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What changed in WYNDHAM HOTELS & RESORTS, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of WYNDHAM HOTELS & RESORTS, INC.'s 2023 and 2024 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 2024 report.

+221 added−267 removedSource: 10-K (2025-02-13) vs 10-K (2024-02-15)

Top changes in WYNDHAM HOTELS & RESORTS, INC.'s 2024 10-K

221 paragraphs added · 267 removed · 187 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeInfrastructure 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.
Biggest changeInfrastructure and Chips Acts. 6 Table of Contents • Expand ancillary revenue streams by enhancing co-branded credit card offerings, introducing new products and services, and strengthening strategic marketing partnerships, including our licensing partnership with Travel + Leisure Co. • Enhance franchisee profitability by optimizing top-line performance, lowering on-property labor and operating costs, and elevating the guest experience through continuous digital innovation. • Maintain disciplined capital allocation by investing in strategic growth opportunities, including M&A, and returning capital to shareholders.
Our franchisees benefit from the program through repeat stays and members benefit through free night stays, as well as other redemption options for their points, such as gift cards, merchandise and experiences. The program is funded by contributions from eligible revenues generated by Wyndham Rewards members and collected by us from hotels in our system.
Our franchisees benefit from the program through repeat stays and members benefit through free night stays, as well as other redemption options for their points, such as gift cards and experiences. The program is funded by contributions from eligible revenues generated by Wyndham Rewards members and collected by us from hotels in our system.
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.
Our 2024 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.
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.
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 Net Income and Adjusted EBITDA (a) ($ in millions) ______________________ (a) See Part II Item 7.
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.
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 , 58, serves as our Chief Accounting Officer. From July 2006 to May 2018, Mr.
Under these agreements, our direct franchisees generally pay us a royalty fee of 4% to 5% of gross room revenue and a marketing and reservation fee of 3% to 5% of gross room revenue. We occasionally provide financial support in the form of loans or development advances to help generate new business.
Under these agreements, our direct franchisees generally pay us a royalty fee of approximately 5% of gross room revenue and a marketing and reservation fee of 3% to 5% of gross room revenue. We occasionally provide financial support in the form of loans or development advances to help generate new business.
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.
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. • 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.
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.
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. 10 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.
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.
From May 2018 through November 2023, Mr. 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.
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.
Ballotti , 63, 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.
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.
Some risks that we consider include: • Current and emerging regulations, including those pertaining to climate-related risks and opportunities, 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 businesses. • 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 a 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.
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.
We license our brands and associated trademarks to approximately 6,200 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.
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.
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, 2024, we had approximately 2,200 employees, consisting of approximately 1,000 employees outside of the United States.
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.
Our 25 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.
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.
As part of our giving efforts, Wyndham Rewards and its members have donated over 200 million points since inception to various non-profit organizations, including organizations supporting humanitarian causes to redeem for travel and other related goods and services.
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.
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 approximately 6,200 franchisees, which reduces our exposure to any one franchisee.
We partnered with the American Hotel & Lodging Association (“AHLA”) to support the 5-Star Promise, a voluntary commitment to enhance policies, trainings, and resources for hotel employees and guests.
We continue to partner with the American Hotel & Lodging Association (“AHLA”) and support the 5-Star Promise, a voluntary commitment to enhance policies, trainings, and resources for hotel employees and guests.
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.
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.
Our franchise sales team consists of nearly 150 professionals throughout the world. Our sales team is focused on growing our franchise business through conversions of existing branded and independent hotels and partnering with developers to brand newly constructed hotels.
Our franchise sales team consists of over 170 professionals throughout the world. Our sales team is focused on growing our franchise business through conversions of existing branded and independent hotels and partnering with developers to brand newly constructed hotels.
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.
The following charts illustrate our system size (by rooms) as of December 31, 2024: ______________________ * Royalty contribution by geography for 2024 was as follows: U.S. 78%, Canada 5%, EMEA 8%, LATAM 3%, and Asia Pacific 6%. ** 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, 2024, our brand portfolio consisted of the following: Global Full Year RevPAR North America Asia Pacific U.S.
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.
The Wyndham Green Program consists of 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 other operational best practices, and 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.
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.
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 seven consecutive years and as one of the “Best Travel Rewards Programs” by US News & World Report for ten years running. Wyndham Rewards has approximately 114 million enrolled members.
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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations for our definition of Hotel Franchising adjusted EBITDA. Hotel Franchising adjusted EBITDA has been recasted to conform with the current year presentation for 2020. The 2020 Hotel Franchising net income and adjusted EBITDA was impacted by COVID-19.
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.
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 , 54, serves as our Chief Commercial Officer. From November 2023 to April 2024, Mr. Strickland served as our Chief Information and Distribution Officer.
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.
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 franchised properties, with approximately 9,300 affiliated hotels with approximately 903,000 rooms located in over 95 countries and welcoming approximately 135 million guests annually worldwide. We operate a hotel portfolio of 25 brands.
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.
Our strategic priorities are more than just goals; they are a commitment to our shareholders, franchisees, and guests that we will remain focused on driving growth, operational excellence, and value creation in all we do. CORPORATE RESPONSIBILITY We are committed to operating our business in a way that is socially, ethically and environmentally responsible.
The UN Sustainable Development Goals serve as a strategic guide for our sustainability program, which helps advance our company’s mission of making hotel travel possible for all.
Our core values and the UN Sustainable Development Goals serve as a strategic guide for our approach to sustainability, which helps advance our company’s mission of making hotel travel possible for all.
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.
Cash served as Executive Vice President and General Counsel of Wyndham Hotel Group. From April 2005 to September 2017, Mr. 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.
To encourage all our team members to lead healthier lifestyles while balancing family, work and other responsibilities, we offer several resources under our Be Well program, including free clinic services, an onsite fitness facility and a Wyndham Relief Fund to help employees who are facing financial hardship. HUMAN RIGHTS Human rights are a basic right entitled to all.
To encourage all our team members to lead healthier lifestyles while balancing family, work and other responsibilities, we offer several resources under our Be Well program, including both virtual and in-person wellness services, an onsite fitness facility and a Wyndham Relief Fund to help employees who are facing financial hardship.
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.
Our members accounted for over 37% of check-ins at our affiliated hotels globally and over 50% in the United States. Total membership grew 8% annually in 2024, 2023 and 2022, with approximately 8 million new enrolled members added in 2024.
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.
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.
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%.
In 2024, our sales team executed 822 contracts representing over 103,000 rooms. A key component of driving our net room growth is our ability to retain properties within our system. Our 2024 global retention rate was 95.7%, which was a 10 basis point improvement from 2023. Our 2024 U.S. retention rate was 95.3%.
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.
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 , 50, serves as our Chief Financial Officer and Head of Strategy. From December 2019 to February 2024, Ms. Allen served as our Chief Financial Officer.
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.
From May 2018 to December 2019, Ms. Allen served as Executive Vice President and Treasurer. From April 2015 to May 2018, 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.
Our teams and franchisees around the world actively engage in their communities, generously giving in ways that enhance the lives of others. We support various charitable programs, including youth and education, military, community and environmental programs.
As a hospitality company, service and volunteering is deeply rooted in our history and corporate culture. Our teams and franchisees around the world actively engage in their communities, generously giving in ways that enhance the lives of others. We support various charitable programs, including youth and education, military, community and environmental programs.
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.
HUMAN RIGHTS Human rights are a basic right entitled to all. We remain committed to the well-being and safety of our team members, guests and all those that connect to our industry. In 2024, we continued to donate and encourage our team members and approximately 114 million enrolled Wyndham Rewards members to support humanitarian causes around the world.
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.
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, 2024 2023 2022 Properties Rooms Properties Rooms Properties Rooms Beginning balance 9,178 871,800 9,059 842,500 8,950 810,100 Additions 515 68,700 500 66,000 490 70,400 Deletions (407) (37,500) (381) (36,700) (381) (38,000) Ending balance 9,286 903,000 9,178 871,800 9,059 842,500 In addition to our current hotel portfolio, we have approximately 2,100 properties and 252,000 rooms in our development pipeline throughout 66 countries.
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.
Our company was named to the 2024 Top 50 Companies for Workplace Fairness by Fair360. We were further named to the Newsweek 2024 List of America’s Most Loved Workplaces for the fourth consecutive year and named one of the 2024 Best Places to Work in New Jersey by New Jersey Business Magazine for the fifth consecutive year.
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.
As of December 31, 2024, approximately 42% of our pipeline was located in the U.S. and 58% was located internationally; 78% of our pipeline was for new construction properties, of which 35% have broken ground and 22% represented conversion opportunities. Approximately 70% of our pipeline is for midscale and above hotels and 17% is in the extended stay segment.
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.
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 8 Table of Contents increasing brand loyalty.
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.
From 1999 to August 2006, Ms. Allen served in 11 Table of Contents positions of increasing responsibility at Wyndham Worldwide’s predecessor. Ms. Allen began her career as an independent auditor at Deloitte & Touche LLP. Paul F. Cash , 55, serves as our General Counsel, Chief Compliance Officer and Corporate Secretary. From October 2017 to May 2018, Mr.
We have worked to enhance our policies and mandated training for all our team members to help them identify and report trafficking activities. We are proud to work with a number of organizations including ECPAT-USA, an organization whose mission is to protect every child’s human right to grow up free from the threat of sexual exploitation and trafficking.
We are proud to work with a number of organizations including PACT, an organization whose mission is to protect every child’s human right to grow up free from the threat of sexual exploitation and trafficking, and Business Ending Slavery and Trafficking (BEST), which offers training and support to help stop human trafficking.
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.
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.
Diversity, Equity and Inclusion We respect differences in people, ideas and experiences. Our core values, grounded in caring, respect, inclusiveness and fundamental human rights, infuse different perspectives that reflect our diverse customers, team members, and communities worldwide.
Team Engagement We engage our team by fostering a supportive values-based culture and workplace. Our core values, grounded in caring, respect and fundamental human rights, infuse different perspectives that reflect our distinct customers, team members, and communities worldwide.
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.
Cash was an associate at the law firm Pünder, Volhard, Weber & Axster in Frankfurt, Germany. Monica Melancon , 57, serves as our Chief Human Resource Officer. From March 2020 to February 2021, Ms. Melancon served as Group Vice President, Human Resources – Managed. Ms.
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.
Now more than ever, we must help ensure the future remains bright for travelers around the world. As the world’s largest hotel franchising company by number of franchised properties, we have a unique opportunity to make a meaningful impact on the world while advancing our mission to make hotel travel possible for all.
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.
These accolades build on our growing resume of workplace awards. Throughout our value chain, from team members, franchisees, partners and suppliers to the community and our guests, together we strive to create an environment where everyone feels valued, inspired and highly engaged.
We boast a remarkably asset-light business model dramatically limiting our capital needs and our exposure to the rising wage environment.
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 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.
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.
OUR STRATEGY Wyndham Hotels & Resorts is the world's largest hotel franchisor by number of franchised properties with approximately 9,300 hotels across 25 brands in more than 95 countries. Our mission is to make hotel travel possible for all while delivering the best value to both our owners and guests.
We added a diversity, equity and inclusion goal to performance reviews of all team members; bolstered our efforts to recruit, retain and promote diverse talent; expanded our supplier diversity program; and continued our robust diversity, equity and inclusion training programs – all to inspire our people to contribute to meaningful change in our company, our industry, our communities and the world.
While we continue to be recognized for our high level of engagement, we consistently encourage 7 Table of Contents open communication, collaboration and mutual respect among all team members. We bolster our efforts to recruit, retain and promote top-tier talent– all to inspire our people to contribute to meaningful change in our company, our industry, our communities and the world.
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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.
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Canada Greater China Rest of Asia EMEA LATAM Total Economy Super 8 $ 28.06 Properties 1,375 117 1,108 1 14 1 2,616 Rooms 82,332 7,545 67,248 50 2,053 50 159,278 Days Inn $ 39.32 Properties 1,235 107 97 10 56 10 1,515 Rooms 88,460 8,516 13,398 1,250 3,451 819 115,894 Travelodge $ 39.63 Properties 328 95 — — — — 423 Rooms 22,231 7,361 — — — — 29,592 Microtel $ 46.26 Properties 285 27 25 15 — 8 360 Rooms 20,149 2,368 2,880 1,118 — 955 27,470 Howard Johnson $ 29.47 Properties 139 18 84 5 7 39 292 Rooms 11,043 1,181 24,048 2,357 790 2,664 42,083 Total Economy $ 34.01 Properties 3,362 364 1,314 31 77 58 5,206 Rooms 224,215 26,971 107,574 4,775 6,294 4,488 374,317 Midscale La Quinta $ 64.06 Properties 884 2 4 3 6 10 909 Rooms 84,377 133 925 550 947 1,161 88,093 Ramada $ 36.83 Properties 264 76 150 72 256 32 850 Rooms 29,628 7,185 29,665 13,587 34,170 4,689 118,924 Baymont $ 40.62 Properties 547 8 — — — 1 556 Rooms 41,115 501 — — — 118 41,734 AmericInn $ 56.63 Properties 226 — — — — — 226 Rooms 13,579 — — — — — 13,579 Wingate $ 56.26 Properties 189 8 13 — — — 210 Rooms 16,331 823 1,833 — — — 18,987 Wyndham Alltra $ 192.07 Properties — — — — — 4 4 Rooms — — — — — 1,170 1,170 Wyndham Garden $ 42.35 Properties 71 4 43 17 28 26 189 Rooms 10,719 696 8,669 3,676 4,361 3,506 31,627 Ramada Encore $ 28.93 Properties — — 34 11 32 8 85 Rooms — — 4,591 2,814 3,682 1,114 12,201 Trademark Collection $ 62.27 Properties 91 17 — 18 130 27 283 Rooms 13,036 2,433 — 2,195 17,476 7,836 42,976 TRYP $ 58.73 Properties 8 — 2 4 25 16 55 Rooms 841 — 201 613 3,574 1,914 7,143 Total Midscale $ 49.22 Properties 2,280 115 246 125 477 124 3,367 Rooms 209,626 11,771 45,884 23,435 64,210 21,508 376,434 Upscale Wyndham $ 48.98 Properties 61 2 58 25 27 39 212 Rooms 13,709 640 16,266 7,721 4,223 7,172 49,731 Wyndham Grand $ 53.65 Properties 9 — 45 8 16 2 80 Rooms 2,920 — 13,411 3,663 3,820 772 24,586 Dazzler $ 51.65 Properties — — — — — 14 14 Rooms — — — — — 1,798 1,798 Esplendor $ 46.59 Properties — — — — — 11 11 Rooms — — — — — 910 910 Dolce $ 76.84 Properties 2 — — 1 12 1 16 Rooms 396 — — 342 3,221 341 4,300 Vienna House $ 67.36 Properties — — — — 49 — 49 Rooms — — — — 7,195 — 7,195 Total Upscale $ 53.34 Properties 72 2 103 34 104 67 382 Rooms 17,025 640 29,677 11,726 18,459 10,993 88,520 Luxury Registry Collection NM Properties 1 1 — — 16 16 34 Rooms 128 279 — — 3,453 7,153 11,013 Extended Stay Echo Suites NM Properties 5 — — — — — 5 Rooms 620 — — — — — 620 Hawthorn $ 53.62 Properties 71 — 11 — 5 — 87 Rooms 5,443 — 1,199 — 542 — 7,184 WaterWalk $ 81.62 Properties 11 — — — — — 11 Rooms 1,502 — — — — — 1,502 Total Extended Stay $ 56.25 Properties 87 — 11 — 5 — 103 Rooms 7,565 — 1,199 — 542 — 9,306 Affiliated properties (a) Properties 177 3 — 11 — 3 194 Rooms 43,229 44 — 47 — 77 43,397 Total $ 42.91 Properties 5,979 485 1,674 201 679 268 9,286 Rooms 501,788 39,705 184,334 39,983 92,958 44,219 902,987 ______________________ (a) Affiliated properties represent properties under affiliation arrangements with former Parent or other third parties.
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Canada 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.
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(b) The reconciliation of Hotel Franchising net income to Hotel Franchising adjusted EBITDA is as follows: Year Ended December 31, (in millions) 2024 (a) 2023 (a) 2022 2021 2020 Hotel Franchising net income $ 628 $ 606 $ 583 $ 503 $ 103 Depreciation and amortization 62 67 63 60 63 Stock-based compensation expense 27 25 21 18 13 Development advance notes amortization 24 15 12 11 9 Restructuring costs 14 — — — 15 Impairments, net 12 — — — 189 Foreign currency impact of highly inflationary countries — 14 — — — Hotel Franchising adjusted EBITDA $ 767 $ 727 $ 679 $ 592 $ 392 ______________________ (a) For 2024 and 2023, the Hotel Franchising segment includes the former Hotel Management segment, which is primarily comprised of our remaining international full-service managed business.
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(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.
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We aim to ensure that wherever people travel, Wyndham is there to welcome them. Operating under an asset-light business model, we generate significant cash flow, which allows us to invest in growth opportunities, strengthen our competitive position, and return capital to shareholders.
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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.
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Our mission and vision are supported by the following strategic goals and objectives: • Grow our direct franchising system by 3.6-4.6% in 2025. • Invest in high FeePAR (RevPAR + royalty rates) growth by targeting additions with attractive RevPAR and royalty rates, while establishing a leadership position in the extended stay segment. • Leverage government infrastructure investment opportunities tied to the U.S.
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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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Wyndham has eight global enterprise resource groups (formerly affinity business groups). These groups serve as supportive networks, driving talent and leadership development and empowering team members to support the business, the communities in which we operate and each other. Members of our executive committee serve as sponsors of the enterprise resource groups.
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Now more than ever, we must help ensure the future remains bright for travelers around the world.
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We have worked to enhance our policies and mandated training for all our team members and franchisees to help them identify and report trafficking activities.
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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.
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We engage team members, owners and operators around the world to uphold and leverage our core values to think globally and execute locally.
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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.
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We continue to encourage and share opportunities to increase efficiencies and the usage of renewable energy where feasible with franchisees as we update our decarbonization plans with longer term targets in alignment with climate science. We continually monitor and prioritize climate-related risks based on the financial and strategic impacts on our business.
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Our company was named to the 2023 Top 50 Companies for Diversity List by DiversityInc.
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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 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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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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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.
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From March 2020 to February 2021, Ms. Melancon served as Group Vice President, Human Resources – Managed. Ms.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe 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.
Biggest changeRisks 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.
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.
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’ properties and/or the surrounding area.
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.
While a significant portion of our debt is effectively at a fixed rate of interest and our nearest maturity is not until 2027, a significant 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.
As 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.
As 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, including ancillary revenue growth initiatives; • our relationship with certain multi-unit franchisees; • changes in the laws, regulations, legislation and government spending affecting our business, internationally and domestically, including administration of, changes relating to, or our ability to capitalize on the government spend under the U.S.
State privacy laws, the Personal Information Protection Law of the People’s Republic of China or similar laws or regulations), credit card security standards, marketing, including sales, consumer protection and advertising, unfair and deceptive trade practices, fraud, bribery and corruption, licensing, labor, employment, anti-discrimination, health care, health and safety, accessibility, immigration, gaming, environmental, intellectual property, securities, stock exchange listing, accounting, tax and regulations applicable under the Dodd-Frank Act, the Office of Foreign Assets Control, the Americans with Disabilities Act, the Sherman Act, the Foreign Corrupt Practices Act and local equivalents in international jurisdictions, including the United Kingdom Bribery Act, we may be subject to regulatory investigations or actions, fines, civil and/or criminal penalties, injunctions and potential criminal prosecution.
State privacy laws, the Personal Information Protection Law of the People’s Republic of China or similar laws or regulations), credit card security standards, marketing, including sales, consumer protection and advertising, unfair and deceptive trade practices, fraud, bribery and corruption, licensing, labor, employment, anti-discrimination, health care, health and safety, accessibility, immigration, gaming, environmental, 15 Table of Contents intellectual property, securities, stock exchange listing, accounting, tax and regulations applicable under the Dodd-Frank Act, the Office of Foreign Assets Control, the Americans with Disabilities Act, the Sherman Act, the Foreign Corrupt Practices Act and local equivalents in international jurisdictions, including the United Kingdom Bribery Act, we may be subject to regulatory investigations or actions, fines, civil and/or criminal penalties, injunctions and potential criminal prosecution.
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.
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 their policies.
While we have updated our policies and practices to provide more flexibility for remote work, we may experience increased attrition of employees to other opportunities as a result of the tightening and increasingly competitive labor market and, particularly as certain employees may seek more flexible work alternatives than we offer, may seek positions with companies outside of the geographic area in which they live that offer remote work opportunities, or may decide to scale back their work life for personal reasons.
While we have updated our policies and practices to provide more flexibility for remote work, we may experience increased attrition of employees to other opportunities as a result of a competitive labor market and, particularly as certain employees may seek more flexible work alternatives than we offer, may seek positions with companies outside of the geographic area in which they live that offer remote work opportunities, or may decide to scale back their work life for personal reasons.
We rely on information technologies and systems to operate our business, which involves reliance on third-party service providers (including cloud-based service providers) such as Sabre Corporation and its SynXis Platform and uninterrupted operations of our and third-party service facilities, including those used for reservation systems, hotel/property management, communications, procurement, call centers, operation of our loyalty program and administrative systems.
We rely on information technologies and systems to operate our business, which involves reliance on third-party service providers (including cloud-based service providers), such as Sabre Corporation and its SynXis Platform and Oracle Hospitality, and uninterrupted operations of our and third-party service facilities, including those used for reservation systems, hotel/property management, communications, procurement, call centers, operation of our loyalty program and administrative systems.
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.
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 13) in the notes to our financial statements.
Increases in the frequency and severity of extreme weather events and other consequences of climate change (including any related regulation) could impact travel demand generally, lead to supply chain interruptions, cause damage to physical assets or adversely impact the accessibility or desirability of travel to certain locations.
Increases in the frequency and severity of extreme weather events and other consequences of climate change (including any related regulations) could impact travel demand generally, lead to supply chain interruptions, cause damage to physical assets or adversely impact the accessibility or desirability of travel to certain locations.
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.
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 flaws, bugs or other security vulnerabilities.
If we are unable to retain our personnel, particularly our executive officers and senior management team, our business could be harmed. Acquisitions and other strategic transactions may not prove successful and could result in operating difficulties and failure to realize anticipated benefits.
If we are unable to retain our personnel, particularly our senior management team, our business could be harmed. Acquisitions and other strategic transactions may not prove successful and could result in operating difficulties and failure to realize anticipated benefits.
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, 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.
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.
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 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.
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 the conflicts in the Middle East, 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 widespread travel or 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. 14 Table of Contents 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, data protection and privacy; 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.
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.
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.
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.
A pandemic, such as the COVID-19 pandemic 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 to us and our suppliers, access to inventory, supply chain operations, our ability to predict future performance, exposure to litigation, and our financial performance, among other things.
The declaration and payment of dividends and share repurchases are at the sole discretion of our Board and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions under our indebtedness and other factors that our Board may deem relevant.
The declaration and payment of dividends and share repurchases are at the sole discretion of our Board and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions under our indebtedness, limitations under applicable law and other factors that our Board may deem relevant.
Our business, along with the hospitality industry generally, faces scrutiny related to environmental, social and governance activities and the risk of damage to our reputation and the value of our hotel brands if we fail to act responsibly or comply with regulatory requirements in a number of areas, such as safety and security, responsible tourism, environmental stewardship, supply chain management, climate change, diversity, equity and inclusion, philanthropy and support for local communities.
Our business, along with the hospitality industry generally, faces scrutiny related to environmental, social and governance activities and the risk of damage to our reputation and the value of our hotel brands if we fail to act responsibly or comply with new or existing regulatory requirements in a number of areas, such as safety and security, responsible tourism, environmental stewardship, responsible sourcing, supply chain management, climate change, human rights, diversity, equity and inclusion, philanthropy and support for local communities.
We may not continue to pay dividends on, or effect repurchases of, our common stock, and the terms of our indebtedness could limit our ability to pay dividends on our common stock.
We may not continue to pay dividends on, or effect repurchases of, our common stock, and the terms of our indebtedness or applicable law could limit our ability to pay dividends on or effect repurchases of our common stock.
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.
Infrastructure Investment and Jobs Act, the CHIPS Act and the Inflation Reduction Act, including as a result of any change in governing party; • 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 renegotiation 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 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.
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.
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 conflicts between Russia and Ukraine and conflicts in the Middle East; acts of God such as earthquakes, hurricanes, fires, floods, volcanoes and other natural disasters; war; concerns with or threats of known and novel contagious diseases or health epidemics or pandemics; environmental disasters; lengthy power outages; cyber threats and attacks; increased pricing, financial instability and capacity constraints of air carriers; and job actions and strikes in the airline and hospitality industries generally.
If we fail to reach satisfactory agreements with travel intermediaries, our affiliated hotels may not appear on their websites and we could lose business as a result. Further, travel intermediaries may seek to offer distribution services under their own brands directly to lodging accommodations in competition with our core franchise business.
If we fail to reach satisfactory agreements with travel intermediaries, our affiliated hotels may not appear on their websites and we could lose business as a result. Further, travel intermediaries may seek to offer distribution services and/or rewards programs under their own brands directly to lodging accommodations in competition with our core franchise business and loyalty program.
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.
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; • 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; 13 Table of Contents • The long-term impact of the pandemic on our business, including consumer behaviors; and • Disruption and volatility within the financial and credit markets.
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.
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, stockholder activism or unsolicited takeover proposals or proxy contests, 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.
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.
Such factors could lead to certain losses by our franchisees being completely uninsured in which case we could lose future fees we collect from these properties, 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 and could result in unanticipated room terminations.
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.
The inability of franchisees to pay back such loans could materially and adversely affect our results of operations, financial condition or cash flows. We may need to dedicate a significant portion of our cash flows to the payment of principal and interest.
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.
Additionally, continued geopolitical turmoil, including the ongoing conflicts between Russia and Ukraine and the conflicts in the Middle East, respectively, has heightened the risk of cyber-attacks. We have been, and likely will continue to be, subject to such cyber-attacks.
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.
Each of these risks could negatively affect our business, financial condition, results of operations and cash flows. 20 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.
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.
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.
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.
Two of our Directors 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.
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.
For example, during the year ended December 31, 2024, the trading price of our common stock ranged between a low sales price of $67.67 and a high sales price of $105.16.
The stock market in general has experienced volatility that has often been unrelated to the operating performance of a particular company.
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.
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.
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. 16 Table of Contents We rely on information technologies and systems to operate our business, which involves reliance on third-party service providers and on uninterrupted operation of service facilities.
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.
As of December 31, 2024, we had aggregate outstanding debt of $2,463 million. We may incur additional indebtedness in the future, which may magnify the potential impacts of the risks related to our debt.
We carry insurance for general liability, property, business interruption and other insurable risks with respect to our business and franchised hotels. We also self-insure for certain risks up to certain monetary limits.
The insurance we carry may not always pay, or be sufficient to pay or reimburse us, for our liabilities, losses or replacement costs. We carry insurance for general liability, property, business interruption and other insurable risks with respect to our business and franchised hotels. We also self-insure for certain risks up to certain monetary limits.
Competition may reduce fee structures, potentially causing us to lower our fees and/or offer other incentives, and may require us to offer terms to prospective franchisees less favorable to us than current franchise agreements, which may adversely impact our profits. Our franchisees also compete with alternative lodging channels, including third-party providers of short-term rental properties and serviced apartments.
Competition may reduce fee structures, potentially causing us to lower our fees and/or offer other incentives, and may require us to offer terms to prospective franchisees less favorable to us than current franchise agreements, which may adversely impact our profits.
Risks Relating to Our Relationships with Third Parties Our license and other fees could be impacted by any softness in Travel + Leisure’s sales of vacation ownership interests. In connection with our 2018 spin-off (the “Spin-Off”) from Wyndham Worldwide, now known as Travel + Leisure Co.
Risks Relating to Our Relationships with Third Parties Our license and other fees could be impacted by any softness in Travel + Leisure’s sales of vacation ownership interests.
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.
Certain of our Directors and executive officers may have actual or potential conflicts of interest because of their current positions at Travel + Leisure or their ownership of Travel + Leisure equity.
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.
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.
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.
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. Declines in or disruptions to the travel and hotel industries may adversely affect us.
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.
The enactment could have a material impact on our effective tax rate or result in higher cash tax liabilities.
(“Travel + Leisure”), we entered into a number of agreements with Travel + Leisure that govern our ongoing relationship with Travel + Leisure.
In connection with our 2018 spin-off (the “Spin-Off”) from Wyndham Worldwide, now known as Travel + Leisure Co., we entered into a number of agreements with Travel + Leisure that govern our ongoing relationship with Travel + Leisure.
The rapid evolution of AI, including potential future regulation of AI, may also result in additional costs associated with compliance with emerging regulations.
The rapid evolution of AI, including potential future regulation of AI, may also result in additional costs associated with compliance with emerging regulations. This evolution, 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.
Our international operations are subject to additional risks not generally applicable to our domestic 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.
Removed
Declines in or disruptions to the travel and hotel industries may adversely affect us.
Added
Our franchisees also compete with alternative lodging channels, including third-party providers of short-term rental properties and serviced apartments, and vacation options, such as cruising. Increasing use of these alternative lodging channels or vacation options could adversely affect the occupancy and/or average rates at franchised hotels and our 12 Table of Contents revenues.
Removed
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.
Added
There can be no assurance that our tax payments, tax credits or incentives will not be adversely affected by these or other initiatives. 17 Table of Contents We are subject to risks related to our debt, hedging transactions, our extension of credit and the cost and availability of capital.
Removed
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.
Added
Due to the cadence of litigation filings, dismissals and settlements, including litigants attempting to preserve claims by filing within applicable statutory limitations periods, the number of pending matters may 18 Table of Contents fluctuate from time to time. For additional information, see our Commitments and Contingencies note (Note 13) in the notes to our financial statements.
Removed
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.
Added
We have experienced and may continue to experience increased pressure from our stakeholders to provide additional transparency and to establish commitments, goals or targets with respect to various environmental, social and governance related issues and to act to meet those commitments, goals and targets.
Removed
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.
Added
Our stakeholders may not agree with our strategies on these issues, and any perception that we have failed to achieve or to act responsibly with respect to such matters may adversely affect our reputation amongst our stakeholders and may affect our guests’ travel choices and directly impact our revenue.
Removed
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.
Added
We are subject to risks related to stockholder activism or an unsolicited takeover proposal or a proxy contest. In recent years, proxy contests and other forms of stockholder activism have been directed against numerous public companies.
Removed
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.
Added
We recently defended against an unsuccessful hostile takeover attempt, which required us to incur significant expenses and costs and was a distraction for our Board, management and team members.
Removed
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.
Added
If such a proposal were to be made again, similar distractions and additional significant costs may occur, which could have a material adverse effect on our business, financial condition or results of operations. Stockholder activists may also seek to involve themselves in our governance, strategic direction and operations through stockholder proposals or otherwise.
Removed
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.
Added
Such proposals could result in substantial cost and divert our attention and resources from our business and our ability to execute our strategic objectives. Additionally, shareholder activism could give rise to 19 Table of Contents perceived uncertainties as to our future, adversely affect our relationships with franchisees or make it more difficult to attract and retain qualified team members.
Removed
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”).
Added
Though we expect to make regular dividends, there can be no assurance that a payment of a dividend will occur in the future.
Removed
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
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.
Removed
We believe Choice’s purported nominations are made in furtherance of its Proposals and Exchange Offer. Responding to and defending against the Proposals, the Exchange Offer and Choice’s potential proxy contest has been, and may continue to be, a distraction for our Board, management and employees, and has required, and may continue to require, us to incur additional expenses and costs.
Removed
As of December 31, 2023, we had (i) an aggregate principal amount of $160 million outstanding under our revolving credit facility due April 2027, (ii) an aggregate principal amount of $385 million outstanding under our term loan A due April 2027, (iii) an aggregate principal amount of $1.14 billion outstanding under our term loan B due 2030 and (iv) an aggregate principal amount of $500 million outstanding of 4.375% senior unsecured notes due 2028 (the “2028 Notes”).
Removed
In the event of a change of control, there is a potential risk of default under the credit agreement governing our term loans and revolving credit facility and under the indenture governing the 2028 Notes.
Removed
Pursuant to the credit agreement, the Exchange Offer and subsequent change of control could result in an event of default permitting the lenders thereunder to terminate their commitments and declare any outstanding principal and accrued interest amounts immediately due and payable under our term loan A and term loan B.
Removed
Pursuant to the indenture governing the 2028 Notes, in the event that the consummation of the Exchange Offer constitutes a change of control and such change of control is accompanied by a ratings downgrade of the 2028 Notes by each of Moody’s and S&P’s within a specified period of time and subject to certain conditions, then Wyndham would be required to offer to repurchase the 2028 Notes at a price of 101% of their principal amount plus accrued and unpaid interest, if any, to, but not including, the date of repurchase.
Removed
We cannot assure stockholders that any waiver or amendment of such change of control provisions would be obtainable or that any replacement financing would be available, in each case on commercially reasonable terms, if at all. In short, if the Exchange Offer is consummated, our liquidity and ability to operate our business could be materially and adversely impacted.
Removed
Any of our future debt agreements could contain similar restrictions and provisions. We might not have sufficient funds to repay the amounts due in relation to our debt instruments following a change of control.
Removed
The uncertain regulatory timeline and an extended period of time between commencement of the Exchange Offer and its closing or termination may present significant risks to our business.
Removed
There may be an extended period between announcement and closing or termination of the transaction, which coupled with an uncertain and extended regulatory review period, exposes us and our stockholders to meaningful risks, including, among others (i) fewer room openings and new business development disruption (through both fewer new signings added to the pipeline and higher breakage of the existing pipeline) and deterioration in segment-leading retention rates, (ii) competitors (including Choice) capitalizing on franchisee uncertainty, (iii) stagnated development of our fast-growing ECHO Suites brand and (iv) challenges attracting and retaining team members.
Removed
Such factors could have a material impact on our business, reducing its growth rate, EBITDA, cash flow, valuation multiple and, ultimately, the share price of our common stock. 15 Table of Contents The consummation of the Exchange Offer also presents additional risks, as discussed in Item 4, “The Solicitation or Recommendation—Background of the Offer and Reasons for Recommendation” of the Solicitation/Recommendation Statement in our Schedule 14D-9 filed on December 18, 2023 with the SEC.
Removed
We rely on information technologies and systems to operate our business, which involves reliance on third-party service providers and on uninterrupted operation of service facilities.
Removed
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.
Removed
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.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changePrior to his time at Wyndham, as a forensic investigator, he performed cyber investigations in both civil and criminal matters and has worked closely with various industries to educate and provide guidance on cybersecurity best practices. The SVP – Legal has been with the Company since 2010, and has served in his current role since 2019.
Biggest changeOur CISO has been with Wyndham since 2012 and has worked in the cybersecurity industry for over 20 years. Prior to his time at Wyndham, as a forensic investigator, he performed cyber investigations in both civil and criminal matters and has worked closely with various industries to educate and provide guidance on cybersecurity best practices.
Any detected threat or potential cybersecurity incident is handled by our hybrid Security Operations Center, or “SOC” which utilizes both internal and external resources for monitoring 24/7 and is responsible for triaging and appropriately handling or escalating the potential incident. 22 Table of Contents Other than the incidents that occurred prior to the Spin-Off, described in more detail in “Item 1A.
Any detected threat or potential cybersecurity incident is handled by our hybrid Security Operations Center, or “SOC” which utilizes both internal and external resources for monitoring 24/7 and is responsible for triaging and appropriately handling or escalating the potential incident. Other than the incidents that occurred prior to the Spin-Off, described in more detail in “Item 1A.
We closely monitor costs of breaches within the industry in an effort to ensure that our coverage is sufficient to address all reasonably foreseeable threats and levels of risk.
We closely monitor costs of breaches within the industry in an effort to ensure that our coverage is sufficient to address all reasonably foreseeable threats and levels of risk. 22 Table of Contents
The IRC also includes our Chief Information and Distribution Officer, Chief Compliance Officer and Chief Financial Officer, each whom has over 15 years of business and senior leadership experience managing risks in their respective fields, collectively covering aspects of cybersecurity, technology strategy, capital allocation and compliance.
The IRC also includes our Chief Commercial Officer, Chief Compliance Officer and Chief Financial Officer and Head of Strategy, each whom has over 15 years of business and senior leadership experience managing risks in their respective fields, collectively covering aspects of cybersecurity, technology strategy, capital allocation and compliance.
The IRC is chaired by the Chief Information Security Officer (“CISO”) and the Senior Vice President – Legal (“SVP – Legal)” responsible for Privacy and Compliance Issues, with the Chief Financial Officer, Chief Information and Distribution Officer, and the General Counsel and Chief Compliance Officer as members.
The IRC is chaired by the Chief Information Security Officer (“CISO”) and the Senior Vice President – Legal (“SVP – Legal)” responsible for Privacy and Compliance Issues, with the Chief Financial Officer and Head of Strategy, Chief Commercial Officer, and the General Counsel and Chief Compliance Officer as members.
The IRC meets regularly to review operations of the Company’s cybersecurity programs and processes, and to discuss emerging legal, technical, or other risks. The Audit Committee of the Board is the Board-level committee with oversight of privacy and security matters. The IRC updates the Audit Committee quarterly to provide risk updates and general education on privacy and information risk trends.
The IRC meets regularly to review operations of the Company’s cybersecurity programs 21 Table of Contents and processes, and to discuss emerging legal, technical, or other risks. The Audit Committee of the Board is the Board-level committee with oversight of privacy and security matters.
The Board is made aware promptly of any cybersecurity incidents that are deemed critical or that could potentially have an impact on the business. The Board also receives periodic privacy and security awareness training from third-party subject matter experts. Our CISO has been with Wyndham since 2012, and has worked in the cybersecurity industry for 19 years.
The IRC updates the Audit Committee quarterly to provide risk updates and general education on privacy and information risk trends. The Board is made aware promptly of any cybersecurity incidents that are deemed critical or that could potentially have an impact on the business. The Board also receives periodic privacy and security awareness training from third-party subject matter experts.
The Information Security Program also measures the overall cybersecurity program against other key regulatory standards such as the Payment Card Industry standard known as PCI 4.0 and the Sarbanes-Oxley Act of 2002. 23 Table of Contents Third Party Risk Program The Company’s third-party risk program includes a process for assessing and overseeing the risk profile of third parties we do business with at the time of contract execution and also in the event that the scope of the work done with any third party materially changes.
Third Party Risk Program The Company’s third-party risk program includes a process for assessing and overseeing the risk profile of third parties we do business with at the time of contract execution and also in the event that the scope of the work done with any third party materially changes.
The SVP – Legal leads the legal team responsible for, among other things, corporate secretary matters, SEC reporting, privacy, compliance and legal operations. The SVP – Legal has several years of experience managing risks related to the Company’s operations, including data privacy.
The SVP – Legal has several years of experience managing risks related to the Company’s operations, including data privacy.
Added
The SVP – Legal has been with the Company since 2010 and has served in his current role since 2019. The SVP – Legal leads the legal team responsible for, among other things, corporate secretary matters, SEC reporting, privacy, compliance and legal operations.
Added
The Information Security Program also measures the overall cybersecurity program against other key regulatory standards such as the Payment Card Industry standard known as PCI 4.0 and the Sarbanes-Oxley Act of 2002.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our corporate headquarters is located in a leased office at 22 Sylvan Way, Parsippany, New Jersey, with the lease expiring in 2029. We also lease space for our reservation center and data warehouse in Saint John, New Brunswick, Canada pursuant to a lease that expires in 2029.
Biggest changeItem 2. Properties. Our corporate headquarters is located at 22 Sylvan Way, Parsippany, New Jersey. In 2024, we purchased the property that was previously leased. We also lease space for our reservation center and data warehouse in Saint John, New Brunswick, Canada pursuant to a lease that expires in 2029.
In 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.
In addition, we have an additional 12 leases for office space in 11 countries outside 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 owned and leased properties are adequate to support our existing operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
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.
Biggest changeSee Note 13 - 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 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.
Biggest changeBelow is a monthly summary of our common stock repurchases, excluding excise taxes and fees, for the quarter ended December 31, 2024: 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 221,989 $ 81.53 221,989 $ 542,279,202 November 22,216 90.02 22,216 540,279,373 December 25,208 99.98 25,208 537,758,961 Total 269,413 $ 83.95 269,413 $ 537,758,961 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, 2019 to December 31, 2024.
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.
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, $400 million in 2023 and $400 million in 2024.
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.
The graph assumes that $100 was invested on December 31, 2019 (the first day of regular-way trading) and all dividends and other distributions were reinvested.
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.
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, 2025, the number of stockholders of record was 4,036.
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).
DIVIDEND POLICY We declared cash dividends of $0.38 per share in each of the first, second, third and fourth quarters of 2024 ($123 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. 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.
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. 24 Table of Contents Cumulative Total Return December 31, 2019 2020 2021 2022 2023 2024 Wyndham Hotels & Resorts, Inc. $ 100.00 $ 95.92 $ 146.38 $ 118.50 $ 136.20 $ 173.92 S&P 500 $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 S&P Hotels, Resorts & Cruise Lines $ 100.00 $ 74.12 $ 88.83 $ 67.29 $ 111.92 $ 147.93 Item 6.
Added
The share repurchase plan has no termination date.

Item 7. Management's Discussion & Analysis

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

66 edited+12 added−41 removed37 unchanged
Biggest changeA reconciliation of net income to adjusted EBITDA is represented below: Year Ended December 31, 2023 2022 Net income $ 289 $ 355 Provision for income taxes 109 121 Depreciation and amortization 76 77 Interest expense, net 102 80 Early extinguishment of debt 3 2 Stock-based compensation expense 39 33 Development advance notes amortization 15 12 Transaction-related expenses 11 — Separation-related expenses 1 1 Gain on asset sale, net — (35) Foreign currency impact of highly inflationary countries 14 4 Adjusted EBITDA $ 659 $ 650 Following is a discussion of the results of our Hotel Franchising segment and Corporate and Other for 2023 compared to 2022: Net Revenues Adjusted EBITDA 2023 2022 % Change 2023 2022 % Change Hotel Franchising $ 1,397 $ 1,277 9 % $ 727 $ 679 7 % Hotel Management n/a 221 n/a n/a 37 n/a Corporate and Other — — — (68) (66) (3 %) Total Company $ 1,397 $ 1,498 (7 %) $ 659 $ 650 1 % Hotel Franchising Net revenues during 2023 increased $120 million, or 9% compared to the prior year, primarily driven by: ◦ $36 million of higher royalty and franchise fees, primarily reflecting the RevPAR and rooms increases; ◦ $35 million of higher marketing, reservation and loyalty revenues, primarily reflecting the RevPAR and room increases as well as revenues associated with our global franchisee conference; ◦ $14 million of management fees primarily from our international full-service management business which were reported within our Hotel Management segment in 2022; ◦ $13 million of higher cost-reimbursement revenues primarily from our international full-service managed properties that have no impact on adjusted EBITDA; ◦ $12 million of higher license and other fees; and ◦ $10 million of higher other revenues.
Biggest changeA reconciliation of net income to adjusted EBITDA for Hotel Franchising segment, Corporate and Total Company is represented below: Year Ended December 31, 2024 2023 Hotel Franchising Corporate Total Company Hotel Franchising Corporate Total Company Net income $ 628 $ (339) $ 289 $ 606 $ (317) $ 289 Provision for income taxes — 79 79 — 109 109 Depreciation and amortization 62 9 71 67 9 76 Interest expense, net — 124 124 — 102 102 Early extinguishment of debt — 3 3 — 3 3 Stock-based compensation expense 27 14 41 25 14 39 Development advance notes amortization 24 — 24 15 — 15 Transaction-related — 47 47 — 11 11 Restructuring costs 14 1 15 — — — Impairment 12 — 12 — — — Separation-related — (11) (11) — 1 1 Foreign currency impact of highly inflationary countries — — — 14 — 14 Adjusted EBITDA $ 767 $ (73) $ 694 $ 727 $ (68) $ 659 Following is a discussion of the results of our Hotel Franchising segment and Corporate for 2024 compared to 2023: Net Revenues Adjusted EBITDA 2024 2023 % Change 2024 2023 % Change Hotel Franchising $ 1,408 $ 1,397 1 % $ 767 $ 727 6 % Corporate — — — (73) (68) (7 %) Total Company $ 1,408 $ 1,397 1 % $ 694 $ 659 5 % Hotel Franchising Net revenues during 2024 increased $11 million, or 1% compared to the prior year as discussed above.
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.
These covenants are subject to a number of important exceptions and qualifications. As of December 31, 2024, 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 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.
For a more detailed description of our commitments and contingencies see Note 13 - 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.
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.
The selected historical consolidated statement of income/(loss) data for the years ended December 31, 2021 and 2020 and the selected historical consolidated balance sheet data as of December 31, 2022, 2021 and 2020 are derived from audited consolidated financial statements of Wyndham Hotels & Resorts businesses that are not included 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.
SELECTED FINANCIAL DATA The following selected historical consolidated statement of income/(loss) data for the years ended December 31, 2024, 2023 and 2022 and the selected historical consolidated balance sheet data as of December 31, 2024 and 2023 are derived from the audited Consolidated Financial Statements of Wyndham Hotels & Resorts included elsewhere in this report.
(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.
(f) Represents revenue per available room and is calculated by multiplying the average occupancy rate by the average daily rate. (g) 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.
We believe that adjusted EBITDA is a useful measure of performance for our segments and, when considered with U.S. Generally Accepted Accounting Principles (“GAAP”) measures, gives a more complete understanding of our operating performance.
We believe that adjusted EBITDA is a useful measure of performance and, when considered with U.S. Generally Accepted Accounting Principles (“GAAP”) measures, gives a more complete understanding of our operating performance.
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.
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.
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.
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.
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.
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 35 Table of Contents recurring operations are recorded in our financial statements using accounting policies that are not particularly subjective, nor complex.
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.
As of December 31, 2024, the potential exposure resulting from adverse outcomes of such legal proceedings could, in the aggregate, range up to approximately $11 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.
During the first quarter of 2021, the Company modified the definition of adjusted EBITDA to exclude the amortization of development advance notes to reflect how the Company’s chief operating decision maker reviews operating performance beginning in 2021. The Company has applied the modified definition of adjusted EBITDA to all periods presented.
During the first quarter of 2021, the Company modified the definition of adjusted EBITDA to exclude the amortization of development advance notes 27 Table of Contents to reflect how the Company’s chief operating decision maker reviews operating performance beginning in 2021. The Company has applied the modified definition of adjusted EBITDA to all periods presented.
As of December 31, 2023, we were in compliance with the financial covenants of our credit agreement and expect to remain in such compliance.
As of December 31, 2024, 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 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.
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 11 - Long-Term Debt and Borrowing Arrangements and Note 18 - Leases to the Consolidated Financial Statements contained in Part IV of this report for more information.
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.
Hotel Franchising adjusted EBITDA, Corporate adjusted EBITDA and adjusted EBITDA are 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 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.
In addition, pursuant to our franchise and management contracts with third-party hotel owners, we generate 28 Table of Contents 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.
In identifying our reportable segments, we also consider the nature of services provided by our operating segments. Management evaluates the operating results of each of our reportable segments based upon net revenues and adjusted EBITDA.
In identifying our reportable segment, we also consider the nature of services provided by our operating segment. Management evaluates the operating results of our reportable segment based upon net revenues and adjusted EBITDA.
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.
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, 2024, our annualized first-lien leverage ratio was 2.7 times.
RESULTS OF OPERATIONS Discussed below are our key operating statistics, consolidated results of operations and the results of operations for each of our reportable segments. The reportable segments presented below represent our operating segments for which discrete financial information is available and used on a regular basis by our chief operating decision maker to assess performance and to allocate resources.
RESULTS OF OPERATIONS Discussed below are our key operating statistics, consolidated results of operations and the results of operations for our reportable segment. The reportable segment presented below represents our operating segment for which discrete financial information is available and used on a regular basis by our chief operating decision maker to assess performance and to allocate resources.
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.
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 34 Table of Contents that all of our undistributed foreign earnings of $143 million will be reinvested indefinitely as of December 31, 2024.
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.
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.
(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.
(c) The reconciliation of net income/(loss) to adjusted EBITDA is as follows: Year Ended December 31, (in millions) 2024 2023 2022 2021 2020 (a) Net income/(loss) $ 289 $ 289 $ 355 $ 244 $ (132) Provision for/(benefit from) income taxes 79 109 121 91 (26) Depreciation and amortization 71 76 77 95 98 Interest expense, net 124 102 80 93 112 Early extinguishment of debt 3 3 2 18 — Stock-based compensation expense 41 39 33 28 19 Development advance notes amortization 24 15 12 11 9 Transaction-related 47 11 — — 12 Restructuring costs 15 — — — 34 Impairments, net 12 — — 6 206 Separation-related (11) 1 1 3 2 Gain on asset sale, net — — (35) — — Foreign currency impact of highly inflationary countries — 14 4 1 2 Adjusted EBITDA $ 694 $ 659 $ 650 $ 590 $ 336 ______________________ (a) Adjusted EBITDA has been recasted to conform with the current year presentation.
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.
As of December 31, 2024, we had $538 million of remaining availability under our program. Dividend Policy We declared cash dividends of $0.38 per share in each of the first, second, third and fourth quarters of 2024 ($123 million in aggregate). In January 2025, the Board approved an increase in the quarterly cash dividend to $0.41 per share.
The selected historical consolidated financial data below should be read together with the audited Consolidated Financial Statements of Wyndham Hotels & Resorts, including the notes thereto and the other financial information included elsewhere in this report. 27 Table of Contents As of or For the Year Ended December 31, ($ 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.
The 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. 26 Table of Contents As of or For the Year Ended December 31, ($ in millions, except per share amounts and RevPAR) 2024 2023 2022 2021 2020 Statement of Income/(Loss) data: Revenues Fee-related and other revenues $ 1,404 $ 1,384 $ 1,354 $ 1,245 $ 950 Cost reimbursement revenues 4 13 144 320 350 Net revenues 1,408 1,397 1,498 1,565 1,300 Expenses Marketing, reservation and loyalty expense 564 569 524 450 419 Cost reimbursement expense 4 13 144 320 350 Other expenses 345 312 272 349 577 Total expenses 913 894 940 1,119 1,346 Operating income/(loss) 495 503 558 446 (46) Interest expense, net 124 102 80 93 112 Early extinguishment of debt 3 3 2 18 — Income/(loss) before income taxes 368 398 476 335 (158) Provision for/(benefit from) income taxes 79 109 121 91 (26) Net income/(loss) $ 289 $ 289 $ 355 $ 244 $ (132) Per share data: Diluted earnings/(loss) per share $ 3.61 $ 3.41 $ 3.91 $ 2.60 $ (1.42) Cash dividends declared per share 1.52 1.40 1.28 0.88 0.56 Balance Sheet data: Cash $ 103 $ 66 $ 161 $ 171 $ 493 Total assets (a) 4,223 4,033 4,123 4,269 4,644 Total debt (a) 2,463 2,201 2,077 2,084 2,597 Total liabilities (a) 3,573 3,287 3,161 3,180 3,681 Total stockholders’ equity 650 746 962 1,089 963 Other financial data: Royalties and franchise fees $ 555 $ 532 $ 512 $ 461 $ 328 License and other fees 119 112 100 79 84 Total adjusted EBITDA (b)(c) 694 659 650 590 336 Operating statistics: Total Company Number of properties (d) 9,286 9,178 9,059 8,950 8,941 Number of rooms (e) 903,000 871,800 842,500 810,100 795,900 RevPAR (f) $ 42.91 $ 43.10 $ 41.88 $ 35.95 $ 24.51 Average royalty rate (g) 3.95 % 3.89 % 3.94 % 4.06 % 3.97 % United States Number of properties (d) 5,979 6,036 6,081 6,139 6,175 Number of rooms (e) 501,800 497,600 493,800 490,600 487,300 RevPAR (f) $ 50.37 $ 50.42 $ 50.72 $ 45.19 $ 30.20 Average royalty rate (g) 4.69 % 4.59 % 4.62 % 4.62 % 4.52 % ______________________ (a) Reflects the impact of the adoption of the new accounting standard in 2020 for the measurement of credit losses on financial instruments.
Stock repurchases decreased $55 million as 2022 benefited from the deployment of the proceeds received in connection with the sale of the owned hotels and exit of the select-service management business.
Stock repurchases decreased $55 million as 2022 benefited from the deployment of the proceeds received in connection with the sale of the owned hotels and exit of the select-service management business. Capital Deployment Our first priority is to invest in the business.
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.
(e) 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.
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, 2024, we had future long-term interest payment obligations of approximately $606 million, of which $132 million is payable within twelve months. As of December 31, 2024, we had purchase commitments primarily consisting of non-cancelable obligations for marketing and technology related services of $142 million, of which $72 million is payable within twelve months.
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.
The interest rate per annum applicable to our term loan B is equal to, at our option, either a base rate plus an applicable rate of 0.75% or the Secured Overnight Financing Rate (“SOFR”) plus an applicable rate of 1.75%.
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 our assets, liabilities, revenues, expenses and cash flows and all entities in which we have a controlling financial interest.
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.
Liquidity and Capital Resources Historically, our business generates sufficient cash flow to support current operations, future growth initiatives, and dividend payments to stockholders, while also enabling us to create additional value for our stockholders in the form of share repurchases. As of December 31, 2024, our liquidity approximated $765 million.
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.
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. 33 Table of Contents During 2024, we spent $34 million on capital expenditures, related to information technology, including digital innovation, and $15 million for the purchase of our corporate headquarters.
CASH FLOW The following table summarizes the changes in cash, cash equivalents and restricted cash during the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, 2023 2022 2021 Cash provided by/(used in) Operating activities $ 376 $ 399 $ 426 Investing activities (66) 179 (34) Financing activities (402) (584) (713) Effects of changes in exchange rates on cash, cash equivalents and restricted cash (3) (4) (1) Net change in cash, cash equivalents and restricted cash $ (95) $ (10) $ (322) During 2023, net cash provided by operating activities decreased $23 million compared to the prior year primarily due to higher development advance notes provided to franchisees in support of system growth and higher interest expense, partially offset by higher cash generated from net income.
CASH FLOW The following table summarizes the changes in cash, cash equivalents and restricted cash during the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, 2024 2023 2022 Cash provided by/(used in) Operating activities $ 290 $ 376 $ 399 Investing activities (65) (66) 179 Financing activities (175) (402) (584) Effects of changes in exchange rates on cash, cash equivalents and restricted cash (3) (3) (4) Net change in cash, cash equivalents and restricted cash $ 47 $ (95) $ (10) During 2024, net cash provided by operating activities decreased $86 million compared to the prior year primarily due to $47 million of transaction-related payments related to the unsuccessful hostile takeover attempt and $37 million of higher development advance notes provided to franchisees in support of system growth.
A credit rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal by the assigning rating organization. Reference in this report to any such credit rating is intended for the limited purpose of discussing or referring to aspects of our liquidity and of our costs of funds.
Reference in this report to any such credit rating is intended for the limited purpose of discussing or referring to aspects of our liquidity and of our costs of funds.
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.
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. 25 Table of Contents Beginning with the first quarter of 2023, as a result of the changes in our Hotel Management segment including the exit from the select-service management business, the sale of our two owned hotels and the exit from substantially all of its U.S. full-service management business, the Hotel Management segment no longer met the quantitative thresholds to be disclosed as a reportable segment.
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.
As of December 31, 2024, we had a term loan B with a principal outstanding balance of $1.5 billion maturing in 2030, a term loan A with a principal outstanding balance of $364 million maturing in 2027, $500 million senior unsecured notes due in August 2028 and a five-year revolving credit facility maturing in 2027 with a maximum aggregate principal amount of $750 million, of which $88 million was outstanding.
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.
Refer to the section below for a discussion as to how these operating statistics affected our business for the periods presented.
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.
Under our current stock repurchase program, we repurchased approximately 4.1 million shares at an average price of $75.63 for a cost of $308 million during 2024. Since inception of our stock repurchase program, we repurchased 24.8 million shares at an average price of $67.32 per share for a cost of $1.7 billion.
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
RECENTLY ADOPTED AND NEW ACCOUNTING PRONOUNCEMENTS For a detailed description of recently adopted and new accounting pronouncements see Note 2 - Summary of Significant Accounting Policies to the Consolidated Financial Statements contained in Part IV of this report. 36 Table of Contents OFF-BALANCE SHEET ARRANGEMENTS There were no off-balance sheet transactions, arrangements or other relationships with unconsolidated entities or other persons in 2024, 2023 and 2022 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.
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.
Changes in these estimates and assumptions could materially affect the determination of such fair values. Loyalty Program We operate the Wyndham Rewards loyalty program. 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.
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.
Corporate Adjusted EBITDA during 2024 was unfavorable by $5 million compared to the prior year. DEVELOPMENT On December 31, 2024, our global development pipeline consisted of approximately 2,100 hotels and 252,000 rooms, representing another record-high level and a 5% year-over-year increase, including 7% growth in the U.S and 4% internationally.
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.
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 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.
“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.
“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.
“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 (as of December 31, 2021), and properties under affiliation agreements for which we receive a fee for reservation and/or other services provided.
“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. “RevPAR” represents revenue per available room and is calculated by multiplying average occupancy rate by average daily rate.
We generate royalties and franchise fees, management fees and other revenues from hotel franchising and hotel management activities, as well as fees from licensing our “Wyndham” trademark, certain other trademarks and intellectual property.
Our presentation of Hotel Franchising adjusted EBITDA, Corporate adjusted EBITDA and adjusted EBITDA may not be comparable to similarly-titled measures used by other companies. We generate royalties and franchise fees, management fees and other revenues from hotel franchising and hotel management activities, as well as fees from licensing our “Wyndham” trademark, certain other trademarks and intellectual property.
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%.
Year Ended December 31, 2024 2023 Change Rooms United States 501,800 497,600 1 % International 401,200 374,200 7 % Total rooms 903,000 871,800 4 % RevPAR United States $ 50.37 $ 50.42 — % International (a) 33.59 33.21 1 % Global RevPAR (a) 42.91 43.10 — % Average Royalty Rate United States 4.69 % 4.59 % 10 bps International 2.49 % 2.37 % 12 bps Global average royalty rate 3.95 % 3.89 % 6 bps ______________________ (a) Excluding currency effects, international RevPAR increased 8% and global RevPAR increased 2%.
We use this measure internally to assess operating performance, both absolutely and in comparison to other companies, and to make day to day operating decisions, including in the evaluation of selected compensation decisions. Our presentation of adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
Generally Accepted Accounting Principles (“GAAP”) measures, gives a more complete understanding of our operating performance. We use this measure internally to assess operating performance, both absolutely and in comparison to other companies, and to make day to day operating decisions, including in the evaluation of selected compensation decisions.
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.
As a result, we aggregated, on a prospective basis, the remaining hotel management business, which is predominately the full-service international managed business within our Hotel Franchising segment. The Consolidated Financial Statements presented herein have been prepared on a stand-alone basis.
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.
We also evaluate the recoverability of each of our definite-lived intangible assets by performing a qualitative assessment to determine if circumstances indicate that impairment may have occurred. Such qualitative assessments require management judgement and 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.
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.
Global average royalty rate increased 6 basis points compared to the prior year, including 10 basis points in the U.S. and 12 basis points internationally. 29 Table of Content YEAR ENDED DECEMBER 31, 2024 VS.
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.
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. Our Board has increased the capacity of the program by $300 million in 2019, $800 million in 2022, $400 million in 2023 and $400 million in 2024.
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.
YEAR ENDED DECEMBER 31, 2023 Year Ended December 31, 2024 2023 Change % Change Revenues Fee-related and other revenues $ 1,404 $ 1,384 $ 20 1 % Cost reimbursement revenues 4 13 (9) (69 %) Net revenues 1,408 1,397 11 1 % Expenses Marketing, reservation and loyalty expense 564 569 (5) (1 %) Cost reimbursement expense 4 13 (9) (69 %) Other expenses 345 312 33 11 % Total expenses 913 894 19 2 % Operating income 495 503 (8) (2 %) Interest expense, net 124 102 22 22 % Early extinguishment of debt 3 3 — — % Income before income taxes 368 398 (30) (8 %) Provision for income taxes 79 109 (30) (28 %) Net income $ 289 $ 289 $ — — % Net revenues during 2024 increased by $11 million, or 1%, compared to the prior year primarily driven by: • $23 million of higher royalty and franchise fees primarily due to net room growth, as well as increased royalty rates and franchise fees; and • $16 million of higher license and other ancillary revenues driven primarily by higher credit card and licensing fees; partially offset by • $15 million of lower marketing, reservation and loyalty revenues primarily due to the absence of pass-through revenues associated with the 2023 global franchisee conference, partially offset by global net room growth; • $9 million of lower cost-reimbursement revenues, which have no impact on net income; and • $4 million of lower management fees, partially due to the exit of our U.S. management business.
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.
During 2024, we paid $47 million, including amounts incurred in 2023, for this transaction. 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.
Interest expense, net during 2023 increased $22 million, or 28%, compared to the prior year primarily due to a higher variable interest rate on our term loan A in 2023 and a higher debt balance. 31 Table of Content Early extinguishment of debt of $3 million in 2023 relates to the refinancing of our term loan B, while $2 million in 2022 relates to the third amendment of our credit agreement and $400 million partial pay down of our term loan B.
Interest expense, net during 2024 increased $22 million, or 22%, compared to the prior year primarily due to a higher average debt balance. Early extinguishment of debt was $3 million in both 2024 and 2023 related to the repricing and refinancing of our term loan B, respectively. Our effective tax rate decreased to 21.5% in 2024 from 27.4% in 2023.
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.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES Financial Condition Year Ended December 31, 2024 2023 Change Total assets $ 4,223 $ 4,033 $ 190 Total liabilities 3,573 3,287 286 Total stockholders’ equity 650 746 (96) Total assets increased $190 million from December 31, 2023 to December 31, 2024 primarily related to increases in development advance notes in support of our growth strategy, cash and accounts receivables.
Our effective tax rate increased to 27.4% in 2023 from 25.4% in 2022. The change was primarily related to a foreign tax assessment received in 2023 that we are currently challenging. As a result of these items, net income during 2023, decreased $66 million compared to the prior year.
During 2024, the effective tax rate was lower primarily due to tax credits received in Puerto Rico and a non-taxable reversal of a separation-related reserve. The 2023 effective tax rate was higher primarily from a foreign tax assessment that we are currently challenging. 30 Table of Content As a result of these items, net income during 2024 was unchanged year-over-year.
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 as of December 31, 2024 increased 4% compared to the prior year, driven by 1% growth in the U.S. and 7% growth internationally. As expected, these increases included 4% growth in the higher RevPAR midscale and above segments in the U.S., along with 7% combined growth in our higher RevPAR EMEA and Latin America regions.
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.
Total liabilities increased $286 million year-over-year primarily related to a $262 million increase in our outstanding debt. Total equity decreased $96 million year-over-year primarily due to $308 million of stock repurchases and $123 million of dividends declared, partially offset by our net income.
Excluding currency effects, global RevPAR for the year ended December 31, 2022 increased 20%, compared to the prior year, including U.S. growth of 12% and international growth of 49%. The increases were primarily driven by stronger pricing power and COVID-19 recovery internationally.
Excluding currency effects, global RevPAR for the year ended December 31, 2024 increased 2% compared to the prior year, including flat RevPAR in the U.S. due to stable occupancy and rate, and 8% growth internationally driven by sustained pricing power. Global average royalty rate for the year ended December 31, 2024 was 3.95%.
As of December 31, 2023, the margin on our term loan A was 1.75%. As of December 31, 2023, $1.1 billion of our variable-rate debt is hedged with pay-fixed/receive-variable interest rate swaps hedging our term loan interest rate exposure. The aggregate fair value of these interest rate swaps was a $13 million asset as of December 31, 2023.
As of December 31, 2024 the margin on our term loan A was 1.75%. 32 Table of Contents As of December 31, 2024, we had pay-fixed/receive-variable interest rate swaps which hedge the interest rate exposure on $1.4 billion, effectively representing over 94% of the outstanding amount of our term loan B.
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 2023, net cash provided by operating activities decreased $23 million compared to the prior year primarily due to higher development advance notes provided to franchisees in support of system growth and higher interest expense, partially offset by higher cash generated from net income.
Net cash used in financing activities decreased $129 million compared to the prior year primarily due to the absence of cash used for the redemption of our $500 million 5.375% senior unsecured notes in 2021, partially offset by a $341 million increase in stock repurchases and a $34 million increase in dividend payments.
Net cash used in financing activities decreased $227 million compared to the prior year primarily due to $163 million of higher net debt borrowings, $83 million of lower stock repurchases and $22 million of stock options exercises, partially offset by a $34 million finance lease payment associated with the purchase of our corporate headquarters.
As of January 2024, nearly all our term loan B has a fixed interest rate through the fourth quarter of 2027. 37 Table of Contents As of December 31, 2023, our credit rating was Ba1 from Moody’s Investors Service and BB+ from both Standard and Poor’s Rating Agency and Fitch Ratings.
As of December 31, 2024, our credit rating was Ba1 from Moody’s Investors Service and BB+ from both Standard and Poor’s Rating Agency and Fitch Ratings. A credit rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal by the assigning rating organization.
Adjusted EBITDA during 2022 increased $87 million, or 15%, compared to the prior year, driven by the revenue increases discussed above, partially offset by; • $81 million of higher marketing, reservation and loyalty expenses primarily as a result of the increase in marketing revenues; • $8 million of higher costs primarily reflecting variable expenses associated with the improvement in travel demand due to the COVID-19 recovery; and • $5 million of higher costs due to inflation, as expected.
Adjusted EBITDA during 2024 increased $40 million compared to the prior-year period primarily driven by: • $29 million of higher fee-related revenues, before development advance note amortization, as discussed above; • $5 million of lower general and administrative costs primarily due to operational efficiencies and an insurance recovery; and • $5 million of lower marketing, reservation and loyalty expenses primarily due to the absence of $18 million in expenses related to the 2023 global franchisee conference, partially offset by higher 2024 spend driven by increased marketing revenue.
This represented the 14 th consecutive quarter of sequential pipeline growth. Approximately 70% of our pipeline is in the midscale and above segments and 58% is international. Additionally, approximately 79% of our pipeline is new construction, of which approximately 34% has broken ground.
Approximately 70% of our pipeline is in the midscale and above segments and 17% is in the extended stay segment. Approximately 58% of our pipeline is international.
Total expenses during 2023 decreased $46 million, or 5%, compared to the prior year, primarily driven by: • $102 million of lower cost-reimbursement expenses associated with the exit of all of our U.S. full-service management business, which have no impact on net income; • $65 million of lower expenses 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 expenses as discussed above); partially offset by • $45 million of higher marketing, reservation and loyalty expenses primarily as a result of timing of spend and costs associated with our global franchisee conference; • $35 million from absence of the gain on asset sale in 2022 related to the sale of our owned hotel Wyndham Grand Bonnet Creek Resort; • $17 million of higher operating expenses primarily driven by revenue-generating activities and $10 million of higher foreign currency losses on highly inflationary countries, primarily Argentina; • $11 million of transaction-related expenses primarily related to the unsolicited Exchange Offer from Choice and our term loan refinancing; and • $9 million of higher general and administrative expenses.
Total expenses during 2024 increased $19 million, or 2%, compared to the prior year, primarily driven by: • $36 million of higher transaction-related expenses primarily due to the failed hostile takeover attempt in 2024; • $15 million of restructuring costs; and • $12 million of impairment charges primarily related to development advance notes; partially offset by • $13 million of lower operating costs primarily due to lower foreign currency losses, primarily related to highly inflationary countries, and an insurance recovery; • $10 million of lower separation-related costs, primarily due to the reversal of a reserve in 2024 related to the expiration of a tax matter associated with our spin-off; • $9 million of lower cost-reimbursement expenses, which have no impact on net income; • $5 million of lower marketing, reservation and loyalty expenses primarily due to the absence of $18 million in expenses related to the 2023 global franchisee conference, partially offset by higher 2024 spend driven by increased marketing revenue; and • $5 million of lower depreciation and amortization.
OPERATING STATISTICS - 2022 VS. 2021 The table below presents our operating statistics for the years ended December 31, 2022 and 2021.
Our Annual Report on Form 10-K for the year ended December 31, 2023 includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2022 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” OPERATING STATISTICS - 2024 VS. 2023 The table below presents our operating statistics for the years ended December 31, 2024 and 2023.
Removed
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.
Added
Amounts may not foot due to rounding. (d) Represents the number of affiliated hotels at the end of the period.
Removed
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.
Added
Adjusted EBITDA is reported on a consolidated basis, as Hotel Franchising adjusted EBITDA and corporate adjusted EBITDA are reported at a segment level. We believe that Hotel Franchising adjusted EBITDA, Corporate adjusted EBITDA and adjusted EBITDA are useful measures of performance and, when considered with U.S.
Removed
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.
Added
Hotel Franchising adjusted EBITDA, Corporate adjusted EBITDA and adjusted EBITDA are not recognized terms under U.S. 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.
Removed
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.
Added
Additionally, approximately 78% of our pipeline is new construction, of which approximately 35% has broken ground. 31 Table of Content RESTRUCTURING During 2024, we approved a restructuring plan focused on enhancing our organizational efficiency. As a result, during 2024, we incurred $15 million of restructuring expenses relating to 135 employees primarily in our Hotel Franchising segment.
Removed
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.
Added
The following table presents activity for the year ended December 31, 2024: 2024 Activity Liability as of December 31, 2023 (a) Costs Recognized Cash Payments Other (b) Liability as of December 31, 2024 (a) 2024 Plan Personnel-related $ — $ 15 $ (8) $ (2) $ 5 Total accrued restructuring $ — $ 15 $ (8) $ (2) $ 5 _____________________ (a) Reported within accrued expenses and other current liabilities on the Consolidated Balance Sheets.
Removed
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.
Added
The interest rate swaps have weighted average fixed rates (plus applicable spreads) ranging from 3.31% to 3.84% based on various effective dates for each of the swap agreements, with $475 million expiring in the fourth quarter of 2027, $600 million expiring in the second quarter of 2028 and $350 million expiring in the third quarter of 2028.
Removed
(c) Corporate and Other reflects unallocated corporate costs that are not attributable to an operating segment.
Added
Net cash used in investing activities decreased $1 million compared to the prior year primarily due to the purchase of our corporate headquarters, partially offset by lower loan advances.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+1 added−0 removed7 unchanged
Biggest changeArgentina 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.
Biggest changeOur 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 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 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, the British Pound and the Argentine Peso. We anticipate that such foreign currency exchange rate risk will remain a market risk exposure for the foreseeable future.
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.
We have determined through such analyses that a hypothetical 10% change in foreign currency exchange rates would have resulted in approximately a $2 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.
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.
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, 2024. 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.
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.
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 $5 million increase or decrease in our annual interest expense.
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.
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 12 - Fair Value to the Consolidated Financial Statements. Our principal market exposures are interest rate and currency exchange rate risks.
The total outstanding balance of such variable-rate borrowings, net of swaps, was $583 million as of December 31, 2023.
The total outstanding balance of such variable-rate borrowings, net of swaps, was $531 million as of December 31, 2024.
As of December 31, 2023, the absolute notional amount of our outstanding foreign exchange hedging instruments was $153 million.
As of December 31, 2024, the absolute notional amount of our outstanding foreign exchange hedging instruments was $186 million.
Added
Argentina is considered to be a highly inflationary economy. As of December 31, 2024, we had total net exposure in Argentina relating to foreign currency of approximately $7 million. Foreign currency exchange losses related to Argentina were immaterial, $14 million and $4 million during 2024, 2023 and 2022, respectively.

Other WH 10-K year-over-year comparisons