Wyndham posts record room openings, strong Q1 earnings despite RevPAR headwinds

The U.S.-based hotel franchisor opened 15,000 rooms globally during the first quarter, a 13 per cent year-over-year increase and the highest ever for that period. Total system size rose four per cent from a year earlier to approximately 907,200 rooms across 9,300 hotels in more than 95 countries.

Growth was driven largely by international expansion. The company added 27,400 rooms internationally, compared with 3,500 in the United States. In Canada, the room count remains unchanged at 39,800.

“Our asset-light, franchise-only model continues to deliver strong returns,” says Geoff Ballotti, president and chief executive officer. “Despite macroeconomic uncertainty, we remain focused on disciplined growth and support for our franchisees.”

Franchise revenue rises; earnings rebound sharply

Fee-related and other revenues totalled US$316 million in the first quarter, a four per cent increase from the same period in 2024, driven by higher royalties and ancillary revenue.

Net income climbed to US$61 million, up from US$16 million a year earlier. The company attributes the gain in part to lower transaction-related expenses, including costs associated with defending against an unsuccessful hostile takeover attempt in 2024.

Adjusted EBITDA rose to US$145 million, up three per cent year-over-year. On a comparable basis—excluding US$8 million in marketing fund variability—EBITDA increased nine per cent.

Diluted earnings per share reached US$0.78, up from US$0.19. Adjusted diluted EPS increased 10 per cent to US$0.86, or 20 per cent on a comparable basis.

The company generated US$80 million in free cash flow and returned US$109 million to shareholders through US$76 million in share repurchases and US$33 million in dividends. Wyndham’s net debt leverage ratio stands at 3.5 times trailing 12-month adjusted EBITDA.

Pipeline reaches new high, with focus on midscale and international markets

Wyndham reports a development pipeline of approximately 254,000 rooms across 2,140 hotels, a five per cent year-over-year increase and the 19th consecutive quarter of sequential growth.

Approximately 70 per cent of the pipeline is in the midscale and above segments, with 17 per cent dedicated to extended stay. Nearly 60 per cent of projects are located outside the U.S., and 77 per cent of rooms in the pipeline are classified as new construction. Roughly 35 per cent of those projects have already broken ground.

The company signed 181 new contracts globally during the quarter, up six per cent from the prior year.

Modest RevPAR growth amid mixed global trends

Global revenue per available room (RevPAR) rose two per cent year-over-year in constant currency, with the U.S. and international segments contributing growth of two and three per cent, respectively.

In the U.S., the growth includes an estimated 100 basis points of benefit from hurricane-related demand and the timing of the Easter holiday. Excluding those effects, U.S. RevPAR rose 0.6 per cent.

RevPAR in Latin America increased 25 per cent, while Europe, the Middle East and Africa posted a six per cent gain. RevPAR in Greater China declined eight per cent, with the company citing continued pricing pressure.

Outlook lowered on softer demand

Wyndham is revising its 2025 outlook to reflect weaker-than-expected demand in March and April. The company now expects global RevPAR to decline between two per cent and grow by as much as one per cent, down from its earlier forecast of two to three per cent growth.

Adjusted EBITDA is expected to range between US$730 million and US$745 million, and adjusted diluted EPS is forecast at US$4.57 to US$4.74. Wyndham continues to project full-year net room growth between 3.6 and 4.6 per cent.

Ballotti says the company remains confident in its long-term prospects.

“Our model has consistently outperformed during downturns,” he says. “We’re confident in our ability to drive long-term value for shareholders through all economic cycles.”