Wyndham Hotels & Resorts Inc Q3 2024 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Joe Greff - JPMorgan - Analyst : Good morning, everybody. I just wanted to ask a question about on how you're thinking about net rooms growth for next year. How confident are you that next year's room growth rate could exceed what you end up doing this year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 12:30PM, WH.N - Q3 2024 Wyndham Hotels & Resorts Inc Earnings Call And then when you think about the composition from a brand and geography perspective, obviously ECHO would be stronger next year, I would think than this year. How is next net rooms growth composition different than what we've seen the last couple of years?

Question: Joe Greff - JPMorgan - Analyst : Great. Thank you, Geoff. And then Michelle, on your comment about the most of the US RevPAR growth being up 3%, which will take its many cities to 60 basis points on versus what the Smith Travel data would suggest, which is great on and noting that the comparisons get easier from here. What specifically is that is on the US economy and mid-scale RevPAR performance in the fourth quarter?

Question: Joe Greff - JPMorgan - Analyst : Thank you.

Question: Stephen Grambling - Morgan Stanley - Analyst : Thank you. So on slide 6, of the deck you have the 2026 walk on EBITDA. You mentioned competence in the 3% to 5% net room growth. Sounds like RevPAR building back about 2% to 3% range. But would love to get a scorecard of where you feel you're running ahead where you may be behind on this trend line. It's for some of the other buckets that there's any other factors to consider for 2025. Just slight impact from that march to that 2026 number? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 12:30PM, WH.N - Q3 2024 Wyndham Hotels & Resorts Inc Earnings Call

Question: Stephen Grambling - Morgan Stanley - Analyst : Awesome. And then maybe one unrelated follow-up. Are there any investments needed for project ECHO to ramp from here? Or was there a bit of front-loading things like the development team and our sales team for the demand drivers of that segment?

Question: Stephen Grambling - Morgan Stanley - Analyst : Perfect. Thank you.

Question: Michael Bellisario - Robert W. Baird &Co., Inc - Analyst : Thanks. Good morning, everyone.

Question: Michael Bellisario - Robert W. Baird &Co., Inc - Analyst : Last night, it was Maleficent for me. So a couple more days set aside. Two unrelated questions there for you on developments. Just first on the 10 ECHO deals that you signed. Are those deals with franchisees that are new to Wyndham, new to ECHO, or they just more deals that your original developers are doing? They're trying to understand the composition of where the signings are now.

Question: Michael Bellisario - Robert W. Baird &Co., Inc - Analyst : That sounds like it's broadening that's going to hear. And then just on a related note than you've historically talked about infrastructure spending, you mentioned oil and gas a couple of times the last few quarters. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 12:30PM, WH.N - Q3 2024 Wyndham Hotels & Resorts Inc Earnings Call Where data centers fit into all that and as all the AI spending and build there is incremental to what you've outlined previously and how might that had RevPAR and unit growth over the intermediate term? Thanks.

Question: Michael Bellisario - Robert W. Baird &Co., Inc - Analyst : Thank you.

Question: David Katz - Jefferies - Analyst : Good morning, everyone. Thanks for the detail and for taking my question. Firstly, I just wanted to go a little farther. I know, Michele, you talked about some of the comp benefits that worked your way in 4Q. One of your peers talked yesterday about leisure for a '25 to flood or maybe a little down. I know that's an important part was not all leisure is created equal. If you could just talk about what you're kind of leisure expectation is broadly and how that relates to your system, would be a good place to start.

Question: David Katz - Jefferies - Analyst : Thank you for that. And as my follow-up, I wanted to touch on the ancillary fees. Should we be, I know that we've seen across the industry, those fees are even for those that may be just a little more mature with them than you are, they are outgrowing the RevPAR-driven fees. My take is that in your case, they're at a much earlier stage of those. And so there's that the ultimate growth and we think about terminal valuing those long-term valuing those, you should be growing at a much higher rate than what kind of the core RevPAR fees would grow out. Is that a fair or contacts. And any color around it would help. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 12:30PM, WH.N - Q3 2024 Wyndham Hotels & Resorts Inc Earnings Call

Question: David Katz - Jefferies - Analyst : Okay, We can leave it there. Thanks.

Question: Ian Zaffino - Oppenheimer &Co.Inc - Analyst : Great. Thank you very much. Just wanted to maybe drill down on the market share gains and congratulations on that. Maybe talk about which of the states those were maybe which brands kind of saw the best traction. And also, is that just a function of the location being around infrastructure projects? Are you doing anything different there? And maybe also versus limit another one as really just topic is, what sort of the sustainability of this do you think the numbers we've seen less than half of the IHRA spend has been dispersed. So kind of any comments or color on the bone should provide there? Thanks.

Question: Ian Zaffino - Oppenheimer &Co.Inc - Analyst : Okay, great. And then just a follow-up to that. How do you think about the mix between economy, midscale, ECHO Suites, et cetera? You just given that a lot of these kind of new drugs that come new drivers or recent drivers have popped up? Is it kind of make you rethink maybe that there's other sources of upside here? So maybe any kind of comments on that. Thanks.

Question: Ian Zaffino - Oppenheimer &Co.Inc - Analyst : Okay, great. Thank you very much.

Question: Patrick Scholes - Truist Securities - Analyst : Hey, good morning, everyone. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 12:30PM, WH.N - Q3 2024 Wyndham Hotels & Resorts Inc Earnings Call

Question: Patrick Scholes - Truist Securities - Analyst : Geoff, Michele, can you give an update on continued progress with the retention rates. You didn't close to, I believe your target of 96% and is there further opportunity beyond that? And then within that retention rate? No, can you give us a breakout of, what that looks like US versus international? Thank you.

Question: Patrick Scholes - Truist Securities - Analyst : I guess just a bit of a follow-up. When we do think about blended 96% roughly retention rate, how does that percentage break out US versus international, if you can share that?

Question: Patrick Scholes - Truist Securities - Analyst : I'm sorry. Not a guide, but where you're currently at now?

Question: Patrick Scholes - Truist Securities - Analyst : Okay. Thank you.

Question: Brandt Montour - Barclays - Analyst : Thanks. Good morning, everybody. I wanted to double-click on the hurricane impact and obviously no one's rooting for this release effort to drag on or from become more, agreed is from here. But just objectively speaking, if you could compare this hurricane season and the devastation with the aftermath of the 2017 hurricanes Harvey and Irma. And the reason I ask is because those relief efforts trailed into all the way into the second quarter of 2018, and you had a pretty large lift related to that in the order of 200 to 300 basis points in the US. So maybe you could just help us sort of understand compare and contrast the two situations.

Question: Brandt Montour - Barclays - Analyst : Okay. That's super helpful. Thanks, Michele. And then a follow-up question. You know, yesterday from Hilton called out a greater impact in the election in November than they had originally expected. I assume that they would presumably they were talking about group, and group doesn't really doesn't affect you guys. But we have heard other smaller operators and different industries call out, swing states specifically, election distraction, sort of keeping people at home and making them to breast with all the commercials and whatnot. I was curious, Geoff or Michele, if there's and I know you don't have the visibility for, well now we're getting to the point where you possibly do have the visibility, any sort of a distraction on sort of leisure travel or anything you think might be keeping people at home that you're sort of baking in?

Question: Brandt Montour - Barclays - Analyst : Perfect. Thanks, everyone.

Question: Lizzie Dove - Goldman Sachs - Analyst : Hi there. Thanks for taking my question. Sounds like you're seeing some really nice green shoots and the economy segment in the fourth quarter. How is the team has been a laggard? Curious to what extent you have seen any impact from some of the newer bonds in the premium economy segment taking any share? You have something like a spot, for example, or especially with the improvements you've seen, do you see those challenges in the economy over the last 18 months is more kind of cyclical it a function of comps? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 12:30PM, WH.N - Q3 2024 Wyndham Hotels & Resorts Inc Earnings Call

Question: Lizzie Dove - Goldman Sachs - Analyst : That's helpful. Thank you. And then just one follow up on China, which I guess is a decent chunk of your international rooms. We have obviously got the stimulus announcement last month or so. How does that change your outlook at all? Is that something you think can have a meaningful impact for China in 2025?

Question: Lizzie Dove - Goldman Sachs - Analyst : Thank you.

Question: Steve Pizzella - Deutsche Bank - Analyst : Good morning, everyone. On development, I believe slide 15 noted net rooms growth pacing ahead of historical performance. Is that just to pull forward of new rules or should we expect to see historical seasonal net room as in the 4Q this year?

Question: Steve Pizzella - Deutsche Bank - Analyst : Okay. Thank you. Then, margins continue to show solid year-over-year growth ex the marketing spend. What is driving the expansion from a cost control perspective? Is there any margin benefits embedded in 2026 algorithm? And how should we think about margins going into next year?

Question: Steve Pizzella - Deutsche Bank - Analyst : Okay, thank you.

Question: Meredith Jensen - HSBC - Analyst : Good morning. Thank you. Quickly on the technology front. I know you spoke quite a bit about your advantage being cloud base versus competitors who may have to rebuild that tech stack to get there. I was wondering if you have kind of any internal targets on the merchandising front like. How many bookings might add on some of those on sort of build a room options? I do think we got one of the competitors were saying and currently they have low teens percentage of bookings that have some of those additions. And so I was wondering if you have any sort of metrics which we could follow on that?

Question: Meredith Jensen - HSBC - Analyst : That's awesome. Thank you. One very quick and addition on the ever-important ancillary fees at just to dig in a little bit more. You mentioned that the business card had this incredible 70% jump year over year in spend. Is that sort of and we'd be able to provide some of those trends going forward and some of the breakdown of ancillary growth that we can sort of look to going forward?

Question: Meredith Jensen - HSBC - Analyst : Awesome. Thank you so much.