Earnings call transcript Q2 2023

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Operator

Welcome to the Wyndham Hotels & Resorts Second Quarter 2023 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.

Matt Capuzzi

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

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

We'll on a of Corresponding non-GAAP be Investor investor.wyndhamhotels.com. at our release, provided of reconciliation GAAP GAAP to non-GAAP earnings metrics are Relations website also measures. referring to measures in a available measures is and our number which

certain We unable we efforts, future discussing without a comparable metric. impact are because only non-GAAP GAAP measures are providing basis unreasonable to the provide on

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

the over With that, I will turn call to Geoff.

Geoff Ballotti

thanks, this and morning call. for everyone, us Matt, for joining earnings Thanks, our second quarter

significantly later, all business hotels company company management U.S. and commitments. a guarantees having a simplified This years franchise franchise our managed business moved of our spin-off company owned business, and management hotel since much quarter hotel we're a Wyndham performance as from pure-play the a our and in from marked public along fifth We've Five with our to Worldwide exited XXXX. sold with model. year more stronger a

continues our of. As accelerate, the have company to much proud hotel to teams so be whose growth largest franchise world's

the launched, brands acquired to industry X in every years, X new of XX to and segment globally bringing luxury. our Over portfolio the integrated from past we've brands economy

With number one program as loyalty U.S. named the by industry's

driving News and our out World Report of every just this franchisees. now check-ins for week, X Rewards nearly X is Wyndham domestically

unit By Our pipeline X brands years, brands our and while that to average rooms gross over XX% million countries, where over XXX hotels. before, expanded debuting times under Despite in We've into marketing development industry's are impact franchisee every banner to retention we've by improved XXX,XXX global rates XX marketed and over annual rate the is X% they've Wyndham with segment. X,XXX in the economy and rate more additions we've never from and retention searched our umbrella times from the new expanding day. an leading X the past each nearly these than COVID, roughly growth XX% our of countries XX% been at driven over over

our NYSE or returned capital we've $X.X the From to by XX% proven the XX% adjusted our at XX%, from to since EBITDA success of margin improved dedicated latter an approximately our ourselves standpoint, and members spin. over We've and whom a earnings company the franchisees, over over listing shareholders, cap franchise billion of of as we've grown market of long-term to we've on team our XX%.

very in no exception. strong coming constant was RevPAR of quarter earnings X%. XXXX, of out COVID quarter X% increased a quarters After rooms consistent currency. eight of second Net growth and first our Globally, strong grew

free million adjusted we capital by grew on and X% development X% generated to returned by another increased cash million comparable basis. our $XX and prior of We sequentially XX% $XXX and flow, Our year of pipeline a to EBITDA shareholders.

record holidays. Day is RevPAR by now XX%. levels of U.S. strong against bookings Labor the the improved April, now XX% China Occupancy July June. remained comps June RevPAR in X% strong. grew basis Dragon point and to especially is strong. has acceleration driven saw We over XX%, was leisure at May growth X% Festival Boat pre-COVID XXXX from growth month-to-date in saw stands May XXX overseas recovery of in last and to we XX% growth normalizing at moderate and XX% a year, versus Demand and levels yet year-over-year then RevPAR and rebound

showing Fundamentals remain build basis quarter. since confidence while levels the movements select expectation consumer strong, and future outpace both continues points, to at economic components, demand in the its unemployment service by brands and counterparts our second to present for increased remains index booking and the time, the continue full-service future the industry U.S. positive Recent XXX XXXXs. in trends, June's data lowest at our across their confidence X points same

nearly Our of their to household outpacing the and rate a XX% $XX,XXX, seen allocate since higher wallets with continue approximately the XXXX, incomes above XX% wage And nearly average XX%, growth with has their median middle-class inflation growth respectively, over of savings and share of the to wage XXXX. start they of travel. since U.S. guests of

about Google trends double-digit from the leisure growth of continue a XXXX search prospects to these infrastructure accounts XX% the for who travel of our versus remain we and affordable When travel with is strong increases revenues, month-to-date, running ahead July combining generate ahead. quarters our years in franchisees' year. X% drive volume we over last that bullish

strong every than to more XX% activity, and system growth by hotels franchisee year it X% consistency last which of higher sequentially and overall was achieve combined the stood X% higher X solidly another where year, year. room to which when We strong by our on XX, us performance opened from year with versus points tenth last nearly day. at opening solid June the XX% the XX our the quarter, track retention rate basis each and opened for in XXXX. we outlook time rooms Year-to-date grew same net of X%. than With through position improved our full and quarter XXX XX,XXX prior new opening We by than conversion our X% consecutive construction we've hotel

including we midscale this segments including for sequential growth system the quarter. added the X,XXX the eighth Houston quarter, Intercontinental La and near Airport Daniel's construction Tennessee sequential George our Bush and the Kingwood in We XXX near distillery, the above openings. United more grew another rooms, Suites Jack points both and basis Here Quinta revenue over of a in Manchester, States, Hawthorn new intense

more Internationally, year. We we hotels, over opened XX grew than X%. XX% rooms last net by

year, team America the Wyndham destinations new Latin new prior in rooms new some and of sequentially the like Capital fantastic Brasilia. construction and by trip versus Our Brazil's business heart grew by X% City, net XX% leisure adding by

organic conversions like our of collection over quality GMC Ramada with on quarter in net first drove region EMEA and our Resort Istanbul sequential registry resort collection second Greece. growth in over at Our X% Airport room first Cypress, first Turkey and the our of in X% year-over-year trademark

quarter, In X Southeast year-over-year. this Pacific new the XX% largest which hotels conversion by Grand luxurious We on which Thailand, the Gulf the years. recent tourism built [indiscernible] Asia in increased and of exponential has hotel system Rim, opened newly in X,XXX a island and Wyndham sequentially their X% including Vietnam's growth by room seen

Huawei's with our the beautiful Central Business last opened net sequential XX a and new world hotels, XX which Wyndham China, to the than headquarters. along District which Garden conversion in year next more growth room XX% experienced XX franchising we hotels, was direct located including And in new X% system, a construction in Shenzhen

sequentially quarter prior XX% and to We rooms marking pipeline consecutive Wyndham's grew by development our nearly versus in a pipeline sequential XXX,XXX X,XXX X% growth. year hotels record XXth of

generating X% additions, and ahead than higher luxury segments. teams awarded XX% XX,XXX of upper mid-scale, Over upper last approximately chain year pipeline higher room upscale, Our revenue over upscale X% for of mid-scale, our XXX the contracts XXXX. and is

extended awarded experienced XX be contracts developers, front, the the including what established first in and over to Finally, few on the weeks, Echo Suites we brand's hotels new stay Canada. another past will

approximately franchising global and Echo Our led direct brand more China both quarter have now XX,XXX growth XX% a has construction XXX by of conversion XXXX rooms. in our Latin our new executed region in Wyndham hotel and rooms second our pipeline teams America in business. than they by with similar and Internationally, Suites did the deals hotels

both the spend [indiscernible] capture rate the yet ninth from revenue deployed earmark increase is market general in increased an quarter, be versus consecutive as digits For business ADRs and well XXXX, to our the a way. in as our into higher infrastructure-related accounts infrastructure reflecting from double as meaningful

infrastructure the and As in our the months of acceleration XX%. spending ahead, we've expanded we sales prepare for years teams by

capabilities drive enhanced to these more our to new leads We've enable workers. in infrastructure digital bookings we've seamless technology invested for and

category our a a acquired are seeing we're growth XX%. from generated XX% year-over-year, way handful result, a leads over up hotels new accounts next years. the number are paving revenue These of investments this of nearly for and the promising significant are for As up

both team and quarter of fostering the last of openings, that strong and RevPAR, another values throughout is this public accountability, Of and global accomplishment caring becoming domestically retention in all more internationally. achieved members room have In net the continued quarters and closing, XX fun. a was our than that global QX our company, growth quarter a core since saw greater while executions, improvement no integrity, community there living each diverse inclusivity, accomplishments

say one for loved diversity. top most Ethisphere's members support companies that and world's for and without one engagement X And of at level now one ethical Inc.'s as workplaces, which engagement been companies XXXX none in of we has of team of this our Diversity have named been years and midyear, global stronger Newsweek We & most company. magazine's can of possible XX Wyndham would and constant public never franchisees a Resorts last as be Hotels the

to turn over I'll that, our with Michele? the And CFO, Allen. call Michele

Michele Allen

Thanks, Geoff, and good morning, everyone.

remarks review flows results. review followed quarter my then our our of today with by begin sheet, outlook. second and detailed cash I'll balance our a I'll

of pattern on started, and contrast, XXXX. remind the service marketing hotels the comparison of lapped as returned fund our regarding variability the our select let spend. the year, and financial pace. of is well potential our impact get by now fund was the impact This the business the sale service timing of remainder exit, that last management business demand. Before select we you variant Though comparisons the of by for hotel spending normalized In more have we dampened briefly to quarterly concerns sales marketing the significantly spend has impacted year-over-year owned the year's exit as the Omicron of will results a our management marketing me year-over-year owned

neutralizes and compared of be I generated revenue transparency $XX enhance recognition comparable revenues revenues basis, which program. highlighting which year-over-year to understanding X% to of on hotels. fee-related timing of as last other with management million and comparable expected $XXX better results our fee-related basis, year, $XXX a provide We our To of increased consistent results last ongoing an the select operations impacts. service other impact quarter, million in the these will business a million basis which included On and adverse loyalty owned included our points from XXX and a relating

and the totals. the included was while business contribution year-over-year was ancillary EBITDA last Adjusted and franchise million timing. Select XX%. of also quarter year, $X owned compared from X% fees impacted to Management by Royalties second and fees marketing fund license $XXX which $XXX grew $XX in million million Service grew change a The million

normalized with revenues the I As by returning million million of in year. the last exceeded second marketing $XX exceeded more year, while cadence this marketing XXXX in mentioned, spend quarter second revenues marketing quarter by expenses expenses to $XX a

basis, year-over-year, adjusted EBITDA improved XX reflecting our comparable adjusted a On and our points. revenue X% basis growth margin primarily increased EBITDA

reflecting up higher $X.XX, Asia from our XX% recovery by basis demand offset as Second on repurchase a driven ADR were overseas, was constant quarter adjusted X% activity, partially second a growth continued basis, strong which EBITDA share well in the Pacific comparable benefits growth quarter, on by adjusted grew RevPAR In our EPS interest as and EMEA. expense. currency especially global diluted and

a acceleration was year-over-year point and X% first performance. from is up XXXX, RevPAR quarter U.S. which X% versus down basis XX

in growth quarter trends of moderation the leisure which last favored [indiscernible]. represented year, Second we select the service largely change travel saw U.S. a robust the

hotels cruise, South region. normalizing, experienced habits last the we're partially Atlantic in in international year, revival travel a center particularly demand and and across robust vacations, our the Florida summer are as counterbalancing city seeing Now

basis service the be as industry, Geoff XXX to second select in Our by segment brands the strongest the mentioned, quarter. continue outpacing performing the in segment points full-service

demand rate in first stronger opportunity the versus quarter accelerating second currency XX% to to Internationally, points pre-COVID for in growth to quarter RevPAR XX constant full of from over payment with than XXXX expected, the return XX% occupancy ahead a of levels.

meaningfully XX% were was RevPAR all quarter, China, and at XXXX the above during was and and Canada levels of at Rim the EMEA, Southeast LATAM In levels. second XXXX Asia XX% Pacific

XXXX the of China, driven demand quarter. levels XX% improved in acceleration which occupancy XX% in This XX% international an to levels improved from in was from quarter. XX% improvement Sequentially, to of XXXX the of first first by

decline Before environment me starts let I franchisees. approximately And community they at XX% financing generally quarter particularly where rooms new move volumes, opened our X% Financing despite more flow, well-established transaction the project year-over-year level, current to for on year, also borrowers a our XXXX. than discuss executed rooms teams only quickly cash this available, XX% our buy-sell are did more X% last more remains the they XX% for financed. in than of industry-wide not year-over-year more and bank than

We programs meaningful we our and impact ready on a continue a necessary. assist not if situation had to although to owners the monitor has of variety it business, have

a second and cash million EBITDA XX%. of in $XX with On $XXX conversion adjusted flow to from rate free year-to-date generated cash free flow. the million We quarter

on XX% $XXX free to the through to We of repurchases year of translates to dividends. are million of XXXX shareholders of common cash goal quarter during at item share returned our second our full solidly line and converting $XX income the We achieve EBITDA to flow, adjusted of stock which net track $XXX approximately million XX% XXX%. adjusted million to

Year-to-date, stock X.Xx price at in with liquidity, million Given depressed ratio we of for of of our bought net first back share ended leverage the range. We end our the $XXX opportunistically the twice we $XXX repurchased amount shares we total quarter quarter. approximately second lower the was the our in and of X.X repurchased million million. have quarter, target the

which quarter, This B in the debt second that advantage mature a loan interest our facility we of replaced May an refinance carries the a window new to plus May basis rate and points. in facility mature took was In billion amount, now loan term set of narrow term B with same SOFR $X.X to of XXXX. XXX XXXX will was

reduced moved maturity result million X a the transaction, weighted to debt and increased our our of debt to we payments our to As from $XXX over maturity this material X.X years. XXXX, only years next next average X

and complementary Our is earnings strategy, on existing of growth our unchanged. core M&A capital We we'll disciplined tenets and perspective. are from transactions our an and the strategy brand allocation to pursue room accretive remain portfolio that net

in in brand overall returned as also to designs franchisees And incentivize our prototype will excess improve turn retention new to increase helps continue invest usual, any rate. will brand to We cash our to equity, which be shareholders.

year quarter well Now to second turning to outlook. reflect of We're from refinancing. refining our expense impact repurchases as B outlook Loan Term interest as XXXX primarily the share full higher the resulting

to $XXX First, to and range to unchanged. our revenue than EBITDA $XXX be of income now reduced our to have million. the remain outlook growth a in million all outlook $X room million expense million, We million adjusted a net of RevPAR, $XXX result, adjusted and expect $XXX interest outlook prior net range for our higher as

be Adjusted our quarter a based lower unchanged million repurchase $X.XX, our is activity. repurchase second as versus activity. as future diluted usual, of result share a EPS shares This share any count XX.X to $X.XX outlook excludes of is prior projected potential outlook and, diluted share on to

million Our for free flow $XX the cash remains rate marketing do of outlook basis. contribution as for full-year fund a conversion expectations on our unchanged also

projected the quarterly impact. some However, on I color to want provide do

$XX back underspend We XXXX. arrive by at fund our investment back made of per will of $XX $XX we our expect to in year expenses fund the million, which that year approximately of to in revenues quarter $XX approximately complete estimated at half million will million the $XX outpace full million million recovery the

Loan above operate the here given Term financial with levels the In closing, capital business B increased in strengthened improvement and quarter levels XXXX for of flow occupancy room refinancing additional free produced to another returns and sheet and our balance cash We facility. our EBITDA U.S. flexibility internationally. and of our adjusted significantly continues solid through

we that to second any deliver commitments the and business resilient simplified positions model enter we us year, As of are the half environment. well on shareholder our confident in

to take With Operator? that, and happy questions. your be would I Geoff

Operator

now Securities. Scholes questions. Instructions] ahead. is floor from Please go question for The Our comes Patrick Truist with first open [Operator

Patrick Scholes

the improve progress here, Do about strong further equilibrium. A Or right one, as first would you made see XX% rate over where questions opportunity years, that? stands the of state that couple at now. you you steady retention certainly, to think a

Geoff Ballotti

No. We improve certainly see that opportunity to rate, Patrick.

in retention point from we've seen to the we've right And last globally, out, you As it XX improvement. and XX moved internationally of both has moved over domestically And to XX% over basis XX% months, points it just XX%. the direction.

is goal to XX%. that longer-term stated move Our to

Patrick Scholes

then quick what had to some you the Michele, mentioned franchisees. those potential assistance, about here. high And needing a if Great. sauce, a franchisee secret I such questions level, away other programs at Okay. assist would, giving just were two programs Without of be?

Michele Allen

and our into as know, Patrick, is Well, reinvest back you the cash cash Yes. highly we're business. looking for to business that ways always generative

money to form us we're environment. come work in typically, that easily the So both has put adapt the to that ROI in current [indiscernible], sense more And of when the for happy makes owner. we the economic but and could

to program source We example. a reputable newly implemented construction financing a have with lender for

as to understand. reasons, program franchisees We competitive provides as can very financing details, and mentioned, you obviously programmatic won't But too disclose terms. you many approach for with provides the competitive our obviously, Wyndham more

Patrick Scholes

the but about And how so way business, much you Is maybe year curious possibly quick tailwind spending. you for if for help or quantifiable, just enough. federal any Geoff, your something. may there of positive question. that infrastructure you last just Fair far a a Okay. the have talked then helped have certainly have from rest quantify not to you

Geoff Ballotti

in believed Patrick. Absolutely, us quarter, helped the we

was we've both the script, out years. We're outperformance first in $XX of X weekday inquiries and talked in mix early advanced leads economy early bookings, for points and later billion saw our and an what the think appropriation, days. this The before, next of index about to it's it said And RevPAR uptick really Our but rate we've becomes starting and really of year. play a as again, we've innings seen in as available fund basis I brand XXX over will occupancy. the

and said, we terms our outperformance. to opportunity play in years quarter this begin midweek we So X $X next and as X this our as over out of we've revenue the that owners, as a early is billion see to franchisees it sized for RPI

Patrick Scholes

Okay. Thank you.

So like sounds certainly multiyear you for it tailwind a folks.

Operator

Thank you.

Our with next question comes JPMorgan. Joe Greff from

Joe Greff

positioning, My is the Geoff not about of a amid chunky look my parter that at signing mode And first these much at of additions What coming increasing differently half And it is, development. activity? Is hotel signing from of question part, echo to gross new developer on X development backed it as recovery and brands? distinct room positive. how say not value to demand with backed can We competition. you it is from brand second this initial China a fully? today marketing development hotel then a Nice a And is in still perspective, perspective launch? Michele the talk new Is Echo than supporting out China? proposition you speaks and obviously, and fully? RevPAR second month. it limited-service And are competing see a versus

Geoff Ballotti

any on Joe, with larger and Echo public differently, These launches not. with higher spaces, that are I'll launches not competitors. extended and stay XX% seeing costs. extended mid-scale more or are banks, They're additional boxes, competitive start amenity we're requirements we economy operating bigger larger stay And any marketing question impact. over elevator Okay. are the competitive much not it and

be underpenetrated there much we costs, key, to daily average plenty will a their continue than that for gross daily over developers and believe, midscale Echo XXx fewer space the we're think that with XX Echo the lower per accommodations is stay operating to of due higher they going to drive as continued average you that approaching operating infrastructure seeking there's economy hotels. above higher that's there. with a Our contracting profits. for and for lower segment, of ROI average very are in we rate. know, workers million length hotels versus way X.X large And marketing it. the cost companies believe extended It ongoing growth and rates out room And space believe stay nights transient

China growth. on license Second direct opened you X% the rooms the net in we're with XX% And quarter. And our that and the as agreement. sequential came room at Xx, know, openings, development, fees another We master license China China the executions pleased direct a front. of part drove development on China really a those this and X,XXX

second and opened signed new and and was in conversion. conversion franchise evenly hotels We of deals the deals new in more record quarter XX XX construction than XX direct we XX XX% back properties last quarter construction our that fourth were year the new China XX the pretty and between signed split contracts

opportunities with the on So second really pleased of we're Michele pickup I China. in terms are our in half? development Joe's anything, there what miss teams seeing Did of

Michele Allen

Again, Geoff, just would say quarter XX% stat, growth new you is direct second that the the deals year-over-year. quoted in franchising no, I XX

Joe Greff

it, to difficult to this as be That little who's going and more bit be second someone And my sufficiently well Yes. a ask one answer, you then, so might might answered Geoff. question, me. it,

how legit out ago, spoken Board couple Choice interest and gives from interest an this also Journal to Street accelerate buyback some the But pre-announcement indication reached this unusual we a be. semi reporting in about entities, of months potentially have the reported and and had activity has some this guys. generated might Wall the then We as maybe a any at they saw to time quarter in and you have had Choice insider that other you over selling you outsider that us month. of they've that this combination Just Board. the from other Geoff,

answer. Thanks. I might would tough there be to be helpful. thoughts any it So know

Geoff Ballotti

articles. on business talking our Yes. our our guests, we're been growing about And that's what as on our And we've Thanks, usual script, We our speculative about news focused the stakeholders. look, value comment all and driving in business. and for Joe. never franchisees

Operator

Thank you.

David with from comes Jefferies. Katz question next Our

David Katz

So to deals focus And at notwithstanding us. the that making that the you announced entering sure back through the pipeline getting that it's they same at cetera. et a just all point just are the I one rate for larger wanted are that double because pipeline pipeline on the same the deals, of of that financing, passing rate they're one

can any would that So you is helpful. give on be backfill us how color starting progressing future for the

Geoff Ballotti

They're Sure. as always Thanks, David. entering the and they have. pipeline exiting

before, pipeline of As and we've talked seeing of there. come issues year. any every our changes or X/Xrds out openings the not each there any We're

future come of a of the So to And average, XX% the are improvement X/Xrd, exits pipeline, XX% the is record And make net as the pipeline. XXX,XXX less after usually than out quarter to up year to conversion on you our rooms into year us last We continue room to on about talking growth, now averaging years. consecutive does opening, rooms. to XXth of retention, was X that the signing course, the gives with other growth. sequential just a of accelerating as the a it enters we're were it this pipeline larger confidence construction. new from But

out pipeline globally. X% X% and contract Echo of very that including XX% the increased strongly, signings the the seeing new take slowdown. higher midscale is you we're multiunit is you Echo the not and the if deals any or XXXX above, XX% were referenced, we than XX% pipeline and up above, midscale up pipeline in still not International that product changes and any of and

any now under of under starts rooms rooms continues as year project to in Actually, construction sequentially. construction. have new slowdown no The prior to increased construction grow pipeline more percentage the in and drop-off now the new or the pipeline we pipeline construction

growth just growth good in pipeline regions international out. really and coming our growth So with the across consistent conversion highest

XX% before look to And back Europe, has strengthen. Latin the since and East its XX% you to America Middle XXXX, grown and especially pre-COVID grown in pipeline DR. has continues by If levels, Mexico

David Katz

Understood. Thank you.

the you And that? you my and are, outperform seen to where for RevPAR the And it the were to are fit follow-up, tell. have numbers can wonder I you, lower-end you total. so service, how much if scales RevPAR we've all some you're into in shown chain doing line, and performing able like relative as as weakness feel just you you limited you're

Michele Allen

end I don't year-over-year know the they would are lower say recovered weakness. scales comps Yes. the be much showing faster more little have chain think counterparts. I difficult their might a I because than bit

second in Geoff saw quarter rates. XXXX quarter consistent as second the it the from his versus the best quarter. then performing first at think And that what would I we look mentioned the recovery prepared segment And still neutralizing for those we're XXXX, in with all you If they're noise, we growth in industry. in in remarks, specifically, versus that growth I seeing saw U.S., July say the accelerate

about summer demand feel travel really season. we the So throughout confident

as seeing strong. leading windows a positive. TSA we figures. All We're advance seeing continue of remain the double-digit booking remains Search increase well indicators Google in volume We're and look at to

David Katz

think there's industry that is data of part some that following reported do you calculated we're what So up. seeing? being how change that in I apologize be But for may

Michele Allen

not No, all. at

Operator

Thank you.

with next Our from Barclays. question comes Brandt Montour

Brandt Montour

to great you, So those called hear May, Michele in curious when stats July reacceleration for out the U.S. I'm June, July. the

bit. weekends more versus above? any strength a color there? Is little you midscale it maybe And particular economy the versus more and Is extra unpack that on if could there weekdays. Just

Michele Allen

second increases strength continued more the ADR continuing the And with quarter. we from strength We're second the seeing quarter, weekday well. in remain as in very consistent we're board, think certainly I what but seen seeing had strong. weekends across then pickup occupancy in

Brandt Montour

well to Slide Okay. That's helpful. X, the new. financing which number is And want as then, as unpack commentary I

a You impact financing. terms out meaningful of of not construction guys called capital for in new seeing availability

publicly of out capital. availability there have a peers of called lack larger Your change

could which just looks slide agnostic X extra mix cycle with lending banks footprint is put like for Your here that right practices. us. of banks guess I the finer a months advantage lower in did broader I is industry business work over point scale? community set versus acquiring construction? centenary of feel of now your guess you they're your some and smaller terms you on more competitive brands you chain if terms the last the do the like a your and Is capital for essentially in

Michele Allen

Yes.

interesting for an perspective that's think sure. I

smaller think between in and us I peers akin it's the Those drives all the about some difference always been to banks. smaller side. relationships. of really community what banks, the more And those have is loan

they're of economies businesses presidents local deep bank decisions their within a see communities, made not by situation, bank, specific These larger locally, just just know you and on banks franchisees made their one Our of understanding servicing see the the name. you are holistic larger more based view standardized loan and which on size. in have the banks typically loan based typically a community specific that is not criteria, and of a borrower prevalent project

a Echo loan him of a able give X-year of past And at in times ventures loan I'll for a to space. to I hotel community different lent our developers paper in you to multiple the Kansas, secured fixed a out that rate from weeks business think get example, the X.XX%. has and XX% and outside cost within he of few ago, bank, bank one quick a a a was

that, exists, if but the just bank community think the it's level. financing reading available at you're So wouldn't very much you of headlines, type that

Operator

from our Michael We'll take Bellisario Baird. you. Thank with next question

Michael Bellisario

deck slide the a on slide. more on one new Just

that X% longer-term unchanged. I added the algorithm, the to about XX% it's that's You important growth didn't back range, you it, talk but think

maybe Why you question maybe higher it gave of So the think the XXXX, big do a to than drivers you that's given all about you couple model. And in made cash last today? what versus here. the X% this there. range is today X% within Thanks. was you changes the How could, think how handicap deployment, to not the flow do then, and the business you've lastly, bucket? input levers Maybe about part

Michele Allen

management. our line, put done though slide owned our we high the at wanted everyone low we've to a exited lot the we we make even to single-digit, We've understood growth business, double-digit looking So back business still and we're our management simplify on the because hotel. sold that sold did sure EPS and in

a more story, potential. same simple EPS it's So

even prospects to wanted to X% do is future we generation were XXXX, to growth and positive longer-term or anything there, days X% X% to the think highly the point of having our at in also cash This that flow for to we cash low. business think, generative, accelerated taking sales were versus then, any the free forward pre-COVID, without was cash are our from capital still capabilities. risk When about flow deployment, X% old the positive, net free pre-simplification. room I really show And X% growth X% darkest you flow cash we

sizable feel growth. So we cash confident in very that ability generate to generate and to EPS capital redeploy our

Michael Bellisario

significant I plus follow-up in then to it. continue level? on Got to just think -- back stock lever Leverage the If X.X%. and stock would -- discounted And use from X% range, the up if buying you still or X minus at buybacks. how you a unwarranted comfortable remains went same it's where

Michele Allen

did. We

of the we stated in amount have over implies certainly we second ratio additional to lean on And even second to we've leaning the in because did target as and flexibility repurchases repurchased before of discount if and think, see where repurchased we we year-to-date, like the ended were first significant quarter million stock it us unwarranted continue of it it's that upper quarter, range. we we share into the the a the leverage fair discount. quarter, was expect a trading the was repurchases. the a at think were the in in Xx think I capacity amount I $XXX I $XXX at And move in unwarranted trade tremendous half million, significant to quarter

that commitment significant going make but So hard unwarranted any I'm today, in our you Board our And you'll that assured $XXX be lean just are can further to million note to if see earnings a release we we continue to not another authorization. willing discount. approved in in

Operator

[Operator Instructions].

question Pizzella from Deutsche Bank. next comes Our Steve with

Steven Pizzella

points the up I was XX the was some the we forward? XX believe, should think you growing rate and think, how I royalty nicely talk of international royalty about drivers up moving about U.S., even rate quarter-over-quarter. basis And year-over-year, The basis there Can points. it

Michele Allen

start. I'll Geoff, sure. Yes,

in eventually Microtel brands, growing equity rate size help rate the opportunity move a royalty system a always us it forward, a perspective. bit within ensure and of move rate will little Quinta, construction to focus on region the the our domestic that large La a to each Our remembering strategy brand's growth large our the building Echo course, given royalty on how prototype will regional always of more on we're continues U.S. the new from we gradually is. see Internationally,

region and each we rate deals We than out footprint build system expect in into our have expect the And international come that year-to-date, royalty see. is improvement in higher will rates seen to legacy in to at would we system specific a trend you the mentioned, that as in as royalty we the our to continue continue come that market. new

Geoff Ballotti

to And Steve there are overseas. us for so grow, many places

rate in become Turkey, where aware lower today first for a countries hotels overseas. As our XX it is and like now XX, country. example, was Ramada for more brands opportunity the our introduced royalty in markets with There's at tremendous sale than

the experienced a team franchise significant International be have internationally. for We us. to continues sales opportunity most

we As those million are over XX know, rooms of and globally unbranded. XX% roughly

do in which we're we've coming we masters have an than -- We before, to our to awareness, were deals continued proposition, value Xx the we're as, countries are agreement continuing ability to lineup term And we grown they not said always brands and royalty rate have a did license before. where long to have direct add internationally, no as that royalty deals again, at push great And rate. longer, franchise these years were master ago. looking the

Steven Pizzella

remarks. And new That's opening you you. your then, Thank in and about helpful. Okay. launching talked brands acquiring

white talk view of brand the versus forward can about any see launching? And that balance With space how the maybe success Echo, you acquiring you from in moving you still lineup.

Geoff Ballotti

Yes. Sure.

and we've Wyndham. Registry launched collection. rooms Playa, rooms without to few having our now really have in a we great And collection a space open have partner and was and pleased hotels We the all-inclusive acquire a pipeline Echo had white space brand, pipeline registry the By We roughly offered out for market Suite. thousand in XX launched a of And with. launches All with the go now in X,XXX us. and white recent been the there.

also us where for opportunities So for that and today, is growth where Central along to through opportunities and comes really present acquire. look we're acquire, great markets we'll some Vienna look opportunity good deal a brand absolutely have along accretive tuck-in trading are at at really adding to we'll continue have Western we to the with Middle but us like a it themselves, really, it. opportunities that a where as and for that's some but traction House got with that, don't And Europe, for We pleased East. we've need we'll when on we with is to saw immediately

Operator

time, the or in this we for At have Ballotti further to any additional turn questions you. no now queue. closing I Thank floor remarks. back will Geoff

Geoff Ballotti

outperformed EBITDA where that thanks, questions in delivered adjusted pleased for we said, your were, very Michele second as Resorts. everybody, interest quarter expectations. Wyndham Well, growth with and & your Hotels We our

franchisees. confident shareholders, opportunities Our teams guests to deliver and we're our that ability in outstanding couldn't to about And value be our lie enthusiastic very our our the more ahead.

of I'd and August the weeks Wyndham channel with of day. please to be you in Thanks before the everybody everybody, Championship next Matt next live to But conferences a I will week. into week, the airing and Michele, in be that tune X, upcoming have we seeing Thursday to from many which months remind and investor at of beginning Annual on again, attending. look like the talking on coverage golf and to great XXth X many the forward we'll you ahead go, CBS August through

Operator

earnings quarter line second a wonderful disconnect and have time conclude Please day. call. Wyndham This today's Thank does your this you. conference at Hotels & XXXX Resorts

Wyndham Hotels & Resorts (WH) 27 Jul 232023 Q2 Earnings call transcript