Wyndham sees RevPAR declines in Q2

PARSIPPANY, New Jersey — Wyndham Hotels & Resorts said its systemwide rooms grew 4% year-over-year but global RevPAR declined 3% YOY, including a 4% decline in the U.S., as part of its second-quarter earnings.

The company also said its development pipeline grew 1% sequentially and 5% YOY to a record 255,000 rooms.

Wyndham said the unfavorable Q2 RevPAR results included approximately 150 basis points of unfavorable impacts from the timing of Easter and the 2024 solar eclipse. Excluding those impacts, U.S. RevPAR would have declined approximately 2.3% YOY.

Internationally, RevPAR results were driven by continued pricing power and offset by a decline in occupancy. Wyndham saw strong performance in EMEA (+7%), Latin America (+18%) and Canada (+7%) while China decreased 8% YOY with a decline in occupancy and pricing pressure.

“We delivered another solid quarter growing our global system by 4%, expanding our development pipeline by 5%, increasing our ancillary revenues by 19%, and continuing to execute our strategy focused on higher FeePAR segments and markets, which is driving growth in both domestic and international royalty rates,” Geoff Ballotti, president and CEO, said in a news release. “Amid a softer domestic RevPAR environment, we grew comparable adjusted EBITDA by 5% and comparable adjusted EPS by 11%... With consistent development, royalty rate, and ancillary fee growth, we remain very confident in our ability to create long-term value.”

As part of a recent operational review, Wyndham said it identified violations of its Super 8 master license agreement in China and issued a notice of default to the master licensee. The company stated that starting this quarter, it has revised its reporting methodology to exclude the impact of all rooms (approximately 67,300 rooms through Q1) due to “the operational challenges of obtaining accurate information from this master licensee and the uncertain outcome of the compliance process.”

The company said its financial results will continue to reflect fees due from the Super 8 master licensee in China, which contributed less than $3 million to the company’s full-year 2024 consolidated adjusted EBITDA.

Through Q2, the company’s pipeline consisted of approximately 2,150 hotels and 255,000 rooms, reflecting 6% pipeline growth in the U.S. and 4% internationally. Approximately 70% of the pipeline is in the midscale and above segments, which grew 5% YOY. Approximately 18% of its pipeline is in extended-stay, while 58% is international. In addition, approximately 76% of the pipeline new construction has just over a third of those projects already broken ground.

Wyndham also adjusted its full-year 2025 outlook, notably increasing year-over-year room growth from 3.6-4.6% to 4-4.6%. RevPAR (-2%-1%), fee-related and other revenues ($1.45-1.49 billion), adjusted EBITDA ($730-745 million) and adjusted net income ($358-372 million) were unchanged.

Other Q2 results

• Wyndham awarded 229 development contracts globally, an increase of 40% YOY
• Ancillary revenues increased 19% YOY
• Diluted earnings per share increased 6% YOY to $1.13; adjusted diluted EPS grew 18% to $1.33, or 11% on a comparable basis
• Net income increased 1% YOY to $87 million; adjusted net income increased 13% to $103 million, or 7% on a comparable basis
• Adjusted EBITDA increased 10% YOY to $195 million, or 5% on a comparable basis
• Returned $109 million to shareholders through $77 million of share repurchases and quarterly cash dividends of $0.41 per share
• The company generated $70 million of net cash provided by operating activities and $88 million of adjusted free cash flow and ended the quarter with a cash balance of $50 million and approximately $580 million in total liquidity
• During Q2, Wyndham repurchased approximately 923,000 shares of its common stock for $77 million

What the analysts said

Analyst Michael Bellisario of R.W. Baird said the overall update for the company was less bad than feared and the earnings were a beat on better other revenues.

“We viewed the earnings setup as a likely ‘less bad’ update, and that is exactly what Wyndham printed,” he said. “While RevPAR growth contracted more than expected, 2Q25 earnings upside was meaningful versus Baird/Street expectations and came from higher other revenues (i.e., credit card fees); full-year earnings guidance was unchanged as well.”

Analyst Patrick Scholes of Truist Securities said while the company’s raise on rooms growth is not a huge it is still “in the right direction.”

“While the actual quality of the earnings beat was not amazing, still growing adjusted EPS 11% year-over-year on -3% RevPAR growth was impressive,” he said. “We see the vast majority of the beat from relatively lower quality items such as market, reservation and loyalty plus other revenues as the more important line item of royalties and franchise fees came-in in-line with consensus expectations.”