WH - Earnings call transcript Q3 2020 | Wyndham Hotels & Resorts, Inc.

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Operator

Welcome to the Wyndham Hotels & Resorts Third Quarter 2020 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode and the floor will be opened for your questions following the presentation. [Operator Instructions] I would now like to turn the call over to Matt Capuzzi, Senior Vice President of Investor Relations. Please go ahead.

Matt Capuzzi

Thank you, operator. you us thank and morning for today. joining Good Ballotti, and Michele me today our CEO Geoff are With Allen, our CFO.

statements reports contain implied. Before to our we our statements. actual will from differ may with report remind subsequent want to These annual XX-K filed forward-looking those with you that results factors get our remarks cause started, most the and These and that filed on are subject I materially risk factors Commission to discussed are risk or SEC. recent expressed in in Exchange Securities detail the Form any today

We which to and number measures a a available we Relations Investor is will on investor.wyndhamhotels.com. GAAP of measures non-GAAP impact, are of Corresponding unable provided measures on comparable to metric. the non-GAAP our the GAAP referring our also at extent reconciliation that be website discussed metrics release, non-GAAP To future GAAP earnings to in provide are measures. our

calls posted I containing In the provide evening, investor to website. our information in may continue Accordingly, encourage supplemental Investor our to website addition Relations on filings we webcasts. with we investors information our public SEC supplemental the or to on Geoff. will that, conference press and website to With turn submitted the any over future. releases, We last monitor an addition in presentation our call

Geoff Ballotti

of the free XX% adjusted our and our XX%. levels XX% of at industry running thanks EBITDA drive In adjusted million leisure-oriented quarter of face franchisees Wyndham open continued Over $XXX during are to cash of above Matt our generated and Thanks, business. due everyone not remain quarter third stability franchise our the joining the million domestic of hotels and for approximately occupancy uncertainty, to call. flow $XXX of third

owners our our overall we provided March, We have see deferrals the within tracking XX% continue May April cash year more is struggling and of and maybe and levels. with on the levels. possibly business know to received doing without the that and at over support, payment the to which of of small for advocate are we to industry, state to both close of franchisees we prior forced federal we XX% some fee everything our are already collections months can why we rest along Nevertheless, government

return which coming XX% to leisure-oriented our and traveler basis our robust Our of at domestically XX market XXX compared XX% the during improved collectively the was from of Approximately, more bookings travel. quarter, quarter. hotels business business a everyday travel which compared during improvement than during points This demand second brands points our share can drive-to gain weekdays, weekends, with the the the driven to are by with second of combined leisure points increased percentage the XX quarter. rising other

everyday Our has traveler disrupted business steady less business segment a by that travel been pandemic. is and the of reliable far

business our crews, As after of a the business come and to on comfortable our industries, travelers stay seek engineers. continued the utility workforce, including travel and from infrastructure workday the bookings road. everyday of safe workers have construction a backbone America’s and Two-thirds

hotels down While rail of have warehouse rebound quarter majority workers. we our business a industries, quarter, point strong in in of logistics sequentially. this declined only a vast this from the trucking, the come the The demand bookings travel including experienced with manufacturing, one-third at XX% third and XX business second improvement XX%, remaining

sequentially. down improving bookings quarter, in from have the seen a quarter down We with this improvement XX segment being to in second third rebounds XX% in XX% similar the point

and improving La uniquely relying business is everyday is a corporate to positioned international one index reason our of again once beneficiary over competitive lodging its travel, travelers, as XX% Room was Michele its internationally our As in occupancies the year in cover, in quarter. strongest in on performing X,XXX than third strongest now our internationally did second are Asia-Pacific set the and quarter, prior will hotel have and outperform. we direct we normal performing travel, leisure brand, our our not RevPAR our China, why these which convention-based where quarter is hotels market. down hotels more And growing have we to reality, Globally, was basis quarter to in business region strongest trends the near already in China against XX% openings, XXX% of domestically improved points. was are to XX% the performing open. XX% air in-bounder recovery rooms third Quinta in which It declined to a reopened leader more demand. a second levels. XX% by our rooms travel business Over as continue returned over for opened the of large XXX

approximately sequentially rooms with a conversion in to X% X% a increase increase in domestic X% construction and rooms. new grew rooms, Our XX,XXX pipeline

crisis construction their executed Globally, was more double-digit contracts third prior Our over United development degrees deployed our XX% world our quarter executions the increased to improvements grew guests more work our we we back domestically time possible the varying travel an scores staying the have by a prototypes, Global. third hotels continues work execute initiatives both and increase sequential to and and the States, in revenue, to restrictions eye has another what None EBITDA along in break new franchisees. an for owners as of representing interest the encouraged frontline new were all the without demand X and both also in been according than Quinta towards to despite and who developer have hotels industry, domestic tumultuous signings improve. our recently sequentially open it’s to to to Travel construction hotel full-time, encouraging stay promoter just quarter. our profitability. would executions, at to pipeline the overall our and state-of-the-art confidence XXXX. our versus efficient so were with to new increased now XXX continue a to international highly in Del rooms. who increasing growth us XX% We we La maximizing towards pipeline the Moda of been decline consumer teams, X% rooms continued see overseas opening organization members and satisfied. safe year. Despite hotels dedication to we Though than throughout hard of signings hotels We And with domestically keep and Microtel who April driven this Nevertheless, for increasing well franchisee around value the in our team remotely much all to our are it encouraged support and the beyond extremely dual-branded how associates and and or year-over-year motivate conducted with hotel Sol Throughout slightly in in innovate Hawthorn conversion members continue satisfaction double and by to these pandemic, second X see sequentially October levels ability our safe prior construction X% to signed encouraged eye year. XX the were an Quinta it’s adjusted overall new hotel internationally XX% Suites in for accomplished working our our XX% construction our both our three from we agreements, of crisis. XXX,XXX above at of and of in aimed teams approximately Intentions many our future, extended signed for X% with teams La as while by offset over prototypes. inspire around gone our MMGY room corporate provide In guest expected they of been Survey and This is see with XXX,XXX ground complete feeling Pulse unimaginable the and been quarter net bookings world

strategy, analyze launched overall that them from enhances loyal keep increasingly acquisition profitability. their and of behavior now knowledge spend. costs best-in-class leverage lowers understand and on sources recently our increasing compile, our We guest them and return we preferences dollars digital and enable the we thereby and to as book customer to our understanding customer direct actionable we for data to teams to and a data franchisees, deliver can our our First, our sophisticated and to the of how brands, better team’s visualize increases can to insights. platform guest incentivize to part direct guests in marketing bookings investment better multiple broader which Investing

Business guestroom Direct. direct incidental are bill for cards. our company now app Wyndham through with new travelers our called launched credit the using women support a book monthly and we to solution without mobile everyday and on Second, channel, business-to-business processed Wyndham powerful ID platform, traveler, now need our Direct one simply direct business including number. All new a charges any can

Lightning thousands the we within is service return increase and our by doing up hotels mobile be and so, an expected experience business and from first-class the to ever friction and saving and engaged August, capture remove travelers in logistic Since launch with transient increased franchisees to app leisure that direct a is Rewards important highly business the to booking as from compared rewarding book warriors in ID have reward us powered providing in of allow is Booking our that now X% our share Wyndham most also of bookings opportunity are both to technology members. will program of eventual September the continue where critical An to for such the road our face the below driving made believe in on geolocation and channel. Book’s faster Touch business the we of in XX providing infrastructure year members tracking check-out million vacation immediately rentals corporate be the Wyndham them demanding. management, money. vacation element the These of year and have we the while go. resorts, XX October of opportunities and economy user redemption running marketing X,XXX in above to we new travel We position of the July X majority in-state the during remote third, fastest available booking point features app, launch and journey and America displays the properties its which summer, authentication guests improvement XXXX. automated end And three-tap by for industries and the these to prior in are for and in to bookings process, seek and easier our and payment of and both app mid-scale hotels are increased bookings XX affiliated account check-in guest, late at at our and anticipate room This our customers club time and are partners. a well prior what Rewards space. They aspirational North industry an travelers. tens X% than a directly over franchisees miles Wyndham the

co-branded Wyndham USA this the Properties, and all Today card, X year of points year’s Wyndham heel card consecutive is staying the heavily in come incredibly built of standout never purchases credit just can received program provides updated owner also advertising X card ago, And who Wyndham including Wyndham the This new the card that suite the credit was second newly per the better loyalty highest for of Rewards hotel credit franchise expenses spent the our industry Despite facing, Wyndham the And hotel positioned the marking are program hotel which the category, spending products, our is loyalty for points announced also the best of now Today We also Rewards an first Rewards travel third dollar in has on small named USA readers the in X proud marketing, the hotel on of leading business business card spent. they business readers Wyndham consecutive industry. rankings Rewards peers. have the and honor that on program best the year named Wyndham Wyndham of loyalty program. we above Rewards utility per weeks gas challenges industry, and a at stays. dollar leisure-focused industry our for drive-to growth. been in all And earn the

impressive in to so teams Our face of the obstacles. continue innovate many and results deliver

for strive We to that, stronger call in owners. our are of Michele. deeply and franchisees emerge over we And faith our crisis Michele? to deliver turn appreciative to from support their and ability value with as continued as company this I’ll the a hotel

Michele Allen

Geoff. my will today our review sheet flows view with and balance XXXX of morning, third results. remarks review provide Thanks, detailed cash everyone. I a best will our our projections. begin I of then Good quarter and

mentioned, Geoff continued of million in million As $XXX revenue, we cash and of headwinds, generated industry $XXX of of adjusted the face free adjusted million $XXX flow. EBITDA,

travelers, performance of portfolio, driven return of was costs. business our manage nature everyday the ability our Our our by and leisure the to demands, drive-to tightly

was hotels a in excludes XX% saw to the Third declines quarter, of quarter with improving revenues only coming XX% and continuing and XX% in in in swing million of Comparable quarter, reflecting the to coming and million XX% at U.S. September, have we in consistent million to month-to-date pulled from we RevPAR changes the from lows. XX, with a from in Adjusted temporarily due basis peaked to decline declines in point reduction And revenues, back been April U.S., third reflecting is brands in $XXX sequential and share, in currency cost. our the mid-April, select seasonality ADR and the in also excluding Occupancy running brands trough XX% in occupancy $X.XX. is through low slightly decreased summer at diluted translate These ADR. cost occupancy RevPAR. XX% travel climbed experienced one-third RevPAR, XX% the the ADR global occupancy XX%, to has reductions declined our well closed primarily season in July, in July, XX%, internationally. earnings experienced as our revenue trends since September. was week from ending at Adjusted million In and levels XX% service reimbursement XX% on service COVID-XX, including constant select $XXX XX% October the Since currently August partially or third have $XX two-thirds economy $XXX year-over-year which XX%. steadily per by EBITDA global in XX%. declined offset typical for and performing down the of in August, space. down domestic mid-scale XX% XX% its full the a

our Importantly, to also showed with see occupancy XX% value second significant the third we chain averaging everyday segments differentials travelers. Internationally, continue decision-making enough quarter conscious, for scale between levels quarter. in price month-to-month, to third impact compared the the quarter to for XX% improvement

Canada, in second also from in For third saw XXXX month-to-date declines to a levels. occupancy the down in maintained significant down presence, China, where in quarter the we have in quarter, being nearing level XX% our China largest second the XX% occupancy currently and October narrowed considerably improvements quarter second presence the largest internationally is from XX% to month-to-date quarter XX% October. our third occupancy

for position were disclosed back effective Moving that were termination strategically quarter, as to from fourth non-compliant for the rooms rooms About related been quarter though we have bring of rooms removed better these these royalty XXXX, is noncompliant only also company able XX% to franchisee of retained. these terminations X,XXX have scheduled Year-to-date, underperforming rooms some compliance. the the these master there rooms our we last been retained we may royalty X.X%. potential are where that to-date. unprofitable success. was our long-term remaining XX,XXX XX,XXX dilutive we of have be firms removed relationships, to approximately firms proactively X,XXX system. and into removing be The planned in to for rate would X,XXX

These EBITDA were The as capabilities which XXXX, unprofitable negotiated had previously out license them from well replace XXXX remaining us with to in And our more hotels hotels provides of much profitable would and operational system year. not markets need absent that impacted have last way XXX a a the royalty XX, basis representations have have franchise infrastructure direct that we last above growing include these September deemphasizing our XX% compliance covered have strategic on properties our support. Moreover, these better engaged adversely slightly significantly by management as guarantees, and master know, as low to would had by net impact negative brands. our in given which and history of us we rooms our non-compliant that you of and points, in system financial are resources our terminations hotels issues opportunity franchise franchisees agreements for been our year. been exiting of to size of growth markets. As redeploy

$XX million the Free million primarily item the excluding for outlays to now actions. flow quarter million quarter or ended on cash our hand. cash related of was to we restructuring with $XXX $XXX special cash Turning cash,

As rates. to of the better XX% Geoff franchisees. in fees of XX% within mentioned, are terms. And than with have previously year our we providing to-date, through support time franchisee will we collection our work our most deferred rates flows prior cash collected are in as payment remaining have some need XX% take extended franchisees we trending of The

As million mentioned remain full mitigate to of $XX achieved deliver the on year a actions disruption. We savings taken actions as on we year-to-date. third last or $XXX related target revenue track to have losses previously number million the discussed. cash from to quarter’s we of these the COVID-XX of million In call, approximately quarter, $XXX the travel

our free also the fall than back As resumed the to expected, from employees compelled patient savings of our with third well and balance markets afforded to too in reflects at bond to flow billion increase up The $XXX quarter liquidity, had and generated as and as summer the the weren’t August. spend we ignore additional issuance sheet third credit $X.X over take end in Though corporate in We of increasing being advertising on we third second of to cash us work welcomed debt, the the capture the ended luxury the quarter quarter demand. attractive were August second were furloughed August lower travel cash million quarter. quarter. as

outstanding of and The issuance execution unique XXX a this for X/Xs, by of were raised our issuance basis a we portion this model. resiliency our our X-year revolver the X repay million issuing XXXX. $XXX an and to appreciation attribute lower business borrowings. cash from As bond bonds at We in to proceeds of result, strength points than used inaugural

Directors of cash to and decision quarterly significant which through August continued approve this peers Board unique generate our a Our once dividend, flow its model in to among business in in confidence our ability be demonstrate continues to industry. our the hotel to again

We similar dividend and November consider in expect a dividend to to to the XXXX. increased consider an in for recommend Board

Moving to to financial our remainder down best year, full XXXX operating approximately view be the for is of year metrics and global RevPAR expected certain this of XX%.

point We EBITDA the the this XXXX. assumption, decline $X point. million RevPAR from provided $XXX approximately updating to XX% full we year are per to million million translates of to previously for million $X.X $XXX sensitivities RevPAR approximately impact per At an the adjusted

We full marketing funds of RevPAR million our to we a effect $XX XXXX. in marketing estimated a EBITDA typical year range. approximately environment, basis. our by overspend on which are is expecting In manage breakeven The our to funds adjusted reflected in

I showed that expected acquisition-related maintain that we item have rate to Note a depreciation of for of effects is to And $X adjusted emerge noise count outlays $XX from not expense, of million is of we the not we year. remind and top our from that and stock-based franchisees’ excluding compensation from million, move fourth business approximately of XXXX, EBITDA, away million, adjusted the this quarter. an line La or functions marketing and tax $X.XX cash XX%. of our peers we outlays do comparable and However, $XXX this interest elected spend special cash the and million negative amortization $XXX to of of despite the in lower their range and to of acquisition one-time shares. million unprecedented to approximately our revenues, to advertising resilience accounting further amortization looking $X.XX flows. expect cash remove $XX $XX seasonally crisis. share will particularly million closing, of Adjusted you results and to based and generating approximately expense on slower operations our EPS past optimize pandemic funds our Last, move through in expense has production, revenue to Below be million, current XX.X charges as remaining integration tremendous forward spin-off our to diluted we Quinta. we In expect

owners. our way are for to market We our share increase hotel innovating

removing and brand We quality franchisees. non-compliant our distracting portfolio pipeline our are supporting we of hotels building strategically are and while from assets a

brands well your Operator? Our to focus are the uniquely be outperform success long-term Geoff of that, and through to both to future. our the of I is questions. into franchisees, and continue on recovery the would take our happy positioned With which and

Operator

[Operator will Greff Joe Instructions] We take with today’s question ahead. first go Please JPMorgan. from

Joe Greff

like everybody. conversion you. by I would start date. Geoff, Thank morning, about Good just talking to off our

And peak that maybe are your sense a specificity from how you. have industry? you and breakeven and then at to with that much the push quarter-over-quarter. or Thank brands? the when a think would or has relationship of is give growth kind stress in thereby you pull that opportunity improve are sense your with and this all increase, rooms that an environment, third-party share companies dealing maybe see give like before conversion it in geographies, the conversion if less others, the target Wyndham the pipeline of of than peak segments, with XX,XXX of us for about what and drivers occupancies your us in you and plateau more sequentially segments of nice operations? does its suspect Can you Can grow opportunity guys have stress conversions your understanding I others it’s opportunities or on what maybe to some looking owners between does convergence development might in

Geoff Ballotti

deal been We this we plateau with conversations you number just the sort could dollar lack out to and there. with, before. ready question I I distribution so there. XX% not realizing signings having with in is brand it’s of road there sequentially of of very that mean, independent out that’s never to our this when make of decision. or were on developers and many up work terms to that out franchisees But XX% pleased to our flow up there they the there having domestically we million I tell franchisees have have conversion looking there are peak more that and traveling are with ways that’s picking it’s think been our Thanks, for quarter that for our out it’s executions able and provide internationally premiums many the were think conversions. And Joe. a I just to forbearance but an of happen developers be extended operating of savings, cost a stimulus and need a as costs things are and that so from we could that going RevPAR are ways hope that through lower are going

they conversions signings the Florida. pickup and of terms a In of Georgia saw in great Texas, standpoint we from terms In there in geographical really Arizona in and was signings. strong where them a on were domestically,

in in in money. key our peak or it’s economy conversion this Quinta Travelodge was terms to great whether it’s going or I In fourth the happen the space going going and plateau to a year away that’s second Baymont to think for people ways in there But to and a brands, is anybody’s or and from in of first quarter guess. quarter up be put even willing also interest our La of until the

Joe Greff

maybe capital nice favorable, us modeled of XQ Great. cash that about but than sort had flow, in Geoff. so we much And EBITDA working this working That’s we to free that, what for proximate that. was How think think about about the favorable maybe a year you conversion year, and I you forward? obviously, hoping it’s not fourth of we the of quarter, a going think think as of in helpful, next contribution it the give and do or from very for kind can capital? was Michele, And more you just about how have including kind

Michele Allen

Joe. morning, Good

budget we think through we I are move obviously, as right the cycle XXXX, working into now.

to free EBITDA numbers the from that to XX% in stronger So full be, detail, the don’t XXXX year would is cash think lower representative XXXX year. we going conversion for QX are not not I at levels probably I full realistic. expect converting discuss at revenue prepared levels flow be are to QX see of adjusted would these

we term our still look where longer would remains levels, target. we levels, should XXXX that demand However, as we to And approach – where XXXX that’s that’s be.

Joe Greff

Okay. Thank guys. you

Geoff Ballotti

Joe. Thanks,

Michele Allen

you. Thank

Operator

of we next Please with Bank question And Asad from go will our take Dany America. ahead.

Dany Asad

and growth comes takes you up? comfortable us morning, if gave how on down, all it guess Hey, puts growth, for when giving it follow-up to maybe for could shape we are good everybody. a Jeff, really best earlier, boil XXXX good unit color I just to the wanted on you Joe’s but from unit like question XXXX

Geoff Ballotti

for Dany question. the Thanks,

to X%. over as X% X% I that from again, the would been would I to that moving X% Net non-compliant room guarantee proactive management X% removals to were exit were happen think flat to on delighted national have what we growth to unit growth We And X% committed rooms. But excluding up internationally. that a absolutely to mentioned we domestically said which forbearance certainly pre-COVID. not delivering have providing been X% are along room the net and number we the have I stimulus. but license aside are to it’s and unprofitable are of Joe, committed I to to guidance, and time the low with And it growth things of agreements, royalty think we

with more again in concerned But be is I we are very sequential be owners a of transaction. of is more and really year-on-year terms mean, can’t opened teams not teams narrow able in good going yet hotels Pacific on travel being XXX% with pipeline the a Our XX% opportunity European lot much lot bid/ask out our there growth again, need are significant on overseas. get certainly that and the constrained having, deal need funds, right so growth to the regions They transact. and is of our and strong we there internationally with And certainly sidelines Asia Southeast sequentially conversations our allowed like but again. And to are the again Rim. we in opens. about domestically rooms, to I in and growth cash both to now. rooms think There to the and strong with

committed So on are call, X%. getting but we guidance are back providing to X% to that to not this we

Dany Asad

Understood. if sneak region, China. I have off actually domestic weren’t that best could one was your over maybe domestically. there I performing mean, from But as much but in in what far granularity numbers up your put you really China, we And do as just it we on don’t

can just that quarter for geographies us help maybe we either segments? what So, parse by the out or performance was

Geoff Ballotti

Sure.

Dany Asad

And your how recovery? that can to we apply

Geoff Ballotti

on. spot are You

there. satellite XX% Tier that very are is When we economy than Tier at you over or have, look in In hotels similar, the here we other with system better actually X,XXX thrilled X that less our XX% are are the and average but cities it China, X Tiers were and X point we to States. performance over a XX% much cities look run to your lower X hotels and the much it in in lower of X, and – there terms an but the mean, rate. over are was of United than X,XXX in economy which I more importantly and daily

our confidence occupancy in they the production strong there for up we really is them XX it think we points X bit September think was improved in us, China, If a been little in again on for that, and there and October economy in week’s down of was seeing and seeing pipeline. traveling to improved and August, occupancy to of down are a improve. are it both points reasons And see I it teams lot openings in you last the and from have as is out are consumer great

Dany Asad

it. you. Thank That’s

Operator

from Next Please is Jefferies. ahead. with Katz question David go

David Katz

Good morning, everyone.

Geoff Ballotti

David. morning, Good

David Katz

delve I go for back and to La little deeper. questions. bit taking Thanks a Quinta to just my wanted

have with for in terms of but some what the about both you else long-term? unit returns it that that that is investment to progress driving vision it terms your the commentary You some and general metrics, RevPAR of driving you share brand what and can about on level growth near-term, can us made in high degree of

Geoff Ballotti

David. in performing Thanks, said year, be continues It we our this is, remarks, our Sure. to brand. prepared throughout as strongest

points Our in again, continues to XXX, segment. overall run grow. the in was and XX to just RevPAR basis highest hours continues highest index up It the its XXX occupancy another

In grow terms seen a growth. have we of being standpoint, great from franchise able again, it began, we to when

happy say, are, the net who deals acquisition. since that new seeing. with they X% are at index rate franchisee strongest gains XXX we as would measure have and is that now The since running I talked our executed attention have owners, our right We the La owners before unit is growth Quinta with acquisition with RevPAR engagement about our and

Our of but of rate happy performance XX%, we rate. top is is than improved retention for the are our we seeing the terms nobody in retention brands, which of retention all our in at months for last in XX are mid-scale, the really what economy our I running still exceeds with higher franchise mean, XX%

to continue see deals. we pipeline, Our

for X% growth Africa, be to doing seeing we we seeing as Asia-Pacific. are now And and in Europe, we increased pipeline America continue they guess have signings to East we execute see the in is sequentially Latin an as to are in teams are internationally, across and seeing Our I beginning deals our are been really Middle our vision that’s to growth. able is

performance side. ROI really the we pleased would I with are that we on the brand. of everything the do feeling exceeding good an out from how say, Michele, to standpoint, and we set we are doing So, are about synergy

Michele Allen

now up, Yes, taken are synergies our of from little our right right initial of just – measure revised a have up to impact. is achieved the COVID initial we we estimate our ROI was picking the high-end actually estimate, and synergies, around which difficult because actually,

have to down would little David, we road, the of bit. So, kind that kick a

David Katz

the around of concern remarks, we have health. as a touched couple year, And but next bit into thinking the know little franchisee on a you Understood. get I quarters ahead opening this financial early in

are what anticipation play kind discussions start of you or you As role? to kind normalize kind interactions, to of in starting provisions those that having what distress of of a

Geoff Ballotti

overall, been some which with and we the we standard level deferred the down. brand have property say, our on have brought have flexibility, that we Well, were have that improvement certain the of I our David, with changes franchisees would support really pleased which fees, fixed with made providing fees first been – them

is is think bill CR do standalone back. has HLA the year. with have I our still it second and attached the officers what there I hope along the we the in, biggest formed thing draw franchisees are their terms rest level. interested they chance I, to to with when moving federal PPP. the a and I signed the be spending of the are on the trying time December along to are that most hoping could most for get it. would of support will could am done before they support Congress hope to we before it a them in mean, the certainly forward right in be that, And optimistic of that that that a be on is and I running think, biggest where are comes have now end more is in of could that what is occupancies

David Katz

well, Great. Thank my questions. everyone. taking you for Be

Geoff Ballotti

David. Thanks,

Operator

Anthony next Barclays. question from is Powell our Please ahead. And with go

Anthony Powell

leisure everyday a time we current trying mix your XX%, talked rate earlier kind remarks, everyday just about good had of as business or of question your the in lower travel happy this business with kind on to business level? prepared over Hi, are the you and and beyond increase morning. than higher the you travel a are I of

Geoff Ballotti

than that Texas infrastructure every there owners, it throughout SK is business phone very of in are is that that believe, one we QX absolutely talked Korea we Alabama way, commercial see we large and Anthony Residential much it was quarter fourth night and boots increase into improving well have as building and he to I on the network Johnson and full foot XX% brands was it’s third they me and to about it did down rate, construction demand us with infrastructure And square Anecdotally, happy bed we will I love the I in utility project QX, about Louisiana. we it side. with their the business I out as workers grow that a in and We on continue cable going and are in Georgia. the Battery and we telling a the is quarter mean, million is that – the think begun a next traveling call from starting. force. are mean, yesterday full increase. it was would think slightly from there, really not what ability in in second are it’s just differentiated talk the construction hotel think call are and to full traveler know I running share. and South are was in to continue are plant infrastructure the was and every I crews see are X from back the his on Those was Yes, to our year. in and higher to our most last who this and bigger projects Howard about up, of talked XX% down to that the the driving continue. is picking battery on

benefiting manufacturing. On pickup from prepared piece remarks, in about side our in the logistic we big a that other talked that that’s certainly

it, was she sales one leads they back, is Carolyn, index to data that standpoint. service our global who I that of rising and back, another will quarter hospitals think that streamline got our look a leading it’s with up. anecdotal ever rail our force, you the the been and an second me one partnering deliveries from at than there that to collection rising PMI versus logistic of talking telling out fourth the manufacturing there big – of supports are around there more business transportation and company across importantly, data Again, on handling ISM when Xx increased accounts picking But and I business is hotels is all this inventory our it more be standpoint, supply have back inventory is think year-over-year. sortation up and supports quarter. is XX% Their our chains. it’s do is just to pressed hotels, I But certainly trucking

job of right sales more be your growth. there out our differentiate share. to global our finding and types teams our So, national us helping accounts sales question again it’s growing for of index our RevPAR to is what’s And been now, teams, these really that

Michele Allen

And a technology there really really degree the suite are capture today, I we tools segment and of increase will the higher – which add is to to making I just add in to is investments that that spend. tool quickly, that business, and that of specifically a set Wyndham business would that, Wyndham Geoff, direct just the that

Geoff Ballotti

great point. That’s a

Anthony Powell

down the Thanks. you from year, geographies RevPAR we softening And any baking of are kind cases in other Europe U.S., COVID in increased in commentary the are in of and terms XX%, seeing number? for the that the

Michele Allen

about Our XX% and really. fourth in quarter estimate XX% to U.S. globally, the right is now

so you Geoff, we COVID from And think impact significant spike, add but seen haven’t since a that? the I to anything to want do

Geoff Ballotti

mean, about. all I great question. a a No, It’s question worried it’s we are

Florida, saw happened last California was really them is October about deck Anthony. points. night, and July investor that caseloads running were our domestically in than Our out improved down what worried certainly September we concern in as what XX but worried X XX franchisees showed June, And This we earlier then in and we It’s sent rising down points. was summer is happened, it July and and down post just are we to points. about, better a X,

certainly Florida of it both it’s seeing yet are So, top certainly number Illinois, not any Dakota, were and in teams concern we North we at something the BUT cases, per Dakota, change, the certainly by or that looking Texas, our California, South states Wisconsin are watching. and capita, of

Anthony Powell

Alright. Thank you.

Geoff Ballotti

Thanks, Anthony.

Operator

go ahead. the is Goldman from Stephen Grambling And with Please next question Sachs.

Stephen Grambling

I money key drive the or that new efforts? existing and to color thinking specifically look cash you bolster Hey, growth, or you are and to both about unit offering as how these support on about for can flow provide cash think guess free the from impact thanks. owners, flow, even on any free base perhaps owners the and guardrails at how

Michele Allen

Stephen. Hi,

see couple $XX good As I that could spend quarters amount to be the that are, of beyond currently and last coming opportunities on expecting we look of we forward which there calls about a our will approximately where has this XXXX couple advance last and quarters million Geoff are of conceivably we the way from development doubling talked us is on for the year. our

is our for properties I think properties certain But priority a as past into further not this just be best there move system, XXXX. retain spent we dollars that could to At for in spent the guess system point, that’s as new also also help be beyond us to but XXXX. attract would be which opportunity well. my high could obviously those they

Stephen Grambling

it’s on quick on follow-up meetings? to you specific scales brands do be centered or anticipate a any chain going is this that, then And

Michele Allen

and Microtel, is I probability construction centered it, some ROIs think brands higher and think for is that more our there could see a higher the you Quinta, markets, some new see so of the owners. also probability I RevPAR high it for there we centered can probability and in of in a you a La drive could hotel the around our U.S. us

Stephen Grambling

in Hey, I much that’s helpful. back jump will so Thanks queue.

Michele Allen

Thank you.

Operator

with is Scholes go next question ahead. The from Please Truist. Patrick

Patrick Scholes

that changed Geoff from fees is that morning, rule and where has occupancy of say talked thumb everyone. have were Hi, about late XX% where level the at paid, past, in in can all the you good of be Michele, XQ? you

Michele Allen

about they for look be franchisees sometimes XX%. occupancy it then and XX% upon Patrick. based at is Hi, could our a breakeven level we The that are capitalized how

So at not expect we XX%, be that and low has in our of them leveraged are on breakeven average, an majority able to changed. which or capitalized, LTV the is where the franchisees will of XXs

flow cash at even Our breaking XX%. at the Wyndham Hotels is typically

Patrick Scholes

level? very answer think business back next thank actually difficult thoughts do some question hear quickly back that, to get My half the could you. of by for happen it – level, will and this of on you your one leisure Certainly a industry XXXX high Okay, take the your there is out are to would saying that I XXXX, how to that? like to prognosticators

Geoff Ballotti

look certainly providing drive-to increasing. increasing. mean, the over look Yes, to guess are guests we the – a and how is increase imparity I traveling pull XX% again, consumer continue saw that And breaks But short we have the XXX demand we we couple get see. willing can we of there That drive in miles database that about I at we thrilled by, to new encouraging a was are something at. not of the customer our talked things guidance, is I and call we to to is that in last Patrick. are with and one We we are our we and guests things ability encouraged this mean, are away really

is in are And shift the think that Myrtle XX% over the along that over Carolinas nearly benefiting were are throughout drove. to it’s at I parks, we think we certainly most seeing occupancies, and remote now quarter I which going September Florida. to from XX% work states. the see and throughout in in I certainly national XX% next mean demand look continue we We we remote of beaches, the And really fourth learning, Beach what to year. the going to ran mountain

the there and also Californians. We we at, and to are advanced now measures bookings in are look But that Arizonans are seeing that the Panhandle two increasing.

Same down and that’s are So multi-night day encouraging. bookings are bookings increasing. coming

July. that travel is feel of right are was continue in COVID September. pleased else about by safer increasing. of what certainly our up is we people will to support demand the of are spikes. all stay, went It we something increased really and to through are And that willing concerned type the and recent that to us are see end consumer now average X% And up It length X% with

Patrick Scholes

very color. you the Okay, for thank much

Geoff Ballotti

Thanks, Patrick.

Operator

is Next Zaffino Ian from Please go question Oppenheimer. ahead. with

Ian Zaffino

Thanks. great. Hi,

could on modeling leisure who like what’s only a think have And actually initially of just Thanks. that last then And leisure them, you how Now, describe follow-up. them? question, kind what’s recovery these of motivating are, I customers travel? about we driving

Michele Allen

Yes, visit our sure. we weekend are we less – getaway, visits mom a another to or short is another going a Hi, so trip. third along customers spend, third of or so coming have have then hi, And instance. days and stop leisure visit Ian. are They then also for category they for traveling leisure grandparents, our then about from X we of are large family and to

of headed a for our you are night. to So, one in are one going and hotels destination to you stay

three So, the we those After night vacations. those largest three groupings leisure X plus are have, the categories. traditional

Ian Zaffino

different how expect be there great. a is further would color could Okay, Thanks. really then follow-up Any helpful? that topic And you do as a are any I on terminations, well, guess terminations going forward? give we we modeling as

Michele Allen

Sure.

it our I investor Slide think actually, it was of we presentation. on X had disclosed

fourth So, previously have with termination connection out in announced we coming in termination, strategy. strategic our additional quarter some do the rooms

the quarter of scrub performed in in then And second that X,XXX the and about fourth X,XXX is there very so that was for rooms be identified should quarter that, the Outside we that we about thorough. XXXX.

for history struggle engagement, that we to COVID to and have everything of help we remains comes avoid good franchisees are going but through failures. operators them Of to seen, with next to do course, a for brand we can are going them what be

Ian Zaffino

this. appreciate Really very you Thank great. Very much.

Michele Allen

Thank you, Ian.

Operator

last with from our take question Michael Please Baird. Bellisario can we Hey, go ahead.

Michael Bellisario

Good morning, everyone.

Geoff Ballotti

Hey, morning, Michael. good

Michael Bellisario

last of today construction the has over or financing does the seen then any your who the have domestically and place. in on new financing gave quarter, stats versus XX pipeline, I of stand think so? in you days internationally last some that terms Where Just in what estimate is changes you

Geoff Ballotti

at would hard Quinta we second say it what say new of investor deck, mean, end have been the I of to consistent the our interest Modas in – we or developers think out we now to new La looking No, this. rooms. see of of are really construction scrubbed were Microtel it’s adding last that signed that we advantage brands for and I really amount our all pleased that Moda some our in our construction somewhat pipeline, take teams dual, to have we quarter, terms haven’t. the were or our I there either the the quarter would XX of Microtel the or it’s pretty in like we saw are I of surprised and repurpose to there

we X% increased of rooms. had XX% rooms a construction prior to break in a domestically in and the to in of new new our again domestically. China was pickup conversion again was in that our in great internationally, we growth So, China. and rooms, construction rooms conversion then in to there in a but and And in Southeast – in and was also big rooms, construction the year begin pipeline we rooms there course pipeline, but XX,XXX great pickup saw Asia in huge see a China, ground grew also It’s both to pickup new internationally

rooms breaks construction of were new the and QX in USA. of X those XX new ground totaled construction Our in

Michael Bellisario

new clear be to just really you that then in said what pipeline, place, And it. no percentage the that’s has your that that’s Got of as construction change? financing

Geoff Ballotti

No change versus XQ.

Michael Bellisario

question, the I has existing expect versus give And quarter, signings of beginning, little signings change time have commented your split franchisee on us to was franchisee what but on think in the new wanted might then ask or going maybe the it over you maybe it. can an breakdown to differently it maybe that with and just trended forward? second how you got qualitatively Okay, at I how

Geoff Ballotti

would I with Michele, existing franchisees. would new more with you signings say that? agree than

Michele Allen

with Yes, follow-up and more I get that. I specific agree points. think would we can And data that’s something on

Geoff Ballotti

much a But I don’t – change of seen I haven’t there.

Michael Bellisario

you. thank Okay,

Operator

And as further no for have return Geoff floor closing we appears, questions. to the will Ballotti remarks. I it

Geoff Ballotti

look face-to-face gorgeous speaking not and of app. the everybody today. everyone out and much iPhone Michele, booking very I in with review care, you and distant ahead mobile Keith app or much, and to and thanks more time App Take booking in and the very hopefully a forward new importantly is future. very Thanks one your much device. looking our to meeting too for you with many again. We hope Android It you your download on Matt the thanks weeks Store go will Alright.

Operator

And this your program. will for today’s conclude Thanks participation.

You a Have may great now just day. connect.

Wyndham Hotels & Resorts (WH) 29 Oct 202020 Q3 Earnings call transcript