Wyndham Hotels & Resorts, Inc.

Welcome to the Wyndham Hotels and Resorts Third Quarter 2024 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. Please go ahead.

Thank you, Operator. Good morning, and thank you for joining us. With me today are Jeff Bilotti, our CEO, and Michelle Allen, our CFO and Head of Strategy. 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 and investor presentation, which are 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 and on our social media channels in the future. Accordingly, we encourage investors to monitor our website and our social media channels in addition to our press releases, files submitted with the SEC, and any public conference calls or webcasts. With that, I will turn the call over to Jeff.

Thanks, Matt. Good morning, everyone, and thanks for joining us today. Q3 illustrates yet another quarter of success in our team's execution against our long-term growth strategy, which we outlined with all of you one year ago this week. Last night, we reported strong earnings with comparable adjusted EBITDA and EPS growth of 7% and 10% respectively. We grew our system 4%. We increased both our U.S. and international royalty rates, and we significantly grew our ancillary fee streams. Year to date, we've generated over $265 million of adjusted free cash flow, and we've returned nearly $380 million to our shareholders. We sustained strong momentum on the development front, opening over 17,000 rooms, bringing our year-to-date total to more than 48,000 rooms globally, up 13% compared to a year ago. We also improved our global franchisee retention rate by 40 basis points year over year. Notably, our franchise sales teams here in the United States signed an impressive 10% more deals in the quarter than they did last year, contributing to the 17th consecutive quarter of growth in our global development pipeline, which increased nearly 5% year over year to a record 248,000 rooms. Domestically, net rooms grew sequentially and year over year, driven by a solid 3% net room growth in our mid-scale and above brands, with new conversions like the Wyndham Bloomington, adjacent to the Mall of America in Minnesota, and the Wyndham Garden Louisville East, near Churchill Downs, the home of the Kentucky Derby. This quarter, we also opened our second new construction, Echo Suites Hotel, located in Plano, Texas, a fast-growing technology hub that's attracted economic investments such as the expansion of Plano's Children's Medical Center, the new Wells Fargo campus, which is expected to create over 4,000 new jobs, and the growing presence of Toyota North America and Frito-Lay's corporate headquarters. We awarded another 10 new Echo Suites contracts this quarter in markets like Huntsville, Alabama, Greensboro and Raleigh, North Carolina, and Myrtle Beach, South Carolina. And we currently have over a dozen Echo Suites hotels under construction across the country. Our Echo Suites owners are telling us that these hotels are performing ahead of their expectations and pro formas. The Spartanburg property, the first Echo Suites to welcome guests last quarter, reached stabilized occupancy levels of over 80% just weeks after opening, while outperforming its competitive set in ADR. Even more promising was that its extended stay occupancy rate, a key metric in this segment, which finished September at a 63% occupancy with a 55-night average length of stay, a clear indicator of the strong demand for this product along with with our ability to generate corporate negotiated business from day one. Internationally, we grew Net Rooms by 2% sequentially and by 8% versus prior year. Our EMEA team grew Net Rooms by 11%, adding several new destinations like the stunning new Dolce by Wyndham Resort in Spain's renowned Penedes wine country outside of Barcelona. and the Days Inn by Wyndham Arnavutkoi near Istanbul's main international airport. Our EMEA team also signed a multi-unit deal to introduce the Microtel brand to India, with plans to open 40 new Microtel hotels by 2031. This represents our eighth Wyndham brand in India, where we currently have 60 hotels and expect double-digit net room growth over the next several years. Our EMEA development pipeline grew 10% year over year and now represents an average fee par 15% above the current portfolio. Our Latin America team, similar to our EMEA team, grew net rooms by 11% in the third quarter and increased its development pipeline by 16% with an average fee par now nearly 20% higher than its current portfolio. It added several new destinations our Wyndham Reward members will want to visit, including the spectacular new construction Wyndham Garden Mazatlan Marina Hotel, located on Mexico's Pacific coast. Our Southeast Asia and Pacific Rim region grew net rooms by 10%, entering several new markets with luxury additions, like the five-star Wyndham Panbil Batam in Indonesia and the upscale La Vidor Hotel in a trademark collection resort adjacent to Samsung and Hyundai's headquarters in the tourism hub of Wangsangxi, South Korea. In China, our direct franchising system grew 13%, with new openings including the Windham Taiyan West nestled at the foot of China's Wohu Mountain, as well as a new La Quinta in Ren Y's booming business district and another new La Quinta on Hainan Island. Development activity across China remained robust, increasing 6% with 37 direct franchise agreements awarded this quarter, bringing the region's direct franchise pipeline to nearly 400 hotels at a fee par 40% higher than that of our current China system. Overall, we expanded our brand presence across the globe, adding five new brands to markets where they hadn't existed previously, including the debut of the newly renovated luxury lifestyle registry collection hotel brand here in the United States with the historic Mining Exchange Hotel in Colorado Springs, the first Wyndham Garden in Malaysia, and the first Wyndham-branded hotel in Cluj, Romania, in the heart of Transylvania and the country's second-largest city. And importantly, these Q3 additions came into the system with a collective average fee park that is expected to be approximately 50% higher than the current system. Now turning to REVPAR. In the United States, REVPAR declined 80 basis points this quarter compared to prior year, while economy REVPAR continues to normalize, up 260 basis points from the first half of this year, gaining 50 basis points of market share this quarter. Importantly, we're seeing positive momentum in infrastructure-related business. weekday performance outpaced weekends, with REVPAR growing about a point, driven by higher demand. This includes an improvement of 250 basis points across our oil and gas markets and sustained year-over-year growth in the five states that have received significant infrastructure funding to date, Texas, California, New York, Illinois, and New Mexico. Our properties in these key markets are well-positioned and when coupled with the efforts by our Wyndham sales team, captured an additional 300 basis points of weekday demand share across our select service chain scales during the quarter. We're encouraged by these results, and we're also encouraged that our brands continue to maintain pricing power. Domestic ADR held steady throughout the quarter at 17% above pre-pandemic levels, which still trails real inflation growth, suggesting that pricing can continue to be flexed in the years ahead. We continue to believe the infrastructure strength we saw in the third quarter, coupled with more favorable comparisons ahead in the fourth quarter, will provide positive domestic RevPAR momentum as we exit 2024. Internationally, RevPAR increased 7% versus prior year in constant currency and accelerated over 1,300 basis points from Q2 to Q3, when compared to 2019. EMEA and Latin America REVPAR were both especially strong this quarter. EMEA grew 9% year-over-year, driven by strength in Greece, Spain, and Turkey, and Latin America grew 52% as a result of strength across Brazil, Mexico, and the Caribbean, as well as the hyperinflationary impact in Argentina, which accounted for 20 points of the region's REVPAR growth. Occupancy, while continuing to recover at varying rates around the globe, now stands at 10% behind where it was in 2019 and remains a significant tailwind as we close out this year and we look towards 2025. One of the key drivers of our ancillary fee growth strategy is the expansion of our suite of co-branded credit card products. Earlier this year, we launched Wyndham Business aimed at streamlining the direct booking process for all types of business travel. This initiative has gained significant traction, driving a double-digit year-to-date increase in our corporate contracted business from infrastructure-related accounts. In addition, our Wyndham Rewards earner business card has seen a 32% year-over-year increase in new accounts and a 70% lift in purchase volumes, contributing to our ancillary fee growth this quarter. We're also leveraging technology as part of Wyndham's owner-first commitment, which is at that very forefront of everything we do. Our recently launched guest engagement platform, Wyndham Connect, is an initiative that was made possible by our best-in-class technology stack with leading partners like Salesforce, Sabre, Oracle, and Amazon, Adobe, Ideas, and Canary. Our technology platform enables personalized guest experiences to boost franchisees' bottom lines while improving guest engagement scores. Franchisees are now digitally and automatically without staff intervention, upselling early check-ins and late check-outs, and they're also pre-selling room upgrades and various in-room amenities online before the guest checks in. More than 4,000 of our hotels in North America have adopted this platform with about 40% of those properties generating over $1,500 in incremental monthly revenue. As we furiously continue to implement guest facing AI tools and services, we're offloading labor intensive tasks from our franchisees. We're reducing their costs and we're increasing their bottom lines while at the same time allowing them to focus on guest service and guest satisfaction. Moreover, Wyndham Connect is simplifying the process of enrolling guests in Wyndham Rewards, helping to drive an increase of more than 2 million new members this quarter to over 112 million members globally at quarter end. Before Michelle takes us through the financials, we want to take a moment to recognize the incredible dedication of our team members around the world. The success of our owner-first operating philosophy and our record owner engagement levels reflects their steadfast commitment and support. And we're thrilled that for the fourth year in a row, we've been named to Newsweek America's Most Loved Workplaces list, earning a spot in the top 10. This achievement is a testament to our team's hard work and commitment that consistently places our owners at the very center of everything it is that we do. In closing, this quarter's results underscore our ability to execute on the key pillars of our long-term growth algorithm, including robust development momentum, continued royalty rate expansion, consistent ancillary fee growth, and the very early innings of a sustained period of growing infrastructure capture. Our value proposition is stronger than ever, powered by our world-class teams around the globe, And we have full conviction that our strategy will create significant value for our shareholders, our guests, our franchisees, and our team members for many years to come. And with that, I'll now turn the call over to Michelle. Michelle?