Wyndham Hotels & Resorts has moved on from Choice Hotels International’s hostile takeover attempt after the latter officially ended its pursuit in March. Wyndham CEO Geoff Ballotti said developers and owners have moved on, too.
The Parsippany, New Jersey-based hotel company had its largest first quarter of openings since it went public in 2018. Wyndham grew its development pipeline by 8% in the quarter, bringing its total to a record 243,000 rooms.
Approximately 58% of Wyndham's pipeline is international, and 79% is new construction.
Developers and owners who were wary to sign with Wyndham amid Choice’s pursuit last year showed more confidence in the company's brands in the first quarter, Ballotti said during Wyndham's 2024 first-quarter earnings call.
“We are seeing a lot less uncertainty out there in the development community,” he said. “With the deal noise dissipating, owners who were uncertain on committing to deals with us — those who did not want to wind up in the Choice system — have agreed to sign.”
Ballotti referenced the brand’s strategic partnership with upscale extended-stay brand WaterWalk, which added 11 hotels with more than 1,500 rooms to Wyndham’s portfolio earlier this month.
Ballotti also also marked a shift in the company's strategy to invest in more revenue-intense chain scales. Wyndham’s pipeline is weighted more toward brands with higher revenue per available room, and openings in the midscale, upper midscale and upscale segments were up 30% in the first quarter of 2024, he said.
“I would say actively we are pushing into higher chain scales … but we will always be looking to lead in the economy segment,” he said.
More than 75% of Wyndham’s funding for the quarter went toward deals that are in these higher RevPAR chain scales, Chief Financial Officer Michele Allen said.
“We’re thrilled with the progress that we’ve made, and the strategy of using key money to penetrate into those upper chain scales and higher RevPAR markets is working,” she said.
Year over year in the first quarter, Wyndham increased its midscale and upper midscale room count by 3% and its upscale and above room count by 9% in the U.S. Its economy room count, however, decreased 2%.
The Asia-Pacific region saw the largest room supply increase year over year, up 16% from last year. Europe, the Middle East and Africa followed as the second-highest region for growth, up 12%.
Latin America led the way in terms of year-over-year RevPAR growth in the first quarter, up 41% over 2023 levels. Ballotti credited Argentina for the bulk of this growth.
By the Numbers
Wyndham hotels globally achieved RevPAR of $36.28 in the first quarter, a 1% increase compared to the first quarter of 2023. International or non-U.S. RevPAR grew 14% year over year in the quarter to $29.38, while U.S. RevPAR decreased 5% to $41.68 in the quarter.
Average daily rate was down 50 basis points year over year in the U.S. but was up 12% internationally. Occupancy told a similar story, as it was down 440 basis points in the U.S. but up 2% internationally.
Wyndham’s adjusted earnings before interest, taxes, depreciation and amortization was $141 million in the first quarter, down from $147 million in the same quarter last year. Its net revenues for the quarter were $305 million, which was down from $313 million compared to last year.
The company’s net income for the first quarter was $16 million, down from $67 million compared to the first quarter of 2023.
As of publication time, Wyndham’s stock price was trading at $75.82 per share, down 5.5% year to date. The New York Stock Exchange Composite Index was up 4.5% for the same time period.