Wyndham Hotels & Resorts, Inc.

Standby, your program is about to begin. If you need assistance on today's conference, please press star zero. Welcome to the Wyndham Hotels and Resorts fourth quarter and full year 2021 earnings conference call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star one on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing the pound key. Lastly, if you should require operator assistance, please press star zero. I would now like to turn the call over to Matt Capuzzi, Senior Vice President of Investor Relations.

Thank you, Operator. Good morning, and thank you for joining us. With me today are Jeff Belotti, our CEO, and Michelle Allen, our CFO. Before we get started, I want to remind you that our remarks today will contain forward-looking statements. These statements are subject to risk factors that may cause our actual results to differ materially from those expressed or implied. These risk factors are discussed in detail in our most recent annual report on Form 10-K, filed with the Securities and Exchange Commission, and any subsequent reports filed with the SEC. We'll also be referring to a number of non-GAAP measures. Corresponding GAAP measures and a reconciliation of non-GAAP measures to GAAP metrics are provided in our earnings release, which is available on our investor relations website at investor.windomhotels.com. We are providing certain measures discussing future impact on a non-GAAP basis only because without unreasonable efforts, we are unable to provide the comparable GAAP metrics. In addition, last evening, we posted an investor presentation containing supplemental information on our investor relations website. We may continue to provide supplemental information on our website in the future. Accordingly, we encourage investors to monitor our website in addition to our press releases, filings submitted with the SEC, and any public conference calls or webcasts. With that, I'll turn the call over to Jeff.

Thanks, Matt, and thanks, everyone, for joining us this morning. 2021 once again demonstrated the strength of our brands, the resiliency of the leisure traveler, and the benefits of the select service economy and mid-scale segments. Many of our franchisees reported the best year they've ever experienced since owning their hotel. Our team's significant progress and accomplishments throughout the year contributed to these outstanding results, positioning our owners and our business for future success. We delivered $590 million of adjusted EBITDA for the full year, over $250 million more than last year, and only 5% below 2019. We generated $389 million in free cash flow, over 10 times more than last year, and $330 million more than we did back in 2019. We closed the year with net room growth in line with our expectations at 1.8%. In the United States, openings for the full year were 96% of 2019 levels And importantly, we saw significant improvement in domestic demand as we progressed throughout the year. In the fourth quarter, we opened 9,900 rooms, which was 20 percent higher than 2019's openings. And with the transaction markets and single asset sales picking up, conversion room openings increased over 35 percent in the fourth quarter versus 2019. Room openings internationally ran 75 percent of 2019 levels, also accelerating throughout the year as they did domestically. In the fourth quarter, we opened 82% of the rooms open in 2019 as travel restrictions were lifted and owners felt more confident about rising demand. International net room growth was 4%. Our China direct franchising business led the way with double-digit net room growth, followed by Latin America at 7% net room growth. We introduced 11 of our 22 brands into 18 new countries and territories strengthening our foundation for future franchise growth in those regions, including our first registry collection hotels in Mexico and Panama, our first trademark hotels in New Zealand and Fiji, and our first Lakita hotel in the United Arab Emirates. On the retention front, we saw improvements both domestically and internationally. In the United States, we achieved our 95 percent retention target, up from 93 percent last year and back in line with 2019. Internationally, our retention rate also improved to 95%, up from 89% last year, and up from 94% back in 2019. As our room openings and retention rates improved throughout the year, so too did our development signings. We awarded 20% more contracts globally in the fourth quarter compared to last year, and 6% more than we signed in the fourth quarter of 2019. In the United States, we awarded 33% more contracts in the fourth quarter versus 2019, bringing our full year domestic executions to 331 deals or 11% more than what the team signed in 2019. With solid select service fundamentals and increasingly improving developer confidence, new construction signings showed continued strength in the fourth quarter. Our US franchise sales team signed 133 new construction contracts in 2021, which was 23 percent more than last year and 32 percent more than 2019. We saw strong demand for our new construction La Quinta del Sol, our Hawthorne Suites, and our Microtel Moda prototypes, given the efficiency of their construction and the market share outperformance of the brands. Acknowledging our strength in the economy space and recognizing increased consumer demand for affordable extended stay product, we will be launching, later this spring, our first extended state brand for the economy segment, a brand we have been designing over the past year in consultation with several of the industry's most experienced extended state developers. We are very excited about the prospects for this new brand, and we look forward to sharing more about it in the months ahead. On a global basis, for the full year, we signed 655 agreements throughout 2021, representing over 82,000 rooms, including nearly 590 direct franchise and management agreements, 12% more than 2019. And our development pipeline grew by more than 5% to over 1,500 hotels for a record 194,000 rooms, or 24% of our current system size. Our brands led the travel sector recovery outperforming their competitive sets by 350 basis points versus 2019 and outpacing overall industry red part growth by 1400 basis points compared to pre pandemic levels in the fourth quarter, us red part grew by 9%. And each month of the quarter saw stronger growth in the month prior our December rep are in the midst of the Omicron surge was the strongest demand month of the quarter. growing 15% domestically. On top of the overall pricing power that leisure-oriented hotels have been experiencing, our brands have gained nearly 300 basis points of ADR index since the start of the pandemic. As we've introduced new pricing tools and increased franchisee education on how to forecast more accurately, how to price more confidently, and how to achieve greater profitability, we're driving rate index gains across every chain scale in our portfolio. And in the year ahead, we will upgrade our automated revenue management system with new competitive rate shopping intelligence, new mobile enhancements, and the latest in revenue management technology, software, and algorithms. Our direct digital channels continue to outpace higher-cost third-party OTA channels. Revenue from brand web bookings increased 35% compared to fourth quarter 2019, benefiting from the success of our highly rated window map, which saw fourth quarter mobile app bookings increase over 40% versus 2019. Our award-winning loyalty program is another significant driver of direct business demand and market share growth. From partnerships to promotions, we're making investments that make Wyndham Awards even more generous. Wyndham Awards now stands at over 92 million members, and the program's overall domestic share of occupancy grew 350 basis points versus 2019 to nearly one out of every two guests. Our largest growth segment from a demand standpoint, Generation Z, Millennial, and Generation X travelers, now make up 65% of all arrivals. We continue to nurture our relationship with these younger guests via our new customer database platform powered by Imperi, using the recency, the frequency, the channel, and the communication preferences that they're accustomed to, ensuring that we're reaching them at the right time, in the right way, and with the right message to keep them booking with us for their next trip, and for the trip after that. Just as 2021 domestic leisure demand outpaced last year, so too did demand from our everyday business travel segments. Infrastructure accounts, which represent the majority of our domestic business segment, contributed over 10% more revenue to our hotels in the fourth quarter than in 2019 and made up half of the newly negotiated business accounts that our sales team signed this year. It's a trend that we expect to continue given the recent passage of our nation's $1.2 trillion infrastructure bill. Our franchisees are slowly seeing staffing levels for their hotels recover to their required needs, with housekeepers remaining the position in most demand. While labor as a percentage of revenue runs nearly 35% for the overall U.S. industry, it runs significantly lower in the select service hotel space at around 12% for economy and mid-scale hotels. With our continued move to digital check-in and check-out, Combined with services like our auto call routing, moving labor out of our franchisees' front offices to professionally run call centers, our franchisees can drive efficiencies in their operations and flow more revenue to their bottom lines. In the year ahead, we will introduce new tools and services to help our owners further reduce operating costs at their hotels. Consumer intent to travel continues to strengthen, and average lengths of stay continue to surpass 2019 levels. Thursday and Sunday nights hit historic Q4 levels of occupancy as guests extend their weekend leisure travel plans and increase their work trips for personal travel. Weekend and short four-night breaks continue to generate the largest percentage of leisure stays, followed by travel to visit family and friends, with our customers driving longer distances from home. In consumer survey after survey, people are indicating their desire to begin traveling again. MMGY's Q4 Leisure Travel Intent Survey reveals an increasingly bullish consumer where over 70% of leisure travelers intend to book in the next three months, portending a very busy spring break for our franchisees. And with nearly 90% of Wyndham's domestic room nights generated by drive-to demand and travel by car remaining the number one travel preference among leisure travelers surveyed, we remain best positioned to continue to capture an outsized share of travel demand in the year ahead. As we look ahead, we will continue to further simplify our business model. We were very pleased in the fourth quarter to negotiate our exit from the resource intensive, lower margin select service management business. And at the same time, with significant interest from buyers of leisure real estate, we began exploring the strategic sale of our two owned hotels, the Wyndham Grand Bonnet Creek Resort in Orlando and the Wyndham Grand Rio Mar Resort in Puerto Rico. We'll be updating you in the coming months on the progress of those deals. Before handing the call over to Michelle, I'd like to take a moment to thank our team members who have been more productive than ever over the past two years. This past October, we were incredibly proud to be ranked number four among Newsweek Magazine's most 100 loved workplaces, followed by being named among Newsweek's most responsible companies, which honor those with superior environmental and social responsibility practices. And just last week, Forbes magazine recognized Wyndham on its 2022 list of America's best employers. Furthering our commitment to diversity and advancing women entrepreneurs and hotel ownership, we were also very proud to welcome our first franchise member of our Women Own the Room initiative earlier this month, who will be breaking ground on two dual-branded Laquita Hawthorne Suites prototypes in Austin and Georgetown, Texas. Our inclusive economy culture built on personal accountability, built on caring, and built on social responsibility has continued to resonate among our team and our ownership community. And for the fourth consecutive year, we were delighted to receive another perfect score on the Human Rights Campaign's 2022 Corporate Equality Index Measuring LGBTQ Workplace Equality. We know that none of this recognition would be possible without our valuable team members who pride themselves on making a meaningful impact on our industry, on the lives of our franchisees, and on all of those around them. And with that, I'll turn the call over to Michelle. Michelle?