Wyndham Hotels & Resorts Q1 Earnings Call Highlights

Key Points

• RevPAR rebounded sharply in Q1—global RevPAR improved ~450 basis points sequentially and U.S. RevPAR (ex‑hurricane) was essentially flat—leading management to raise its 2026 global RevPAR outlook to a range of +1% to -1%.
• Record development pipeline: Wyndham extended its pipeline to more than 259,000 rooms across 2,200+ hotels, drove 4% net room growth (9% internationally), and is shifting toward higher‑tier brands and direct franchising in China to capture higher fees.
• Ancillary and capital momentum: Ancillary revenue grew 21% driven by the renewed co‑branded credit card and Wyndham Rewards contribution hit a domestic record 54% as membership rose 10%, while the company issued $650 million of senior notes, returned $85 million to shareholders, held ~$1.1 billion of liquidity and kept adjusted EBITDA guidance largely intact.

Wyndham Hotels & Resorts NYSE: WH reported what executives described as a strong start to 2026, citing a faster-than-expected recovery in U.S. select-service demand, continued development momentum, and sharp growth in ancillary revenues during the company’s first-quarter earnings call.

RevPAR trends improved through the quarter

President and CEO Geoff Ballotti said global RevPAR improved 450 basis points sequentially from the fourth quarter. In the U.S., the company’s RevPAR performance improved meaningfully as the quarter progressed. Ballotti noted that domestic RevPAR, excluding the prior year’s hurricane impact, improved more than 600 basis points sequentially to “essentially flat,” outperforming the company’s expectation of down 2% to down 3%.

Ballotti attributed the sequential improvement to demand picking up throughout the quarter, with January down 4% in RevPAR before improving to +1% growth in both February and March. He added that April month-to-date trends were consistent with February and March.

Ballotti highlighted improvement across key states and segments. Texas, California, and Florida—together representing roughly one-quarter of Wyndham’s U.S. room count—improved by 800 basis points sequentially, from down 11% in the fourth quarter to down 3% in the first quarter, with Texas alone improving 700 basis points to +2% year-over-year. He also pointed to strength in Midwest and industrial states, as well as improvement in oil and gas markets, which he said represent about 12% of Wyndham’s room count.

On leisure indicators, Ballotti said cancellation rates were improving, booking lead times were “really solid,” and lengths of stay were increasing. He also referenced external research on tax refunds and travel spending and said Wyndham’s internal research showed higher intent to travel among its middle-income customer base versus the same time last year.

International performance mixed, with Canada a bright spot

Internationally, Ballotti said RevPAR was down 1% year-over-year in constant currency, consistent with the fourth quarter. He called out Canada as a key positive, with RevPAR up 8% on pricing power and improved demand.

In EMEA, RevPAR grew 1%, supported by “strong performance in Turkey, Greece, and Spain,” offset by softness in the Middle East, which declined to down 5% in the first quarter after being up 18% in the fourth quarter, according to Ballotti. In Latin America, Mexico weighed on results, with RevPAR falling due to lower U.S. inbound travel that created pricing pressure. Ballotti said Latin America RevPAR was down 4% year-over-year, but excluding Mexico the region increased 11%, driven by Argentina, Brazil, and the Caribbean.

Asia Pacific RevPAR improved nearly 700 basis points sequentially to down 1%. Ballotti said China RevPAR improved 540 basis points sequentially to down 5%, driven by occupancy improvement, though he noted occupancy remained only 88% of pre-COVID levels. In Q&A, Ballotti said China occupancy improved 12 points and was up 8% year-over-year, while ADR remained pressured amid deflationary conditions. Both Ballotti and CFO Amit Sripathi said they expected China to improve to flat-to-positive RevPAR growth for the full year.

Development pipeline hits record and rooms grow internationally

Ballotti said Wyndham posted 4% net room growth in the quarter and extended its development pipeline growth streak to a 23rd consecutive quarter, reaching a record of more than 259,000 rooms across more than 2,200 hotels. He said the company’s pipeline carries a 30% FeePAR premium and positioned the strategy as a structural upgrade toward higher-tier brands.

Domestically, Ballotti said net rooms were flat, reflecting affiliate room exits tied to the sale of Vacasa Vacation Rentals to Casago and the closure of 17 vacation resorts associated with Travel + Leisure’s Blue Thread partner’s previously announced resort optimization initiative. He pointed to openings and conversions across brands including Dolce by Wyndham and Trademark Collection by Wyndham, and said new ECHO Suites by Wyndham Hotels openings continued to support new construction activity.

International net rooms increased 9%, led by growth across EMEA (+7%), Latin America and the Caribbean (+12%), Southeast Asia and the Pacific Rim (+11%), and continued double-digit growth in China. Ballotti also emphasized the company’s progress in China shifting toward direct franchising, which he said carries materially higher royalty rates than legacy arrangements.

Ancillary revenue grew 21% as loyalty contribution rose

Wyndham delivered 21% growth in ancillary revenues in the first quarter. Sripathi said the growth was “primarily driven by the credit card program,” reflecting a full-quarter benefit from the renewed long-term co-branded credit card agreement that was renewed in March of last year. He said the company’s full-year outlook for ancillary growth remained in the low-to-mid teens.

Ballotti also emphasized loyalty momentum, stating that Wyndham Rewards occupancy contribution rose 120 basis points to a record 54% domestically. He said global membership enrollments grew 10% year-over-year, and the collective length of stay for Wyndham’s 124 million members increased 6%.

Financial results, capital returns, and updated outlook

Sripathi reported first-quarter net revenues of $327 million and adjusted EBITDA of $156 million. Net revenues increased 3% year-over-year, which he said reflected ancillary growth and 4% system growth, partially offset by lower other franchise fees and a deferral of fees from Revo Hospitality Group. On a comparable basis that neutralizes marketing fund timing impacts, adjusted EBITDA declined 1%, which Sripathi said primarily reflected the absence of one-time cost reductions.

Adjusted diluted EPS was $0.96, down 3% on a comparable basis, driven by slightly lower comparable adjusted EBITDA, a higher effective tax rate, and increased interest expense, partially offset by share repurchases, according to Sripathi.

Wyndham generated $64 million of free cash flow and returned $85 million to shareholders, including $51 million of share repurchases and $34 million in dividends. Sripathi said the company issued $650 million of senior unsecured notes at 5.625% in February and used the proceeds to repay outstanding revolver borrowings and its term loan A balance. He said the company ended the quarter with about $1.1 billion in total liquidity and net leverage of 3.5x, “at the midpoint of our target range.”

For 2026, Sripathi reaffirmed full-year global net room growth expectations of 4% to 4.5%, excluding any potential termination impact tied to Revo’s ongoing insolvency. Given first-quarter U.S. RevPAR outperformance and continued +1% growth in the U.S. over the past three months, he said the company raised its global RevPAR outlook to a range of up 1% to down 1%.

The company also updated guidance to reflect actions related to Revo. Sripathi said Wyndham foreclosed on and took ownership of two European properties previously owned by Revo as part of efforts to “pursue all available remedies” and improve recoverability. He said the properties are expected to generate about $10 million of net revenues in full-year 2026, with “a limited impact to earnings” as Wyndham stabilizes operations and evaluates strategic options.

Wyndham now expects net revenues of $1.47 billion to $1.5 billion, while maintaining its adjusted EBITDA outlook of $730 million to $745 million. Sripathi said the adjusted net income range was updated to $351 million to $365 million to reflect higher interest expense following the debt issuance, while the adjusted diluted EPS range remained unchanged at $4.62 to $4.80 due to the offsetting impact of share repurchases.

About Wyndham Hotels & Resorts NYSE: WH

Wyndham Hotels & Resorts, Inc NYSE: WH is a leading global hospitality company specializing in hotel franchising and management. Established in 2018 through the spin-off of Wyndham Hotel Group from Wyndham Worldwide, the company focuses on the development, marketing and distribution of hotel brands designed to meet the needs of business and leisure travelers. Its core business model centers on franchising agreements, enabling third-party hotel owners to operate under the Wyndham portfolio while accessing the company's centralized services and support.

The company's brand portfolio spans economy, midscale and upper-midscale segments, featuring well-known names such as Wyndham, Ramada, Days Inn, Super 8, Microtel Inn & Suites, and La Quinta by Wyndham.

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