Wyndham Hotels & Resorts' first-quarter systemwide revenue per available room increased by 1 percent year over year, largely due to rate hikes outside of the United States, but executives cited a new corporate travel program and increasing levels of U.S. infrastructure spending as reasons for optimism regarding 2024 demand.
Wyndham's first-quarter U.S. RevPAR declined 5 percent year over year, while international RevPAR increased 14 percent, excluding currency effects, according to the company. U.S. occupancy and average daily rate each declined year over year. Still, on Wyndham's first earnings call since Choice Hotels International gave up its hostile quest for the company, executives projected increasing RevPAR for the balance of the year.
One reason for that, Wyndham president and CEO Geoff Ballotti said on the call, is Wyndham Business, a loyalty program for businesses the company introduced last week that allows corporate clients to accrue points for hotel stays in addition to points that individual travelers earn. Ballotti said the program drew immediate interest.
"Last week, we launched Wyndham Business to help manage companies' travel needs, providing discounts and allowing planners to instantly book without needing to RFP or contract at one of our franchised hotels," he said. "The pace of applications immediately doubled, and we think that will help lead that double-digit uptick that we're seeing in leads from those projects. We've seen a 20 percent increase in new accounts."
Wyndham in February announced it had enabled Groups360 instant group booking capabilities at more than 5,600 properties in the United States.
Additionally, Ballotti said the U.S. federal government in recent months has increased the disbursement to states of funding allocated in the 2021 infrastructure act, suggesting an increase in the infrastructure-related projects that are the primary driver of Wyndham's business travel demand.
"When you think about those big bridge and road and train projects and airport projects, the shovels haven't hit the ground," Ballotti said. "But since we've been investing in our capabilities, we have been able to track an 11 percent increase in infrastructure revenues for our franchisees."
Infrastructure-related travel bookings made up 22 percent of Wyndham's 2023 gross room revenues, according to a presentation for investors, with "logistics and other" adding another 5 percent and corporate transient accounting for 2 percent. Ballotti also said Wyndham is seeing an uptick in demand in states with significant oil and gas industry operations.
"We've done a lot from a technology standpoint to continue to make it easier to do business with us," he said "We've been investing heavily in our capabilities, and we've been increasing our sales team to sell Wyndham business. We've increased our sales team by 25 percent, and we'll continue to roll out more new technology like this that allows them to book without having to RFP."
Q1 Metrics, 2024 Outlook
Wyndham's first-quarter U.S. occupancy declined "440 basis points," about 4.4 percentage points, Its U.S. ADR declined 50 basis points, or about 0.5 percent.
The company again projected full-year 2024 systemwide RevPAR growth of 2 percent to 3 percent year over year.
Fourth-quarter net revenues were $305 million, down from $313 million one year before. Net income was $16 million, compared with $67 million in the first quarter of 2023.
As of March 31, Wyndham's pipeline included nearly 2,000 hotels and about 243,000 rooms, up about 8 percent year over year. Total room count on that date was 876,300, up about 4 percent. Ballotti noted the company's first-quarter openings in the midscale and higher tears increased 30 percent year over year, and pointed to the deal to bring the WaterWalk brand into its portfolio as evidence of its attention to the upscale market.
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