Wyndham Hotels & Resorts, Inc.

Welcome to the Wyndham Hotels and Resorts first quarter 2022 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 1 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 Velotti, 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 metric. 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 filing submitted with the SEC, and any public conference calls or webcasts. With that, I will turn the call over to Jeff.

Thanks, Matt, and thanks, everyone, for joining us this morning. We are very pleased to report a strong start to the year with first quarter results once again demonstrating the value we bring to our owners, the strength of our brands, and the unconstrained demand of the leisure traveler as our domestic economy hotels achieved record levels of Q1 occupancy, rate, and rev par. We delivered $159 million of adjusted EBITDA in the first quarter, 64% more than last year and 41% more than what we delivered in 2019. And we generated $125 million in free cash flow, more than double what we generated last year. We grew our development pipeline 5% sequentially and by 9% versus prior year to a record 204,000 rooms. We awarded 114 new contracts domestically and 51 contracts internationally, which in total account for more than 22,000 new rooms. The number of domestic contracts was nearly 130% more than what we awarded last year and nearly 90% more than what we awarded in 2019. Importantly, we awarded contracts to develop the first 50 hotels for our new construction extended stay brand, hotels that will begin to break ground later this year. Developer reaction has been overwhelmingly positive given its ultra-cost-efficient prototype and operating model. For the fifth consecutive quarter, we grew our overall system sequentially, closing Q1 with 200 basis points of year-over-year growth and 40 basis points of sequential net room growth. We opened more than 11,000 rooms globally, which was nearly 50% more than last year, and in line with the first quarter of 2019. And we retained over 1000 more rooms in Q1 than we did in Q1 of 2019, which has resulted in a 95% retention rate over the last 12 months. These results were in line with our expectation and position us solidly on track to achieve our full year net room growth outlook of two to 4%. Here in the United States, we grew our system size year over year by 120 basis points and by 30 basis points sequentially. opening nearly 7,000 rooms in the quarter, the most we've opened in the first quarter of any year since 2013. Our U.S. retention rate was consistent with Q1 2019 levels, running over 95% during the last 12 months. Internationally, net rooms grew by over 3% versus prior year and by 60 basis points sequentially. Our China direct franchising business led the way with double digit net room growth, followed by our Latin America, in Southeast Asia and the Pacific Rim regions, both growing at 5%. We continued to launch many of our brands in countries they've never operated in before, including our first La Quinta by Wyndham in China, our first Dolce by Wyndham in Brazil, and our first Howard Johnson by Wyndham in Ecuador. We made significant progress in continuing to simplify our business. We completed the previously communicated exit of our select service management business, resulting in no change to the underlying franchise agreement terms for the hotels transferred to CPLG's acquirer, Highgate Holdings. In addition, we closed on the sale of our Wyndham Grand Bonnet Creek Hotel in Orlando and executed a 20-year franchise agreement to keep this beautiful resort in our system at full franchise fees. And we're also now under contract to sell our last remaining owned hotel, the Wyndham Grand Rio Mar in Puerto Rico, which we expect to also be subject to a long-term franchise agreement at full fees. We're expecting that this transaction to sell our last remaining owned hotel will close in May of this year. Our global rev par increased 39% year over year in constant currency, which is 96% of 2019 levels. Here in the United States, we continued to see strong leisure demand. We grew rev par by 38%, which is 4% higher than 2019. And our brands once again outpaced overall industry growth by over 650 basis points. Weekend rev par exceeded 2019 levels by 10%, and we did not see any meaningful impact from rising gasoline costs as occupancy for our select service brands remained steady at about 96% of 2019 levels in the weeks before and after the gas price increase in March. And with the US Travel Association reporting that nearly nine out of every 10 Americans are expecting to travel this summer, We expect to see continued strong drive to leisure demand throughout the summer season. Demand from our everyday business travel segments also continued to increase in the quarter. And infrastructure accounts, which represent the majority of our domestic business segment, contributed 16% more revenue to our hotels than in the first quarter of 2021, driven by the uptick in government spending. And with the recent passage of the $1.2 trillion infrastructure bill by Congress, which includes approximately $550 billion in new spending that will be invested in core infrastructure projects over the next five years. Our teams have been more focused than ever on the organizations that are contracting for the construction of U.S. roads, bridges, levees, dams, ports, and waterways. And encouragingly, our franchisees are already seeing steady and consistent pickup in these types of infrastructure accounts. And these accounts made up more than half of the newly negotiated business contracts that our sales team signed this quarter. With winning rewards enrollments growing by 8% in the quarter, our award-winning loyalty program now stands at approximately 94 million members. The program's overall domestic share of occupancy continues to grow and contributes nearly one out of every two check-ins for our franchisees. With the staffing shortages our franchisees continue to experience, we're partnering with them to identify best practices and training tools that focus on recruiting, hiring, and retention strategies. And when you combine our move to digital check-in and check-out with franchisee opt-in services like our highly requested auto call routing technology, we're moving fixed labor costs out of their hotels and helping them improve their operating margins. Over the past two months, during our cross-country executive summit meetings, We've highlighted new operating guides and new strategic sourcing programs designed to further reduce on-property operating costs. But perhaps no initiative holds greater promise for our small business owners than Wyndham's digital room key. With the launch of our highly rated Wyndham booking app, which has now surpassed 4 million consumer downloads, we became the first hotel franchisor to introduce, at scale, digital room keys embedded into our app to the economy segment. allowing franchisees to further expedite check-ins and reduce staffing levels. Importantly, Wyndham's mobile key solution allows our franchisees to upgrade their existing door locks versus having to replace those door locks altogether. While we're in the early months from an adoption standpoint, hundreds of our franchisees have expressed interest in this labor-saving technology over the past several weeks of our meetings with them. And we aim to lead in the economy and mid-scale select service segments with the number one mobile app that checks guests into and checks them out of their room, that opens their guest room door, and also provides industry-leading texting solutions to continually communicate with our guests without detracting from the check-in or the front desk experience. One of the major messages delivered to franchisees who we met with this quarter was requiring all owners globally to attain a minimum level one core certification and our Wyndham Green certification program by April of 2023 as part of our brand standard compliance, something which we believe will help them further reduce their operating costs while building sustainable practices and consumer awareness recognition to help drive incremental revenue from environmentally conscious travelers. We continue to advance our ESG efforts and just this week we published our 2022 ESG report which is now posted to our corporate and investor websites. Our report has been prepared in accordance with the Global Reporting Initiative standards and integrates the recommendations of the Sustainability Accounting Standards Board and the Task Force on Climate-Related Financial Disclosures. The report highlights our commitment to operating our business in a way that is socially, ethically, and environmentally responsible and includes enhanced disclosures around risk management. And finally, furthering our commitment to advancing women hotel ownership by providing enhanced training, operational support, and capital support, we were very proud to celebrate Women's History Month by hosting several Women Own the Room events throughout March as we awarded new hotel development contracts to women developers for projects in Colorado, in Delaware, Texas, Virginia, Oklahoma, and in Florida. Our count on me culture built on integrity, accountability, inclusiveness, caring, and fun would not be possible without the ongoing support of 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 to that end, we were extremely pleased to be recognized this month by Forbes magazine on its 2022 list of best employers for diversity. which highlights companies identified as being the most dedicated to diversity, to equity, and to inclusion. And with that, I'll now turn the call over to Michelle. Michelle?