Systemwide third-quarter revenue per available room at Wyndham Hotels & Resorts properties declined 5 percent year over year, the company announced.
The RevPAR decline was more marked in some Southern and Western U.S. states, dropping 11 percent year over year in Texas, 7 percent in Florida and 6 percent in California.
Wyndham CEO Geoff Ballotti said on an earnings call said the results reflect "continued consumer caution in an uncertain economic environment, especially within the select-service segments here in the United States, where our guests are more price sensitive."
Ballotti said he sees "nothing structural that concerns us in any of the leading indicators that we look at daily" regarding the economy segment, noting booking lead times have increased 2 percent from 2024, cancellation rates have improved and average length of stay has remained consistent. That "would not be the case" if "we thought something structural was happening," he said.
Ballotti noted that U.S. occupancy across all tiers remains lower than pre-pandemic levels, but added that data from hotel analytics firm STR shows hotels in upper tiers have been more successful in raising rates, softening the impact on those companies' RevPAR.
"Is there anything structural that we're seeing out there? Aside from persistent inflation and consumer uncertainty and immigration in some of those states that we mentioned that aren't helping is that the upscale hotels are able to price more aggressively to inflation than the lower chain scales are, where the guest is obviously more price-sensitive," he said.
As for the infrastructure-related spending that makes up the substantial majority of Wyndham's business travel clientele, Ballotti acknowledged that the Trump administration's decision to temporarily halt some disbursements in Q1 and continued interruptions of spending has had an effect but said he remained hopeful.
"Obviously, there's a lot of headlines out there that allocated monies have potentially been frozen as the federal government looks to possibly reallocate among states, and we're seeing some projects being paused as project priorities are certainly shifting," he said, noting the repeal of electric vehicle incentives in Trump's spending bill and reallocation to other infrastructure projects.
"But we're optimistic," Ballotti said. "The infrastructure spending, again over 80 percent of which is not spent, is going to resume at some point. Infrastructure room nights contracted this year are up 2 times versus consumed, and they're pacing well ahead of same time last year."
He also noted the increase in infrastructure investment from private companies. Infrastructure-related travel bookings made up 22 percent of Wyndham's 2024 gross room revenue, according to a presentation for investors, with "logistics and other" adding another 6 percent and corporate transient accounting for 2 percent.
Wyndham Q3 Metrics
Wyndham's third-quarter systemwide RevPAR dropped to $50.05. U.S. RevPAR declined 5 percent year over year to $55.07.
Third-quarter net revenue declined 12 percent year over year to $382 million. Net income was $105 million, compared with $102 million one yar prior.
Wyndham lowered its projection for full-year 2025 RevPAR to a 2 percent to a 3 percent year over year decline, down from its previous projection of from a 2 percent decline from 2024 levels to a 1 percent increase.
Wyndham at the end of the third quarter had about 855,400 rooms in its system globally, up nearly 4 percent year over year, with total U.S. rooms up less than 1 percent to 500,600.
Wyndham's development pipeline at the end of Q3 included about 2,180 hotels and 257,000 rooms, the latter figure up 4 percent year over year.
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