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What changed in WYNDHAM HOTELS & RESORTS, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of WYNDHAM HOTELS & RESORTS, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+256 added−249 removedSource: 10-K (2024-02-15) vs 10-K (2023-02-16)

Top changes in WYNDHAM HOTELS & RESORTS, INC.'s 2023 10-K

256 paragraphs added · 249 removed · 183 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeCanada Greater China Rest of Asia EMEA LATAM Total Economy Super 8 $ 28.96 Properties 1,468 122 1,087 1 12 1 2,691 Rooms 87,560 7,934 66,605 50 1,974 50 164,173 Days Inn $ 40.69 Properties 1,284 105 51 12 55 9 1,516 Rooms 92,981 8,210 7,920 1,782 3,347 747 114,987 Travelodge $ 39.61 Properties 340 101 — — — — 441 Rooms 23,200 7,914 — — — — 31,114 Microtel $ 47.59 Properties 293 26 14 15 — 8 356 Rooms 20,699 2,283 1,775 1,118 — 955 26,830 Howard Johnson $ 27.06 Properties 148 18 72 2 7 40 287 Rooms 11,335 1,207 21,538 1,902 790 2,563 39,335 Total Economy $ 34.54 Properties 3,533 372 1,224 30 74 58 5,291 Rooms 235,775 27,548 97,838 4,852 6,111 4,315 376,439 Midscale La Quinta $ 64.47 Properties 901 2 2 1 4 8 918 Rooms 87,020 133 704 188 765 953 89,763 Ramada $ 33.17 Properties 298 77 142 66 237 31 851 Rooms 34,834 7,333 28,493 13,286 31,968 4,430 120,344 Baymont $ 42.16 Properties 521 6 — — — 1 528 Rooms 39,521 404 — — — 118 40,043 AmericInn $ 57.88 Properties 215 — — — — — 215 Rooms 12,653 — — — — — 12,653 Wingate $ 56.16 Properties 180 8 8 — — — 196 Rooms 16,017 822 1,202 — — — 18,041 Wyndham Alltra NM Properties — — — — — 3 3 Rooms — — — — — 974 974 Wyndham Garden $ 43.21 Properties 64 5 25 10 26 19 149 Rooms 10,368 851 5,200 1,427 4,315 2,613 24,774 Ramada Encore $ 20.29 Properties — — 29 12 23 12 76 Rooms — — 4,051 3,348 2,633 1,656 11,688 Hawthorn $ 57.57 Properties 67 — — — 5 — 72 Rooms 5,462 — — — 504 — 5,966 Trademark Collection $ 57.89 Properties 64 14 — 12 81 14 185 Rooms 10,431 1,917 — 609 12,585 2,294 27,836 TRYP $ 45.68 Properties 9 — — 1 27 16 53 Rooms 991 — — 191 3,830 1,931 6,943 Total Midscale $ 47.13 Properties 2,319 112 206 102 403 104 3,246 Rooms 217,297 11,460 39,650 19,049 56,600 14,969 359,025 Upscale Wyndham $ 47.25 Properties 46 1 39 18 23 41 168 Rooms 11,918 235 11,303 4,279 3,673 9,009 40,417 Wyndham Grand $ 57.95 Properties 10 — 38 6 15 1 70 Rooms 3,037 — 12,298 1,797 3,644 346 21,122 Dazzler $ 46.80 Properties — — — — — 14 14 Rooms — — — — — 1,798 1,798 Esplendor $ 40.51 Properties — — — — — 9 9 Rooms — — — — — 806 806 Dolce $ 76.00 Properties 4 3 — 1 9 1 18 Rooms 960 276 — 342 2,738 341 4,657 Vienna House NM Properties — — — — 41 — 41 Rooms — — — — 6,404 — 6,404 Total Upscale $ 53.26 Properties 60 4 77 25 88 66 320 Rooms 15,915 511 23,601 6,418 16,459 12,300 75,204 Luxury Registry Collection $ 122.52 Properties — — — — — 16 16 Rooms — — — — — 6,827 6,827 Affiliated properties (a) Properties 169 3 — 11 — 3 186 Rooms 24,847 44 — 47 — 77 25,015 Total (b) $ 41.88 Properties 6,081 491 1,507 168 565 247 9,059 Rooms 493,834 39,563 161,089 30,366 79,170 38,488 842,510 ______________________ (a) Affiliated properties represent properties under affiliation arrangements with former Parent or other third parties.
Biggest changeCanada Greater China Rest of Asia EMEA LATAM Total Economy Super 8 $ 29.13 Properties 1,419 119 1,110 1 13 1 2,663 Rooms 85,091 7,717 68,105 50 2,015 50 163,028 Days Inn $ 40.00 Properties 1,257 106 62 11 55 10 1,501 Rooms 90,758 8,388 9,539 1,377 3,335 819 114,216 Travelodge $ 40.14 Properties 339 100 — — — — 439 Rooms 22,941 7,713 — — — — 30,654 Microtel $ 47.54 Properties 293 28 19 15 — 8 363 Rooms 20,705 2,430 2,309 1,118 — 955 27,517 Howard Johnson $ 30.85 Properties 143 19 74 3 7 39 285 Rooms 11,259 1,275 21,996 2,004 790 2,664 39,988 Total Economy $ 34.90 Properties 3,451 372 1,265 30 75 58 5,251 Rooms 230,754 27,523 101,949 4,549 6,140 4,488 375,403 Midscale La Quinta $ 64.09 Properties 899 2 2 2 4 9 918 Rooms 86,285 133 704 434 765 1,070 89,391 Ramada $ 36.05 Properties 279 73 148 70 243 31 844 Rooms 31,395 7,066 29,675 13,445 33,268 4,224 119,073 Baymont $ 40.80 Properties 539 6 — — — 1 546 Rooms 40,835 404 — — — 118 41,357 AmericInn $ 57.93 Properties 218 — — — — — 218 Rooms 12,866 — — — — — 12,866 Wingate $ 56.54 Properties 189 8 8 — — — 205 Rooms 16,598 822 1,232 — — — 18,652 Wyndham Alltra NM Properties — — — — — 3 3 Rooms — — — — — 974 974 Wyndham Garden $ 44.95 Properties 65 4 30 12 27 24 162 Rooms 10,155 696 6,241 2,468 4,469 3,196 27,225 Ramada Encore $ 27.40 Properties — — 28 11 29 10 78 Rooms — — 3,694 2,814 3,358 1,443 11,309 Hawthorn $ 57.82 Properties 68 — 2 — 5 — 75 Rooms 5,284 — 306 — 542 — 6,132 Trademark Collection $ 59.72 Properties 87 16 — 14 131 23 271 Rooms 12,844 2,256 — 918 17,327 5,541 38,886 TRYP $ 54.44 Properties 8 — 2 3 26 15 54 Rooms 841 — 201 388 3,627 1,805 6,862 Total Midscale $ 48.88 Properties 2,352 109 220 112 465 116 3,374 Rooms 217,103 11,377 42,053 20,467 63,356 18,371 372,727 Upscale Wyndham $ 51.25 Properties 47 2 50 22 27 35 183 Rooms 12,112 640 14,362 5,487 4,318 6,121 43,040 Wyndham Grand $ 56.14 Properties 10 — 42 8 16 2 78 Rooms 3,037 — 12,783 3,663 3,777 770 24,030 Dazzler $ 63.90 Properties — — — — — 14 14 Rooms — — — — — 1,798 1,798 Esplendor $ 59.66 Properties — — — — — 9 9 Rooms — — — — — 806 806 Dolce $ 74.84 Properties 4 2 — 1 9 1 17 Rooms 921 275 — 342 2,747 341 4,626 Vienna House $ 61.73 Properties — — — — 42 — 42 Rooms — — — — 6,584 — 6,584 Total Upscale $ 55.45 Properties 61 4 92 31 94 61 343 Rooms 16,070 915 27,145 9,492 17,426 9,836 80,884 Luxury Registry Collection $ 79.19 Properties — — — — 5 16 21 Rooms — — — — 1,800 7,156 8,956 Affiliated properties (a) Properties 172 3 — 11 — 3 189 Rooms 33,656 44 — 47 — 77 33,824 Total (b) $ 43.10 Properties 6,036 488 1,577 184 639 254 9,178 Rooms 497,583 39,859 171,147 34,555 88,722 39,928 871,794 ______________________ (a) Affiliated properties represent properties under affiliation arrangements with former Parent or other third parties.
Wyndham has seven global affinity business groups. These affinity groups serve as fully inclusive networks where empowered team members foster innovation, help us grow, and enhance global diversity, equity and inclusion globally. Members of our executive committee serve as sponsors of the affinity groups where they serve as allies, mentors and advocates.
Wyndham has seven global affinity business groups. These affinity groups serve as fully inclusive networks where empowered team members foster innovation, help us grow, and enhance diversity, equity and inclusion globally. Members of our executive committee serve as sponsors of the affinity groups where they serve as allies, mentors and advocates.
Ethical leadership starts with our Board of Directors, and is shared by senior management with every team member across every brand and business at Wyndham Hotels & Resorts. Our Business Principles guide our interactions and set the standard for how every one of us should approach our work in service to our mission.
Ethical leadership starts with our Board of Directors (the “Board”) and is shared by senior management with every team member across every brand and business at Wyndham Hotels & Resorts. Our Business Principles guide our interactions and set the standard for how every one of us should approach our work in service to our mission.
We register the trademarks that we own in the United States Patent and Trademark Office, as well as with other relevant authorities, where we deem appropriate, and otherwise seek to protect our trademarks and other intellectual property rights from unauthorized use as permitted by law.
We register the trademarks we own in the United States Patent and Trademark Office, as well as with other relevant authorities, where we deem appropriate, and otherwise seek to protect our trademarks and other intellectual property rights from unauthorized use as permitted by law.
We license our brands and associated trademarks to over 6,000 franchisees globally, which provides for a highly diversified owner base with limited concentration. Our franchisees range from sole proprietors to institutional investors such as public real estate investment trusts. Our franchise agreements are typically 10 to 20 years in length, providing significant visibility into future cash flows.
We license our brands and associated trademarks to over 6,100 franchisees globally, which provides for a highly diversified owner base with limited concentration. Our franchisees range from sole proprietors to institutional investors such as public real estate investment trusts. Our franchise agreements are typically 10 to 20 years in length, providing significant visibility into future cash flows.
In addition to a regional presence in the United States, we currently have sales teams located in England, Turkey, United Arab Emirates, China, Singapore, Canada, India, Mexico, Brazil, Argentina, Columbia and Australia. Our international presence in key countries allows us to quickly adapt to changes in the increasingly dynamic global marketplace and to capitalize on new opportunities as they emerge.
In addition to a regional presence in the United States, we currently have sales teams located in England, Turkey, United Arab Emirates, China, Singapore, Canada, India, Mexico, Brazil, Argentina, Colombia and Australia. Our international presence in key countries allows us to quickly adapt to changes in the increasingly dynamic global marketplace and to capitalize on new opportunities as they emerge.
Prior to joining Starwood Hotels and Resorts Worldwide, Mr. Ballotti was a Banking Officer in the Commercial Real Estate Group at the Bank of New England. Michele Allen , 48, serves as our Chief Financial Officer. From May 2018 to December 2019, Ms. Allen served as Executive Vice President and Treasurer. From April 2015 to May 2018, Ms.
Prior to joining Starwood Hotels and Resorts Worldwide, Mr. Ballotti was a Banking Officer in the Commercial Real Estate Group at the Bank of New England. Michele Allen , 49, serves as our Chief Financial Officer. From May 2018 to December 2019, Ms. Allen served as Executive Vice President and Treasurer. From April 2015 to May 2018, Ms.
These funds are applied to reimburse hotels and partners for Wyndham Rewards points redemptions by loyalty members and to pay for administrative expenses and marketing initiatives that support the program. 6 Table of Contents OUR FRANCHISING BUSINESS Hotel Franchising Segment Adjusted EBITDA (a) ($ in millions) ______________________ (a) See Part II Item 7.
These funds are applied to reimburse hotels and partners for Wyndham Rewards points redemptions by loyalty members and to pay for administrative expenses and marketing initiatives that support the program. 5 Table of Contents OUR FRANCHISING BUSINESS Hotel Franchising Segment Adjusted EBITDA (a) ($ in millions) ______________________ (a) See Part II Item 7.
Allen began her career as an independent auditor at Deloitte & Touche LLP. Paul F. Cash , 53, serves as our General Counsel, Chief Compliance Officer and Corporate Secretary. From October 2017 to May 2018, Mr. Cash served as Executive Vice President and General Counsel of Wyndham Hotel Group. From April 2005 to September 2017, Mr.
Allen began her career as an independent auditor at Deloitte & Touche LLP. Paul F. Cash , 54, serves as our General Counsel, Chief Compliance Officer and Corporate Secretary. From October 2017 to May 2018, Mr. Cash served as Executive Vice President and General Counsel of Wyndham Hotel Group. From April 2005 to September 2017, Mr.
Melancon previously served as Regional Employee Relations Manager of La Quinta from March 2015 to July 2016. Prior to joining La Quinta, Ms. Melancon served 15 years in various human resource positions of increasing responsibility at Target Corporation. Nicola Rossi , 56, serves as our Chief Accounting Officer. From July 2006 to May 2018, Mr.
Melancon previously served as Regional Employee Relations Manager of La Quinta from March 2015 to July 2016. Prior to joining La Quinta, Ms. Melancon served 15 years in various human resource positions of increasing responsibility at Target Corporation. Nicola Rossi , 57, serves as our Chief Accounting Officer. From July 2006 to May 2018, Mr.
We remain committed to helping our franchisees reduce the energy, water and carbon footprint of their hotels as we work towards achieving our 2025 environmental targets. We continuously evaluate opportunities to increase efficiencies and the usage of renewable energy where feasible as we update our decarbonization plans with longer term targets in alignment with climate science.
We remain committed to helping our franchisees reduce the energy, water and carbon footprint of their hotels as we work towards achieving our 2025 environmental targets. We continue to evaluate opportunities to increase efficiencies and the usage of renewable energy where feasible as we update our decarbonization plans with longer term targets in alignment with climate science.
Checchio served in positions of increasing responsibility for Wyndham Hotel Group including Senior Vice President, Global Brands. From July 2004 to August 2015, Ms. Checchio held several marketing positions of increasing responsibility and served as Brand Marketing and Advertising Director for JetBlue Airways. Monica Melancon , 55, serves as our Chief Human Resource Officer.
Checchio served in positions of increasing responsibility for Wyndham Hotel Group including Senior Vice President, Global Brands. From July 2004 to August 2015, Ms. Checchio held several marketing positions of increasing responsibility and served as Brand Marketing and Advertising Director for JetBlue Airways. Monica Melancon , 56, serves as our Chief Human Resource Officer.
Cash was an associate at the law firm Pünder, Volhard, Weber & Axster in Frankfurt, Germany. Lisa Borromeo Checchio , 42, serves as our Chief Marketing Officer. From May 2018 to January 2019, Ms. Checchio served as our Senior Vice President and Chief Marketing Officer. From August 2015 to May 2018, Ms.
Cash was an associate at the law firm Pünder, Volhard, Weber & Axster in Frankfurt, Germany. Lisa Borromeo Checchio , 43, serves as our Chief Marketing Officer. From May 2018 to January 2019, Ms. Checchio served as our Senior Vice President and Chief Marketing Officer. From August 2015 to May 2018, Ms.
Management’s Discussion and Analysis of Financial Condition and Results of Operations for our definition of adjusted EBITDA and the reconciliation of net income/(loss) to adjusted EBITDA. Adjusted EBITDA has been recasted to conform with the current year presentation for 2018 through 2020. 2020 adjusted EBITDA was impacted by COVID-19.
Management’s Discussion and Analysis of Financial Condition and Results of Operations for our definition of adjusted EBITDA and the reconciliation of net income/(loss) to adjusted EBITDA. Adjusted EBITDA has been recasted to conform with the current year presentation for 2019 through 2020. 2020 adjusted EBITDA was impacted by COVID-19.
OUR STRATEGY As the world’s largest hotel franchising company by number of hotels, with approximately 9,100 hotels under 24 brands across over 95 countries, Wyndham Hotels & Resorts is an asset-light business with significant cash generation capabilities.
OUR STRATEGY As the world’s largest hotel franchising company by number of hotels, with approximately 9,200 hotels under 24 brands across over 95 countries, Wyndham Hotels & Resorts is an asset-light business with significant cash generation capabilities.
Our 24 brands are primarily located in secondary and tertiary cities and approximately 80% of the U.S. population lives within ten miles of at least one of our affiliated hotels. Our mission is to make hotel travel possible for all. Wherever people go, Wyndham will be there to welcome them.
Our 24 brands are primarily located in secondary and tertiary cities and approximately 80% of the U.S. population lives within ten miles of at least one of our affiliated hotels. Our mission is to make hotel travel possible for all. Wherever 2 Table of Contents people go, Wyndham will be there to welcome them.
One master franchisor in China for the Super 8 brand accounts for 12% of our hotels. Apart from this relationship, no one franchisee accounts for more than 2% of our hotels. 11 Table of Contents SEASONALITY While the hotel industry is seasonal in nature, periods of higher revenues vary property-by-property and performance is dependent on location and guest base.
One master franchisor in China for the Super 8 brand accounts for 12% of our hotels. Apart from this relationship, no one franchisee accounts for more than 2% of our hotels. SEASONALITY While the hotel industry is seasonal in nature, periods of higher revenues vary property-by-property and performance is dependent on location and guest base.
As the world’s largest hotel franchising company by number of hotels, we have a unique opportunity to make a meaningful impact on the world while advancing our mission to make hotel travel possible for all. As a hospitality company, service and volunteering is deeply rooted in our history and corporate culture.
As the world’s largest hotel franchising company by number of hotels, we have a unique opportunity to make a meaningful impact on the world while advancing our mission to make hotel travel possible for all. 6 Table of Contents As a hospitality company, service and volunteering is deeply rooted in our history and corporate culture.
From October 2003 to March 2008, Mr. Ballotti was President of the North America Division of Starwood Hotels and Resorts Worldwide. From 1989 to 2003, Mr. Ballotti held leadership positions of increasing responsibility at Starwood Hotels and Resorts Worldwide, including President of Starwood North America, Executive Vice President, Operations, Senior Vice President, Southern Europe and Managing Director, Ciga Spa, Italy.
Ballotti was President of the North America Division of Starwood Hotels and Resorts Worldwide. From 1989 to 2003, Mr. Ballotti held leadership positions of increasing responsibility at Starwood Hotels and Resorts Worldwide, including President of Starwood North America, Executive Vice President, Operations, Senior Vice President, Southern Europe and Managing Director, Ciga Spa, Italy.
Allen served as Senior Vice President of Finance for Wyndham Worldwide. From August 2006 to March 2015, Ms. Allen held leadership positions of increasing responsibility at Wyndham Hotel Group, including Senior Vice President of Finance and Controller. From 1999 to August 2006, Ms. Allen 12 Table of Contents served in positions of increasing responsibility at Wyndham Worldwide’s predecessor. Ms.
Allen served as Senior Vice President of Finance for Wyndham Worldwide. From August 2006 to March 2015, Ms. Allen held leadership positions of increasing responsibility at Wyndham Hotel Group, including Senior Vice President of Finance and Controller. From 1999 to August 2006, Ms. Allen served in positions of increasing responsibility at Wyndham Worldwide’s predecessor. Ms.
Some risks that we consider include: • Current and emerging regulations, like those pertaining to energy efficiency, energy consumption reporting and green building codes and standards at the local, state, and national levels, are considered as risks for our business. • Acute physical risks (extreme weather events), including hurricanes and wildfires, are increasing in frequency can impact travel demand in specific markets, supply chains and cause physical damage to our assets. • Chronic physical risks, such as include rising sea levels, rising mean temperatures, changes in precipitation patterns (including droughts) and extreme variability in weather patterns, can influence demand for travel and tourism in key markets adversely by decreasing revenue and/or causing property damage.
Some risks that we consider include: • Current and emerging regulations, including those pertaining to energy efficiency, energy and GHG emissions reporting and green building codes and standards at the local, state, and national levels, are considered as risks for franchised business. • Acute physical risks (extreme weather events), including hurricanes and wildfires, are increasing in frequency and can impact travel demand in specific markets, supply chains and cause physical damage to franchisee's assets. • Chronic physical risks, such as rising sea levels, rising mean temperatures, changes in precipitation patterns (including droughts) and extreme variability in weather patterns, can influence demand for travel and tourism in key markets adversely by decreasing revenue and/or causing property damage for franchisees.
Cash served as Executive Vice President and General Counsel and in legal executive positions with increasing leadership responsibility for Wyndham Destination Network. From January 2003 to April 2005, Mr.
Cash served as Executive Vice President and General Counsel and in legal executive positions 11 Table of Contents with increasing leadership responsibility for Wyndham Destination Network. From January 2003 to April 2005, Mr.
Our philanthropy captures the dedication of our team members, leaders and business partners who have pledged to make lasting, important contributions to the communities in which we operate. HUMAN CAPITAL As of December 31, 2022, we had approximately 2,500 employees, consisting of approximately 1,100 employees outside of the United States.
Our philanthropy captures the dedication of our team members, leaders and business partners who have pledged to make lasting, important contributions to the communities in which we operate. HUMAN CAPITAL As of December 31, 2023, we had approximately 2,300 employees, consisting of approximately 1,200 employees outside of the United States.
Based on historical performance, revenues from franchise and management contracts are generally higher in the second and third quarters than in the first or fourth quarters due to increased leisure travel during the spring and summer months.
Based on historical performance, revenues from franchise contracts are generally higher in the second and third quarters than in the first or fourth quarters due to increased leisure travel during the spring and 10 Table of Contents summer months.
While we continue to be recognized for the progress we have made on our Diversity, Equity and Inclusion 8 Table of Contents journey, we know we can do more.
While we continue to be recognized for the progress we have made on our Diversity, Equity and Inclusion journey, we know we can do more.
Rossi was Corporate Controller and from June 1999 to March 2000 was Assistant Corporate Controller of Jacuzzi Brands, Inc. Mr. Rossi began his career as an independent auditor at Deloitte & Touche LLP. Scott R. Strickland , 52, serves as our Chief Information Officer. From March 2017 to May 2018, Mr.
Rossi was Corporate Controller and from June 1999 to March 2000 was Assistant Corporate Controller of Jacuzzi Brands, Inc. Mr. Rossi began his career as an independent auditor at Deloitte & Touche LLP. Scott R. Strickland , 53, serves as our Chief Information and Distribution Officer. From May 2018 through November 2023, Mr.
Ballotti , 61, serves as our President and Chief Executive Officer and member of our Board of Directors. From March 2014 to May 2018, Mr. Ballotti served as President and Chief Executive Officer of Wyndham Hotel Group. From March 2008 to March 2014, Mr. Ballotti served as Chief Executive Officer of Wyndham Destination Network.
Ballotti , 62, serves as our President and Chief Executive Officer and member of our Board. From March 2014 to May 2018, Mr. Ballotti served as President and Chief Executive Officer of Wyndham Hotel Group. From March 2008 to March 2014, Mr. Ballotti served as Chief Executive Officer of Wyndham Destination Network. From October 2003 to March 2008, Mr.
We continually monitor and prioritize climate-related risks based on the financial and strategic impacts on our business. Enterprise risks, including those related to sustainability, climate and energy, are identified and assessed on an ongoing basis. We review climate-related risks using the Task Force for Climate-Related Financial Disclosures (“TFCD”) on an annual basis, which include both transition and physical risks.
We continually monitor and prioritize climate-related risks based on the financial and strategic impacts on our business. Enterprise risks, including those related to sustainability, climate and energy, are identified and assessed on an ongoing basis. We review climate-related risks using the TCFD recommendations on an annual basis, which include both transition and physical risks.
Members can use points for stays at over 50,000 properties, including stays at thousands of hotels, vacation clubs and vacation rentals globally as well as merchandise, gift cards, airlines, charities, and tours and activities. Affiliation with our loyalty programs encourages members to allocate more of their travel spending to our hotels.
Members can use points for stays at over 60,000 hotels, vacation club resorts and vacation rentals globally as well as merchandise, gift cards, airlines, charities, and tours and activities. Affiliation with our loyalty programs encourages members to allocate more of their travel spending to our hotels.
The Wyndham Green Program consists of two integral components: 1) the Wyndham Green Certification, our internal certification with best practices to address energy and water conservation, waste diversion, operational efficiency, as well as guest, team member and franchisee education and engagement, and 2) the Wyndham Green Toolbox, a proprietary environmental management tool that tracks, measures and reports environmental performance data to help hotels improve energy efficiency, reduce emissions, conserve water, and reduce waste – thus minimizing environmental impact.
The Wyndham Green Program consists of two integral components: 1) the Wyndham Green Certification, our internal certification with best practices to address energy and water conservation, waste diversion, responsible purchasing, as well as guest, team member and franchisee education and engagement, and 2) the Wyndham Green Toolbox, an environmental management tool that tracks, measures and reports environmental performance data to help franchisees improve energy efficiency, reduce greenhouse gas or (“GHG”), emissions, conserve water, and reduce waste – thus minimizing environmental impact.
We remain committed to the well-being and safety of our team members, guests and all those that connect to our industry. In 2022, we continued to donate and activate our team members and approximately 99 million enrolled Wyndham Rewards members to support humanitarian causes around the world.
We remain committed to the well-being and safety of our team members, guests and all those that connect to our industry. In 2023, we continued to donate and encourage our team members and over 106 million enrolled Wyndham Rewards members to support humanitarian causes around the world.
Our members accounted for over 37% of check-ins at our affiliated hotels globally and over 48% in the United States. Total membership grew 6% in 2020 and 7% in both 2021 and 2022, with approximately 7 million new enrolled members added in 2022.
Our members accounted for over 35% of check-ins at our affiliated hotels globally and over 48% in the United States. Total membership grew 7% annually in each 2021, 2022 and 2023, with approximately 7 million new enrolled members added in 2023.
Item 1. Business. Wyndham Hotels & Resorts, Inc. (“Wyndham Hotels”, the “Company”, “we”, “our” or “us”) is the world’s largest hotel franchising company by number of hotels, with approximately 9,100 affiliated hotels with approximately 843,000 rooms located in over 95 countries and welcoming over 130 million guests annually worldwide.
Item 1. Business. Wyndham Hotels & Resorts, Inc. (“Wyndham Hotels”, the “Company”, “we”, “our” or “us”) is the world’s largest hotel franchising company by number of hotels, with approximately 9,200 affiliated hotels with approximately 872,000 rooms located in over 95 countries and welcoming nearly 140 million guests annually worldwide. We operate a hotel portfolio of 24 brands.
It has won more than 100 awards and accolades in recent years and was recently ranked #1 “Best Hotel Loyalty Program” in USA TODAY 10 Best Readers’ Choice Awards for the fifth time and as one of the best hotel rewards programs by US News & World Report and WalletHub. Wyndham Rewards has approximately 99 million enrolled members.
It has won more than 100 awards and accolades in recent years and was recently ranked #1 “Best Hotel Loyalty Program” in USA TODAY 10 Best Readers’ Choice Awards for six consecutive years and as one of the “Best Travel Rewards Programs” by US News & World Report for nine years running. Wyndham Rewards has over 106 million enrolled members.
Our workforce is comprised of approximately 2,050 corporate employees and approximately 450 managed property employees. Culture As a leader in hospitality, we recognize the critical role that service plays for our company. At Wyndham, our values underpin our inclusive culture, drive our growth, nurture innovation, and inspire the great experiences we create for team members and the people we serve.
Culture As a leader in hospitality, we recognize the critical role that service plays for our company. At Wyndham, our values underpin our inclusive culture, drive our growth, nurture innovation, and inspire the great experiences we create for team members and the people we serve.
In 2022, our sales team executed 882 contracts representing over 113,000 rooms. A key component of driving our net room growth is our ability to retain properties within our system. Our 2022 global retention rate was over 95%, which was a 20 basis point improvement from 2021. Our 2022 U.S. retention rate was also over 95%.
In 2023, our sales team executed 864 contracts representing nearly 104,000 rooms. A key component of driving our net room growth is our ability to retain properties within our system. Our 2023 global retention rate was 95.6%, which was a 30 basis point improvement from 2022. Our 2023 U.S. retention rate was 95.4%.
Our focus includes: • Embarking on a multi-decade journey to help our franchisees reduce their greenhouse gas emissions in alignment with efforts to limit the rise in global temperatures in part by providing tools and best practices through our Wyndham Green Program. • Promoting best practices around water conservation at these hotels through our Wyndham Green Program; supporting the access to clean water to all through our community partnerships; and reducing single-use plastics to keep our waterways and oceans pollution-free and safe for wildlife. • Sharing best practices around waste diversion through our Wyndham Green Program in order to reduce waste sent to landfills. • Promoting and expanding best practices for biodiversity protection across hotels in our system; partnering with suppliers to make a meaningful impact to protect forests and biodiversity.
Our focus includes: • Embarking on a long-term journey to help our franchisees reduce their GHG emissions in alignment with efforts to limit the rise in global temperatures in part by providing tools and best practices through our Wyndham Green Program. 8 Table of Contents • Promoting best practices around water conservation at these hotels through our Wyndham Green Program; supporting the access to clean water through our community partnerships; and reducing single-use plastics to promote clean waterways and oceans. • Sharing best practices around waste diversion through our Wyndham Green Program to reduce waste sent to landfills and the environmental impact. • Promoting and expanding best practices for biodiversity protection across Wyndham's franchised hotels; engaging with suppliers to make a meaningful impact to protect forests and biodiversity.
A franchisee’s success may also be affected by general, regional and local economic conditions. The potential effect of these conditions on our performance is substantially reduced by virtue of the diverse locations of our affiliated hotels and by the scale of our base. Our system is dispersed among over 6,000 franchisees, which reduces our exposure to any one franchisee.
The potential effect of these conditions on our performance is substantially reduced by virtue of the diverse locations of our affiliated hotels and by the scale of our base. Our system is dispersed among over 6,100 franchisees, which reduces our exposure to any one franchisee.
Our Guest Loyalty Program Wyndham Rewards is our award-winning guest loyalty program that supports our portfolio of brands. The program generates significant repeat business by rewarding guests with points for each qualified stay at all of our active properties, which are then redeemable for free nights and other goods and services.
Our Guest Loyalty Program Wyndham Rewards is our award-winning guest loyalty program that supports our portfolio of brands. The program generates significant repeat business by rewarding guests with points for each qualified stay at all of our participating properties.
We engage team members, owners and operators around the world to uphold and leverage our core values to think globally and execute locally. We developed the Wyndham Green Program, which was designed to show how hotels can reduce operating costs through efficiency, help drive revenue from environmentally conscious travelers, remain competitive in the market and increase brand loyalty.
We engage team members, owners and operators around the world to uphold and leverage our core values to think globally and execute locally. Through the Wyndham Green Program, we support franchisees by helping them to reduce operating costs through efficiency measures, drive revenue from environmentally conscious travelers, and remain competitive in the market, while increasing brand loyalty.
As of December 31, 2022, approximately 40% of our pipeline was located in the U.S. and 60% was located internationally; 80% of our pipeline was for new construction properties, of which 36% have broken ground and 20% represented conversion opportunities.
As of December 31, 2023, approximately 42% of our pipeline was located in the U.S. and 58% was located internationally; 79% of our pipeline was for new construction properties, of which 34% have broken ground and 21% represented conversion opportunities.
We boast a remarkably asset-light business model dramatically limiting our capital needs and our exposure to the rising wage environment. 2 Table of Contents The following chart presents the number of branded hotels associated with each of the five largest traditional hotel franchise companies as of December 31, 2022, except for IHG which is as of September 30, 2022: Source: Companies’ public disclosures Our widely recognized brands with select-service focus offer a breadth of options for franchisees and a wide range of price points and experiences for our guests.
The following chart presents the number of branded hotels associated with each of the five largest traditional hotel franchise companies as of December 31, 2023, except for Choice and IHG which are as of September 30, 2023: Source: Companies’ public disclosures Our widely recognized brands with select-service focus offer a breadth of options for franchisees and a wide range of price points and experiences for our guests.
Strickland served as Chief Information Officer of Wyndham Hotel Group. From November 2011 to March 2017, Mr. Strickland served as Chief Information Officer for Denon Marantz Electronics. From February 2005 to June 2010, Mr. Strickland served as Chief Information Officer for Black & Decker HHI. From 1999 to 2005, Mr. Strickland served as an Associate Partner with PricewaterhouseCoopers.
Strickland served as Chief Information Officer of the Company. From March 2017 to May 2018, Mr. Strickland served as Chief Information Officer of Wyndham Hotel Group. From November 2011 to March 2017, Mr. Strickland served as Chief Information Officer for Denon Marantz Electronics. From February 2005 to June 2010, Mr.
Wyndham Hotels became an independent, public company in May 2018 when it was spun-off from Wyndham Worldwide, now known as Travel + Leisure Co. (“Travel + Leisure”). COMPETITION We encounter competition among hotel franchisors and lodging operators. We believe franchisees make decisions based principally upon the perceived value and quality of the brand and the services offered.
It was an integral part of Wyndham Worldwide Corporation and its predecessor from 1997 to 2018. Wyndham Hotels became an independent, public company in May 2018 when it was spun-off from Wyndham Worldwide, now known as Travel + Leisure Co. (“Travel + Leisure”). COMPETITION We encounter competition among hotel franchisors and lodging operators.
We are a global leader in the economy and midscale chain scales where our brands represent approximately 30% of branded rooms in the United States, and also have a strong presence in the upper midscale chain scale. 3 Table of Contents The following charts illustrate our system size (by rooms) as of December 31, 2022: ______________________ * Royalty contribution by geography for 2022 was as follows: U.S. 85%, Canada 5%, EMEA 5%, Asia Pacific 3% and LATAM 2%. ** LATAM is representative of Latin America and the Caribbean. *** EMEA is representative of Europe, the Middle East, Eurasia and Africa. 4 Table of Contents As of December 31, 2022, our brand portfolio consisted of the following: Global Full Year RevPAR North America Asia Pacific U.S.
The following charts illustrate our system size (by rooms) as of December 31, 2023: ______________________ * Royalty contribution by geography for 2023 was as follows: U.S. 80%, Canada 5%, EMEA 7%, Asia Pacific 5% and LATAM 3%. ** LATAM is representative of Latin America and the Caribbean. *** EMEA is representative of Europe, the Middle East, Eurasia and Africa. 3 Table of Contents As of December 31, 2023, our brand portfolio consisted of the following: Global Full Year RevPAR North America Asia Pacific U.S.
For the third consecutive year, Wyndham was named one of the Best Places to Work in New Jersey by New Jersey Business Magazine in 2022, we were on Newsweek’s 2022 Most Loved Workplaces list and Forbes recognized Wyndham on its 2022 list of World’s Best Employers and America’s Best Employers.
We were further named to the Newsweek 2023 List of Most Loved Workplaces for the second consecutive year and named one of the 2023 Best Places to Work in New Jersey by New Jersey Business Magazine for the fourth consecutive year.
(b) Excludes ECHO Suites Extended Stay by Wyndham, which did not have any open hotels as of December 31, 2022, though 170 hotels were added to the pipeline since the launch in March 2022 and three had broken ground during 2022.
(b) Excludes ECHO Suites Extended Stay by Wyndham, which did not have any open hotels. As of December 31, 2023, we had 268 hotels in our pipeline, of which 11 have broken ground.
As part of our giving efforts, Wyndham Rewards and its members have donated approximately 170 million points since inception to various non-profit organizations, including organizations supporting humanitarian causes to redeem for travel and other related goods and services. 9 Table of Contents ENVIRONMENTAL IMPACT We are committed to operating sustainably in a way that provides outstanding experiences for those we serve through places to stay that are environmentally responsible.
As part of our giving efforts, Wyndham Rewards and its members have donated approximately 181 million points since inception to various non-profit organizations, including organizations supporting humanitarian causes to redeem for travel and other related goods and services.
We further believe that the perceived value of a brand name is partially a function of the success of the existing hotels franchised under the brand. The ability of an individual franchisee to compete may be affected by the location and quality of its property, the number of competitors in the vicinity, community reputation and other factors.
The ability of an individual franchisee to compete may be affected by the location and quality of its property, the number of competitors in the vicinity, community reputation and other factors. A franchisee’s success may also be affected by general, regional and local economic conditions.
Throughout our value chain, from team members, franchisees, partners and suppliers to the community and our guests, we believe that diversity of backgrounds, cultures and experiences helps drive our company’s success. Wellness: Our “Be Well” Program We are committed to offering programs that focus on the total well-being of all our team members.
These accolades build on our growing resume of workplace awards. 7 Table of Contents Throughout our value chain, from team members, franchisees, partners and suppliers to the community and our guests, we believe that diversity of backgrounds, cultures and experiences helps drive our company’s success.
We also understand that nutrition, exercise, lifestyle management, physical, mental, and emotional wellness, financial health and the quality of the environment in which we work and live are also critical priorities for each of our team members. We believe that health and wellness promote both professional and personal productivity, achievement, and fulfillment, ultimately making us stronger across the organization.
Wellness: Our “Be Well” Program We are committed to offering programs that focus on the total well-being of all our team members. We also understand that nutrition, exercise, lifestyle management, physical, mental, and emotional wellness, financial health and the quality of the environment in which we work and live are also critical priorities for each of our team members.
NM - not meaningful. 5 Table of Contents The following table presents the changes in our portfolio for the last three years: As of December 31, 2022 2021 2020 Properties Rooms Properties Rooms Properties Rooms Beginning balance 8,950 810,100 8,941 795,900 9,280 831,000 Additions 490 70,400 415 53,100 322 35,600 Deletions (a) (381) (38,000) (406) (38,900) (661) (70,700) Ending balance 9,059 842,500 8,950 810,100 8,941 795,900 ______________________ (a) 2020 includes the deletion of 214 properties and approximately 18,500 rooms from the termination of non-compliant and brand detracting rooms, 20 properties and approximately 2,900 unprofitable rooms in connection with a guaranteed management contract and three properties and approximately 5,300 low-royalty rooms in connection with hotel sales by a strategic partner.
NM - not meaningful. 4 Table of Contents The following table presents the changes in our portfolio for the last three years: As of December 31, 2023 2022 2021 Properties Rooms Properties Rooms Properties Rooms Beginning balance 9,059 842,500 8,950 810,100 8,941 795,900 Additions 500 66,000 490 70,400 415 53,100 Deletions (381) (36,700) (381) (38,000) (406) (38,900) Ending balance 9,178 871,800 9,059 842,500 8,950 810,100 In addition to our current hotel portfolio, we have over 1,900 properties and approximately 240,000 rooms in our development pipeline throughout 57 countries including 8 where we do not currently have a presence.
CORPORATE RESPONSIBILITY We are committed to operating our business in a way that is socially, ethically and environmentally responsible. Now more than ever, we must help ensure the future remains bright for travelers around the world.
Now more than ever, we must help ensure the future remains bright for travelers around the world.
As more travelers are looking for environmentally friendly lodging options, it is critical to position 10 Table of Contents our hotels optimally and provide new environmentally responsible options for our guests. Our 2022 ESG Report, which is available on our corporate website and not incorporated by reference into this Annual Report, contains additional information regarding our commitment to social responsibility.
Our 2023 ESG Report, which is available on our corporate website and not incorporated by reference into this Annual Report, contains additional information regarding our commitment to social responsibility and sustainability. 9 Table of Contents OUR HISTORY Our business was initially incorporated as Hospitality Franchise Systems, Inc. in 1990 to acquire the Howard Johnson brand and the franchise rights to the Ramada brand in the United States.
The Company was also named a 2022 Noteworthy Company for Diversity by Diversity Inc., awarded the VETS Indexes Recognized Employer designation as part of the 2022 VETS Indexes Employer Awards, a Forbes 2022 The Best Employers for Diversity, a 2022 Military Friendly Employer and Military Friendly Supplier Diversity Program by VIQTORY in acknowledgement of our commitment to create sustainable and meaningful benefits for our military community.
Our commitment to supporting the military community afforded Wyndham the VETS Indexes 4 Star Employer designation as part of the 2023 VETS Indexes Employer Awards, a 2023 Military Friendly Employer Silver Award and Military Friendly – Top 10 Supplier Diversity Program Award for the second consecutive year.
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We operate a hotel portfolio of 24 brands, including Vienna House, which we acquired in 2022 and ECHO Suites Extended Stay by Wyndham, our first economy extended stay brand that we launched in the first quarter of 2022.
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We boast a remarkably asset-light business model dramatically limiting our capital needs and our exposure to the rising wage environment.
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In addition to our current hotel portfolio, we have over 1,700 properties and approximately 219,000 rooms in our development pipeline throughout 60 countries including 13 where we do not currently have a presence.
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We are a global leader in the economy and midscale chain scales where our brands represent approximately 30% of branded rooms in the United States. Additionally, we have a strong presence in the upper midscale chain scale.
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OUR MANAGEMENT BUSINESS Hotel Management Segment Adjusted EBITDA (a) ($ in millions) ______________________ (a) See Part II Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for our definition of adjusted EBITDA and the reconciliation of net income/(loss) to adjusted EBITDA. 2020 adjusted EBITDA was impacted by COVID-19.
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Our company’s mission is to make hotel travel possible for all and we aim to be the world’s leading provider of select-service hotel brands by delivering the best value to owners and guests.
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During 2022, we completed the sale of our two owned hotels and exited our select-service management business. As a result of these transactions, we decreased the number of our managed hotels by 158 during the year.
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In support of our mission and vision, our strategic priorities are organized around the following primary goals and objectives: • Growing our direct franchising system by 3-4% in 2024, with an ambition to accelerate to 3-5% annually by 2026 by continuing to improve our franchisee retention rates, investing in our brands and expanding into adjacent market segments and new geographies while supporting the roll-out of our ECHO Suites by Wyndham pipeline. • Targeting new development efforts in high FeePAR (RevPAR + royalty rates) brands and regions. • Optimizing top-line performance and market share for our franchisees by embracing continuous digital innovation and best practices, as well as capitalizing on the growing government spend tied to the U.S.
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As of December 31, 2022, we had 72 full-service hotels under management contracts, located primarily in international markets such as Argentina, China and the Middle East. We manage full-service properties under our brands, primarily under the Wyndham, Wyndham Grand, Wyndham Garden, Dolce, Ramada, Dazzler and Esplendor brands in major markets and resort destinations globally.
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Infrastructure and Chips Acts. • Boosting franchisee profitability by reducing on-property labor and operating costs by deploying state-of-the-art owner-first technology solutions that not only streamline operations but also elevate guest experiences. • Capitalizing on ancillary revenue opportunities by expanding our co-branded credit card offerings, introducing new products and services, building new strategic marketing partnerships and leveraging our unique "blue-tread' licensing partnership with Travel + Leisure Group.
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The duration of our management agreements is typically 10 to 20 years. We earn a base management fee, which is based on a percentage of the hotel’s total revenue, and in some cases we earn an incentive fee, which is based on achieving performance metrics agreed upon with hotel owners.
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Our strategic priorities are more than just goals; they are a commitment to our shareholders, franchisees, and guests that we will continue to drive growth, operational excellence, and profitability in all we do. CORPORATE RESPONSIBILITY We are committed to operating our business in a way that is socially, ethically and environmentally responsible.
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Under our management arrangements, we provide all the benefits of a franchising agreement and also conduct the day-to-day-operations of the hotel on behalf of the owner.
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Our company was named to the 2023 Top 50 Companies for Diversity List by DiversityInc.
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Our company’s mission is to make hotel travel possible for all, and our vision is to be the world’s leading provider of select-service hotel brands by delivering the best value to owners and guests. 7 Table of Contents In support of our mission and vision, our 2023 strategic priorities are organized around the following primary goals and objectives: • drive net room growth of 2-4%, including an improvement in the retention rate of our current global system, through the continued investment in new brands, system refreshes and other programs, as well as expanding our portfolio reach across adjacent segments and geographies; and • increase owners’ profitability by optimizing property revenue and maximizing market share through continued digital innovation, capturing increase share of growing spend from the Infrastructure and CHIPS and Science Acts and reducing on-property labor and operating costs through state-of-the-art, owner-first technology solutions and services that improve guest experience and increase hotel operating efficiencies.
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We were also recognized by Forbes as one of The Best Employers for Diversity for the second consecutive year and named to Newsweek’s list of America’s Greatest Workplaces for Diversity showcasing Wyndham’s continued commitment to providing a workplace that promotes diversity, equity and inclusion for all.
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Our company was named the best place to work for LGBTQ Equality by earning a perfect score, for the fifth consecutive year, on the Human Rights Campaign’s Corporate Equality Index—a national benchmarking survey on practices related to LGBTQ equality.
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We believe that health and wellness promote both professional and personal productivity, achievement, and fulfillment, ultimately making us stronger across the organization.
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During the fourth quarter of 2022, Wyndham was named to the Dow Jones Sustainability World Index, which consists of the top 10% of the largest 2,500 stocks in the S&P Global Broad Market Index based on their sustainability and environmental practices.
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ENVIRONMENTAL IMPACT As the world’s largest hotel franchising company, we have the opportunity to make a meaningful impact on the world and we take that opportunity seriously. We are committed to operating our business in a way that is socially, ethically and environmentally responsible.
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OUR HISTORY Our business was initially incorporated as Hospitality Franchise Systems, Inc. in 1990 to acquire the Howard Johnson brand and the franchise rights to the Ramada brand in the United States. It was an integral part of Wyndham Worldwide Corporation and its predecessor from 1997 to 2018.
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During 2023, Wyndham was named one of the Net-Zero Leaders by Forbes for 2023 ( © 2023 Forbes. All rights reserved. Used under license), which identifies leading companies that are progressing to a low-carbon economy by 2050 and are also adapting their business model to achieve sustainability targets.
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As more travelers are looking for environmentally-friendly lodging options, it is critical to position Wyndham-branded hotels optimally to provide environmentally responsible options and to make it simpler for our guests to locate and book stays with these types of hotels.
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We believe franchisees make decisions based principally upon the perceived value and quality of the brand and the services offered. We further believe that the perceived value of a brand name is partially a function of the success of the existing hotels franchised under the brand.
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Strickland served as Chief Information Officer for Black & Decker HHI. From 1999 to 2005, Mr. Strickland served as an Associate Partner with PricewaterhouseCoopers.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

52 edited+32 added−15 removed72 unchanged
Biggest changeAs such, our business is subject, directly or through our franchisees, to risks common in the hotel and hotel franchising industries, including risks related to: • our ability to meet our objectives for growth in the number of our franchised hotels and hotel rooms in our franchise system and to retain and renew franchisee contracts, all on favorable terms; • the number, occupancy and room rates of hotels operating under our franchise agreements; • the delay of hotel openings in our pipeline; • changes in the supply and demand for hotel rooms; • increased pricing or supply chain disruptions for raw materials which could cause delays in the completion and development of new hotels; • our ability to develop and maintain positive relations and contractual arrangements with current and potential franchisees under our franchise agreements and other third parties, including marketing alliances and affiliations with e-commerce channels; • our franchisees’ pricing decisions; • the quality of the services provided by franchisees and their investments in the maintenance and improvement of properties; • the bankruptcy or insolvency of a significant number of our franchised hotels; • the financial condition of franchisees, owners or other developers and the availability of financing to them; • adverse events occurring at franchised hotel locations, including personal injuries, food tampering, contamination or the spread of illness, including COVID-19; • negative publicity, which could damage our hotel brands; • our ability to successfully market our current or any future hotel brands and programs, including our rewards program, and to service or pilot new initiatives; • our relationship with certain multi-unit franchisees; • changes in the laws, regulations and legislation affecting our business, internationally and domestically; • our failure to adequately protect and maintain our trademarks and other intellectual property rights; • the relative mix of branded hotels in the various hotel industry price categories; • corporate budgets and spending and cancellations, deferrals or renegotiations of group business; • seasonal or cyclical volatility in our business; • operating costs, including as a result of inflation, energy costs and labor costs, such as minimum wage increases and unionization, workers’ compensation and health-care related costs and insurance; and • disputes, claims and litigation and other legal proceedings concerning our franchised hotels’ operations, including with consumers, government regulators, other businesses, franchisees, organized labor activities and class actions.
Biggest changeAs such, our business is subject, directly or through our franchisees, to risks common in the hotel and hotel franchising industries, including risks related to: • our ability to meet our objectives for growth in the number of our franchised hotels and hotel rooms in our franchise system and to retain and renew franchisee contracts, all on favorable terms; • the number, occupancy and room rates of hotels operating under our franchise agreements; • the delay of hotel openings in our pipeline; • changes in the supply and demand for hotel rooms; • increased pricing or supply chain disruptions for raw materials which could cause delays in the completion and development of new hotels; • our ability to develop and maintain positive relations and contractual arrangements with current and potential franchisees under our franchise agreements and other third parties, including marketing alliances and affiliations with e-commerce channels; • our franchisees’ pricing decisions; • the quality of the services provided by franchisees and their investments in the maintenance and improvement of properties; • the bankruptcy or insolvency of a significant number of our franchised hotels; • the financial condition of franchisees, owners or other developers and the availability of financing to them; • adverse events occurring at franchised hotel locations, including personal injuries, food tampering, contamination or the spread of illness, including through pandemics or other health crises; • negative publicity, which could damage our hotel brands; • our ability to successfully market our current or any future hotel brands and programs, including our rewards program, and to service or pilot new initiatives; • our relationship with certain multi-unit franchisees; • changes in the laws, regulations, legislation and government spending affecting our business, internationally and domestically, including changes relating to the U.S.
Two of our Directors also serve on the Travel + Leisure Board and certain of our executive officers and non-employee Directors own shares of Travel + Leisure common stock because of their current or former positions with Travel + Leisure.
Two of our Directors also serve on the Travel + Leisure board of directors and certain of our executive officers and non-employee Directors own shares of Travel + Leisure common stock because of their current or former positions with Travel + Leisure.
Violation or non-compliance with any of these laws or regulations, contractual requirements relating to data security and privacy, or with our own privacy and security policies, either intentionally or unintentionally, or through the acts of intermediaries could have a material adverse effect on our hotel brands, reputation, business, financial condition and results of operations, as well as subject us to significant fines, litigation, losses, third-party damages and other liabilities.
Violation or non-compliance with any of these laws or regulations, contractual requirements relating to data security and privacy, or with our own privacy and security policies or processes, either intentionally or unintentionally, or through the acts of intermediaries could have a material adverse effect on our hotel brands, reputation, business, financial condition and results of operations, as well as subject us to significant fines, litigation, losses, third-party damages and other liabilities.
Our third amended and restated by-laws provide that, subject to limited exceptions, (1) the Court of Chancery of the State of Delaware will be the sole and exclusive forum for derivative actions; claims related to a breach of a fiduciary duty, corporate law, our second amended and restated certificate of incorporation, as amended or our third amended and restated bylaws, as amended; or under the internal affairs doctrine; and (2) the federal district courts of the United States will be the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under the Securities Act of 1933, as amended, including all causes of action asserted against any defendant to such complaint.
Our third amended and restated by-laws provide that, subject to limited exceptions, (1) the Court of Chancery of the State of Delaware will be the sole and exclusive forum for derivative actions; claims related to a breach of a fiduciary duty, corporate law, our third amended and restated certificate of incorporation, as amended or our third amended and restated by-laws, as amended; or under the internal affairs doctrine; and (2) the federal district courts of the United States will be the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under the Securities Act of 1933, as amended, including all causes of action asserted against any defendant to such complaint.
Failure to maintain the security of personally identifiable and proprietary information, non-compliance with our contractual obligations regarding such information or a violation of our privacy and security policies with respect to such information could adversely affect us.
Failure to maintain the security of personally identifiable and proprietary information, non-compliance with our contractual obligations regarding such information or a violation of our privacy and security policies or processes with respect to such information could adversely affect us.
This includes potential changes in tax laws or the interpretation of tax laws arising out of the Base Erosion Profit Shifting project initiated by the Organization for Economic Co-operation and Development (“OECD”).
This includes potential changes in tax laws or the interpretation of tax laws arising out of the Base Erosion Profit Shifting (“BEPS”) project initiated by the Organization for Economic Co-operation and Development (“OECD”).
We are subject to a number of disputes, claims, litigation and other legal proceedings as described in this report, and any unfavorable rulings or outcomes in current or future litigation and other legal proceedings may materially harm our business. For additional information, see our Commitments and Contingencies note (Note 15) in the notes to our financial statements.
We are subject to a number of disputes, claims, litigation and other legal proceedings as described in this report, and any unfavorable rulings or outcomes in current or future litigation and other legal proceedings may materially harm our business. For additional information, see our Commitments and Contingencies note (Note 14) in the notes to our financial statements.
While a significant portion of our debt is effectively at a fixed rate of interest and our nearest maturity is not until 2025, an increase in financing cost due to increased interest rates may hinder our efforts to expand our franchisee footprint, which could adversely affect our cash flows and business.
While a significant portion of our debt is effectively at a fixed rate of interest and our nearest maturity is not until 2027, an increase in financing cost due to increased interest rates may hinder our efforts to expand our franchisee footprint, which could adversely affect our cash flows and business.
Any decline in or disruptions to the travel or hotel industries may adversely affect travel demand and the results of our operations, and those of our current franchised hotels and potential franchisees and developers. Any of these factors could increase our costs, reduce our revenues and otherwise adversely impact our profitability and/or opportunities for growth.
Any declines in or disruptions to the travel or hotel industries may adversely affect travel demand and the results of our operations, and those of our current franchised hotels and potential franchisees and developers. Any of these factors could increase our costs, reduce our revenues and otherwise adversely impact our profitability and/or opportunities for growth.
Our debt instruments contain restrictions, covenants and events of default that, among other things, could limit our ability to respond to changing business and economic conditions; take advantage of business opportunities; incur or guarantee additional debt; pay dividends or make distributions or repurchases; make investments or acquisitions; sell, transfer or otherwise dispose of certain assets; create 18 Table of Contents liens; consolidate or merge; enter into transactions with affiliates; and prepay and repurchase or redeem certain indebtedness.
Our debt instruments contain restrictions, covenants and events of default that, among other things, could limit our ability to respond to changing business and economic conditions; take advantage of business opportunities; incur or guarantee additional debt; pay dividends or make distributions or repurchases; make investments or acquisitions; sell, transfer or otherwise dispose of certain assets; create liens; consolidate or merge; enter into transactions with affiliates; and prepay and repurchase or redeem certain indebtedness.
Also, the same cyber security issues exist for the third parties with whom we interact and share information, and cyber-attacks on third parties which possess or use our customer, personnel and other information could adversely impact us in the same way as would a direct cyber-attack on us.
Also, the same cyber security issues exist for the third parties with whom we interact and share information, and cyber-attacks on third parties which possess or use our guest, personnel and other information could adversely impact us in the same way as would a direct cyber-attack on us.
We face risks affecting the travel and hotel industries that include, but are not limited to: economic slowdown and potential recessionary pressures; economic factors such as inflation, rising interest rates, employment layoffs, increased costs of living and reduced discretionary income, which may adversely impact decisions by consumers and businesses to use travel accommodations; domestic unrest, terrorist incidents and threats and associated heightened travel security measures; political instability or political and regional strife, including the ongoing conflict between Russia and Ukraine; acts of God such as earthquakes, hurricanes, fires, floods, volcanoes and other natural disasters; war; concerns with or threats of contagious diseases or health epidemics or pandemics, such as COVID-19; environmental disasters; lengthy power outages; cyber threats, increased pricing, financial instability and capacity constraints of air carriers; airline job actions and strikes.
We face risks affecting the travel and hotel industries that include, but are not limited to: economic slowdown and potential recessionary pressures; economic factors such as inflation, rising interest rates, employment layoffs, increased costs of living and reduced discretionary income, which may adversely impact decisions by consumers and businesses to use travel accommodations; domestic unrest, terrorist incidents and threats and associated heightened travel security measures; political instability or political and regional strife, including the ongoing conflict between Russia and Ukraine; acts of God such as earthquakes, hurricanes, fires, floods, volcanoes and other natural disasters; war, including the Israel-Hamas war; concerns with or threats of known and novel contagious diseases or health epidemics or pandemics; environmental disasters; lengthy power outages; cyber threats, increased pricing, financial instability and capacity constraints of air carriers; airline job actions and strikes.
Additionally, such travel intermediaries may divert reservations away from our direct online channels or increase the overall cost of internet reservations for our affiliated hotels through their fees and a variety of online marketing methods, including the purchase by certain travel intermediaries of keywords consisting of or containing our hotel brands from Internet search engines to influence search results and direct guests to their websites.
Additionally, such travel intermediaries may divert reservations away from our direct online channels or increase the overall cost of internet reservations for our affiliated hotels through their fees and a variety of online marketing methods, including the purchase by certain travel intermediaries of keywords consisting of or containing our hotel brands from Internet search engines to 13 Table of Contents influence search results and direct guests to their websites.
Additionally, the legal and regulatory environment surrounding information security and privacy in the U.S. and international jurisdictions is constantly evolving, including recent developments and complexities with regard to requirements for the cross-border transfer of personal information due to emerging laws, regulations and judicial decisions (such as cross- 17 Table of Contents border data transfer regulations issued by the People’s Republic of China authorities).
Additionally, the legal and regulatory environment surrounding information security and privacy in the U.S. and international jurisdictions is constantly evolving, including recent developments and complexities with regard to requirements for the cross-border transfer of personal information due to emerging laws, regulations and judicial decisions (such as cross-border data transfer regulations issued by the People’s Republic of China authorities).
Financial and economic sanctions imposed on certain industry sectors and parties in Russia by the U.S., United Kingdom and European Union, as well as potential retaliatory actions by Russia, could also have a negative impact on the global economy.
Financial and economic sanctions imposed on certain industry sectors and parties in Russia by the U.S., United Kingdom and European Union, as well as retaliatory actions by Russia, could have a negative impact on the global economy.
For additional information, see our Commitments and Contingencies note (Note 15) in the notes to our financial statements. The insurance we carry may not always pay, or be sufficient to pay or reimburse us, for our liabilities, losses or replacement costs.
For additional information, see our Commitments and Contingencies note (Note 14) in the notes to our financial statements. The insurance we carry may not always pay, or be sufficient to pay or reimburse us, for our liabilities, losses or replacement costs.
Our success depends, in part, on the maintenance of our ongoing relationship with Travel + Leisure, Travel + Leisure’s performance of its obligations under these agreements and continued strategic focus on sales of vacation ownership interests, including Travel + Leisure’s maintenance of the quality of products and services it sells under the “Wyndham” trademark and certain other trademarks and intellectual property that we license to Travel + Leisure.
Our success depends, in part, on the maintenance of our ongoing relationship with Travel + Leisure, Travel + Leisure’s performance of its obligations under these agreements and continued strategic focus on sales of vacation 16 Table of Contents ownership interests, including Travel + Leisure’s maintenance of the quality of products and services it sells under the “Wyndham” trademark and certain other trademarks and intellectual property that we license to Travel + Leisure.
We may be required to record significant non-cash impairment charges in our financial statements during the period in which any impairment of our goodwill, other intangible assets or other assets is determined, which would negatively impact our results of operations and stockholders’ equity. 19 Table of Contents Risks Relating to Litigation, Reputation and Insurance We are subject to risks related to litigation.
We may be required to record significant non-cash impairment charges in our financial statements during the period in which any impairment of our goodwill, other intangible assets or other assets is determined, which would negatively impact our results of operations and stockholders’ equity. Risks Relating to Litigation, Reputation and Insurance We are subject to risks related to litigation.
Our international operations are subject to numerous risks including: exposure to local economic conditions; potential adverse changes in the diplomatic relations of foreign countries with the U.S.; hostility from local populations; political instability, including as a result of the ongoing conflict between Russia and Ukraine; trade disputes with trade partners, including China, potential military conflict resulting from escalating political tensions with Russia and China and other geopolitical risks; threats or acts of terrorism; the effect of disruptions caused by severe weather, natural disasters, outbreak 15 Table of Contents of disease, such as COVID-19 or other events that make travel to a particular region less attractive or more difficult; the presence and acceptance of varying levels of business corruption in international markets; restrictions and taxes on the withdrawal of foreign investment and earnings; government policies against businesses or properties owned by foreigners; investment restrictions or requirements; diminished ability to legally enforce our contractual rights in foreign countries; forced nationalization of hotel properties by local, state or national governments; foreign exchange restrictions; fluctuations in foreign currency exchange rates, including the negative impact of the weakening of foreign currencies in geographic regions in which we operate relative to the U.S. dollar; our ability to, or our decision whether or not in particular instances to, hedge against foreign currency effects, and whether we are successful in any such hedging transactions; the ability to comply with or the effect of complying with new and developing laws, regulations and policies of foreign governments, including with respect to climate change; conflicts between local laws and U.S. laws, including laws that impact our rights to protect our intellectual property; withholding and other taxes on remittances and other payments by subsidiaries; and changes in and application of foreign taxation structures including value added taxes.
Our international operations are subject to numerous risks including: exposure to local economic conditions; potential adverse changes in the diplomatic relations of foreign countries with the U.S.; hostility from local populations; political instability, including as a result of the ongoing conflicts between Russia and Ukraine and Israel and Hamas, respectively; trade disputes with trade partners, including China, potential military conflict resulting from escalating political tensions with Russia and China and other geopolitical risks; threats or acts of terrorism; the effect of disruptions caused by severe weather, natural disasters, outbreak of disease, such as pandemics or other health crises, or other events that make travel to a particular region less attractive or more difficult; the presence and acceptance of varying levels of business corruption in international markets; restrictions and taxes on the withdrawal of foreign investment and earnings; government policies against businesses or properties owned by foreigners; investment restrictions or requirements; diminished ability to legally enforce our contractual rights in foreign countries; forced nationalization of hotel properties by local, state or national governments; foreign exchange restrictions; fluctuations in foreign currency exchange rates, including the negative impact of the weakening of foreign currencies in geographic regions in which we operate relative to the U.S. dollar; our ability to, or our decision whether or not in particular instances to, hedge against foreign currency effects, and whether we are successful in any such hedging transactions; the ability to comply with or the effect of complying with new and developing laws, regulations and policies of foreign governments, including with respect to climate change; conflicts between local laws and U.S. laws, including laws that impact our rights to protect our intellectual property; withholding and other taxes on remittances and other payments by subsidiaries; and changes in and application of foreign taxation structures including value added taxes.
Although we do not believe we have incurred any material adverse impact on our operations or financial results as a result of any present or recent cyber-attack, there is no guarantee that cyber-attacks have not gone generally undetected or without general recognition of magnitude or will not occur in the future, any of which could materially adversely affect our brands, reputation, consumer confidence in us, costs and profitability.
Although we do not believe we have incurred any ongoing material adverse impact on our business strategy, results of operations or financial condition as a result of any present or recent cyber-attack, there is no guarantee that cyber-attacks have not gone generally undetected or without general recognition of magnitude or will not occur in the future, any of which could materially adversely affect our brands, reputation, consumer confidence in us, costs and profitability.
Increasing use of these alternative lodging channels could adversely affect the occupancy and/or average rates at franchised hotels and our revenues. The use of business models by competitors that are different from ours may require us to change our model so that we can remain competitive.
Increasing use of these alternative lodging channels could adversely affect the 12 Table of Contents occupancy and/or average rates at franchised hotels and our revenues. The use of business models by competitors that are different from ours may require us to change our model so that we can remain competitive.
While we believe we have adequate sources of liquidity to meet our anticipated requirements for working capital, debt service and capital expenditures for the foreseeable future, if we are unable to refinance or repay our outstanding debt when due, our results of operations and financial condition will be materially and adversely affected.
While we believe we have adequate sources of liquidity to meet our anticipated requirements for working capital, debt 19 Table of Contents service and capital expenditures for the foreseeable future, if we are unable to refinance or repay our outstanding debt when due, our results of operations and financial condition will be materially and adversely affected.
Consumers use third-party internet travel intermediaries, including search engines, and peer-to-peer online networks to search for and book their lodging accommodations. As the percentage of internet reservations increases, travel intermediaries may be able to obtain higher commissions and reduced room rates to the detriment of our business.
Third-party internet travel intermediaries and peer-to-peer online networks may adversely affect us. Consumers use third-party internet travel intermediaries, including search engines, and peer-to-peer online networks to search for and book their lodging accommodations. As the percentage of internet reservations increases, travel intermediaries may be able to obtain higher commissions and reduced room rates to the detriment of our business.
We are subject to risks related to our debt, hedging transactions, our extension of credit and the cost and availability of capital. As of December 31, 2022, we had aggregate outstanding debt of $2,077 million. We may incur additional indebtedness in the future, which may magnify the potential impacts of the risks related to our debt.
We are subject to risks related to our debt, hedging transactions, our extension of credit and the cost and availability of capital. As of December 31, 2023, we had aggregate outstanding debt of $2,201 million. We may incur additional indebtedness in the future, which may magnify the potential impacts of the risks related to our debt.
We may face increased cybersecurity risks due to our increasing reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities. Cybercriminal “hacker” activity has increased in sophistication, duration and frequency since the start of the COVID-19 pandemic and poses additional risks.
We may face increased cybersecurity risks due to our increasing reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities. Cybercriminal “hacker” activity has increased in sophistication, duration and frequency since 2020 and poses additional risks.
The market price of our common stock may continue to fluctuate depending upon many factors, some of which may be beyond our control, including the effects of the COVID-19 pandemic, our ability to achieve growth and performance objectives, the success or failure of our business strategy, general economic conditions, our quarterly or annual earnings and those of other companies in our industry, changes in financial estimates and recommendations by securities analysts, changes in laws and regulations, political instability, increased competition and changes affecting the travel industry and other events impacting our business.
The market price of our common stock may continue to fluctuate depending upon many factors, some of which may be beyond our control, including pandemics or other health crises, our ability to achieve growth and performance objectives, the success or failure of our business strategy, the Exchange Offer, general economic conditions, our quarterly or annual earnings and those of other companies in our industry, changes in financial estimates and recommendations by securities analysts, changes in laws and regulations, political instability, increased competition and changes affecting the travel industry and other events impacting our business.
This could create, or appear to create, potential conflicts of interest when our or Travel + Leisure’s management, officers and directors face decisions that could have different implications for us and Travel + Leisure. We are subject to risks related to corporate social responsibility.
This could create, or appear to create, potential conflicts of interest when our or Travel + Leisure’s management, officers and directors face decisions that could have different implications for us and Travel + Leisure. We are subject to risks related to environmental, social and governance activities.
However, the conflict has negatively impacted global macro-economic conditions and a prolonged conflict, the potential expansion of the conflict into other European countries, or the direct involvement of the U.S. or other countries where we source our guests could have more significant impacts on macro-economic conditions, which could adversely affect discretionary consumer spending and, consequently, our operations.
However, these conflicts have negatively impacted global macro-economic conditions and prolonged conflicts, the potential expansion of the conflicts into other European and Middle Eastern countries, or the direct involvement of the U.S. or other countries where we source our guests could have more significant impacts on macro-economic conditions, which could adversely affect discretionary consumer spending and, consequently, our operations.
New hotels may be constructed and 13 Table of Contents these additions to supply create new competitors, in some cases without corresponding increases in demand for lodging.
New hotels may be constructed and these additions to supply create new competitors, in some cases without corresponding increases in demand for lodging.
The ongoing conflict between Russia and Ukraine has and may continue to negatively impact macro-economic conditions, which may adversely affect discretionary consumer spending and, as a result, our business, financial condition, results of operations and cash flows. Russia’s invasion of Ukraine has negatively affected the global economy.
The ongoing conflicts between Russia and Ukraine and Israel and Hamas, respectively, have and may continue to negatively impact macro-economic conditions, which may adversely affect discretionary consumer spending and, as a result, our business, financial condition, results of operations and cash flows. Russia’s invasion of Ukraine and the Israel-Hamas war have negatively affected the global economy.
While we maintain cyber risk insurance, in the event of a significant security or data breach, this insurance may not cover all of the losses that we may suffer and may result in increased cost or impact the future availability of coverage.
While we maintain cyber risk insurance, in the event of a significant security or data breach, this insurance may not cover all of the losses (including but not limited to financial, operational, legal, business or reputational losses) that we may suffer and may result in increased cost or impact the future availability of coverage.
Data breaches, viruses, ransomware, worms, malicious software, and other serious cyber incidents have increased globally, along with the methods, techniques and complexity of attacks, including efforts to discover and exploit any design flows, bugs or other security vulnerabilities. Additionally, continued geopolitical turmoil, including the ongoing conflict between Russia and Ukraine, has heightened the risk of cyber-attacks.
Data breaches, viruses, ransomware, worms, malicious software, and other serious cyber incidents have increased globally, along with the methods, techniques and complexity of attacks, including efforts to discover and exploit any design flows, bugs or other security vulnerabilities.
For example, during the year ended December 31, 2022, the trading price of our common stock ranged between a low sales price of $58.81 and a high sales price of $93.86.
For example, during the year ended December 31, 2023, the trading price of our common stock ranged between a low sales price of $63.69 and a high sales price of $81.73.
Each of these risks could negatively affect our business, financial condition, results of operations and cash flows. 21 Table of Contents If the Spin-Off, together with certain related transactions, were to fail to qualify as a reorganization for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code, then our stockholders, we and Travel + Leisure might be required to pay substantial U.S. federal income taxes.
If the Spin-Off, together with certain related transactions, were to fail to qualify as a reorganization for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code, then our stockholders, we and Travel + Leisure might be required to pay substantial U.S. federal income taxes.
Our operations are regulated by federal, state and local governments in the countries in which we operate. In addition, U.S. and international federal, state and local regulators may enact new laws and regulations that may reduce our profits or require us to modify our business practices substantially.
In addition, U.S. and international federal, state and local regulators may enact new laws and regulations that may reduce our profits or require us to modify our business practices substantially.
Risks Relating to the Spin-Off and Related Transactions In connection with the Spin-Off and Travel + Leisure’s sale of its European vacation rentals business, we agreed to indemnify Travel + Leisure and Travel + Leisure agreed to indemnify us for certain liabilities, including taxes, and if we are required to perform under these indemnities or if Travel + Leisure is unable to satisfy its obligations under these indemnities, our financial results could be negatively affected.
Though we expect to make regular dividends, there can be no assurance that a payment of a dividend will occur in the future. 21 Table of Contents Risks Relating to the Spin-Off and Related Transactions In connection with the Spin-Off and Travel + Leisure’s sale of its European vacation rentals business, we agreed to indemnify Travel + Leisure and Travel + Leisure agreed to indemnify us for certain liabilities, including taxes, and if we are required to perform under these indemnities or if Travel + Leisure is unable to satisfy its obligations under these indemnities, our financial results could be negatively affected.
These rules, should they be implemented via domestic legislation of countries or via international treaties, could have a material impact on our effective tax rate or result in higher cash tax liabilities. There can be no assurance that our tax payments, tax credits or incentives will not be adversely affected by these or other initiatives.
The enactment could have a material impact on our effective tax rate or result in higher cash tax liabilities. There can be no assurance that our tax payments, tax credits or incentives will not be adversely affected by these or other initiatives.
Additional risks to our business relating to the Russia and Ukraine conflict include potential interruptions in global supply chains and the availability of items essential to our operations, the heightened possibility of cyberattacks and terrorist activity, volatility or disruption in financial markets and the potential for travel restrictions affecting our guests’ ability to access our franchisees’ hotel locations. 14 Table of Contents Third-party internet travel intermediaries and peer-to-peer online networks may adversely affect us.
Additional risks to our business relating to the Russia and Ukraine and Israel and Hamas conflicts include potential interruptions in global supply chains and the availability of items essential to our operations, the heightened possibility of cyberattacks and terrorist activity, volatility or disruption in financial markets and the potential for travel restrictions affecting our guests’ ability to access our franchisees’ hotel locations.
If we are unable to maintain a good relationship with Travel + Leisure, or if Travel + Leisure does not perform its obligations under these agreements, fails to maintain the quality of the products and services it sells under the “Wyndham” trademark and certain other trademarks or fails to pay such royalties, our earnings could decrease. 16 Table of Contents Risks Relating to Regulation and Technology Our operations are subject to extensive regulation and the cost of compliance or failure to comply with regulations may adversely affect us.
If we are unable to maintain a good relationship with Travel + Leisure, or if Travel + Leisure does not perform its obligations under these agreements, fails to maintain the quality of the products and services it sells under the “Wyndham” trademark and certain other trademarks or fails to pay such royalties, our earnings could decrease.
The stock market in general has experienced volatility that has often been unrelated to the operating performance of a particular company. These market fluctuations may adversely affect the trading price of our common stock.
The stock market in general has experienced volatility that has often been unrelated to the operating performance of a particular company.
While we maintain what we believe are reasonable security controls over personal and proprietary information, a breach of or breakdown in our systems that results in the unauthorized release of personal or proprietary information could nevertheless occur and have a material adverse effect on our hotel brands, reputation, business, financial condition and results of operations, as well as subject us to significant fines, litigation, losses, third-party damages and other liabilities, or our subsidiary could fail to comply with the stipulated order with the FTC.
Such breach could have a material adverse effect on our hotel brands, reputation, business, financial condition and results of operations, as well as subject us to significant fines, litigation, losses, third-party damages and other liabilities, or our subsidiary could fail to comply with the stipulated order with the FTC.
Certain of our Directors and executive officers may have actual or potential conflicts of interest because of their ownership of Travel + Leisure equity or their current or former positions at Travel + Leisure.
These market fluctuations may adversely affect the trading price of our common stock. 20 Table of Contents Certain of our Directors and executive officers may have actual or potential conflicts of interest because of their ownership of Travel + Leisure equity or their current or former positions at Travel + Leisure.
In particular, our stakeholders (notably our customers, stockholders and team members) are increasingly interested in our approach to managing climate-related risks and opportunities (including, but not limited to, targets that keep global average temperature rise to no more than 1.5°C, measure Scope 3 franchisee emissions and expand participation in the Wyndham Green Certification program) and may directly impact our revenue. 20 Table of Contents Provisions in our corporate governance documents and Delaware law may prevent or delay an acquisition of our business, which could decrease the market price of our common stock.
In particular, our stakeholders (notably our guests, stockholders and team members) are increasingly interested in our approach to managing climate-related risks and opportunities (including, but not limited to, targets that keep global average temperature rise to no more than 1.5°C, measure Scope 3 franchisee emissions and expand participation in the Wyndham Green Certification program) and may affect our guests’ travel choices and directly impact our revenue.
The current conflict between Russia and Ukraine has not materially affected our overall operations and our operations in both countries are immaterial.
The current conflicts between Russia and Ukraine and Israel and Hamas, respectively, have not materially affected our overall operations and our operations in both regions are immaterial.
Even if we ultimately succeed in recovering from Travel + Leisure any amounts for which we are held liable, we may be temporarily required to bear those losses ourselves.
Even if we ultimately succeed in recovering from Travel + Leisure any amounts for which we are held liable, we may be temporarily required to bear those losses ourselves. Each of these risks could negatively affect our business, financial condition, results of operations and cash flows.
We may need to dedicate a significant portion of our cash flows to the payment of principal and interest.
The inability of franchisees to pay back such loans could materially and adversely affect our cash flows and business. We may need to dedicate a significant portion of our cash flows to the payment of principal and interest.
In addition, we extend credit to assist franchisees in converting to, or building a new hotel under, one of our hotel brands through development advance notes and mezzanine or other forms of subordinated financing. The inability of franchisees to pay back such loans could materially and adversely affect our cash flows and business.
In addition, we extend credit to assist franchisees in converting to, or building a new hotel under, one of our hotel brands through development advance notes and mezzanine or other forms of subordinated financing and we have a program that guarantees a portion of loans taken by franchisees for certain new construction projects.
For example, certain of our franchisees’ properties are located in coastal areas that could be threatened should sea levels dramatically rise. Because a significant portion of our revenues is derived from fees based on room revenues, disruptions at our franchised properties due to climate change may adversely impact the fees we collect from these properties.
Because a significant portion of our revenues is derived from fees based on room revenues, disruptions at our franchised properties due to such occurrences may adversely impact the fees we collect from these properties.
Risks Relating to Our Indebtedness and Tax Treatment Changes in U.S. federal, state and local or foreign tax law, interpretations of existing tax law or adverse determinations by tax authorities could increase our tax burden or otherwise adversely affect our financial condition or results of operations.
The rapid evolution of AI, including potential government regulation of AI, may require significant resources to develop, test and maintain our business, offerings, services, and features to help us implement AI ethically in order to minimize unintended, harmful impact. 18 Table of Contents Risks Relating to Our Tax Treatment and Indebtedness Changes in U.S. federal, state and local or foreign tax law, interpretations of existing tax law or adverse determinations by tax authorities could increase our tax burden or otherwise adversely affect our financial condition or results of operations.
Any of these factors could reduce our revenues, increase our costs or otherwise limit our opportunities for growth. Our international operations are subject to additional risks not generally applicable to our domestic operations.
Our international operations are subject to additional risks not generally applicable to our domestic operations.
In addition, failure to keep pace with developments in technology could impair our operations or competitive position.
In addition, failure to keep pace with developments in technology could impair our operations or competitive position. We may use artificial intelligence in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.
We have been, and likely will continue to be, subject to such cyber-attacks.
Additionally, continued geopolitical turmoil, including the ongoing conflicts 17 Table of Contents between Russia and Ukraine and Israel and Hamas, respectively, has heightened the risk of cyber-attacks. We have been, and likely will continue to be, subject to such cyber-attacks.
Removed
The COVID-19 pandemic has impacted our operations and the operations of our franchisees, and this pandemic or other potential future pandemics could have a material adverse effect on our business, results of operations and financial condition.
Added
For example, certain of our franchisees’ properties are located in coastal areas that could be threatened should sea levels dramatically rise, or are located in areas where the risk of natural or climate-related disaster or other catastrophic losses exists, and the occurrence of such an event could cause substantial damage to our franchisees and/or the surrounding area.
Removed
Since first being identified in December 2019, COVID-19 had an unp recedented impact on the global economy and the hospitality industry due to the implementation of a wide variety of control measures including, but not limited to, states of emergency and restrictions on travel and large gatherings.
Added
In the event of a substantial loss, the insurance coverage carried by our franchisees may not be sufficient to pay the full value of financial obligations, liabilities or the replacement cost of any lost investment or property held by our franchisees.
Removed
These measures resulted in cancelled and reduced travel, complete and partial suspensions of hotel operations and hotel closures. While many of these measures and similar restrictions were subsequently relaxed, a resurgence of future COVID-19 variants or ot her potential future pandemics may cause similar disruptions to our industry that existed in 2020 and 2021.
Added
Additionally, certain types of losses may be uninsurable or prohibitively expensive to insure, and other types of losses or risks that our franchisees may face could fall outside of the general coverage terms and limits of our policies.
Removed
Similarly, while our operations and the operations of our franchisees have largely stabilized since the onset of COVID-19, the potential effects that COVID-19 may continue to have on us or on our franchisees are unclear. Such impacts could have a material adverse effect on our business, results of operations and financial condition.
Added
Such factors could lead to certain losses by our franchisees being completely uninsured in which case we could lose future franchisee fees and may be exposed to a potential impairment of any development advance notes funded to the franchisee should the underlying guarantees provided to us prove to be insufficient.
Removed
Preliminary agreement has been reached between OECD member jurisdictions on the global minimum tax (Pillar Two) directive. Further details regarding implementation of these rules are expected to be finalized in the near future.
Added
Pandemics and other health crises could affect our business, financial condition and results of operations. The emergence, severity, magnitude and duration of global or regional health crises are uncertain and difficult to predict.
Removed
The London Interbank Offered Rate (“LIBOR”) is expected to no longer be available after June 30, 2023 for the primary U.S. dollar LIBOR settings used by the Company.
Added
A pandemic, such as another wave of COVID-19 which in the past had an adverse impact on our business, could again affect certain business operations, consumer demand in the hospitality industry, costs of doing business, availability of labor, access to inventory, supply chain operations, our ability to predict future performance, exposure to litigation, and our financial performance, among other things.
Removed
Our credit facility gives us the option to use LIBOR as a funding benchmark, but also allows us and the administrative agent to replace LIBOR with an alternative benchmark rate, subject to the right of the majority of the lenders to object thereto, as set forth in the credit facility.
Added
Other factors and uncertainties related to potential pandemics and health crises include, but are not limited to: • Evolving macroeconomic factors, including general economic uncertainty, unemployment rates, and recessionary pressures; • Changes in labor markets affecting us and our suppliers; • Unknown consequences on our business performance and initiatives stemming from the substantial investment of time and other resources to the pandemic response; • Potential government actions including, but not limited to, restrictions on travel and stay-in-place directives; • The pace of post-pandemic recovery; • The long-term impact of the pandemic on our business, including consumer behaviors; and • Disruption and volatility within the financial and credit markets.
Removed
In April 2022, we amended our credit facility to change the applicable rate benchmark from LIBOR to Term Secured Overnight Financing Rate (“SOFR”) for our revolver and term loan A. Our term loan B is still based on LIBOR and will need to be modified by June 30, 2023.
Added
Infrastructure Investment and Jobs Act, the CHIPS Act and the Inflation Reduction Act resulting from a change in governing party, if any; • our failure to adequately protect and maintain our trademarks and other intellectual property rights; • the relative mix of branded hotels in the various hotel industry price categories; • corporate budgets and spending and cancellations, deferrals or renegotiations of group business; 14 Table of Contents • seasonal or cyclical volatility in our business; • operating costs, including as a result of inflation, energy costs and labor costs, such as minimum wage increases and unionization, workers’ compensation and healthcare related costs and insurance; and • disputes, claims and litigation and other legal proceedings concerning our franchised hotels’ operations, including with consumers, government regulators, other businesses, franchisees, organized labor activities and class actions.
Removed
Our interest rate swaps are also based on the one-month U.S. dollar LIBOR. The International Swaps and Derivatives Association has issued terms that can be applied to determine the alternative reference rates under swap transactions and the timing of the switch to such alternatives.
Added
Any of these factors could reduce our revenues, increase our costs or otherwise limit our opportunities for growth. We have been the subject of unsolicited interest from Choice, which has been, and may continue to be, a distraction to our management and employees and could have a material adverse impact on our business and operations.
Removed
There have been significant efforts by market participants and government and regulatory bodies in the U.S. and abroad to identify suitable replacement rates and develop processes for migration to the use of the alternatives.
Added
On December 12, 2023, Choice commenced the Exchange Offer. The uncertainty regarding the Exchange Offer may be disruptive to our business, which could have a negative effect on our operations, financial condition or results of operations.
Removed
In the U.S., the Alternative Reference Rates Committee (“AARC”), a committee of private sector entities convened by the Federal Reserve Board and the Federal Reserve Bank of New York, has recommended SOFR plus a recommended spread adjustment as LIBOR’s replacement.
Added
Management and employee distraction related to Choice’s unsolicited interest also may adversely impact our ability to optimally conduct our business and pursue our strategic objectives.
Removed
There are significant differences between LIBOR and SOFR, such as LIBOR being an unsecured lending rate while SOFR is a secured lending rate, and SOFR is an overnight rate while LIBOR reflects term rates at different maturities.
Added
As discussed in our Solicitation/Recommendation Statement filed in response to the Exchange Offer on Schedule 14D-9, on December 18, 2023 (the “Solicitation/Recommendation Statement”), Choice previously made a series of proposals to acquire all of our outstanding shares of common stock (the “Proposals”).
Removed
If our LIBOR-based borrowings are converted to SOFR, as occurred in April 2022, the differences between LIBOR and SOFR, plus the recommended spread adjustment, could result in interest costs that are higher than if LIBOR remained available, which could have a material adverse effect on our operating results.
Added
Our Board rejected each of the Proposals, concluding that the Proposals were inadequate in terms of price, consideration mix and other terms. Upon rejection of the Proposals, Choice subsequently commenced the Exchange Offer.
Removed
Although SOFR is the ARRC’s recommended replacement rate, it is also possible that lenders may instead choose alternative replacement rates that may differ from LIBOR in ways similar to SOFR or in other ways that would result in higher interest costs for us.
Added
On January 22, 2024, Choice sent us notice of their intent to nominate directors to replace our entire Board at the company’s 2024 annual meeting of stockholders and a proposal to repeal any amendments to our third amended and restated by-laws adopted subsequent to January 4, 2023.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, we have an additional 11 leases for office space in 10 countries outside the United States and one additional lease within the United States. We will evaluate the need to renew each lease on a case-by-case basis prior to its expiration. We believe our current leased properties are adequate to support our existing operations.
Biggest changeIn addition, we have an additional 12 leases for office space in 11 countries outside the United States and one additional lease within the United States. We will evaluate the need to renew each lease on a case-by-case basis prior to its expiration. We believe our current leased properties are adequate to support our existing operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSee Note 15 - Commitments and Contingencies to the Consolidated Financial Statements contained in Part IV of this report for a description of claims and legal actions arising in the ordinary course of our business.
Biggest changeSee Note 14 - Commitments and Contingencies to the Consolidated Financial Statements contained in Part IV of this report for a description of claims and legal actions arising in the ordinary course of our business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeBelow is a summary of our common stock repurchases, excluding fees and expenses, by month for the quarter ended December 31, 2022: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Approximate Dollar Value of Shares that May Yet Be Purchased Under Plan October 318,796 $ 66.54 318,796 $ 547,693,500 November 522,728 72.69 522,728 509,697,514 December 1,038,266 70.82 1,038,266 436,168,920 Total 1,879,790 $ 70.61 1,879,790 $ 436,168,920 STOCK PERFORMANCE GRAPH The following graph compares the cumulative total stockholder return of our common stock against the S&P 500 Index and the S&P Hotels, Resorts & Cruise Lines Index (consisting of Booking Holdings Inc., Carnival Corporation & plc, Expedia Group, Inc., Hilton Worldwide Holdings Inc., Marriott International, Inc., Norwegian Cruise Line Holdings Ltd., and Royal Caribbean Cruises Ltd.) for the period from June 1, 2018 to December 31, 2022.
Biggest changeBelow is a monthly summary of our common stock repurchases, excluding excise taxes and fees, for the quarter ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Approximate Dollar Value of Shares that May Yet Be Purchased Under Plan October 970,597 $ 70.26 970,597 $ 500,903,673 November 446,232 75.94 446,232 467,016,026 December 305,244 79.04 305,244 442,888,623 Total 1,722,073 $ 73.29 1,722,073 $ 442,888,623 STOCK PERFORMANCE GRAPH The following graph compares the cumulative total stockholder return of our common stock against the S&P 500 Index and the S&P Hotels, Resorts & Cruise Lines Index (consisting of Booking Holdings Inc., Carnival Corporation & plc, Expedia Group, Inc., Hilton Worldwide Holdings Inc., Marriott International, Inc., Norwegian Cruise Line Holdings Ltd., and Royal Caribbean Cruises Ltd.) for the period from December 31, 2018 to December 31, 2023.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. MARKET PRICE OF COMMON STOCK Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “WH”. As of January 31, 2023, the number of stockholders of record was 4,226.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. MARKET PRICE OF COMMON STOCK Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “WH”. As of January 31, 2024, the number of stockholders of record was 4,092.
The graph assumes that $100 was invested on June 1, 2018 (the first day of regular-way trading) and all dividends and other distributions were reinvested.
The graph assumes that $100 was invested on December 31, 2018 (the first day of regular-way trading) and all dividends and other distributions were reinvested.
ISSUER PURCHASES OF EQUITY SECURITIES In May 2018, our Board approved a share repurchase plan pursuant to which we were authorized to purchase up to $300 million of our common stock. In August 2019, the Board increased the capacity of the program by $300 million.
ISSUER PURCHASES OF EQUITY SECURITIES In May 2018, our Board approved a share repurchase plan pursuant to which we were authorized to purchase up to $300 million of our common stock. Our Board has increased the capacity of the program by $300 million in 2019, $800 million in 2022, and $400 million in 2023.
DIVIDEND POLICY We declared cash dividends of $0.32 per share in each of the first, second, third and fourth quarters of 2022 ($116 million in aggregate), which is consistent with our pre-pandemic quarterly dividend per share.
DIVIDEND POLICY We declared cash dividends of $0.35 per share in each of the first, second, third and fourth quarters of 2023 ($119 million in aggregate).
The Stock Performance Graph is not deemed filed with the Securities and Exchange Commission (“SEC”) and shall not be deemed incorporated by reference into any of our prior or future filings made with the SEC. 23 Table of Contents Cumulative Total Return December 31, June 1, 2018 2018 2019 2020 2021 2022 Wyndham Hotels & Resorts, Inc. $ 100.00 $ 74.91 $ 105.93 $ 101.61 $ 155.06 $ 125.53 S&P 500 $ 100.00 $ 93.72 $ 123.23 $ 145.90 $ 187.79 $ 153.78 S&P Hotels, Resorts & Cruise Lines $ 100.00 $ 84.58 $ 115.92 $ 85.92 $ 102.97 $ 78.01 Item 6.
The Stock Performance Graph is not deemed filed with the Securities and Exchange Commission (“SEC”) and shall not be deemed incorporated by reference into any of our prior or future filings made with the SEC. 25 Table of Contents Cumulative Total Return December 31, 2018 2019 2020 2021 2022 2023 Wyndham Hotels & Resorts, Inc. $ 100.00 $ 141.40 $ 135.64 $ 206.98 $ 167.56 $ 192.58 S&P 500 $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 S&P Hotels, Resorts & Cruise Lines $ 100.00 $ 137.05 $ 101.59 $ 121.75 $ 92.23 $ 153.39 Item 6.
Removed
Our Board increased the capacity of the program by $400 million in February 2022 and an additional $400 million in October 2022.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

60 edited+27 added−39 removed57 unchanged
Biggest changeThe selected historical consolidated and combined financial data below should be read together with the audited Consolidated Financial Statements of Wyndham Hotels & Resorts, including the notes thereto and the other financial information included elsewhere in this report. 33 Table of Content As of or For the Year Ended December 31, ($ in millions, except per share amounts and RevPAR) 2022 2021 2020 2019 2018 (a) Statement of Income/(Loss) data: Revenues Fee-related and other revenues $ 1,354 $ 1,245 $ 950 $ 1,430 $ 1,282 Cost reimbursement revenues 144 320 350 623 586 Net revenues 1,498 1,565 1,300 2,053 1,868 Expenses Marketing, reservation and loyalty expense 524 450 419 563 486 Cost reimbursement expense 144 320 350 623 586 Other expenses 272 349 577 560 513 Total expenses 940 1,119 1,346 1,746 1,585 Operating income/(loss) 558 446 (46) 307 283 Interest expense, net 80 93 112 100 60 Early extinguishment of debt 2 18 — — — Income/(loss) before income taxes 476 335 (158) 207 223 Provision for/(benefit from) income taxes 121 91 (26) 50 61 Net income/(loss) $ 355 $ 244 $ (132) $ 157 $ 162 Per share data: Diluted earnings/(loss) per share $ 3.91 $ 2.60 $ (1.42) $ 1.62 $ 1.62 Cash dividends declared per share 1.28 0.88 0.56 1.16 0.75 Balance Sheet data: Cash $ 161 $ 171 $ 493 $ 94 $ 366 Total assets (b) 4,123 4,269 4,644 4,533 4,976 Total debt (b) 2,077 2,084 2,597 2,122 2,141 Total liabilities (b) 3,161 3,180 3,681 3,321 3,558 Total stockholders’ equity 962 1,089 963 1,212 1,418 Other financial data: Royalties and franchise fees $ 512 $ 461 $ 328 $ 480 $ 441 License and other fees 100 79 84 131 111 Adjusted EBITDA (c) Hotel Franchising segment $ 679 $ 592 $ 392 $ 629 $ 521 Hotel Management segment 37 57 13 66 47 Corporate and Other (d) (66) (59) (69) (74) (55) Total adjusted EBITDA (e) $ 650 $ 590 $ 336 $ 621 $ 513 Operating statistics: Total Company Number of properties (f) 9,059 8,950 8,941 9,280 9,157 Number of rooms (g) 842,500 810,100 795,900 831,000 809,900 RevPAR (h) $ 41.88 $ 35.95 $ 24.51 $ 40.92 $ 40.80 Average royalty rate (i) 3.9% 4.1% 4.0% 3.8% 3.8% United States Number of properties (f) 6,081 6,139 6,175 6,342 6,358 Number of rooms (g) 493,800 490,600 487,300 510,200 506,100 RevPAR (h) $ 50.72 $ 45.19 $ 30.20 $ 46.39 $ 45.30 Average royalty rate (i) 4.6% 4.6% 4.5% 4.5% 4.5% ______________________ (a) In May 2018, we acquired La Quinta Holdings’ hotel franchise and hotel-management business, spanning a portfolio of over 900 La Quinta-branded hotels.
Biggest changeThe selected historical consolidated financial data below should be read together with the audited Consolidated Financial Statements of Wyndham Hotels & Resorts, including the notes thereto and the other financial information included elsewhere in this report. 27 Table of Contents As of or For the Year Ended December 31, ($ in millions, except per share amounts and RevPAR) 2023 2022 2021 2020 2019 Statement of Income/(Loss) data: Revenues Fee-related and other revenues $ 1,384 $ 1,354 $ 1,245 $ 950 $ 1,430 Cost reimbursement revenues 13 144 320 350 623 Net revenues 1,397 1,498 1,565 1,300 2,053 Expenses Marketing, reservation and loyalty expense 569 524 450 419 563 Cost reimbursement expense 13 144 320 350 623 Other expenses 312 272 349 577 560 Total expenses 894 940 1,119 1,346 1,746 Operating income/(loss) 503 558 446 (46) 307 Interest expense, net 102 80 93 112 100 Early extinguishment of debt 3 2 18 — — Income/(loss) before income taxes 398 476 335 (158) 207 Provision for/(benefit from) income taxes 109 121 91 (26) 50 Net income/(loss) $ 289 $ 355 $ 244 $ (132) $ 157 Per share data: Diluted earnings/(loss) per share $ 3.41 $ 3.91 $ 2.60 $ (1.42) $ 1.62 Cash dividends declared per share 1.40 1.28 0.88 0.56 1.16 Balance Sheet data: Cash $ 66 $ 161 $ 171 $ 493 $ 94 Total assets (a) 4,033 4,123 4,269 4,644 4,533 Total debt (a) 2,201 2,077 2,084 2,597 2,122 Total liabilities (a) 3,287 3,161 3,180 3,681 3,321 Total stockholders’ equity 746 962 1,089 963 1,212 Other financial data: Royalties and franchise fees $ 532 $ 512 $ 461 $ 328 $ 480 License and other fees 112 100 79 84 131 Adjusted EBITDA (b) Hotel Franchising segment $ 727 $ 679 $ 592 $ 392 $ 629 Hotel Management segment n/a 37 57 13 66 Corporate and Other (c) (68) (66) (59) (69) (74) Total adjusted EBITDA (d) $ 659 $ 650 $ 590 $ 336 $ 621 Operating statistics: Total Company Number of properties (e) 9,178 9,059 8,950 8,941 9,280 Number of rooms (f) 871,800 842,500 810,100 795,900 831,000 RevPAR (g) $ 43.10 $ 41.88 $ 35.95 $ 24.51 $ 40.92 Average royalty rate (h) 3.9 % 3.9 % 4.1 % 4.0 % 3.8 % United States Number of properties (e) 6,036 6,081 6,139 6,175 6,342 Number of rooms (f) 497,600 493,800 490,600 487,300 510,200 RevPAR (g) $ 50.42 $ 50.72 $ 45.19 $ 30.20 $ 46.39 Average royalty rate (h) 4.6 % 4.6 % 4.6 % 4.5 % 4.5 % ______________________ (a) Reflects the impact of the adoption of the new accounting standard in 2020 for the measurement of credit losses on financial instruments and the 2019 accounting standard for lease accounting.
Adjusted EBITDA is defined as net income/(loss) excluding net interest expense, depreciation and amortization, early extinguishment of debt charges, impairment charges, restructuring and related charges, contract termination costs, transaction-related items (acquisition-, disposition- or separation-related), (gain)/loss on asset sales, foreign currency impacts of highly inflationary countries, stock-based compensation expense, income taxes and development advance notes amortization.
Adjusted EBITDA is defined as net income/(loss) excluding net interest expense, depreciation and amortization, early extinguishment of debt charges, impairment charges, restructuring and related charges, contract termination costs, separation-related items, transaction-related items (acquisition-, disposition-, or debt-related), (gain)/loss on asset sales, foreign currency impacts of highly inflationary countries, stock-based compensation expense, income taxes and development advance notes amortization.
The fair value of each other indefinite-lived intangible asset is estimated using a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which are dependent on internal forecasts, discount rates and to a lesser extent, estimation of long-term rates of growth.
The fair value of goodwill and each other indefinite-lived intangible asset is estimated using a discounted cash flow methodology. This analysis requires significant judgments, including estimation of future cash flows, which are dependent on internal forecasts, discount rates and to a lesser extent, estimation of long-term rates of growth.
Rooms increased 7% from the prior year period reflecting: • Organic growth of 4%; • The conversion of managed properties to franchise in connection with the exit of our select-service management business and the sales of our two owned hotels, which resulted in 270 basis points of growth; and • The acquisition of the Vienna House brand in the third quarter of 2022, which resulted in 80 basis points of growth. 28 Table of Content Excluding currency effects, global RevPAR increased 22% from the prior year period due to a 14% increase in the U.S. and a 49% increase internationally, both driven by stronger pricing power.
Rooms increased 7% from the prior year period reflecting: • Organic growth of 4%; • The conversion of managed properties to franchise in connection with the exit of our select-service management business and the sales of our two owned hotels, which resulted in 270 basis points of growth; and • The acquisition of the Vienna House brand in the third quarter of 2022, which resulted in 80 basis points of growth. 35 Table of Content Excluding currency effects, global RevPAR increased 22% from the prior year period due to a 14% increase in the U.S. and a 49% increase internationally, both driven by stronger pricing power.
Based on historical performance, revenues from franchise and management contracts are generally higher in the second and third quarters than in the first or fourth quarters due to increased leisure travel during the spring and summer months.
Based on historical performance, revenues from franchise contracts are generally higher in the second and third quarters than in the first or fourth quarters due to increased leisure travel during the spring and summer months.
Global average royalty rate for the year ended December 31, 2022 decreased by 20 basis points to 3.9%, compared to the prior year due to mix as both international RevPAR and net room growth outpaced the U.S., with the RevPAR growth primarily the result of COVID-19 recovering more slowly internationally than it did in the U.S. 26 Table of Content YEAR ENDED DECEMBER 31, 2022 VS.
Global average royalty rate for the year ended December 31, 2022 decreased by 20 basis points to 3.9%, compared to the prior year due to mix as both international RevPAR and net room growth outpaced the U.S., with the RevPAR growth primarily the result of COVID-19 recovering more slowly internationally than it did in the U.S. 33 Table of Content YEAR ENDED DECEMBER 31, 2022 VS.
These covenants are subject to a number of important exceptions and qualifications. As of December 31, 2022, we were in compliance with the financial covenants described above. SEASONALITY While the hotel industry is seasonal in nature, periods of higher revenues vary property-by-property and performance is dependent on location and guest base.
These covenants are subject to a number of important exceptions and qualifications. As of December 31, 2023, we were in compliance with the financial covenants described above. SEASONALITY While the hotel industry is seasonal in nature, periods of higher revenues vary property-by-property and performance is dependent on location and guest base.
For a more detailed description of our commitments and contingencies see Note 15 - Commitments and Contingencies to the Consolidated Financial Statements contained in Part IV of this report. CRITICAL ACCOUNTING ESTIMATES AND POLICIES In presenting our financial statements in conformity with U.S. GAAP, we are required to make estimates and assumptions that affect the amounts reported therein.
For a more detailed description of our commitments and contingencies see Note 14 - Commitments and Contingencies to the Consolidated Financial Statements contained in Part IV of this report. CRITICAL ACCOUNTING ESTIMATES AND POLICIES In presenting our financial statements in conformity with U.S. GAAP, we are required to make estimates and assumptions that affect the amounts reported therein.
Early extinguishment of debt of $2 million in 2022 relates to the amendment of our credit agreement and $400 million partial pay down of our term loan B, while the $18 million in 2021 relates to the redemption of our $500 million senior notes. 27 Table of Content Our effective tax rate decreased to 25.4% in 2022 from 27.2% in 2021.
Early extinguishment of debt of $2 million in 2022 relates to the third amendment of our credit agreement and $400 million partial pay down of our term loan B, while the $18 million in 2021 relates to the redemption of our $500 million senior notes. 34 Table of Content Our effective tax rate decreased to 25.4% in 2022 from 27.2% in 2021.
Amounts may not foot due to rounding. (f) Represents the number of hotels at the end of the period. (g) Represents the number of rooms at the end of the period which are (i) either under franchise and/or management agreements and (ii) properties under affiliation agreements for which the Company r eceives a fee for reservation and/or other services provided.
Amounts may not foot due to rounding. (e) Represents the number of hotels at the end of the period. (f) Represents the number of rooms at the end of the period which are (i) either under franchise and/or management agreements and (ii) properties under affiliation agreements for which the Company r eceives a fee for reservation and/or other services provided.
SELECTED FINANCIAL DATA The following selected historical consolidated statement of income/(loss) data for the years ended December 31, 2022, 2021 and 2020 and the selected historical consolidated balance sheet data as of December 31, 2022 and 2021 are derived from the audited Consolidated Financial Statements of Wyndham Hotels & Resorts included elsewhere in this report.
SELECTED FINANCIAL DATA The following selected historical consolidated statement of income/(loss) data for the years ended December 31, 2023, 2022 and 2021 and the selected historical consolidated balance sheet data as of December 31, 2023 and 2022 are derived from the audited Consolidated Financial Statements of Wyndham Hotels & Resorts included elsewhere in this report.
(h) Represents revenue per available room and is calculated by multiplying the average occupancy rate by the average daily rate. (i) Represents the average royalty rate earned on our franchised properties and is calculated by dividing total royalties, excluding the impact of amortization of development advance notes, by total room revenues.
(g) Represents revenue per available room and is calculated by multiplying the average occupancy rate by the average daily rate. (h) Represents the average royalty rate earned on our franchised properties and is calculated by dividing total royalties, excluding the impact of amortization of development advance notes, by total room revenues.
The ratio is calculated by dividing consolidated first lien indebtedness (as defined in the credit agreement) net of consolidated unrestricted cash as of the measurement date by consolidated EBITDA (as defined in the credit agreement), as measured on a trailing four-fiscal-quarter basis preceding the measurement date. As of December 31, 2022, our first-lien leverage ratio was 2.2 times.
The ratio is calculated by dividing consolidated first lien indebtedness (as defined in the credit agreement) net of consolidated unrestricted cash as of the measurement date by consolidated EBITDA (as defined in the credit agreement), as measured on a trailing four-fiscal-quarter basis preceding the measurement date. As of December 31, 2023, our first-lien leverage ratio was 2.5 times.
GAAP and should not be considered as an alternative to net income or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. Our presentation of adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.
GAAP and should not be considered 29 Table of Contents as an alternative to net income or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. Our presentation of adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
The selected historical consolidated and combined statement of income/(loss) data for the years ended December 31, 2019 and 2018 and the selected historical consolidated and combined balance sheet data as of December 31, 2020, 2019 and 2018 are derived from audited consolidated and combined financial statements of Wyndham Hotels & Resorts businesses that are not included in this report.
The selected historical consolidated statement of income/(loss) data for the years ended December 31, 2020 and 2019 and the selected historical consolidated balance sheet data as of December 31, 2021, 2020 and 2019 are derived from audited consolidated financial statements of Wyndham Hotels & Resorts businesses that are not included in this report.
Events of default in these credit facilities include, among others, failure to pay interest, principal and fees when due; breach of a covenant or warranty; acceleration of or failure to pay other debt in excess of a threshold amount; unpaid judgments in excess of a threshold amount, insolvency matters; and a change of control.
Events of default in these credit facilities include, among others, failure to pay interest, principal 39 Table of Contents and fees when due; breach of a covenant or warranty; acceleration of or failure to pay other debt in excess of a threshold amount; unpaid judgments in excess of a threshold amount, insolvency matters; and a change of control.
However, the majority of our business activities are in environments where we are paid a fee for a service performed, and therefore the results of the majority of our 39 Table of Contents recurring operations are recorded in our financial statements using accounting policies that are not particularly subjective, nor complex.
However, the majority of our business activities are in environments where we are paid a fee for a service performed, and therefore the results of the majority of our recurring operations are recorded in our financial statements using accounting policies that are not particularly subjective, nor complex.
As of December 31, 2022, the potential exposure resulting from adverse outcomes of such legal proceedings could, in the aggregate, range up to approximately $3 million in excess of recorded accruals. However, we do not believe that the impact of such litigation should result in a material liability to us in relation to our financial position or liquidity.
As of December 31, 2023, the potential exposure resulting from adverse outcomes of such legal proceedings could, in the aggregate, range up to approximately $10 million in excess of recorded accruals. However, we do not believe that the impact of such litigation should result in a material liability to us in relation to our financial position or liquidity.
Liquidity and Capital Resources Historically, our business generates sufficient cash flow to not only support our current operations as well as our future growth needs and dividend payments to our stockholders, but also to create additional value for our stockholders in the form of share repurchases and business investment. As of December 31, 2022, our liquidity approximated $900 million.
Liquidity and Capital Resources Historically, our business generates sufficient cash flow to not only support our current operations as well as our future growth needs and dividend payments to our stockholders, but also to create additional value for our stockholders in the form of share repurchases and business investment. As of December 31, 2023, our liquidity approximated $650 million.
We believe that adjusted EBITDA is a useful measure of performance for our segments which, when considered with U.S. Generally Accepted Accounting Principles (“GAAP”) measures, allows a more complete understanding of our operating performance.
We believe that adjusted EBITDA is a useful measure of 28 Table of Contents performance for our segments which, when considered with U.S. Generally Accepted Accounting Principles (“GAAP”) measures, allows a more complete understanding of our operating performance.
As of December 31, 2022, we were in compliance with the financial covenants of our credit agreement and expect to remain in such compliance.
As of December 31, 2023, we were in compliance with the financial covenants of our credit agreement and expect to remain in such compliance.
Contractual Obligations Material contractual obligations arising in the normal course of business primarily consist of long-term debt and related interest payments, purchase commitments and lease payments. See Note 13 - Long-Term Debt and Borrowing Arrangements and Note 20 - Leases to the Consolidated Financial Statements contained in Part IV of this report for more information.
Contractual Obligations Material contractual obligations arising in the normal course of business primarily consist of long-term debt and related interest payments, purchase commitments and lease payments. See Note 12 - Long-Term Debt and Borrowing Arrangements and Note 19 - Leases to the Consolidated Financial Statements contained in Part IV of this report for more information.
We regularly review our deferred tax 40 Table of Contents assets to assess their potential realization and establish a valuation allowance for portions of such assets that we believe will not be ultimately realized.
We regularly review our deferred tax assets to assess their potential realization and establish a valuation allowance for portions of such assets that we believe will not be ultimately realized.
OFF-BALANCE SHEET ARRANGEMENTS There were no off-balance sheet transactions, arrangements or other relationships with unconsolidated entities or other persons in 2022, 2021 and 2020 that have, or are reasonably likely to have, a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
OFF-BALANCE SHEET ARRANGEMENTS There were no off-balance sheet transactions, arrangements or other relationships with unconsolidated entities or other persons in 2023, 2022 and 2021 that have, or are reasonably likely to have, a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. 41 Table of Contents
(d) Corporate and Other reflects unallocated corporate costs that are not attributable to an operating segment.
(c) Corporate and Other reflects unallocated corporate costs that are not attributable to an operating segment.
We also expect to maintain a regular dividend payment. Excess cash generated beyond these needs is expected to be available for enhanced stockholder return in the form of stock repurchases or potential acquisitions from time to time. During 2022, we spent $39 million on capital expenditures, primarily related to information technology, including digital innovation.
We also expect to maintain a regular dividend payment. Excess cash generated beyond these needs is expected to be available for enhanced stockholder return in the form of stock repurchases or potential acquisitions from time to time. 38 Table of Contents During 2023, we spent $37 million on capital expenditures, primarily related to information technology, including digital innovation.
Foreign Earnings Although the one-time mandatory deemed repatriation tax during 2017 and the territorial tax system created as a result of U.S. tax reform generally eliminate U.S. federal income taxes on dividends from foreign subsidiaries, we continue to assert 38 Table of Contents that all of our undistributed foreign earnings of $48 million will be reinvested indefinitely as of December 31, 2022.
Foreign Earnings Although the one-time mandatory deemed repatriation tax during 2017 and the territorial tax system created as a result of U.S. tax reform generally eliminate U.S. federal income taxes on dividends from foreign subsidiaries, we continue to assert that all of our undistributed foreign earnings of $84 million will be reinvested indefinitely as of December 31, 2023.
(e) The reconciliation of net income/(loss) to adjusted EBITDA is as follows: Year Ended December 31, (in millions) 2022 2021 2020 (a) 2019 (a) 2018 (a) Net income/(loss) $ 355 $ 244 $ (132) $ 157 $ 162 Provision for/(benefit from) income taxes 121 91 (26) 50 61 Depreciation and amortization 77 95 98 109 99 Interest expense, net 80 93 112 100 60 Early extinguishment of debt 2 18 — — — Stock-based compensation expense 33 28 19 15 9 Development advance notes amortization 12 11 9 8 7 Gain on asset sale, net (35) — — — — Separation-related expenses 1 3 2 22 77 Impairments, net — 6 206 45 — Restructuring costs — — 34 8 — Transaction-related expenses, net — — 12 40 36 Contract termination costs — — — 42 — Transaction-related item — — — 20 — Foreign currency impact of highly inflationary countries 4 1 2 5 3 Adjusted EBITDA $ 650 $ 590 $ 336 $ 621 $ 513 ______________________ (a) Adjusted EBITDA has been recasted to conform with the current year presentation.
(d) The reconciliation of net income/(loss) to adjusted EBITDA is as follows: Year Ended December 31, (in millions) 2023 2022 2021 2020 (a) 2019 (a) Net income/(loss) $ 289 $ 355 $ 244 $ (132) $ 157 Provision for/(benefit from) income taxes 109 121 91 (26) 50 Depreciation and amortization 76 77 95 98 109 Interest expense, net 102 80 93 112 100 Early extinguishment of debt 3 2 18 — — Stock-based compensation expense 39 33 28 19 15 Development advance notes amortization 15 12 11 9 8 Transaction-related expenses, net 11 — — 12 40 Separation-related expenses 1 1 3 2 22 Gain on asset sale, net — (35) — — — Impairments, net — — 6 206 45 Restructuring costs — — — 34 8 Contract termination costs — — — — 42 Transaction-related item — — — — 20 Foreign currency impact of highly inflationary countries 14 4 1 2 5 Adjusted EBITDA $ 659 $ 650 $ 590 $ 336 $ 621 ______________________ (a) Adjusted EBITDA has been recasted to conform with the current year presentation.
As of December 31, 2022, we had purchase commitments of $140 million of which $57 million is payable within twelve months. Stock Repurchase Program In May 2018, our Board approved a share repurchase plan pursuant to which we were authorized to purchase up to $300 million of our common stock.
As of December 31, 2023, we had purchase commitments of $146 million of which $58 million is payable within twelve months. Stock Repurchase Program In May 2018, our Board approved a share repurchase plan pursuant to which we were authorized to purchase up to $300 million of our common stock.
As of December 31, 2022, we had future long-term interest payment obligations of approximately $337 million of which $94 million is payable within twelve months. We have purchase commitments primarily consisting of non-cancelable obligations for marketing and technology related services.
As of December 31, 2023, we had future long-term interest payment obligations of approximately $623 million of which $119 million is payable within twelve months. We have purchase commitments primarily consisting of non-cancelable obligations for marketing and technology related services.
As of December 31, 2022, we had a term loan B with a principal outstanding balance of $1.1 billion maturing in 2025, a term loan A with a principal outstanding balance of $400 million maturing in 2027 and a five-year revolving credit facility maturing in 2027 with a maximum aggregate principal amount of $750 million, of which none was outstanding and $9 million was allocated to outstanding letters of credit.
As of December 31, 2023, we had a term loan B with a principal outstanding balance of $1.1 billion maturing in 2030, a term loan A with a principal outstanding balance of $384 million maturing in 2027 and a five-year revolving credit facility maturing in 2027 with a maximum aggregate principal amount of $750 million, of which $160 million was outstanding and $9 million was allocated to outstanding letters of credit.
The estimates used to calculate the fair value of other indefinite-lived intangible assets change from year to year based on operating results and market conditions. Changes in these estimates and assumptions could materially affect the determination of fair value and the other indefinite-lived intangible assets’ impairment.
The estimates used to calculate the fair value of our goodwill and other indefinite-lived intangible assets change from year to year based on operating results and market conditions. Changes in these estimates and assumptions could materially affect the determination of such fair values. Loyalty Program We operate the Wyndham Rewards loyalty program.
The Consolidated Financial Statements presented herein have been prepared on a stand-alone basis. The Consolidated Financial Statements include the Company’s assets, liabilities, revenues, expenses and cash flows and all entities in which it has a controlling financial interest.
The Consolidated Financial Statements include the Company’s assets, liabilities, revenues, expenses and cash flows and all entities in which it has a controlling financial interest.
In addition, pursuant to our franchise and management contracts with third-party hotel owners, we generate marketing, reservation and loyalty fee revenues and cost reimbursement revenues that over time are offset, respectively, by the marketing, reservation and loyalty costs and property operating costs that we incur. 25 Table of Contents OPERATING STATISTICS - 2022 VS. 2021 The table below presents our operating statistics for the years ended December 31, 2022 and 2021.
In addition, pursuant to our franchise and management contracts with third-party hotel owners, we generate marketing, reservation and loyalty fee revenues and cost reimbursement revenues that over time are offset, respectively, by the marketing, reservation and loyalty costs and property operating costs that we incur.
(b) Reflects the impact of the adoption of the new accounting standard in 2020 for the measurement of credit losses on financial instruments and the 2019 accounting standard for lease accounting. 34 Table of Content (c) “Adjusted EBITDA” is defined as net income/(loss) excluding net interest expense, depreciation and amortization, early extinguishment of debt charges, impairment charges, restructuring and related charges, contract termination costs, transaction-related items (acquisition-, disposition- or separation-related), (gain)/loss on asset sales, foreign currency impacts of highly inflationary countries, stock-based compensation expense, income taxes and development advance notes amortization.
(b) “Adjusted EBITDA” is defined as net income/(loss) excluding net interest expense, depreciation and amortization, early extinguishment of debt charges, impairment charges, restructuring and related charges, contract termination costs, separation-related items, transaction-related items (acquisition-, disposition-, or debt-related), (gain)/loss on asset sales, foreign currency impacts of highly inflationary countries, stock-based compensation expense, income taxes and development advance notes amortization.
In determining our provision for income taxes, we use judgment, reflecting our estimates and assumptions, in applying the more likely than not threshold.
In determining our provision for income taxes, we use judgment, reflecting our estimates and assumptions, in applying the more likely than not threshold. A change in the assumptions and estimates utilized could materially impact our results of operations.
The interest rate per annum applicable to our term loan B is equal to, at our option, either a base rate plus a margin of 0.75% or LIBOR plus a margin of 1.75%.
The interest rate per annum applicable to our term loan B is equal to, at our option, either a base rate plus a margin of 1.25% or the Secured Overnight Financing Rate (“SOFR”) plus a margin of 2.25% plus a 0.10% SOFR adjustment.
In August 2019, the Board increased the capacity of the program by $300 million. Our Board increased the capacity of the program by $400 million in February 2022 and an additional $400 million in October 2022.
Our Board has increased the capacity of the program by $300 million in 2019, $800 million in 2022, and $400 million in 2023.
Refer to the section below for a discussion as to how these operating statistics affected our business for the periods presented.
These operating statistics are drivers of our revenues and therefore provide an enhanced understanding of our business. Refer to the section below for a discussion as to how these operating statistics affected our business for the periods presented.
Our revolving credit facility and term loan A are subject to an interest rate per annum equal to, at our option, either a base rate plus a margin ranging from 0.50% to 1.00% or the Secured Overnight Funding Rate (“SOFR”) plus a 0.10% SOFR adjustment, plus a margin ranging from 1.50% to 2.00%, in either case based upon the total leverage ratio of the Company and its restricted subsidiaries. 36 Table of Contents As of December 31, 2022, $1.1 billion of our term loan B is hedged with pay-fixed/receive-variable interest rate swaps hedging our term loan interest rate exposure.
Our revolving credit facility and term loan A are subject to an interest rate per annum equal to, at our option, either a base rate plus a margin ranging from 0.50% to 1.00% or SOFR plus a 0.10% SOFR adjustment, plus a margin ranging from 1.50% to 2.00%, in either case based upon our total leverage ratio and the total leverage of our restricted subsidiaries.
CASH FLOW The following table summarizes the changes in cash, cash equivalents and restricted cash during the years ended December 31, 2022, 2021 and 2020: Year Ended December 31, 2022 2021 2020 Cash provided by/(used in) Operating activities $ 399 $ 426 $ 67 Investing activities 179 (34) (31) Financing activities (584) (713) 363 Effects of changes in exchange rates on cash, cash equivalents and restricted cash (4) (1) — Net change in cash, cash equivalents and restricted cash $ (10) $ (322) $ 399 During 2022, net cash provided by operating activities decreased $27 million compared to the prior year primarily due to higher development advances provided to franchisees in support of system growth, as well as the impact from the sale of our two owned hotels and the exit of our select-service management business and lower cash collected from 2020 COVID-19 related fee deferrals.
During 2022, net cash provided by operating activities decreased $27 million compared to the prior year primarily due to higher development advances provided to franchisees in support of system growth, as well as the impact from the sale of our two owned hotels and the exit of our select-service management business and lower cash collected from 2020 COVID-19 related fee deferrals.
“Average royalty rate” represents the average royalty rate earned on our franchised properties and is calculated by dividing total royalties, excluding the impact of amortization of development advance notes, by total room revenues. These operating statistics are drivers of our revenues and therefore provide an enhanced understanding of our business.
“RevPAR” represents revenue per available room and is calculated by multiplying average occupancy rate by average daily rate. “Average royalty rate” represents the average royalty rate earned on our franchised properties and is calculated by dividing total royalties, excluding the impact of amortization of development advance notes, by total room revenues.
(Unless otherwise noted, all amounts are in millions, except share and per share amounts) References herein to “Wyndham Hotels,” the “Company,” “we,” “our” and “us” refer to both (i) Wyndham Hotels & Resorts, Inc. and its consolidated subsidiaries for time periods following the consummation of the spin-off and (ii) the Wyndham Hotels & Resorts businesses for time periods prior to the consummation of our spin-off from Wyndham Worldwide (“former Parent”), now known as Travel + Leisure Co.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. (Unless otherwise noted, all amounts are in millions, except share and per share amounts) References herein to “Wyndham Hotels,” the “Company,” “we,” “our” and “us” refer to Wyndham Hotels & Resorts, Inc. and its consolidated subsidiaries for time periods following the consummation of the spin-off.
Wyndham Rewards members may also accumulate points by purchasing everyday services and products with their Wyndham Rewards co-branded credit card.
Wyndham Rewards members primarily accumulate points by staying in hotels operated under one of our brands and by purchasing everyday services and products with their Wyndham Rewards co-branded credit card.
As of December 31, 2022, we had $436 million of remaining availability under our program. Dividend Policy We declared cash dividends of $0.32 per share in each of the first, second, third and fourth quarters of 2022 ($116 million in aggregate), which is consistent with our pre-pandemic quarterly dividend per share.
As of December 31, 2023, we had $443 million of remaining availability under our program. Dividend Policy We declared cash dividends of $0.35 per share in each of the first, second, third and fourth quarters of 2023 ($119 million in aggregate). In February 2024, the Board approved an increase in the quarterly cash dividend to $0.38 per share.
Under our current stock repurchase program, we repurchased approximately 6.2 million shares at an average price of $71.70 per share for a cost of $445 million during 2022. Since inception, we repurchased 15.2 million shares at an average price of $63.32 per share for a cost of $964 million.
Under our current stock repurchase program, we repurchased approximately 5.5 million shares at an average price of $72.25 per share for a cost of $397 million during 2023. Since inception of our stock repurchase program, we repurchased 20.7 million shares at an average price of $65.69 per share for a cost of $1.4 billion.
Rooms as of December 31, 2021 increased 2% compared to the prior year. As expected, we experienced strong growth in the higher RevPAR midscale and above chain scales in the U.S., increasing system size by 5%, as well as strong growth in the direct franchising business in China, which grew 15%.
Rooms as of December 31, 2023 increased 3% compared to the prior year, reflecting 1% growth in the U.S. and 7% growth internationall y. As expected, these increases included strong growth in both the higher RevPAR midscale and above segments in the U.S. and the direct franchising business in China, which grew 3% and 13%, respectively.
“Rooms” represent the number of hotel rooms at the end of the period which are either under franchise and/or management agreements, or are Company-owned, and properties under affiliation agreements for which we receive a fee for reservation and/or other services provided. “RevPAR” represents revenue per available room and is calculated by multiplying average occupancy rate by average daily rate.
OPERATING STATISTICS - 2023 VS. 2022 The table below presents our operating statistics for the years ended December 31, 2023 and 2022. “Rooms” represent the number of hotel rooms at the end of the period which are either under franchise and/or management agreements and properties under affiliation agreements for which we receive a fee for reservation and/or other services provided.
Global average royalty rate for the year ended December 31, 2021 increased 3% to 4.1%, compared to the prior year. 30 Table of Content YEAR ENDED DECEMBER 31, 2021 VS.
U.S. average royalty rate was consistent and international average royalty rate increased 30 basis points compared to the prior year. Global average royalty rate for the year ended December 31, 2023 remained consistent at 3.9%, compared to the prior year due to faster system growth internationally. 30 Table of Content YEAR ENDED DECEMBER 31, 2023 VS.
Total equity decreased $127 million year-over-year primarily due to $445 million of stock repurchases and $116 million of dividend payments, partially offset by the net income we generated in the year and a $53 million increase in accumulated other comprehensive income primarily associated with the increase in the value of our interest rate swaps.
Total equity decreased $216 million year-over-year primarily due to $397 million of stock repurchases and $119 million of dividend payments, partially offset by our net income.
The Company is a leading global hotel franchisor, licensing its renowned hotel brands to hotel owners in over 95 countries around the world. 24 Table of Contents The Company operates in the following segments: • Hotel Franchising — licenses our lodging brands and provides related services to third-party hotel owners and others. • Hotel Management — provides hotel management services for full-service hotels.
The Company is a leading global hotel franchisor, licensing its renowned hotel brands to hotel owners in over 95 countries around the world.
Corporate and Other Adjusted EBITDA during 2022 was unfavorable by $7 million compared to the prior year primarily due to inflationary cost pressures, as expected. 29 Table of Content OPERATING STATISTICS - 2021 VS. 2020 The table below presents our operating statistics for the years ended December 31, 2021 and 2020.
Corporate and Other Adjusted EBITDA during 2022 was unfavorable by $7 million compared to the prior year primarily due to inflationary cost pressures, as expected. 36 Table of Content DEVELOPMENT On December 31, 2023, our global development pipeline consisted of over 1,950 hotels and approximately 240,000 rooms, representing another record high level and a 10% increase year-over-year, including 8% growth in the U.S and 11% internationally.
If it is not more likely than not that the fair value is in excess of the carrying value, or we elect to bypass the qualitative assessment, we would use the one-step impairment test. The qualitative factors evaluated include macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, our historical share price as well as other industry-specific considerations.
Such qualitative assessments require management judgement and 40 Table of Contents include factors such as macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, our historical share price as well as other industry-specific considerations. Application of a quantitative impairment assessment of our goodwill and other indefinite-lived intangible assets requires judgment in the assumptions used to determine fair value.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Financial Condition Year Ended December 31, 2022 2021 Change Total assets $ 4,123 $ 4,269 $ (146) Total liabilities 3,161 3,180 (19) Total stockholders’ equity 962 1,089 (127) Total assets decreased $146 million from December 31, 2021 to December 31, 2022 primarily due to a $154 million reduction in assets held for sale due to the completion of the sales of our two owned hotels and an $84 million reduction in intangible assets related to the exit of our select-service management business, both of which occurred in the first half of 2022.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Financial Condition Year Ended December 31, 2023 2022 Change Total assets $ 4,033 $ 4,123 $ (90) Total liabilities 3,287 3,161 126 Total stockholders’ equity 746 962 (216) Total assets decreased $90 million from December 31, 2022 to December 31, 2023 primarily related to utilizing our excess cash for share repurchases in 2023.
During 2023, we anticipate spending approximately $35 million on capital expenditures. In addition, during 2022, we spent $48 million, net of repayments, on development advance notes. During 2023, we anticipate spending approximately $60 million on development advance notes.
During 2024, we anticipate spending approximately $40 million on capital expenditures. During 2023, we spent $72 million, net of repayments, on development advance notes. During 2024, we anticipate spending approximately $90 million on development advance notes. We may also provide other forms of financial support such as enhanced credit support to further assist in the growth of our business.
We may also provide other forms of financial support such as enhanced credit support to further assist in the growth of our business. We expect all our cash needs to be funded from cash on hand and cash generated through operations, and/or availability under our revolving credit facility and, if needed and available, new debt incurrence.
In addition, during 2024, we anticipate spending approximately $75 million of cash associated with legal and advisory fees related to the unsolicited offer by Choice. We expect all our cash needs to be funded from cash on hand and cash generated through operations, and/or availability under our revolving credit facility.
Year Ended December 31, 2021 2020 % Change Rooms United States 490,600 487,300 1 % International 319,500 308,600 4 % Total rooms 810,100 795,900 2 % RevPAR United States $ 45.19 $ 30.20 50 % International (a) 21.52 15.35 40 % Global RevPAR (a) 35.95 24.51 47 % Average Royalty Rate United States 4.6 % 4.5 % 2 % International 2.1 % 2.1 % — % Global average royalty rate 4.1 % 4.0 % 3 % ______________________ (a) Excluding currency effects, international RevPAR increased 36% and global RevPAR increased 46%.
Year Ended December 31, 2023 2022 % Change Rooms United States 497,600 493,800 1 % International 374,200 348,700 7 % Total rooms 871,800 842,500 3 % RevPAR United States $ 50.42 $ 50.72 (1 %) International (a) 33.21 29.05 14 % Global RevPAR (a) 43.10 41.88 3 % Average Royalty Rate United States 4.6 % 4.6 % — International 2.4 % 2.1 % 30 bps Global average royalty rate 3.9 % 3.9 % — ______________________ (a) Excluding currency effects, international RevPAR increased 21% and global RevPAR increased 5%.
We earn revenue from these programs (i) when a member stays at a participating hotel or club resort or vacation rental from a fee charged by us to the property owner or manager, which is based upon a percentage of room revenues generated from such stay which we recognize, net of redemptions, over time based upon loyalty point redemption patterns, including an estimate of loyalty points that will expire or will never be redeemed, and (ii) based upon a percentage of the member’s spending on the Wyndham Rewards co-branded credit cards for which revenues are paid to us by a third-party issuing bank which we primarily recognize over time based upon the redemption patterns of the loyalty points earned under the program, including an estimate of loyalty points that will expire or will never be redeemed.
We earn revenue related to the issuance of these loyalty points from these programs which we recognize, net of redemptions, over time based upon loyalty point redemption patterns, including an estimate of loyalty points that will expire or will never be redeemed.
Net revenues during 2021 increased $236 million, or 27% compared to the prior year, primarily driven by: • $127 million of higher royalty and franchise fees driven by the ongoing recovery in travel demand, its impact on global RevPAR and increase in our system size; and • $98 million of higher marketing, reservation and loyalty revenues, driven by the ongoing recovery in travel demand. 32 Table of Content Adjusted EBITDA during 2021 increased $200 million, or 51%, compared to the prior year, driven by revenue increases discussed above, partially offset by $36 million of higher expenses primarily due to higher marketing, reservation and loyalty expense and other volume-related expenses.
Adjusted EBITDA during 2023 increased $48 million compared to the prior-year period, primarily driven by the revenue increases discussed above, partially offset by $45 million of higher marketing, reservation and loyalty expenses as well as $7 million of higher operating expenses principally driven by revenue-generating activities and $6 million of higher general and administrative expenses. 32 Table of Content Corporate and Other Adjusted EBITDA during 2023 was unfavorable by $2 million compared to the prior year.
Net cash used in investing activities increased $3 million compared to the prior year, primarily due to higher property and equipment additions. Net cash used in financing activities increased $1.1 billion compared to the prior year.
Net cash used in financing activities decreased $182 million compared to the prior year primarily due to $137 million of net borrowings primarily from our revolving credit facility, which was used for investments in the business and share repurchases.
Removed
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Added
Our primary segment is hotel franchising which principally consists of licensing our lodging brands and providing related services to third-party hotel owners and others. 26 Table of Contents In the first quarter of 2023, we changed the composition of our reportable segments to reflect the recent changes in our Hotel Management segment due to the exit from the select-service management business, the sale of our two owned hotels and the exit from substantially all of our U.S. full-service management business in 2022.
Removed
Global RevPAR for the year ended December 31, 2021 increased 47% to $35.95, compared to the prior year due to the ongoing recovery in travel demand. Global RevPAR recovered to 88% of 2019 levels on an annual and constant currency basis, including domestic and international RevPAR at 97% and 67%, respectively, of 2019 levels.
Added
The remaining hotel management business, which is predominately the full-service international managed business, no longer meets the quantitative thresholds to be considered a reportable segment and as a result, we have aggregated, on a prospective basis, such management business within our Hotel Franchising segment.
Removed
YEAR ENDED DECEMBER 31, 2020 Year Ended December 31, 2021 2020 Change % Change Revenues Fee-related and other revenues $ 1,245 $ 950 $ 295 31 % Cost reimbursement revenues 320 350 (30) (9 %) Net revenues 1,565 1,300 265 20 % Expenses Marketing, reservation and loyalty expense 450 419 31 7 % Cost reimbursement expense 320 350 (30) (9 %) Other expenses 349 577 (228) (40 %) Total expenses 1,119 1,346 (227) (17 %) Operating income/(loss) 446 (46) 492 n/a Interest expense, net 93 112 (19) (17 %) Early extinguishment of debt 18 — 18 n/a Income/(loss) before income taxes 335 (158) 493 n/a Provision for/(benefit from) income taxes 91 (26) 117 n/a Net income/(loss) $ 244 $ (132) $ 376 n/a Net revenues during 2021 increased $265 million, or 20%, compared to the prior year, primarily driven by: • $133 million of higher royalty and franchise fees reflecting a 47% increase in global RevPAR due to the ongoing recovery in travel demand and a 2% increase in system size; • $98 million of higher marketing, reservation and loyalty fee primarily due to the RevPAR increase; • $53 million of higher management and other fees due to the ongoing recovery in travel demand; partially offset by • $30 million of lower cost-reimbursement revenues in our hotel management business as a result of CorePoint Lodging asset sales.
Added
Rejection of Unsolicited Offer and Commencement of Exchange Offer On October 17, 2023, we announced that our Board unanimously rejected a highly conditional, unsolicited stock-and-cash proposal by Choice to acquire all outstanding shares of Wyndham.
Removed
Total expenses during 2021, decreased $227 million, or 17%, compared to the prior year, primarily driven by: • $200 million of lower impairment charges, driven by the absence of $206 million of impairment charges during 2020, partially offset by a $6 million impairment charge in 2021 resulting from our Board’s approval of a plan to sell our two owned hotels; • $34 million of lower restructuring charges due to the absence of cost saving initiatives implemented in 2020 in response to COVID-19; • $30 million of lower cost-reimbursement expenses consistent with the revenue decline discussed above; • $12 million of lower transaction-related expenses; partially offset by • $31 million of higher marketing, reservation and loyalty expenses primarily due to the ongoing recovery in travel demand; and • $23 million of higher operating expenses primarily associated with the recovery in travel demand at our owned hotels.
Added
Our Board, together with our financial and legal advisors, closely reviewed Choice’s latest proposal with a nominal value of $90 per share, comprised of 45% in stock and 55% in cash, and determined that it was not in the best interest of stockholders to accept the proposal.
Removed
Interest expense, net during 2021 decreased $19 million, or 17%, compared to the prior year and early extinguishment of debt was $18 million in 2021 as a result of the redemption of our $500 million 5.375% senior notes in April 2021.
Added
On December 12, 2023, Choice commenced the Exchange Offer for any and all issued and outstanding shares of our common stock for, at the election of the holder, (i) $49.50 in cash and 0.324 shares of Choice common stock (together with the $49.50 in cash, the “Standard Offer Consideration”), (ii) an amount in cash equal to the equivalent market value of the Standard Offer Consideration based on the volume-weighted average of the closing prices of Choice common stock as quoted on the NYSE over the five NYSE trading days ending on the 10th business day preceding March 8, 2024 (the “Expiration Date”) or (iii) a number of shares of Choice common stock having a value equal to the equivalent market value of the Standard Offer Consideration (based on the volume-weighted average of the closing prices of Choice common stock as quoted on the NYSE over the five NYSE trading days ending on the 10th business day preceding the Expiration Date), subject to proration, as disclosed in Choice's Prospectus/Offer to Exchange dated December 12, 2023 and the related Letter of Transmittal.
Removed
Our effective tax rate increased to 27.2% on pre-tax income from 16.5% on pre-tax loss during 2021 and 2020, respectively. The change was primarily related to valuation allowances for certain tax attributes and impact of foreign taxes, including withholding taxes on international operations.
Added
On December 18, 2023, we filed a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC providing for the unanimous recommendation by our Board that our stockholders reject the Exchange Offer and not tender any of the shares of common stock to Choice pursuant to the Exchange Offer.
Removed
In 2020, we had goodwill impairment charges that were nondeductible for tax purposes which decreased the effective tax rate.
Added
On January 22, 2024, Choice sent us notice of their intent to nominate directors to replace our entire Board at the Company’s 2024 annual meeting of stockholders and a proposal to repeal any amendments to our third amended and restated by-laws adopted subsequent to January 4, 2023. The Consolidated Financial Statements presented herein have been prepared on a stand-alone basis.
Removed
As a result of these items, net income during 2021, increased $376 million compared to the prior year. 31 Table of Content A reconciliation of net income/(loss) to adjusted EBITDA is represented below: Year Ended December 31, 2021 2020 (a) Net income/(loss) $ 244 $ (132) Provision for/(benefit from) income taxes 91 (26) Depreciation and amortization 95 98 Interest expense, net 93 112 Early extinguishment of debt 18 — Stock-based compensation expense 28 19 Development advance notes amortization 11 9 Impairments, net 6 206 Separation-related expenses 3 2 Restructuring costs — 34 Transaction-related expenses, net — 12 Foreign currency impact of highly inflationary countries 1 2 Adjusted EBITDA $ 590 $ 336 ______________________ (a) Adjusted EBITDA for 2020 has been recasted to conform with the current year presentation.
Added
We also achieved our goal of increasing our retention rate by 30 bps year-over-year. Excluding currency effects, global RevPAR for the year ended December 31, 2023 increased 5%, compared to the prior year, including a 1% decline in the U.S. and 21% growth internationally. During 2022, we achieved record-breaking RevPAR in the U.S. due to COVID-impacted travel patterns.
Removed
Following is a discussion of the results of each of our segments and Corporate and Other for 2021 compared to 2020: Net Revenues Adjusted EBITDA 2021 2020 % Change 2021 2020 (a) % Change Hotel Franchising $ 1,099 $ 863 27 % $ 592 $ 392 51 % Hotel Management 466 437 7 % 57 13 338 % Corporate and Other — — n/a (59) (69) (14 %) Total Company $ 1,565 $ 1,300 20 % $ 590 $ 336 76 % ______________________ (a) Adjusted EBITDA for 2020 has been recasted to conform with the current year presentation.
Added
Comparing to 2019 to neutralize for COVID-impacted travel patterns, U.S. RevPAR grew 9%. International RevPAR growth from prior year was driven by higher occupancy levels and stronger pricing power in connection with the COVID-19 recovery, and compared to 2019, grew 36% on a constant-currency basis.
Removed
Hotel Franchising Year Ended December 31, 2021 2020 % Change Rooms United States 465,100 452,600 3 % International 304,300 293,900 4 % Total rooms 769,400 746,500 3 % RevPAR United States $ 43.95 $ 29.50 49 % International (a) 20.86 14.75 41 % Global RevPAR (a) 34.85 23.74 47 % ______________________ (a) Excluding currency effects, international RevPAR increased 37% and global RevPAR increased 46%.
Added
YEAR ENDED DECEMBER 31, 2022 Year Ended December 31, 2023 2022 Change % Change Revenues Fee-related and other revenues $ 1,384 $ 1,354 $ 30 2 % Cost reimbursement revenues 13 144 (131) (91 %) Net revenues 1,397 1,498 (101) (7 %) Expenses Marketing, reservation and loyalty expense 569 524 45 9 % Cost reimbursement expense 13 144 (131) (91 %) Gain on asset sale, net — (35) 35 n/a Other expenses 312 307 5 2 % Total expenses 894 940 (46) (5 %) Operating income 503 558 (55) (10 %) Interest expense, net 102 80 22 28 % Early extinguishment of debt 3 2 1 50 % Income before income taxes 398 476 (78) (16 %) Provision for income taxes 109 121 (12) (10 %) Net income $ 289 $ 355 $ (66) (19 %) Net revenues during 2023 decreased by $101 million, or 7%, compared to the prior year, primarily driven by: • $102 million of lower cost-reimbursement revenues associated with the exit of all of our U.S. full-service management business, which have no impact on net income; and • $79 million of lower revenues associated with our select-service management and owned hotel businesses which were exited in the first half of 2022 (of which $29 million represented cost-reimbursement revenues that have no impact on net income); partially offset by • $34 million of higher marketing, reservation and loyalty fees reflecting a 3% increase in both global RevPAR and rooms as well as revenues associated with our global franchisee conference in 2023, our first conference since 2019; • $27 million of higher royalty, franchise and management fees due to the RevPAR and rooms increases; • $12 million of higher license and other fees; and • $7 million of higher other revenues.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−0 removed7 unchanged
Biggest changeWe have foreign currency rate exposure to exchange rate fluctuations worldwide, particularly with respect to the Canadian Dollar, the Chinese Yuan, the Euro, the Brazilian Real and the Argentine Peso. We anticipate that such foreign currency exchange rate risk will remain a market risk exposure for the foreseeable future.
Biggest changeWe have foreign currency rate exposure to exchange rate fluctuations worldwide, particularly with respect to the Canadian Dollar, Chinese Yuan, Euro, Brazilian Real, British Pound and Argentine Peso. We anticipate that such foreign currency exchange rate risk will remain a market risk exposure for the foreseeable future.
We do not engage in trading, market making or other speculative activities in the derivatives markets. More detailed information about these financial instruments is provided in Note 14 - Fair Value to the Consolidated Financial Statements contained in Part IV of this report. Our principal market exposures are interest and currency exchange rate risks.
We do not engage in trading, market making or other speculative activities in the derivatives markets. More detailed information about these financial instruments is provided in Note 13 - Fair Value to the Consolidated Financial Statements contained in Part IV of this report. Our principal market exposures are interest rate and currency exchange rate risks.
The primary assumption used in these models is a hypothetical 10% weakening or strengthening of the U.S. dollar against all our currency exposures as of December 31, 2022. The gains and losses on the hedging instruments are largely offset by the gains and losses on the underlying assets, liabilities or expected cash flows.
The primary assumption used in these models is a hypothetical 10% weakening or strengthening of the U.S. dollar against all our currency exposures as of December 31, 2023. The gains and losses on the hedging instruments are largely offset by the gains and losses on the underlying assets, liabilities or expected cash flows.
Argentina is considered to be a highly inflationary economy. As of December 31, 2022, we had total net assets of $2 million in Argentina. Our total market risk is influenced by a wide variety of factors including the volatility present within the markets and the liquidity of the markets. There are certain limitations inherent in the sensitivity analyses presented.
Argentina is considered to be a highly inflationary economy. As of December 31, 2023, we had total net assets of $1 million in Argentina. Our total market risk is influenced by a wide variety of factors including the volatility present within the markets and the liquidity of the markets. There are certain limitations inherent in the sensitivity analyses presented.
We have determined through such analyses, that a hypothetical 10% change in foreign currency exchange rates would have resulted in approximately an $11 million increase or 41 Table of Contents decrease to the fair value of our outstanding forward foreign currency exchange contracts, which would generally be offset by an opposite effect on the underlying exposure being economically hedged.
We have determined through such analyses, that a hypothetical 10% change in foreign currency exchange rates would have resulted in approximately a $1 million increase or decrease to the fair value of our outstanding forward foreign currency exchange contracts, which would generally be offset by an opposite effect on the underlying exposure being economically hedged.
A hypothetical 10% change in our effective weighted average interest rate on our variable-rate borrowings would result in a $2 million increase or decrease to our annual long-term debt interest expense, and a one-point change in the underlying interest rates would result in approximately a $4 million increase or decrease in our annual interest expense.
A hypothetical 10% change in our effective weighted average interest rate on our variable-rate borrowings would result in a $3 million increase or decrease to our annual long-term debt interest expense, and a one-point change in the underlying interest rates would result in approximately a $6 million increase or decrease in our annual interest expense.
The total outstanding balance of such variable-rate borrowings, net of swaps, was $444 million as of December 31, 2022.
The total outstanding balance of such variable-rate borrowings, net of swaps, was $583 million as of December 31, 2023.
As of December 31, 2022, the absolute notional amount of our outstanding foreign exchange hedging instruments was $182 million.
As of December 31, 2023, the absolute notional amount of our outstanding foreign exchange hedging instruments was $153 million.

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