Wyndham Hotels & Resorts was one of the first major hotel companies to report Q2 2021 earnings on Wednesday and raised its dividend by 50% to US$0.24 per share after further improvements in adjusted EBITDA and cash flow.
Here are Q2 highlights for Wyndham:
- Second quarter diluted earnings per share was US$0.73 compared to diluted loss per share of US$1.86 in second quarter 2020; second quarter adjusted diluted EPS was $0.95 compared to adjusted diluted EPS of US$0.10 in second quarter 2020.
- Second quarter net income was US$68 million compared to a net loss of US$174 million in second quarter 2020; second quarter adjusted net income was US$89 million compared to adjusted net income of US$9 million in second quarter 2020.
- Second quarter adjusted EBITDA was US$168 million compared to adjusted EBITDA of US$66 million in second quarter 2020.
- Second quarter net cash provided by operating activities was US$116 million and free cash flow was US$104 million compared to net cash used in operating activities of US$57 million and free cash flow of US$(68) million in second quarter 2020.
- Global RevPAR increased 110% compared to second quarter 2020 and declined 17% compared to second quarter 2019 in constant currency.
- Paid quarterly cash dividend of $0.16 per share in second quarter and Board of Directors recently authorized a 50% increase in the quarterly cash dividend to US$0.24 per share beginning with the dividend expected to be declared in third quarter 2021.
“Our brands continue to capture market share gains above pre-pandemic levels, while our economy brands here in the U.S. actually exceeded 2019 RevPAR for the quarter,” said Geoffrey Ballotti, president and chief executive officer for Wyndham. “We opened over 70% more rooms than we did last year while growing our development pipeline by 6% vs. prior year, and by 2% sequentially – to over 190,000 rooms.”
During the first half of 2021, Wyndham’s global system grew 30 basis points primarily reflecting continued growth in the company’s direct-franchising business in China. This was partially offset by the anticipated decline in domestic system size as conversion and new construction activities continue to ramp-up following the pandemic and recent supply chain delays. Year-to-date deletions ran 27% below 2019 levels putting Wyndham solidly on track with its goal of achieving a 95% retention rate for the full year 2021.
Fee-related and other revenues increased 67% to US$321 million, compared to US$192 million in the second quarter of 2020. Global RevPAR has now recovered to 83% of 2019 levels, including domestic RevPAR at 95% of 2019 levels.
Wyndham provided the following outlook for full-year 2021:
- Fee-related and other revenues of US$1.16 billion to US$1.19 billion.
- Adjusted net income of US$244 million to US$254 million.
- Adjusted EBITDA of US$525 million to US$535 million.
- Adjusted diluted EPS of US$2.60 to US$2.70, based on an adjusted diluted share count of 94.0 million that excludes any future share repurchases.
- Rooms growth of 1% to 2%.
- A RevPAR increase of approximately 40% versus 2020, or a decline of approximately 16% compared to 2019.
- Free cash conversion from Adjusted EBITDA of approximately 55%.