Wyndham Hotels & Resorts reported a strong first quarter, with its global development pipeline climbing 8%. Riding on increased interest from owners, its development pipeline touched a record 243,000 rooms. There was growth in new openings, franchisee retention and net room growth across the globe for the 15th consecutive quarter.
The Parsippany, N.J.-based lodging company opened 13,000 rooms, accounting for a 27% YOY increase. Global system was up 4%, reflecting 1% growth in the U.S. and 8% globally. RevPAR improved 1% in constant currency from 2023, reflecting a 5% slip in the U.S. and a 14% growth internationally. Wyndham completed its most difficult YOY comparisons in the U.S. in the first quarter, which led to a decline of 440 basis points in occupancy and 50 basis points in ADR.
Wyndham is optimistic on achieving its net room growth outlook of 3-4% for 2024, including an increase in its retention rate compared to 2023.
Most of its pipeline (69%) is in the midscale and above segments, which saw a 4% YOY growth. Approximately 79% of the pipeline consists of new-build projects, of which 35% has broken ground. Of the total pipeline, 58% is international.
Adjusted EBITDA also fell to $141 million, from $147 million in Q1 2023. The decrease included a $10 million “unfavorable impact” from marketing fund variability. Excluding this, adjusted EBITDA was up 3%.
The company ventured into the extended-stay segment earlier this month through its strategic partnership with WaterWalk, a “strong, upscale brand with a great pedigree,” said Geoff Ballotti, Wyndham’s president and chief executive officer, during the earnings call.
“This is a great upscale complement to our economy and midscale extended segment. It’s both conversion and new-build opportunities for us,” Ballotti said.
“Our strong balance sheet and cash flow generation capabilities provide significant opportunity to continue to enhance returns to our shareholders over both the short and long-term, as evidenced by our board of directors’ approval of a $400 million increase in our share repurchase authorization,” Ballotti said.
