PARSIPPANY, New Jersey—Wyndham Resorts & Resorts introduced outcomes for the three months and yr ended Dec. 31, 2023. Highlights embody:
- System-wide rooms grew organically by 3.5 p.c year-over-year, a report excessive.
- Opened a report 66,000 natural rooms, representing a year-over-year enhance of three p.c.
- World retention charge—together with all terminations—improved one other 30 foundation factors to a report 95.6 p.c.
- Improvement pipeline grew 1 p.c sequentially and by 10 p.c year-over-year to a report 240,000 rooms.
- Grew ECHO Suites pipeline practically 60 p.c year-over-year with 98 new contract signings.
- Signed 766 contracts for legacy manufacturers, a rise of 8 p.c year-over-year.
- Fourth quarter diluted earnings per share of $0.60 and web earnings of $50 million; adjusted diluted EPS of $0.91, adjusted web earnings of $75 million and adjusted EBITDA of $154 million.
- Full-year 2023 diluted EPS of $3.41 and web earnings of $289 million; adjusted diluted EPS of $4.01, adjusted web earnings of $341 million, and adjusted EBITDA of $659 million.
- Internet money supplied by working actions of $376 million and free money movement of $339 million for the complete yr.
- Returned $515 million to shareholders for the complete yr by way of $397 million of share repurchases and quarterly money dividends of $0.35 per share.
- Board of Administrators not too long ago licensed a 9 p.c enhance within the quarterly money dividend to $0.38 per share starting with the dividend anticipated to be declared within the first quarter of 2024.
“We’re tremendously proud to report fourth-quarter outcomes that reveal the continued success of our world technique and our accelerating momentum,” stated Geoff Ballotti, president and CEO. “Regardless of the distraction, uncertainty, and misperceptions attributable to Alternative and their slanted and fixed communications to our franchisee base, room openings accelerated and our world growth pipeline grew by 10 p.c to an all-time excessive of 240,000 rooms. Our workforce opened 27 p.c extra rooms than final yr within the fourth quarter and we welcomed 500 new accommodations to our system in 2023. This, when mixed with our bettering franchisee engagement and report retention charge, drove the most effective natural system progress we’ve ever achieved.
We grew comparable adjusted EBITDA by 6 p.c and returned over half a billion {dollars} to our shareholders by way of dividends and share repurchases. We’re assured within the continued effectiveness of our progress technique and see distinctive value-creation alternatives within the years forward.”
System Dimension and Improvement
The corporate’s world system grew 3.5 p.c, marking 12 consecutive quarters of natural progress and reflecting 1 p.c progress in america and seven p.c internationally. As anticipated, these will increase included sturdy progress in each the upper RevPAR midscale and above segments in america and the direct franchising enterprise in China, which grew 3 p.c and 13 p.c, respectively. The corporate additionally elevated its retention charge, which incorporates all terminations, by one other 30 foundation factors year-over-year, ending the yr at a report 95.6 p.c.
On De. 31, 2023, the corporate’s world growth pipeline consisted of over 1,950 accommodations and roughly 240,000 rooms, representing one other record-high stage and a ten p.c year-over-year enhance. Highlights embody:
- 14th consecutive quarter of sequential pipeline progress
- 8 p.c progress in america and 11 p.c internationally
- Roughly 70 p.c of the pipeline is within the midscale and above segments, which grew 6 p.c year-over-year
- Roughly 58 p.c of the pipeline is worldwide
- Roughly 79 p.c of the pipeline is new development, of which roughly 34 p.c has damaged floor
- The corporate awarded 766 new contracts for its legacy manufacturers in full-year 2023, a rise of 8 p.c in comparison with full-year 2022. Moreover, the corporate awarded 98 further new contracts for its ECHO Suites model, and, as of Dec. 31, 2023, the corporate had awarded 268 contracts, or over 33,000 rooms, for the model.
RevPAR
Fourth quarter world RevPAR declined 1 p.c in fixed foreign money in comparison with 2022 reflecting a 4 p.c decline in america and progress of seven p.c internationally. For the complete yr, world RevPAR grew 5 p.c in fixed foreign money in comparison with 2022 reflecting a 1 p.c decline in america and progress of 21 p.c internationally.
The corporate had achieved report RevPAR in america through the previous yr on account of COVID-impacted journey patterns. Evaluating to 2019 to neutralize for COVID-impacted journey patterns, U.S. RevPAR grew 10 p.c in fourth quarter—a 120 foundation level acceleration from third quarter 2023 progress—and 9 p.c for the complete yr. Internationally, year-over-year RevPAR progress for each the fourth quarter and the complete yr was primarily pushed by greater occupancy ranges. In comparison with 2019, worldwide RevPAR grew within the fourth quarter and full yr by 44 p.c and 36 p.c, respectively, on a constant-currency foundation.
Working Outcomes
Fourth Quarter
- Price-related and different revenues have been $320 million in comparison with $310 million in fourth quarter 2022 reflecting world web room progress in addition to greater license and ancillary charges.
- The corporate generated web earnings of $50 million in comparison with $56 million in fourth quarter 2022. The lower was reflective of a better efficient tax charge, greater curiosity expense, international foreign money influence from hyperinflation in Argentina, and transaction-related bills ensuing from the provide by Alternative Resorts, partially offset by greater adjusted EBITDA.
- Adjusted EBITDA grew 22 p.c to $154 million from $126 million. This enhance included a $21 million influence from advertising and marketing fund variability, excluding which adjusted EBITDA grew 6 p.c primarily reflecting greater fee-related and different revenues.
- Diluted earnings per share have been $0.60 in comparison with $0.63 in fourth quarter 2022. This lower displays decrease web earnings, partially offset by the advantage of a decrease share rely on account of share repurchase exercise.
- Adjusted diluted EPS grew 26 p.c to $0.91 per share from $0.72 per share. This enhance included $0.19 per share associated to the advertising and marketing fund variability (after estimated taxes), excluding which adjusted diluted EPS was unchanged year-over-year as adjusted EBITDA progress and the profit from share repurchase exercise was offset by greater curiosity expense.
- Throughout fourth quarter 2023, the corporate’s advertising and marketing fund revenues exceeded bills by $9 million; whereas in fourth quarter 2022, the corporate’s advertising and marketing fund bills exceeded revenues by $12 million, leading to $21 million of promoting fund variability.
Full 12 months
- Price-related and different revenues have been $1,384 million in comparison with $1,354 million in full-year 2022, which included $50 million from the corporate’s choose service administration enterprise and owned accommodations, which have been exited in 2022. On a comparable foundation, fee-related and different revenues elevated 6 p.c year-over-year primarily reflecting world RevPAR and web room progress, greater license and ancillary charges, and pass-through revenues related to the corporate’s world franchisee convention in September, which was held for the primary time since 2019.
- The corporate generated a web earnings of $289 million in comparison with $355 million in full-year 2022, which included $37 million from the select-service managed and owned accommodations. The lower was reflective of a better efficient tax charge, greater curiosity expense, international foreign money influence from hyperinflation in Argentina, and transaction-related bills ensuing from the unsolicited provide by Alternative Resorts, partially offset by greater adjusted EBITDA.
- Adjusted EBITDA was $659 million in comparison with $650 million in full-year 2022, which included $18 million from the select-service managed and owned accommodations. The expansion in adjusted EBITDA was additional impacted by $11 million of unfavorable advertising and marketing fund variability. On a comparable foundation, adjusted EBITDA elevated 6 p.c reflecting greater fee-related and different revenues.
- Diluted earnings per share have been $3.41 in comparison with $3.91 in full-year 2022, which included $0.40 per share from the select-service managed and owned accommodations. This lower displays the decrease web earnings, partially offset by the advantage of a decrease share rely on account of share repurchase exercise.
- Adjusted diluted EPS was $4.01 per share in comparison with $3.96 per share in full-year 2022, which included $0.15 per share from the select-service managed and owned accommodations. This progress in adjusted diluted EPS was additional impacted by $0.09 per share (after estimated taxes) of unfavorable advertising and marketing fund variability. On a comparable foundation, adjusted diluted EPS elevated 8% year-over-year reflecting the adjusted EBITDA progress and the profit from share repurchase exercise, partially offset by greater curiosity expense.
- Throughout full-year 2023, the corporate’s advertising and marketing fund revenues exceeded bills by $9 million; whereas in 2022, the corporate’s advertising and marketing fund revenues exceeded bills by $20 million, leading to $11 million of promoting fund variability.
Stability Sheet and Liquidity
The corporate generated $376 million of web money supplied by working actions and a free money movement of $339 million within the full yr 2023. The corporate ended the quarter with a money stability of $66 million and roughly $650 million in complete liquidity.
The corporate’s web debt leverage ratio was 3.2 instances on Dec. 31, 2023, throughout the decrease half of the corporate’s 3 to 4 instances said goal vary.
Share Repurchases and Dividends
Throughout the fourth quarter, the corporate repurchased roughly 1.7 million shares of its widespread inventory for $127 million. For the full-year 2023, the corporate repurchased roughly 5.5 million shares of its widespread inventory for $397 million, at a mean worth of $72.25, 8 p.c decrease than buying and selling ranges as of Feb. 13, 2024.
The corporate paid widespread inventory dividends of $28 million, or $0.35 per share, within the fourth quarter of 2023 for a complete of $118 million, or $1.40 per share, for the full-year 2023.
For the complete yr 2023, the corporate returned $515 million to shareholders by way of share repurchases and quarterly money dividends.
The corporate’s Board of Administrators licensed a 9 p.c enhance within the quarterly money dividend to $0.38 per share, starting with the dividend anticipated to be declared within the first quarter of 2024.
Full-12 months 2024 Outlook
NOTE: Outlook for adjusted EBITDA, adjusted web earnings, adjusted diluted EPS and free money movement conversion charge excludes all bills and money outlays related to the provide by Alternative Resorts, that are presently anticipated to approximate $75 million earlier than taxes.
12 months-over-year progress charges for adjusted EBITDA, adjusted web earnings and adjusted diluted EPS will not be comparable on account of full-year 2023 advertising and marketing fund revenues exceeding bills by $9 million, which considerably accomplished the restoration of the $49 million assist the corporate supplied to its house owners throughout COVID. The corporate expects advertising and marketing revenues to equal bills throughout full-year 2024 although the seasonality of spend will have an effect on the quarterly comparisons all year long.
The corporate is offering sure monetary metrics solely on a non-GAAP foundation as a result of, with out unreasonable efforts, it’s unable to foretell with affordable certainty the prevalence or quantity of the entire changes or different potential changes which will come up sooner or later through the forward-looking interval, which could be depending on future occasions that might not be reliably predicted. Primarily based on previous reported outcomes, the place a number of of this stuff have utilized, such excluded gadgets may very well be materials, individually, or within the combination, to the reported outcomes.
