Wyndham Hotels & Resorts reports strong first quarter 2023 results

• Global RevPAR grew 12 per cent compared to first quarter 2022 in constant currency.

• U.S. RevPAR grew 4 per cent compared to first quarter 2022.

• System-wide rooms grew 4 per cent year-over-year, including 1 per cent of growth in the U.S. and 9 per cent of growth internationally.

• Development pipeline grew 11 per cent year-over-year to 226,000 rooms, and signings increased 7 per cent, excluding ECHO Suites Extended Stay by Wyndham.

• Awarded 35 new construction projects for ECHO Suites Extended Stay by Wyndham, bringing the total number to 205 since launch in March 2022.

• Returned $87 million to shareholders through $56 million of share repurchases and a quarterly cash dividend of $0.35 per share.

• Company raises full-year 2023 outlook. Our impressive first quarter results demonstrate continued momentum with global RevPAR growth of 12 per cent, net

room growth of 4 per cent and the 11th consecutive quarter of sequential growth in our development pipeline,” says Geoffrey A. Ballotti, president and chief executive officer.

“We outperformed our adjusted EBITDA expectations, leading us to raise our full-year outlook as a result. With our seasonally strongest summer season on the horizon and no signs of slowdown in our middle-income guests’ desire to spend on travel, we’re enthusiastic about the opportunities that lie ahead and our ability to deliver outstanding value to our shareholders, guests, franchisees and team members.”

First Quarter Financial Results

The comparability of the Company’s first quarter results is impacted by the sale of its owned hotels and the exit of its select-service management business, both of which occurred in 2022, as well as quarterly timing variances from its marketing funds. The Company’s reported results and comparable-basis results (adjusted to neutralize these impacts) are presented below to enhance transparency and provide a better understanding of the results of the Company’s ongoing operations:

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Note: Growth rates may not recalculate due to rounding; see Table 7 for a reconciliation of non-GAAP metrics.

(a) Includes estimated tax impact for the select-service management business, owned assets and marketing fund variability.

• Fee-related and other revenues were $308 million compared to $316 million in first quarter 2022, which included $38 million from the Company’s select-service management business and owned hotels. On a comparable basis, fee-related and other revenues increased 11 per cent year-over-year primarily reflecting global RevPAR growth of 9 per cent, higher franchise fees and incremental license fees.

• The Company generated net income of $67 million, or $0.77 per diluted share, compared to $106 million, or $1.14 per diluted share, in the first quarter of 2022. The decline in net income was primarily due to the sale of the Company’s owned hotels and the exit of its select-service management business, partially offset by higher adjusted EBITDA in the Company’s hotel franchising segment.

• Adjusted EBITDA was $147 million compared to $159 million in first quarter 2022, which included a $15 million contribution from the Company’s select-service management business and owned hotels. On a comparable basis - which excludes the marketing fund variability - adjusted EBITDA increased 10 per cent year-over-year reflecting higher fee-related and other revenues.

• During first quarter 2023, the Company’s marketing fund expenses exceeded revenues by $4 million; while in first quarter 2022, the Company’s marketing fund revenues exceeded expenses by $7 million. Full reconciliations of GAAP results to the Company’s non-GAAP adjusted measures for all reported periods appear in the tables to this press release.

RevPAR

First quarter global RevPAR grew by 12 per cent in constant currency compared to 2022 as the U.S. grew 4 per cent and international grew 37 per cent. Approximately two-thirds of this increase is driven by stronger pricing power, while the remainder is driven by higher occupancy levels.

Development

• On March 31, 2023, the Company’s global development pipeline consisted of approximately 1,800 hotels and 226,000 rooms, representing an 11 per cent year-over-year increase, including 28 per cent growth in the U.S.

• Approximately 72 per cent of the Company’s pipeline is in the midscale and above segments.

• Approximately 57 per cent of the Company’s development pipeline is international and 80 per cent is new construction, of which approximately 35 per cent has broken ground.

• During first quarter 2023, the Company awarded 123 new contracts for its legacy brands, an increase of 7 per cent year-over-year, and 35 new contracts for its ECHO Suites Extended Stay by Wyndham brand, bringing the total number of contracts awarded for the brand to 205 since its launch. The pipeline includes over 25,000 rooms associated with the Company’s ECHO brand.

Cash and Liquidity

The Company generated net cash provided by operating activities of $93 million and free cash flow of $84 million in the first quarter of 2023. The Company ended the quarter with a cash balance of $150 million and approximately $890 million in total liquidity.

Share Repurchases and Dividends

During the first quarter, the Company repurchased approximately 790,200 shares of its common stock for $56 million. The Company paid common stock dividends of $31 million, or $0.35 per share.

Full-Year 2023 Outlook

The Company is increasing its outlook as follows:

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(a) Outlook represents global RevPAR growth of 6 per cent to 8 per cent compared to 2019.

(b) Represents the percentage of adjusted EBITDA that is expected to produce free cash flow.

Year-over-year growth rates are not comparable due to the sale of the Company’s owned hotels and the exit of its select-service management business, both of which occurred during 2022, as well as the variability in its marketing funds due to the support that the Company provided to its owners during 2020. More detailed projections are available in Table 8 of this press release. The Company is providing certain financial metrics only on a non-GAAP basis because, without unreasonable efforts, it is unable to predict with reasonable certainty the occurrence or amount of all of the adjustments or other potential adjustments that may arise in the future during the forward-looking period, which can be dependent on future events that may

not be reliably predicted. Based on past reported results, where one or more of these items have been applicable, such excluded items could be material, individually or in the aggregate, to the reported results.

Conference Call Information

Wyndham Hotels will hold a conference call with investors to discuss the Company’s results and outlook on Thursday, April 27, 2023, at 8:30 a.m. ET. Listeners can access the webcast live through the Company’s website at https://investor.wyndhamhotels.... The conference call may also be accessed by dialing 800 267-6316 and providing the passcode “Wyndham”. Listeners are urged to call at least five minutes prior to the scheduled start time. An archive of this webcast will be available on the website beginning at noon ET on April 27, 2023. A telephone replay will be available for approximately ten days beginning at noon ET on April 27, 2023 at 800 695-0395.