Wyndham Hotels & Resorts Inc Q4 2024 Earnings Call Transcript

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

Question: Brandt Montour - Barclays Capital Inc. - Analyst : Good morning, everybody. Thanks for taking my question. I wanted to start off with a question about development. The net unit growth guidance of 4.1% at the midpoint is a sort of 50 bp lift year-over-year acceleration. Can you help us break that up between a lift in new construction versus a lift in conversions versus the retention improvement? And then if you could also help us understand if it's sort of [pro-RAD] is similar in the US versus international. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 13, 2025 / 1:30PM, WH.N - Q4 2024 Wyndham Hotels & Resorts Inc Earnings Call

Question: Michael Bellisario - Robert W. Baird & Co Inc - Analyst : Thanks. Good morning, everyone. Just want to stick on the developments front but also focus on key money -- two questions here. One, are you seeing higher returns key money investment today, or has that been relatively stable recently? And then second, just in terms of the dollars that you're investing, understand that it's flat year over year. But broadly speaking, are you doing more dollars in the same amount of deals, or more deals with plus or minus the same amount of dollars invested? Thanks.

Question: Lizzie Dove - Goldman Sachs & Company, Inc. - Analyst : Hi there, thanks for taking my question. You mentioned an interesting point about the pipeline representing 30% and 40% FeePAR premium to your current US and international system, respectively. Could you maybe talk a little bit more about to what extent is that factoring into this year's guidance or how soon can we start to see that flow through to your results over the next few years? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 13, 2025 / 1:30PM, WH.N - Q4 2024 Wyndham Hotels & Resorts Inc Earnings Call

Question: Stephen Grambling - Morgan Stanley & Co. LLC - Analyst : Thanks. On the non-room fee side, you just talked about the credit card fee stream getting a step up. How should investors be thinking about that segment's growth longer term? And if I can sneak a kind of related question in there on the debit card program, what percentage of your bookings are typically on debit cards?

Question: David Katz - Jefferies LLC - Analyst : Good morning, everybody. My question's largely for Michelle. When we sort of look across the guidance for '25 and then in the context of the longer-term guide you gave through '26, it implies some acceleration from '25 into '26. It begs the question of whether you're being a bit conservative this year and leaving a little bit of headroom or you are predicting more of a back-end loaded kind of long-term guide. If you could help us with that, please.

Question: Patrick Scholes - Truist Securities - Analyst : Hi, good morning, Geoff and Michele. I may have missed this. Did you say that there were -- well, excuse me, will there be any hurricane impact into your RevPAR guidance for this year?

Question: Patrick Scholes - Truist Securities - Analyst : Well, when you say adjusted out, is that from the 4Q that you're adjusting out for the upcoming 4Q or there's some ongoing benefits at the moment? Can you just explain that a little bit more if I say -- what do you mean by adjusting out? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 13, 2025 / 1:30PM, WH.N - Q4 2024 Wyndham Hotels & Resorts Inc Earnings Call

Question: Steve Pizzella - Deutsche Bank Securities Inc. - Analyst : Hey, good morning everyone. Just wanted to stick with the 8.5% adjusted EBITDA CAGR to get to 2026. What type of RevPAR environment do you need to get there next year? And do you need to see any improvement to FX? And then just sticking with 2026 and following up on the credit card. I know some deals do have a step up in year two. So how should we think about 2026 ancillary fees?

Question: Steve Pizzella - Deutsche Bank Securities Inc. - Analyst : Okay, that makes sense. So should we think about the ancillary fees throughout the year ramping up as we progress in 2025? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 13, 2025 / 1:30PM, WH.N - Q4 2024 Wyndham Hotels & Resorts Inc Earnings Call

Question: Dany Asad - Bank of America - Analyst : Hi, good morning everybody. Geoff or Michele, just another development question for you. Can you maybe just give us a little bit more details on kind of your -- in your net rooms, that growth outlook, how do we think about China specifically? That's kind of what's embedded in there. And then as -- higher level, but as you've been pushing into all these higher fee part rooms in your development, does your natural retention of the overall system change? And where should we think about that going over the longer term?

Question: Dan Politzer - Wells Fargo Securities, LLC - Analyst : Hey, good morning everyone. Thanks for taking my question. The royalty rates stepped up nicely in the quarter. I think in the US, they were at 15 basis points year over year. How best to think about that as we kind of flow through into 2025 and even into 2026? I think you guys had a target out there of about 4.75%. So as we think about that -- getting that 8.5% EBITDA CAGR, how do you think about kind of that acceleration or uptake in your royalty rates in the next couple of years?

Question: Isaac Sellhausen - Oppenheimer & Co. Inc. - Analyst : Hey, good morning. This is Isaac Sellhausen on for Ian. Thanks for taking all the questions. I just had one on ECHO Suites, which looks to have grown to a nice portion of the pipeline. Are you able to provide any update on early performance of the brand, maybe how you're seeing ADR, RevPAR trends in the extended today compared to economy and mid-scale? Thanks.

Question: Meredith Jensen - HSBC Securities - Analyst : Hi. You just touched upon this a little bit, but I was hoping you might speak more about the booking window and length of stay, sort of as I see the evolution of leisure and infrastructure as well as the growth of the extended stay and how others are kind of moving over time versus recent past where Thursday and Sunday were big days. Thanks.

Question: Dan Wasiolek - Morningstar, Inc. - Analyst : Hi, excuse me. Good morning guys. Thanks for taking the questions. Just kind of maybe two longer-term, big picture questions. You're seeing a nice pickup in your infrastructure contribution. Any change to your long-term fee revenue guidance from this segment? I think, unless I missed it, you had talked about that in your marketing deck. And then maybe just a question on AI and how that might influence your direct and indirect distribution mix if you have any thoughts on that. Thank you.

Question: Alex Brignall - Redburn Atlantic - Analyst : Hi, thank you so much for taking the question. The pipeline that you -- hey, how are you doing? The pipeline evolution has obviously been incredibly strong, especially perhaps in context of some of the peers, much of their growth coming from kind of bolt-on deals. I wonder if you can talk about opportunities that you've seen. A lot of a lot of your growth has been organic and helped by an improving retention rate. I wonder if you could talk about any opportunities for deals that might come outside of your organic activities. And then let's pretend that it's related -- and definitely you can say in terms of your own relationships and opportunities that have risen as the sort of choice situation moves further and further in the rearview mirror. Thank you.