Wyndham Hotels & Resorts Reports Third Quarter 2019 Results

Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months ended September 30, 2019. Highlights include:

  • Diluted earnings per share declined 19%, to $0.47, and adjusted diluted EPS grew 29%, to $1.10.
  • Net income was $45 million for the third quarter, a 22% decrease over the prior-year quarter; adjusted net income was $106 million, a 25% increase over the prior-year quarter.
  • Adjusted EBITDA increased 14% compared with the prior-year quarter, to $190 million.
  • System-wide rooms grew 3% year-over-year, including U.S. rooms growth of 1% and international rooms growth of 6%.
  • The Company’s development pipeline grew 7% year-over-year to 190,000 rooms.
  • U.S. RevPAR declined 1% year-over-year, and international RevPAR declined 1% year-over-year in constant currency.
  • Returned more than $100 million to shareholders in the quarter, through share repurchases and dividends.
  • Company updates its full-year 2019 outlook.

“Our team’s sharp execution against our strategic and operating plans allowed us to deliver solid results in the third quarter, despite a softening RevPAR environment, highlighted by continued expansion of our system size and significant growth in adjusted EBITDA,” said Geoffrey A. Ballotti, president and chief executive officer. “In addition, we increased our share repurchase authorization to reflect our strong free cash flow and our sustained focus on returning cash to shareholders. We remain confident that our business is well-positioned for continued success.”

Revenues decreased 7% to $560 million, compared with $604 million in the third quarter of 2018. The decline is primarily due to lower cost-reimbursement revenues in our hotel management business, which have no impact on adjusted EBITDA.

Net income was $45 million, or $0.47 per diluted share, compared to $58 million, or $0.58 per diluted share, in the third quarter of 2018. As previously announced, 2019 results reflect contract-termination expenses and transaction-related items. Prior-year results included separation-related and transaction-related expenses associated with the Company’s spin-off and acquisition of La Quinta.

Adjusted net income was $106 million, or $1.10 per diluted share, compared with $85 million, or $0.85 per diluted share, in the third quarter of 2018. Third quarter earnings benefited from higher royalty and franchise fees and other revenues, as well as increased synergies from the acquisition and integration of La Quinta, partially offset by higher marketing expenses. 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.

Third quarter adjusted EBITDA increased 14% to $190 million, compared with $166 million in the third quarter of 2018. The increase in adjusted EBITDA primarily reflected higher fee revenues and increased synergies from the acquisition and integration of La Quinta.

As of September 30, 2019, the Company’s hotel system consisted of over 9,200 properties and approximately 822,000 rooms, a 3% increase compared with the third quarter of 2018. The Company’s development pipeline consisted of 1,450 hotels and approximately 190,000 rooms, a 7% year-over-year room increase. The Company also increased its pipeline sequentially by 1% compared to second quarter 2019. Approximately 56% of the Company’s development pipeline is international and 74% is new construction.

Business Segment Discussion

The following discussion of third quarter operating results focuses on revenue and adjusted EBITDA for each of the Company’s segments.

Hotel Franchising

$ millions



% Change







Adjusted EBITDA




Revenues increased 9% compared to third quarter 2018, due to higher fee revenues and the timing of the Company’s global franchisee conference, which was in April last year but in September this year. Adjusted EBITDA grew 10% to $195 million, reflecting the growth in revenues and increased synergies from the acquisition of La Quinta, partially offset by a $7 million impact from higher marketing expenses.

Hotel Management

$ millions



% Change







Adjusted EBITDA




Revenues decreased $72 million compared to the prior-year period, primarily due to lower cost-reimbursement revenues, which have no impact on adjusted EBITDA, and a one-time accrual for customer payments we agreed to make, which is considered transaction-related and therefore does not impact Adjusted EBITDA. Adjusted EBITDA increased $8 million compared to the prior-year quarter, primarily reflecting reduced marketing expenses and $2 million of management contract termination fees.

Other Items

Share Repurchases and Dividends – The Company repurchased approximately 1,410,000 shares of its common stock for $75 million in the third quarter. The Company’s Board of Directors also increased the Company’s share repurchase authorization by $300 million in August. The Company paid common stock dividends of $28 million, or $0.29 per share, in the third quarter.

La Quinta Integration – The Company achieved run-rate synergies related to the La Quinta acquisition of $68 million annually during the third quarter, as anticipated.

Agreement with CorePoint Lodging – In October, the Company entered into an agreement with CorePoint Lodging, for whom the Company manages La Quinta-branded hotels, to collaborate on initiatives in support of CorePoint’s operations and to resolve open issues between the two companies. As part of the agreement, the Company will make payments of approximately $20 million to CorePoint, and CorePoint will commit to maintaining cash operating reserves of approximately $20 million. The two companies also agreed to finalize outstanding tax matters related to the Company’s May 2018 acquisition of La Quinta Holdings Inc. As a result of the agreement, the Company recorded charges of approximately $26 million ($21 million after-tax) in the third quarter.

Hotel Management Contract Termination – As previously announced, the Company recorded a $34 million charge in the third quarter to terminate an unprofitable hotel-management arrangement, which was initiated in 2012 and covers eight hotel properties and 2,500 U.S. rooms, all of which will remain in the Company’s franchise system this year. With the termination of this arrangement, the Company’s future maximum annual hotel-management guaranty obligations will be $5 million.


The Company is updating its previous outlook for full-year 2019 as follows:

Updated Outlook

Prior Outlook

Year-over-year rooms growth

2% – 4%

2% – 4%

Year-over-year global RevPAR growth (a)

(1%) – 0%

Approximately 1%


$2.05 – $2.06 billion

$2.05 – $2.08 billion

Adjusted EBITDA

$610 – $615 million

$610 – $618 million

Adjusted net income

$311 – $318 million

$308 – $315 million

Adjusted diluted EPS (b)

$3.21 – $3.28

$3.16 – $3.23


(a)  In constant currency and excluding the Company’s 2018 acquisitions and divestitures until their anniversary dates.

(b)  Reflects first, second and third quarter repurchases and excludes future repurchases.

About Wyndham Hotels & Resorts

Wyndham Hotels & Resorts (NYSE: WH) is the world’s largest hotel franchising company, with over 9,200 hotels across more than 80 countries on six continents.  Through its network of approximately 822,000 rooms appealing to the everyday traveler, Wyndham commands a leading presence in the economy and midscale segments of the lodging industry. The Company operates a portfolio of 20 hotel brands, including Super 8®, Days Inn®, Ramada®, Microtel Inn & Suites®, La Quinta®, Baymont®, Wingate®, AmericInn®, Hawthorn Suites®, The Trademark Collection® and Wyndham®. Wyndham Hotels & Resorts is also a leading provider of hotel management services, with more than 400 properties under management. The Company’s award-winning Wyndham Rewards loyalty program offers over 79 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally.