PARSIPPANY, New Jersey—Wyndham Hotel Group reported a 9.7% increase in system-wide revenue per available room during the second quarter, according to company executives during an earnings call Wednesday morning.
Excluding the impact of the TRYP by Wyndham hotel brand and in constant currency, the RevPAR increase was 5.8%.
The bump in performance was a common theme throughout the company’s second-quarter results, in which Wyndham exceeded expectations nearly across the board, said Stephen P. Holmes, chairman and CEO of Wyndham Worldwide Corporation.
“Most significantly, we’re seeing rate improvement across all chain scales in the U.S.,” he said.
|Stephen P. Holmes
chairman and CEO
Wyndham Worldwide Corporation
Rates gains extended throughout the world as well, in all regions excluding Asia/Pacific, added CFO Thomas G. Conforti.
Revenues were US$190 million during the second quarter of 2011, an increase of 7% compared with the second quarter of 2010, reflecting a RevPAR increase and incremental revenues related to the acquisition of the TRYP hotel brand in June 2010.
“Our second-quarter results reflected continued momentum and execution across our businesses,” Conforti said.
Second-quarter 2011 earnings before interest, taxes, depreciation and amortization was US$66 million, an increase of 32%, compared with second quarter 2010 adjusted EBITDA, primarily as a result of the RevPAR improvement and lower bad debt expense.
“Development efforts in the quarter were robust,” Conforti said.
Wyndham’s development team executed approximately 150 deals during the period ending 30 June 2011, with a heavy focus on international expansion.
China remains an area of interest. Holmes said he wants Wyndham’s hotel footprint in the country to equal that of the United States.
The company's hotel system consisted of approximately 7,220 properties and 612,900 rooms as of 30 June. The development pipeline included more than 840 hotels and approximately 111,000 rooms, of which 58% were new construction. International rooms accounted for 64% of the development pipeline.
Wyndham will invest US$200 million in mezzanine and other financing during the next several years to support the growth of the Wyndham Hotels and Resorts brand, Holmes said.
Wyndham Worldwide performance and outlook
Second-quarter revenues increased 13% from the prior-year period to US$1.1 billion. The revenue growth reflects strong RevPAR growth in the company’s hotel business, contributions from acquisitions of vacation rental businesses and higher sales in the vacation ownership business.
For the second quarter of 2011, adjusted net income increased to US$108 million, compared with US$95 million during the second quarter of 2010. On a per share basis, adjusted net income grew 25% to 64 cents per diluted share, compared with the same period in 2010.
Executives issued the following outlook during the call:
- Wyndham Worldwide is increasing full-year 2011 adjusted EPS guidance from US$2.15 - US$2.25 to US$2.32 – US$2.40, based on a diluted share count of 171 million.
- The company is increasing its revenue guidance from approximately US$4 billion - US$4.2 billion to approximately US$4.2 billion - US$4.3 billion.
- It also increased adjusted EBITDA from approximately US$925 million - US$955 million to approximately US$960 million - US$975 million.