Wyndham Hotels & Resorts, Inc.

We're about to begin. Welcome to the Wyndham Hotels and Resorts fourth quarter and full year 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. In the interest of time, we ask that you please limit yourself to one primary question and one follow-up. Lastly, if you should require operator assistance today, please press star zero. I would now like to turn the call over to Mr. Matt Capuzzi, Senior Vice President of Investor Relations. Please go ahead, sir.

Thank you, operator. Good morning, and thank you for joining us. With me today are Jeff Bloddy, 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 will 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, filings 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. We're thrilled to report a very strong finish for the year with net room growth of 4% and comparable adjusted EBITDA and EPS growth of 7% and 10% respectively, all in line with our expectations. We opened a record 69,000 rooms, the largest number of annual organic room additions in Wyndham's history and 4% more than last year. Our global retention rate improved another 10 basis points to 95.7% a level of franchisee engagement and satisfaction that's never been higher, and a testament to the strength of our owner-first value proposition. Domestically, net rooms grew sequentially and year over year, including a 4% increase in our mid-scale and above brands, with conversions like the Wyndham Atlanta Buckhead Hotel and Conference Center, along with half a dozen new construction La Quinta hotels, opening and growing infrastructure markets like Dallas, Austin, and San Antonio, Texas. Our Echo Suites brand opened in new markets like Nashville, Indianapolis, Madison, Wisconsin, and Richmond, Virginia. And as this new brand stabilizes, operating performance continues to exceed owner expectations from both the market share and an extended stay occupancy standpoint. We also expanded our upscale extended stay segment offerings this quarter with the launch of apartment-style Wyndham Residences in Washington, D.C. and downtown Houston. The extended stay market is predicted to grow nearly 30% from $21 billion in 2024 to $27 billion by 2028. And it's a segment with Echo Suites, Hawthorne Suites, Waterwalk, and Wyndham Residences that now represents nearly one-third of our growing domestic development pipeline. Internationally, we grew net rooms 2% sequentially and 7% year over year. In EMEA, net rooms increased 5% with over a dozen conversion and more than half a dozen new construction hotels, including our first Wyndham Garden on the Indian subcontinent and Haryana's popular travel destination of Soniput and the Ramada by Wyndham Gaziantep in the sixth most populous city in Turkey. a country where we now have opened over 120 hotels. Development momentum across EMEA remains robust, with our pipeline growing 20% and an average fee par 17% higher than the region's current portfolio. In Latin America, our development pipeline grew by 15% and an average fee par 23% higher than the current system. Net rooms in the region grew by 11%, including a solid mix of conversion hotels like the Wyndham, Puerto Veras, Chile, and new construction additions like the new Wyndham Tulum, located in the heart of Mexico's Yucatan Peninsula. Our Southeast Asia and Pacific Rim region grew net rooms by an impressive 16%, with over half a dozen new construction openings, including two in Thailand's coastal vacation destination of Pattaya, the trademark Beverly Mountain Bay Resort, and the Howard Johnson's Joimchen Beach, along with the new construction tripped by Wyndham Southport overlooking Australia's Gold Coast. This region's pipeline stands at over 100 hotels at a fee par that is 25% higher than its current portfolio. And in China, our direct franchising system also grew 16% with over 60 openings in the quarter, half of which were new conversions and half of which were new construction hotels, including the spectacular five-star Wyndham Quanzhou, our 40th Wyndham Garden Hotel in Hangzhou, and our 90th Days Inn Hotel in China, the beautiful new construction Days Inn Shanzhou. Development activity across China set new records with 150 direct franchise agreements signed last year, pushing the region's direct franchising pipeline to nearly 400 hotels at a fee par that is 40% higher than that of our current China direct franchising system. Over the past three years, our direct franchising system in China has grown at a 13% CAGR, while our master franchisees have grown by approximately 1%. Were it not for the drag of these legacy master license agreements, which have a nominal impact on EBITDA, our net room growth in 2024 would have been 40 basis points higher, underscoring the importance of and our focus on accelerating the growth of our direct franchising brands internationally, where we continue to build a pipeline of higher quality hotels that deliver stronger fee par, and greater revenue potential. Looking ahead, we remain confident that our direct franchising model will be the key driver of sustainable growth across our international regions. U.S. RevPAR in the fourth quarter grew by 5.3%, including a 140 basis point contribution from hurricane impacts. Excluding the hurricane lift, RevPAR improved 3.9%, reflecting increased blue-collar midweek business demand and leisure transient weekend bookings. As expected, we continue to see strong weekday performance driven by infrastructure bookings. Throughout 2024, we saw over 2,200 major infrastructure project starts, totaling nearly one quarter of a trillion dollars in value, with nearly 80% of these projects located near at least one and often several Wyndham-branded hotels. Wyndham franchisees in these markets experienced a rev par increase of more than 6%, in the fourth quarter alone, contributing 140 basis points to our overall fourth quarter U.S. RevPAR growth. The surge in data center demand in construction has become a defining trend in the digital era, and Wyndham has dozens of hotels within a 10-mile radius of the top 10 data center projects that commenced in 2024 across the United States. These hotels saw an impressive year-over-year Q4 RevPAR premium of nearly 500 basis points compared to the rest of our U.S. portfolio, with about half of this market share gain coming from increased demand and the remainder resulting from improved pricing power driven by occupancy gains. This performance gives us increased confidence in continued outsized RevPar improvements for the hundreds of existing and pipeline hotels that we have, not only in top data center markets like Silicon Valley and major metro areas like Dallas, but also in emerging data center markets like Columbus, Ohio, and Jackson, Mississippi, where our sales, development, and marketing teams are focused on for increased growth opportunities. Importantly, leisure demand increased 3% over the year during the fourth quarter in non-hurricane affected regions. U.S. leisure travel intentions for the next six months have increased year over year across all income brackets, according to MMGY's latest survey, reflecting broad-based confidence in both travel and the overall economy. and consumer trends that we're seeing remain healthy. Booking lead times lengthened this quarter by another 4%, while average lengths of stay improved by another 2%, driving increased spending and higher ancillary revenue for both Wyndham and for our franchisees. Just as our domestic business showed strong momentum, international markets were also meaningful contributors with 6% year-over-year RevPAR growth in constant currency. Excluding hyperinflationary Argentina, Latin America RevPar grew by 32% with both pricing power and higher fee par additions in Brazil, Mexico, and the Caribbean. Our EMEA region saw a 7% lift year over year led by strong performance in Spain, Turkey, Austria, and Greece. And our Southeast Asia and Canadian regions each posted 5% growth year over year. These gains were partially offset by continued deflationary pressures in China, where RevPAR declined 11%. China ADR still remains 3% ahead of 2019, while occupancy remains at 80% of pre-COVID levels. Royalty rate growth this year was strong, increasing by 10 basis points domestically and 12 basis points internationally, reflecting a deliberate effort to remix the composition of our portfolio to drive higher royalty rate hotels into our system. By enhancing the value proposition and revenue contribution for our hotels, strategically expanding our brands and markets where we have scale, and concentrating openings with higher fee par hotels while exiting lower fee par properties, we've been able to push fee structures higher. The fee par of 2024 domestic openings represented a 36% premium relative to the rooms that exited the system during the year. And the FEPAR of 2024 international openings represented a 27% premium relative to the international rooms that exited the system last year. Just as our development strategy is targeting significantly higher FEPAR additions to our portfolio, our marketing strategy is targeting both a younger and more affluent customer. Our teams continue to succeed in attracting more Gen Y and Gen Z guests. growing by another 130 basis points versus 2023, while retaining loyalty among retiree and older generations. Our guests average household income of $104,000 is over 9% higher than last year, with a growing share of check-ins coming from higher income guests earning over $200,000. A key driver of this success is Wyndham Rewards, which continues to generate strong engagement and value for franchisees. Membership has now reached 114 million members globally, an 8% increase versus last year. And the program's share of US occupancy increased 200 basis points in 2024, now accounting for more than one out of every two check-ins domestically. Investments in AI-driven technology and mobile innovations have made it easier for members to book directly, track rewards, and enjoy exclusive offerings, including over 300,000 experiential travel opportunities globally through partnerships with Viator, Caesars, minor league baseball, and others. From on-field college football game experiences to private VIP tours, show tickets, cooking classes, extreme adventures, and more, these experiential offerings continue to cement Wyndham Rewards as the industry's number one ranked loyalty program and the industry's fastest way to earn a free night. We delivered strong growth in ancillary fees throughout the year, led by the continued expansion of our co-branded credit card program. As initiatives like Wyndham Connect, our new guest engagement platform that automates upselling of early check-ins and late checkouts, are ramping up well and are expected to contribute incrementally. The primary driver of ancillary fee growth in 2025 remains our suite of co-branded card products. Just last week, we finalized a long-term agreement to renew our U.S. co-branded credit card with our current provider, Barclays. And as a result, through new marketing initiatives, new product opportunities, and program modernization, we expect to accelerate cardholder acquisitions and capture a greater share of member wallet. The improved economics will begin benefiting Wyndham immediately. And we also recently finalized an agreement to launch a co-branded debit card, the first of its kind in the United States hospitality sector. In collaboration with our new partner, Galileo Financial Technologies, a platform owned by SoFi, this innovative product is designed to tap into the $4.5 trillion debit card spending market, providing our loyalty members an alternative solution to earn Wyndham Reward points on their everyday purchases. We expect the debit card to be available within our digital ecosystem by the peak of our busy summer travel season. Before turning the call over to Michelle, we want to take a moment to express our gratitude to our team members around the world. Their hard work and their commitment to our owner-first operating philosophy is critical to the success we continue to achieve. 2024's results underscore Wyndham's ability to execute on the key pillars of our long-term growth algorithm, including strong development momentum, continued royalty rate expansion, sustained ancillary fee growth, and increased weekend demand highlighting our growing infrastructure spend capture. Our performance represents the building blocks for sustained momentum and successful achievement of our 2025 goals and longer-term growth strategy. And with that, I'll now turn the call over to Michelle. Michelle?