Wyndham Hotels & Resorts, Inc.

Good day and welcome to the Wyndham Hotels and Resorts first quarter 2023 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 star 2. 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 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, filings 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. As expected, our brands delivered record levels of domestic rev par for our owners in the first quarter. With 4% growth versus prior year, and our international regions continued their recovery, growing REBPAR by 37%. Globally, net rooms increased 4% and we grew our development pipeline by 11% and by another 3% sequentially. Adjusted EBITDA, which increased 10% on a comparable basis, was ahead of our expectations. This overperformance is reflected in our new outlook that Michelle will walk you through in a moment. We generated $84 million of free cash flow, and we returned another $87 million to our shareholders. By all accounts, it was a great start to 2023. With US unemployment at its lowest level since the 1960s and consumer savings of $1.6 trillion, our guests who are primarily middle class with household incomes of over $90,000, nearly 30% above the US median, are allocating a higher share of their wallets to travel this year. This surge in travel spending has been unabated by the economic headlines throughout the year and reflects their strong desire to reconnect with family and friends, explore new destinations, and create lasting memories. U.S. REVPAR growth for our economy brands was in line with fourth quarter performance, a reflection of the cadence of growth for this segment, which had fully recovered by the second quarter of 2021. Meanwhile, our mid-scale and upscale portfolios benefited from continued recovery and occupancy while still driving rate gains. We grew our overall system sequentially for the ninth consecutive quarter. We opened over 10,000 rooms globally, and we maintained a retention rate of 95.3% over the last 12 months, a continued indication of our brand's improving market share and value proposition. These results position us solidly on track to achieve our full-year net room growth outlook of 2% to 4%. Here in the United States, we grew our system for the seventh sequential quarter, including another 110 basis points of sequential growth in the more revenue-intensive mid-scale and above chain scales this quarter. We added over 6,000 rooms with more than 40 new hotel conversions, along with five new construction additions like the La Quinta Hawthorne Suites Dual Brand Hotel, in Sulphur, Louisiana, across from the West Cal Arena. Internationally, we opened over 4,000 rooms and grew net rooms by 7% organically. Our Latin America team added some fantastic conversions from competitive brands like our new Windham Garden Torreon in this booming Mexican city, along with the new La Quinta Quito, steps from the upscale stores and entertainment in Ecuador's capital city. Our EMEA region drove 75 basis points of sequential net room growth with quality first quarter conversions like the new Dolce Milan Malpensa near Italy's number one international inbound airport and within easy reach of Lake Como. And in China, which experienced 125 basis points of sequential net room growth in our direct franchising system, we opened our 25th Days In since reacquiring the Days In Master License Agreement with the Days Hotel, Changsha Yahuwah West, adjacent to the campus of Changsha University. We grew our development pipeline 3% sequentially and by 11% versus prior year to a record 226,000 rooms and 1,800 hotels, over 70% of which are in the higher revenue mid-scale, upper mid-scale, upscale, upper upscale, and luxury chain scale segments. our teams awarded nearly 160 contracts globally for approximately 20,000 room additions, marking Wyndham's 11th consecutive quarter of sequential pipeline growth. Behind the strength and the momentum of the demand in the extended stay sector, we awarded another 35 ECHO Suites by Wyndham contracts to institutional developers and experienced extended stay operators bringing the total number of contracts awarded to 205 hotels since launching the brand last March. We expect to break ground on another two dozen Echo hotels throughout 2023, with a brand beginning to contribute meaningfully to our room count in 2024 and beyond. Excluding Echo, the number of domestic contracts signed in the first quarter was 13% higher than what we awarded last year, reflecting continued developer interest in our new construction prototype and conversion brands, If there's one thing that our franchise sales and development teams experienced at the Hunter Investment Conference last month and at the Asian American Hotel Owners Association Convention a few weeks ago, it's that our owners believe that there has never been a better time to build or own another hotel than now, especially in the select service segment. This unbridled enthusiasm is a reflection of a strong and vibrant hotel industry. Demand from our infrastructure-related business accounts, which makes up approximately 20% of our annual domestic royalties, is expected to remain a tailwind for Wyndham in the coming months and years ahead as we capitalize on the U.S. government's $1.5 trillion in infrastructure and CHIPS Act spending. For the past eight consecutive quarters, Wyndham's general infrastructure-related revenues have increased double digits versus 2019, a trend that began in the second quarter of 2021. Our domestic footprint of hotels overlaps very well with the states expected to receive the highest levels of future infrastructure spend. And these top six states of ours by system size have received over one-third of the allocated federal spend to date. We've estimated that this new level of infrastructure spending represents an opportunity to generate over $3.3 billion of incremental revenue for our franchisees and over $150 million of incremental royalties for Wyndham over the spend period as we continue to invest in the people, the processes, and the technology to support our growing global sales teams to capture more share from these infrastructure accounts. Our award-winning Wyndham Rewards loyalty program was recognized as the best hotel loyalty program for the fifth consecutive year by readers of USA Today because of its simplicity, its generosity, and the experiences it offers through partnerships like the one we recently announced with Minor League Baseball. where we average nearly 20 hotels within a 25-mile radius of their 120 ballparks, and where our members will be able to redeem points for unprecedented access to all that minor league baseball has to offer, including tickets and one-of-a-kind experiences during the season's 8,000 scheduled games. During the quarter, we grew enrollments by 7%, and we recently celebrated our 100 millionth enrolled member. And most importantly, Wyndham Rewards helped drive a 15% increase in direct bookings, representing a record high level of contribution for our brand.com sites, which once again outpaced the rate of growth across all third-party channels. Our core values and our count-on-me service culture are at the very heart of what drives our growth and what makes Wyndham such a great place to work. And it was no surprise to see that Wyndham Hotels and Resorts was selected by Forbes as a 2023 America's Best Large Employer for the second year in a row, by Newsweek as one of America's greatest places to work for diversity in 2023, and by Ethisphere as one of the 2023 world's most ethical companies. As always, we sincerely thank our valued team members around the world, without whom none of this would be possible. And with that, I'll turn the call over to Michelle. Michelle?