry. points

is of more First, large worth discussed last as hotel likely independent our to brand than as an on call its I in own. part detail family a brand like Wyndham be on quarterly

synergies contributions can stock we've able brand, earnings this, our the strategic to be acquisitions. produce when quarterly public economy And while is can. the select at we that make stock lodging of and to available pursue Well, issue increased in an In X according a it to may evidence and hotel point a invest we in why, As above a This data good we've can't investors from one second, our the a first for the independent investor looking trend are acquisitions. service the solid market our the months don't nutshell supply the significantly grew of expectations. us faster developing why This STR for smart sense a in in that is reason and about now oversupply there's of were of half cycle, than a demand midscale any results our seen year. conclusion, lodging. continuation think and

to like with on book you that, with is the shared over about finishing to and us turn note in back of we highly EBITDA adjusted XXXX a Geoff. I previously, remain XXXX. opportunities strong what front consistent the further in call and year full would we about With Our enthusiastic

Geoffrey Ballotti

Thanks, David.

progress were demonstrate results for our quarter continued our strategic third strong and on said, objectives. David As the

program, hard and loyalty that position state-of-the-art leading based position global opportunities advantage brand to take market of full technology tremendous and lie XX,XXX professionals. awareness strong very a us well and a working have These team member trends industry distribution platform ahead. a with now the of We

We friendly and approach to and will focus on room acquisitions capital identifying integrating growth accretive maintain organic shareholder on on a deployment. a

business the take our optimistic make David of to pleased and And and to results, us that, future. I with very growth Our recent integrations potential our La including continue model, Keith? our be all questions. our about will your outlook Quinta

Operator

JPMorgan. with our Joe [Operator take ahead. go Instructions] first We'll Greff from question Please

Joseph Greff

that first domestic has My talk guys. is and side the could domestically churn think of how about the lesions And stable, in with that room next growth I I level improvement the are share which targets helpful? shifting us X% know more morning, years. you over of lesions thoughts additions would see the remind about you your trend? to words range. X% can get if that here? you years? think Can share the latest been you which your Good great the is maybe is commented question of kind us relative Can you be Geoff couple on watched rooms with have you other what last an But to when the couple to you the us that of been you of growth

Geoffrey Ballotti

Sure. Joe. Thanks

XX% internationally, we're to on see quality we great our the have X% to where we're was domestically a point question, than this second focus is to spaces and we're As as And year this to seeing like And domestic the growth to we're year X the progress. where size. continuing our really from to out, and from that's where help it great second more I'd with making is to to system really mentioned. portfolio rooms growth. And and stabilize momentum growth on really your a opening right do ever happened we room look making as touch you in domestically continue like franchises. X. be saw very a overall positive it growth our of move we'd internationally when on we're on I in stabilized grow work to basis. domestic basis things will the from second, But We'll happy third have quarter system system also long-term now a international you we're which we're bottom our target on but that encouraged that as doing zero we're most our begin the And growth stabilize. domestically the with the to with declined progress made XXXX quarters rooms room's excited And as for our of we're said to in X see seeing based the and where first overseas. about what that we master we're at you expected

Joseph Greff

follow U.S. for Great. my question is RevPAR same store sort the And adjusted ex-M&A on then what's David, XQ a of in up in growth baked basis?

David Wyshner

number the been issues. It have QX a out in works the to as this is far I the where the of slower being what X%. X%. to of hurricane have Joe, year lapping we than us so be brings range of we range to approximately expected

Joseph Greff

guys. you, Thank

Operator

Thank you.

Stephen comes go next Grambling question with Sachs. ahead. Our from Goldman Please

Stephen Grambling

the good room the underlying you question think year-to-date. the about And on first, morning. bases, when or other second had stated you regions in what guess demand are growth. U.S., Hey, follow Joe's that? focusing driving customer then on segments to that up guess acceleration I I

X, chain is come or Do in what from? scales second. to what of to from is move that likely actually As line or brands X X sight you Thanks. keep you growth that to expectation to zero around any have

Geoffrey Ballotti

I'll Stephen. take of first, Sure. the second part that

is great include Our - be Quinta. and a as American American both it And good pipeline. La and And driving increasing as saw La our and the a forward there. we great will that saw in we growth what's quarter, is Quinta both as growing franchise sales will room growth in a team, going in

in hotels growth. We the introduced United La brands of XX-ish It's just in growth aside where is this American XX over tremendous States. like opened hotels one We're like our new like year We've as Quinta. JD Microtel, our where have overseas. XX now in which And we're And by seen and I occurring the start mentioned now, at to Trademark, it year brands We're another we're the we great Europe. rated with Wingate by like in brand. with seeing which internationally, Wyndham. it pipeline. introduced brand a is XXX then an in terms right construction open midscale Hawthorn, from domestically seen Trademark. that growth Power hotels our In seeing seeing year, Last our has great we number

grow, Our only. China in was direct direct continues China business business our pipeline to with franchise our XX% and up

We and growth America XX,XXX over to have direct well. in like Europe we'd a franchise in rooms Southeast in strong that see that country, stronger in as pipeline Asia, solid Latin

David Wyshner

of been in with And broad stated the would of then of Texas quarter. leisure up demand we've our particularly and the Eclipse really different fairly related particularly We just leisure terms outpacing more and coming out the through and from demand the energy demand. from markets. of other different that the has or strength that challenges challenges span some sources our growth of estimated overcame the business seeing I point third demand than calendar we some anything then, that so way which oil or strength would than West leisure strong based. the a in does broad-based business versus and XX% the to oriented I more of And in range companies tend supply the seen, consistency Virginia say strong bookings, demand. look points number else. But and And We've in across related with that of tracks, in RevPAR parts Midwest. all to markets, seen demand also upper at fairly related sources across energy has strong. when geographies And we're been

Stephen Grambling

the Helpful. much, in queue. so jump Thanks I'll back

Operator

with David go Please Our ahead. Jefferies. from next question comes Katz

David Katz

good morning. Hi

Geoffrey Ballotti

morning. Good

David Katz

I pipeline. wanted La to specifically Quinta and the just talk about

of your I to think that how and you in becomes rooms many about indicated How be half like and you into there rooms the looking us as become? accelerate starting year sales should force. first the would thinking integrated get look that that could your we into it is What as have XX,XXX we to next for pipeline. platform

Geoffrey Ballotti

first into X guidance saw brand And be it's site strong sales or the the La time franchise there in in as talked about about executions X%. rooms, at year, guess were which is We've the XXX strong team. a at would hotels. we've at up at David with in And the now applications in the having over, Quinta, we David. there pipeline executed it believe what that's that our I think now last at I to and X And When what sequentially XX,XXX of in we seen quarter. consistent is really at XXX both took this X quarter hotels I pickup efforts. would

David Wyshner

correct. That's

our Quinta quarter grew the pipeline So, alone. X% third in La

David Katz

about on are And made so so David let's say equity in the that term for process further second repurchases if weakfish it. obviously a focus you've Got ramping please? I an How can please. market. around some X just share to allocation export X think decision commentary an you boundaries potential the do capital the acquisitions in near and and forth. up Obviously, quarters

David Wyshner

a industry the we to bit been it the additions firepower average of stock to little and the hard hard, And we of. we question the on saved And and cognizant a acquisition our the bit share to or of as XX predict we an exactly And been view number control otherwise it with our for that of repurchases occur about the result, next continue to have flow our they to cash as going and market of what's as with Sure. to Those aggressive Starting opportunity opportunity free to tend that lumpy little know result, and timing a been. to course us a be will when hard the it's of the brand the accretive more in acquisitions. are acquisition in our good of We've in brand cognizant that use terms look portfolio. do every to to might and the look XX deploy coming obviously years. We're pressure recently. have and XX don't on terms going are a months. averaged I brand certainly in year the have will under for months. have over But we've quarter And a specific for be in then we're that. fourth associated been, over the last

David Katz

Okay. around that of going one we is be are there it I it's allowed XXX. payment the this last XXX? full previously and think know, ask And to happened point, sort reduction and and But today can to had in if we final what sort detail XXX was as to I of point core at the indicated cash what of to caused

David Wyshner

Sure. to reduction The million that million $XXX the reason is million from the paid quarter. $XX in third $XXX we for

of to pay no a been out little change there's amount expectation the They there. it So, bit. pushed has in the aggregate need

getting in we the no so than little change we're only of expectation It's a that initially far. benefit that paid million bit cash total. it had holding will anticipated. million in there's be that been has the So, longer $XXX But $XX just

David Katz

it. Got Got it.

much. you Thank very Okay.

Operator

question with Patrick go from SunTrust. ahead. Please And Scholes comes our next

Charles Scholes

morning. Good

Geoffrey Ballotti

morning. Good

Charles Scholes

that half did have If look domestically like as and what a you RevPAR I did would a you Smith to for X.X% correctly, certain at heard chance said and I Smith did a Travel than about you quarter scale the segments point various believe point in Travel implied. looks better the

share So, my think quarter? you to up some that the is in fair picked market it question

Geoffrey Ballotti

growth economy was again. about performed our really brands. were excited Patrick are And track as saw I we we brands we domestically. Canada We're international really our and good did and across saw in line which our internationally, share in gain. strong think RevPAR I Yes, mid-scale economy mentioned whereas David Europe global which We growth think

Charles Scholes

my status thinking how about question what cost a follow-up the be concerns acquisition. And with synergies. lot revenues La synergies then and should And talk future Okay. is on the in in we latest about the the revenue or Quinta progression

Geoffrey Ballotti

revenue I up overtime. think Yeah, will synergies show

effect. RevPAR by ability a of Quinta the the grow the returns as First as all, La of and program to and take rooms in well addition size, to the as system of cross Wyndham add our in Rewards Wyndham to loyalty benefits branding

assumed revenue opportunities to as the Quinta and be changes that the well some to perspective. clear, digital $XX to tied to helpful and virtually only making revenue synergies that La built will systems of websites card improve synergy But think our savings cost synergies million $XX that program. a the from and credit adding presence the into I are of we've to the Quinta be the of we're million is just all La that's

what of not growth will from that the of are things that synergy think Those do number part we a So, perspective shared. RevPAR rooms we assumption we've helpful a and numbers overtime. can be

Charles Scholes

call. Okay. for That's Thank you it. the

Operator

[ph] Please Shochange ahead. Research. Jared next question comes Our go with Wolfe from

Unidentified Analyst

Hi. Good my for everyone. Thanks question. morning, taking

going back to the domestic topic. Just growth

at reason the really development low of haven't, because industry in is you net part end think hasn't been much I years the had any the there scale. really growth recent chain of

from trending some segment is, development see think now in here seeing why in about talk the budget few can right especially years? opportunities you about today strength about you at the So, lower domestically of that end? how regard more, you economy next commentary you over And the to the here the talk more you're demand can

Geoffrey Ballotti

Sure. Thanks Jared.

ways focus see standards. Hotels parted not the where and growth been tremendous we've on goodbye, XX,XXX economy in opportunity economy our or have said Our in domestically quality the met brands. with issue quality We mid-scale. XX,XXX has our that

midscale. economies opportunities our and on have economy of know. from system. the construction growth you Independence even competitors continue see Our terms a And part lot going brands converting ability quality be without pickup think we're that opportunity gross to convert as we Independence adds with space less I as of in in where the in in really our with to excited room lower ways you Both our hotels we our growth strong. economy and as to about And and

Unidentified Analyst

including me Okay, end little you Super XX% royalties I'm And owners I Because understand bit all economics about A owner in at can wondering thank system the end help and lower in you. if of marketing typically related scale a an will think fees. all of chain up their revenue days the and the the for better. paying

branding basically cover sense, to they for have So, XX%. that make to

call kind can economy savings bigger the OTA owners brand. advantage you just procurement what a from of or can you of or that typically that's being from system. the part maybe kind revenue Whether else that of anything usually GAAP out? So, get And share premium get cost using what

Geoffrey Ballotti

Sure, yeah.

an So, the occupancy not you and is you that's we or share the at easy independent pretty look competitors channels, value spot of with OTA biggest. When that's in on that brand you're for proposition the central franchisee. our at savings, the look that through compelling a Jared contributing, our becomes are it a

independence importantly OTA most which us very business doing points they that coming you in XX which We're be explains of receiving mid-XXs the on I open down the basis our zero higher believe when our went of proposition that XXX-XXX their shift opened proposition. powerful. roughly to of be XXX U.S. XX-ish a in standpoint. mix and of hotels through with being success at OTA more to arrangement domestically able really just value now than with from feed XX% that a the and independents their should through a value from an interest midscale from seeing basis And compelling to which the where Trademark, XX% what that the becomes half If economy launch business deliver great the be and are again it's central it think rate, commission to Wyndham a OTA you hotels that from might would or of systems think through

David Wyshner

at as that four, a being the hotel need part And we pays amounts add result, would reservation would The points activity. and something at franchise for five just believe I and a of And marketing are strongly do to to anyway that. the that that of synergies brands have we one for value its parts own. reservation systems sharing our for on an and more in hotel contribution deliver independent spending our could that that of and marketing scale than of significantly one of we that

Unidentified Analyst

Okay. Thank you. follow-up Geoff. And real just quick the

the you are percentage I loyalty members? loyalty think But and occupied your nights your didn't And of members room about percentage. hear share the by occupancy. your share what of you can I talked exact growing

Geoffrey Ballotti

that our our It approaching the basis We're share our high Sure, channels. fair we to a is our up That but for roughly space, could brands yeah. in grow and Certain brands. fastest was over growing of mid-scale trend brands it nights to at the brands say XXX economy the point share were XX% it's roughly and the for XX% quarter. midscale in script. Wyndham XXs continues points think occupancy of it XX% occupancy the in making it's midscale Rewards overall, through was Gerard that room of I are coming

Unidentified Analyst

Thank Great. much. very you

Operator

ahead. Ian question Please from Oppenheimer. next with [ph] our take go We'll

Unidentified Analyst

on forward we Thank talked as an the from in seeing China. you Question maybe the away kind kind mentioned going great. an Are we growth Hi, yet? I point that because the bigger the what move of direct you you. forward. Are acceleration about least we've maybe there we know Thanks. opportunity of going accelerating outlook the at deals? mix should And expect of at of

Geoffrey Ballotti

you. with direct Yeah. It's business our Ian of in percentage XX are because fast been thank relationships, total of franchise our as business. years not we've which a China, smaller growing our still as the there now master

opened of franchise new introduction - direct, from are to rooms our have well, existing where coming very that's represents XX% roughly brands, like we I China new we Ramada don't is of grew XX,XXX selling XXXth last sales. announced you our the which of brands third have brand, about all so business Ramada and relationship that a in its had rooms XX%, today. the are selectively. told direct believe and we've that XX,XXX the franchise coming hotel And direct in we week, growth quarter rooms business quarter Our that there just last And China of grew over most to and is that brands, direct the China through a

both and brands quarter, sold. those This of we introduced two new brands

would say the having offset lower percent percentage be that direct will X%, China in wise, system it I but China the direct, business. business, XX% master's overall grow to said slower. grew being continue grew in could a that, overall So, we our by But of our believe our than I quarter which

Unidentified Analyst

That's helpful. you Okay. much. really Thank very

Operator

ahead. we'll from question today's Grambling And as last go follow-up Please with Stephen Goldman a take Sachs.

Stephen Grambling

letting on. jump thanks back Hey, me for

seeing of and market I segments, mean are in as forward? interest softening international given So, in correction behavior Thanks. change some guess some and you any the the of signs customer other about think or owner to in turning the the China I the industries, you

Geoffrey Ballotti

overall, from the where basis, see in X% Stephen, direct developers. and on we're we're a side, we're China currency our franchise business essentially really our from RevPAR RevPAR not a consumer grow, interest saw happy to was we any certainly growth But standpoint, it constant consumer not, of lack seeing flat. our up on was

it doing is is job and team China strong really year. Our another exceptional an having

with low feel we master thing with and time As on couple franchisees that continue need the us to is long-term right hotel. low to what we do were long quality for performing the of focus

Geoffrey Ballotti

Great, thank you so much.

Operator

we have And as I'll floor return back remarks. the additional to further any or appears for it no questions, closing Ballotti, Geoff

Geoffrey Ballotti

Wyndham you Hotels you your in for busy with talking interest and us, of most our February. your and Halloween. again appreciate time and in know we Take during part we year, thanks seeing Well forward Happy care travels spending it's Resorts Keith thank morning to or we everybody importantly the a of look you and

Operator

call. disconnect And Resorts XXXX quarter this day. time and will at this great a conclude have third earnings today's Wyndham Please Hotels and conference

Wyndham Hotels & Resorts (WH) 30 Oct 182018 Q3 Earnings call transcript