Wyndham Hotels & Resorts in the third quarter broke records for quarterly revenue per available room and pipeline growth, but occupancy lagged in recovery, the company announced Wednesday.
The company saw its “highest U.S. RevPAR ever recorded for [Wyndham] brands,” in the third quarter, Wyndham president and CEO Geoffrey Ballotti said Wednesday during an earnings call.
Wyndham’s global occupancy in the third quarter reached 91 percent of third-quarter 2019 levels. “Occupancy, however, still has room to recover across the globe” CFO Michele Allen said during the earnings call. Still, when it comes to business travel, “our weekday occupancy was highest on record for month of September,” she said.
Wyndham’s global third-quarter RevPAR (at) increased 12 percent year over year in constant currency to $49.17. International RevPAR increased 46 percent to $34.79, and U.S. RevPAR grew 2 percent to $59.15.
The company’s Q3 global RevPAR was 111 percent of Q3 2019, the company reported. U.S. RevPAR was 110 percent of 2019, with international 117 percent, driven “primarily by stronger pricing power.”
Wyndham’s companywide third-quarter average daily rate was 122 percent of Q3 2019 levels, according to the company, with U.S. ADR at 110 percent and other regions at 140 percent.
Pipeline Growth
Wyndham saw significant growth in its development pipeline—up by 10 percent this quarter, of the highest the company has seen—and surpassing the company’s “full-year development goal for our new extended-stay brand and completed the acquisition of our 23rd brand, Vienna House” according to Ballotti.
The $44 million acquisition of German-based hotel brand Vienna House was a topic of conversation during the earnings call, with representatives stating its portfolio is expected to expand over next few years and “this is the kind of business we’re looking to target,” Allen said.
As of Sept. 30, Wyndham’s “global development pipeline consisted of over 1,600 hotels and over 212,000 rooms, of which approximately 76 percent is in the midscale and above segments—61 percent in the U.S.” according to the company. The pipeline grew 10 percent year over year: 24 percent in the U.S. and 2 percent elsewhere, according to the company.
Of note, Wyndham’s pipeline includes “120 new contracts” for its extended-stay sector.
Q3 Financial Performance
Wyndham’s total third-quarter revenue was $407 million, down from $463 million the year prior. Third-quarter net income was $101 million, compared with $103 million one year prior. The slight year-over-year decline was linked to the departure of some Wyndham “select-service management business and owned hotels” according to the company.
The company increased its projections for full-year 2022 RevPAR to a 14 percent to 16 percent increase from 2021 levels. Previously, it had forecast a 12 percent to 16 percent increase.
[email protected] (Angelique Platas)
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