Q2 2022 Wyndham Hotels & Resorts Inc Earnings Call
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Yeah.
Welcome to the Wyndham hotels, <unk> resorts second quarter 2022 earnings conference call.
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I would now like to turn the call over to Matt <unk> Senior Vice President of Investor Relations.
Thank you operator, good morning, and thank you for joining US with me today are Jeff <unk>, our CEO and Michele Allen our CFO .
Before we get started I want to remind you that our remarks today will contain forward looking statements. These statements are subject to risk factors that may cause our actual results to differ materially from those expressed or implied these.
These risk factors are discussed in detail in our most recent annual report on Form 10-K filed with the Securities and Exchange Commission and any subsequent river ports filed with the SEC.
We'll be referring to a number of non-GAAP measures corresponding GAAP measures and a reconciliation of non-GAAP measures to GAAP metrics are provided in our earnings release, which is available on our Investor Relations website at Investor Wyndham hotels Dot com.
We are providing certain measures discussing future impact on a non-GAAP basis, only because without unreasonable efforts. We are unable to provide the comparable GAAP metric.
In addition last evening, we posted an investor presentation containing supplemental information on our Investor Relations website.
We may continue to provide supplemental information on our website in the future.
Accordingly, we encourage investors to monitor our website. In addition to our press releases filings submitted with the SEC and any public conference calls or webcast.
With that I'll turn the call over to Jeff.
Thanks, Matt and thanks, everyone for joining us. This morning, we're pleased to report another very strong quarter, where global Revpar grew 23% to last year.
And 3% to 2019.
Here in the United States Revpar grew 15% year over year in.
And internationally Revpar grew nearly 60%.
July month to date domestic Revpar is running 6% ahead of where it was back in 2019.
And internationally, our EMEA, Canada, and Latam regions are all running ahead.
Our guests are staying longer and spending more at our hotels than they did in 2019.
And importantly, our booking windows continue to increase.
Consumer intent to travel and their willingness and ability to spend remains healthy despite the broader economic concerns.
We grew net rooms by 3% and our diverse.
Element pipeline by 9% to a record 208000 rooms.
We delivered $175 million of adjusted EBITDA more than we delivered in the second quarters of both last year in 2019, generating nearly $100 million of free cash flow.
And we returned $170 million to our shareholders, bringing our year to date capital returned to approximately $240 million or 3% of our market cap.
We grew our development pipeline this quarter by 2% sequentially and by 9% versus prior year.
This marks the eighth consecutive quarter of sequential pipeline growth.
We awarded approximately 125, new contracts domestically and.
And over 60 contracts internationally, which in total account for more than 22000 new rooms.
The number of domestic contract signed was approximately 75% higher than what we awarded both last year and back in the second quarter of 2019.
Importantly, we awarded contracts to develop another 22 hotels for our recently launched new construction extended stay brand, which brings the total number of project eco contracts awarded to 72 since its launch four short months ago.
We grew our overall system by 1% sequentially and by 3% versus prior year.
We opened more rooms than last year, and once again improved our retention rate.
There's terminations were 200 basis points lower than last year.
These results were in line with our expectation and position us solidly on track to achieve our full year net room growth outlook of 2% to 4%.
Here in the United States, we grew our system size by 2% year over year and by 10 basis points sequentially opening another 6300 rooms in the quarter, including our first dual branded la Quinta Hawthorn suites hotel in Pfluger Bill, Texas.
The window Molina, and John Deere Commons in Illinois.
And the origin hotel in Austin, Texas, which joined our full service upscale Wyndham brand. This past June .
Internationally net rooms grew 2% sequentially.
And by more than 4% versus prior year.
Notably our Latin America region grew its system size by 12% compared to prior year, which included the addition of four luxury registry collection of resorts with over 1500 rooms in Mexico.
Your long term franchise agreements with the Palladium Hotel group.
As part of this strategic alliance on just this month. Another 5000 franchised rooms will be added to our portfolio throughout the remainder of 2022.
Bringing the total to 15 upper upscale and luxury palladium hotels and resorts.
In Mexico, Brazil, Jamaica, and the Dominican Republic, joining our registry collection and trademark hotel collection by Wyndham.
Our China direct franchising business grew its system size by 12%.
<unk> the opening of the beautiful new construction Wyndham Garden cotton being our first Wyndham garden in Yunnan Province.
Our southeast Asia Pacific Rim region grew net rooms by 3%, which included the introduction of our Microtel brand in New Zealand with the opening of the Microtel, Wellington and our first trademark by Wyndham in Vietnam.
Trademark has a brand that has grown to more than 150 hotels globally in the past five years.
And it's a brand that now has another 80 hotels currently in its pipeline.
And finally, our EMEA region grew net rooms by 2%, including the addition of our first trip by Wyndham in Greece.
Our award winning Wyndham rewards loyalty program continues to be recognized as the number one hotel rewards program by both U S News and World report in USA today.
The program grew domestic enrollments by 8% versus prior year and by 25% versus where it stood pre pandemic.
Total membership now stands at over 95 million members.
And awareness of the program increased by another 100 basis points compared to 2021.
Placing it among the top three most recognized of the industry's 13 major loyalty programs tracked by market cashed.
Domestically nearly one out of every two check ins are asking for their wyndham reward points of check ins with brands like La Quinta now, we're approaching a 55% Wyndham rewards share of occupancy.
Revenue generated from direct bookings on our brand dotcom sites grew nearly 30% in the quarter compared to 2021.
Outpacing the rate of growth across all third party channels driven in large part by the Wyndham rewards loyalty program.
And we're making it easier and more convenient than ever for guests to book their vacations through the five star rated window map, which has seen a 30% growth in downloads since last year.
This quarter, we launched road trip plan around the App the first ever of its kind.
With its real time functionality guests can tell us where they want their trip that began and where they want their trip to end.
The App then provides recommendation for overnight stays along the way based on how long or how far they want to drive each day.
But lets the guests choose their desired stops they can set hotel preferences by price or by brand and they can filter there by Wyndham hotel selections based on multiple criteria like.
Whether or not the hotel accepts pets or has for example truck parking.
And within minutes. They can book multiple stays in the same booking flow and even pay for their rooms with their wyndham reward points with cash or with a combination of both cash endpoints.
We're seeing tremendous adoption since its launch in may.
With guests having spent thousands of hours planning their trips the longest trip plan, so far being over 4700 miles with multiple stays at Wyndham hotels, along the way.
From an ESG in a development standpoint, we are building on our commitment to encouraging diverse hotel ownership.
We were the first major hotel company to launch a program focusing on women's advancement via our women owned the room program.
Now Wyndham has become the first major hotel company to launch a similar program focus specifically.
On the advancement of Black entrepreneurs.
Two weeks ago, we announced our newest development program bold by Wyndham at that but the national Black Hotel owners operators and developers Annual Association summit meeting in Miami.
While black employment in the U S hotel industry as nearly 20% less than 2% of the nation's hotel owners are black.
Bold, which stands for black owners in lodging developers aims to engage in advance more black entrepreneurs on their journey to a hotel ownership and.
And interest in the program to date has exceeded our expectations.
Diversity and inclusion have always been a cornerstone of the Wyndham culture and these initiatives proved there also advantageous from a business standpoint.
All of the development efforts and awards are supported by Wyndham has dedicated a bee gees or affinity business groups, who along with our tea and I team continue to drive awareness and ally ship throughout our organization.
Over the past few years, our teams around the world have made tremendous progress in simplifying our operating model.
We negotiated an exit for our select service management business and sold our two owned hotels.
And importantly, we were able to lock in long term franchise agreements at full fees on all of these hotels.
In a moment Michel will discuss our intended use of the related proceeds from these transactions.
At a time when our brands are performing at record levels and continuing to gain market share versus how they performed pre COVID-19.
Our business model has never been more straightforward.
99% of our 9000 hotels are not franchised la.
Limiting our exposure to operating costs and capital requirements and allowing our teams to focus on the higher margin cash generating franchise business that.
And we've been so successful at over the past 30 years.
And with that I'll turn the call over now to Michelle Michelle.
Thanks, Jeff and good morning, everyone I'll begin my remarks today with a detailed review of our second quarter results. I'll, then review our cash flows and balance sheet, followed by an update to our 2022.
During the second quarter, our fee related and other revenue grew to 354 million and our adjusted EBITDA grew to $175 million.
Our overall year over year results are not comparable to the sale of our two owned hotels and the exit of our select service management business, which we previously communicated.
In an effort to simplify our results I will provide commentary today about our segment performance.
Our franchising segment grew revenue by 18% year over year, primarily reflecting global revpar growth of 23% and higher license fees.
EBITDA grew 11% at these revenue increases were partially offset by an adverse timing impact from my marketing funds.
Our franchising margin, which excludes the effects of the marketing funds and is calculated on the same basis as our peers.
Year over year at 85%.
Fee related and other revenue within our hotel management segment declined $19 million in second quarter 2022, while adjusted EBITDA declined 10 million, principally reflecting the select service management owned hotel sale transactions, which collectively contributed approximately $20 million less in revenue and approximately eight.
Less in EBITDA year over year.
Within our corporate and other segment, we saw $2 million of higher expenses due to inflationary cost pressures a reflection of the current environment.
Adjusted diluted EPS improved 13% to $1.07.
The increase in adjusted EBITDA, and a benefit from our share repurchase activity.
Partially offset by the impact of the sale transactions, which collectively reduced EPS by four or five percentage points.
Excluding the impact of these transactions adjusted diluted EPS growth was 18%.
Before moving onto free cash flow, let me take a moment to discuss current regional revpar trends.
We'll wrap her surpassed 2019 levels for the first time during the quarter as international recovery accelerated.
Pricing power has continued to improve with ADR in all regions exceeding 2019 levels in second quarter global ADR up 117% year over year.
In the U S occupancy reached 96% of 2019 levels in Canada 98.
88% and in China 67.
Overall global occupancy improved to 88% of 2019 levels illustrating brown for continued demand for cap rate.
Now turning to free cash flow, which was $99 million for the quarter compared to $104 million last year, reflecting the timing of tax payments on a year to date basis with this timing impact neutralized free cash flow was $224 million compared to $163 million last year up 30.
7%.
Our year to date free cash flow conversion rate now stands at 67% and we.
<unk> on track to achieve our targeted 55% conversion rate.
In May we completed the sale of our remaining owned hotel the Wyndham Grand Rio Mar resort in Puerto Rico for $62 million.
Based on the resorts 2019, adjusted EBITDA the sales price represents a 19 times multiple inclusive of planned capital expenditures.
No gain or loss on the sale as the proceeds approximated adjusted net book value.
The completion of the sale combined with the sale of the Wyndham Grand Bonnet Creek and the exit of our select service management business in the first quarter, we have substantially simplified our business model and generated $263 million of capital.
As a reminder, together with the free cash flow, we will generate this year, we expect to have just over $600 million of cash deploy.
Our first priority as always is to invest in the business. We are actively exploring both external and organic growth opportunities.
The core tenets of our M&A strategy are for deals to be accretive from an earnings and in that room growth perspective and to be complementary to our existing brand portfolio and geographic footprint.
We will remain disciplined in this approach we expect to maintain our industry, leading dividend payout ratio of course subject to board approval and share repurchases, which had been a particularly compelling opportunity given the recent pricing. We will continue to be an integral element of our capital allocation strategy.
We returned $171 million to our shareholders during the second quarter of 2000 $22 million to $142 million of share repurchases and 29 million of common stock dividends in the second quarter, we opportunistically repurchased three and a half times. The first quarter amount. We have retired approximately $240 million of capital to shareholders.
In the first half of this year, which as Jeff mentioned represents approximately 3% of our market cap.
We ended the quarter with approximately $1 $1 billion in total liquidity and our net leverage ratio was two and a half times well below our three to four times stated target range.
Our ending cash balance of $400 million is above our normal levels due to the proceeds we received from the select service management and owned hotel sale transactions, all of which have yet to be deployed.
Excluding the excess cash on our balance sheet, our net leverage ratio was two nine times just below the low end of our target range.
With this low leverage our $750 million revolving credit facility recently extended to April 2027, and no maturities until mid 2025, the strength of our balance sheet provides us with tremendous flexibility along with the means to fund strategic growth initiatives over the coming years.
Now turning to outlook, we're updating our full year 2022 outlook to reflect future projections related to the license fees received from travel and leisure based on their full year 22 gross VOI sales outlook provided in April as well as a lower share count due to our second quarter repurchase activity.
We now expect fee related and other revenues of 1.29 billion to $1. Three 2 billion, an increase of $6 million from april's outlook, reflecting the incremental license fees from P&L.
Adjusted EBITDA increase of $6 million as well and is now projected to be $611 million to $631 million.
We expect adjusted net income of 323 million to $334 million 5 million higher than our prior outlook.
And adjusted diluted EPS increased 12 cents per share and is now projected to be $3 51 per share to $3 63 per share based on a diluted share count of $91 9 million, which as usual excludes any future potential share repurchases.
There are no changes to our prior outlook for global net room growth global Revpar or for our free cash flow conversion rate.
Looking toward 2023, we have provided two new sites in our investor presentation to help with your modeling Slide 33 provides a historical financial impact of our select service management business and owned hotels, which will need to be adjusted from your base and slide 35 provides revenue sensitivities.
In closing our business is operating above 2019 levels with continued room for recovery given occupancy levels here in the U S and internationally.
We produced another quarter of strong adjusted EBITDA and cash flow and we completed our goal of simplifying our business all while strengthening our balance sheet and significantly increasing capital returns as we enter the second half of the year, we believe our resilient business model and strong balance sheet position us well to deliver on shareholder commitments even in changing.
In challenging times with that Jeff and I would be happy to take your questions operator.
The floor is now open for questions.
At this time, if you have a question or comment please press star one on your telephone keypad.
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Q.
Our first question comes from Joe Greff of J P. Morgan.
Yeah.
Yeah.
Hi, good morning, everybody.
Jeff I'd love to see here.
What with the mood is among among your.
Developers, particularly in the U S as well as in China.
Given.
In more challenging financing market and certainly uncertain uncertain macro.
How much has changed here in July in June .
Versus earlier in the year.
And then sort of the net of all this is kind of the pipeline continue to grow sequentially.
The answer is yes, what gives you that confidence.
Well the answer is yes, Joe Thanks for the question and Theres a lot of things that are that give us confidence I think.
Look I don't think back to the beginning of your question developers are any less confident than they were at the beginning of the year either here in the U S or in China or new construction signings.
Very very strong we had 100 signings in the quarter. It was up 10% to 21 and it was up 32% to 2019 and I think what gives us confidence as our economy and mid scale select service brands are selling right now here in the states of just record levels and it's reflecting developer confidence that now is a good time to be.
Building an end to belief.
Is that from all of these developers that had a record year last year that still believes they're going to have a very good year. This year is that whatever happens in the future I think the belief is that if you could build now is a good time to build because we're at the very early stages.
Of what they will do.
They believe in their heart and their core will be a sustained multi year recovery and we're seeing that in China as well I mean, we.
We opened 2800 rooms in the second quarter, and we awarded 25% more contracts.
In China. Despite so many of our team members being locked down I mean in doing this remotely.
And then they did in the second quarter of 2019 I mean this was this was the second quarter I believe Michelle that they delivered over a 12% net room growth in our direct franchising business, but the demand.
For development contracts over there is is really really strong and we all know that.
They've got a real good ability to recover quickly coming out of this our team has consistently delivered over in China over the last few years, including in the first quarter were excuse me where it wasn't easy.
But with over 60000 direct franchise rooms in our pipeline right now, we're very bullish as well over in China.
Okay.
Great. Thanks, and then.
Michelle I think it was a quarter ago, you mentioned M&A is in the company's DNA.
Can you talk about if there was anything warm in and I know you reminded us of your criteria, but I think a lot of investors were surprised to see.
The choice thought Radisson not that I would expect you and Jeff to talk about why you didn't buy a specific company that a competitor purchase.
But if you could talk about the M&A landscape and on our numbers and our numbers, even with Revpar declining next year.
We still can get to a point, where the current quarterly buyback amount.
It's sustainable going forward is that something that you would agree with absent M&A and that's all I mean, yes, I will comment Joe because we get the question a lot on odd Radisson and.
I think it is important I mean, our teams stay very close to everything that's out there both domestically and internationally, including Radisson, which we've looked at multiple times over the years, it's just never been for us Oh over those years of strategic fit.
I think if you think about radisson in terms of their portfolio of three quarters of it.
It is here in the Americas and it's it's there of course country Inn and suites brand, which competes directly with La Quinta, which has two times the footprint and then of course, the other fourth of that portfolio here domestically is their full service radisson in their upper upscale full service Radisson Blu product, which.
Which competes with our upscale Wyndham and upper upscale Wyndham Grand Hotel so.
Both Wyndham and Wyndham Grand or two very strong brands for us that are also performing very well.
So with larger footprints and I think finally, we've we've been successful in exiting our owned real estate and our management guarantees, which would've come back with with with an acquisition of Radisson. So again.
Having looked at it before in the past, it's never been for Us strategically.
And it's not brands that we've ever felt we could grow more quickly than our brands, which compete with radisson in those segments. So.
Let Michel I'll touch on our M&A strategy, but it's really to focus on our brands that are accretive to both earnings and net run net room growth going forward.
Yeah.
Hi, Joe.
From an M&A landscape perspective, we're looking for opportunities both domestically and internationally, particularly in what we consider to be high growth markets with high demand generators.
<unk> out into the future and.
That probably looks more like smaller regional in the Midscale select service or even upscale space, but I'd also say that you know now.
<unk> is off the table if it meets our criteria, we believe that consolidation in the industry is inevitable and and size and scale matter. They matter are now more than they ever have and we expect that down tick.
To continue.
And then I think I think I think the last part of your question with respect to.
The cadence and pace of our share repurchase volume so our.
Our Q2 volume was worth about three five times higher than three and a half times. The volume purchased in Q1. So there was a significant uptick this quarter compared compare to prior and and as you know preference is going to the beach to deploy our capital to grow that business and we want to give our teams.
Ample time to find those opportunities but absent.
Those opportunities I think the Q2 run rate would be a reasonable assumption for the back half of the year and of course, we would look to take advantage of any stock price volatility, which could mean, we might see higher volumes and in one of the quarters versus the other.
Great. Thank you both.
Thanks, Joe.
We'll take our next question from Patrick Scholes of choice to Securities.
Thank you operator.
Jeff and Michelle.
Got you.
Good morning.
A couple of days ago, a Walmart com.
Called out some pressures on consumer spending I'm wondering.
Specifically with your economy brands, such as travel lodge or microtel, if you're seeing them.
Similar pressure.
Pressures.
For those brands as well.
Or just across your system.
Yeah, we're really not I think the important differentiation Patrick in terms of our customers are they they're not lower end consumers that are squarely in the middle class. They represent the vast demographic of America.
And what we're seeing is they're earning more and theyre spending more and certainly with unemployment near historic lows and their wages up from where it was back in 2019.
We believe they have ample savings in resources and they're wanting to travel more than ever this year I mean, they are booking earlier.
We know that they're driving further this year than last year and we were.
We're hearing from them anecdotally, we're seeing in our research that.
Theyre moving traveling experience up and into their hierarchy of needs versus doing anything else with their money and all the survey research out there you know over 70% of them are saying they want to travel the same or more than they did this time last year.
You know look last summer was the best summer our franchisees in those two brands or any of our domestic brands ever experienced in and if you talk to our franchisees. Most are feeling that this year will be even better than last year.
Certainly we were pleased without the summer shaping up July month to date Revpar is up 6% to to last a.
Last July up.
Until this past Saturday, we know we do have some tough comps that are coming up.
And those comps are going to get tougher, but we continue to see consumer demand.
Out there and very strong our web traffic is running 15% ahead of where it was back in 2019.
Still on pace with last year's record summer.
Okay great.
That's it for me thank you.
Patrick.
We'll take our next question from David Katz of Jefferies.
Hi, good morning, everyone. Thanks for taking my questions, which.
Which I think are a.
A little different versions of ones, we've had so far.
The first is that you put out some guidance and I'm wondering you know what macroeconomic context are you baking in or factor in into that guidance as we move through the rest of this year what is your assumption set basically.
Oh sure sure David versus our internal estimates, we we did have about a $10 million in the second quarter, a part of that license fees. The other part is related to our marketing funds and we raised for license fees, but did not raise for the fund to be given we have not changed our full year expectations for the marketing.
And still expect.
We still expect that to reverse and and in the fourth quarter with respect to what what we're building into our back half assumptions I'd say last year.
With respect to Revpar, we saw significant increases are beginning of July so comps get really difficult in the back half of this year. Our outlook has always reflected this dynamic and and as Jeff mentioned Revpar. Thus far even in July has been performing with our expectations. So sorry back half expectations right now.
Assume some flattening out of Revpar on the domestic side and then and then continued recovery and <unk>.
Her nationally and and this was always the expectation given the tough comp and we saw so range at 12% to 16% to reflect this time.
Okay.
Perfect. Thank you.
Second I just wanted to ask about the deal environment and whether there is any macro impact that you can identify or register with respect to deal opportunities and I ask it in the context that you purchased you know meaningful.
We are above what we had and above 2019 levels and whether theres a message in.
I know that the environment is perhaps less fertile.
Or whether I'm, reaching with that.
I think it's I think it's a fair assumption to say there is not.
There's not an abundance of deals coming our way environment and so.
So if we thought we had a better use of the best.
<unk> in that business.
Would we would likely be looking to hold onto that cash to to complete us a sizable M&A that doesn't mean, there's there's nothing out there. It just means that the chance of getting something done at any you know at any significant level of capital deployment over the next nine to 12 months is probably less likely.
In today's environment.
Understood perfect. Thanks.
Thanks, David.
Okay.
We'll take our next question from Michael Bellisario of Baird.
Thanks, Good morning, everyone.
Just one question on the development front and net unit growth can you maybe provide the.
The puts and takes in your 2% to 4%.
Unit growth range, what would need to happen in the back half of the year for you to end up at the low end maybe versus the high end today.
Sure I think we wouldn't we would need to see I wanted to items that are openings fall significantly below our priority.
Our prior year numbers.
We're expecting to try to in line with the App with back half this year or we would need to see retention fall significantly below our target, 95% retention rate, none of which we see any indications of.
Of that happening.
Yeah and in fact, we were really really pleased with the job all of our attention teams around the world. This quarter did Mike and continue to do I mean, our retention continues to improve and.
And our terminations continue to come down our Q terminations.
Where were 2% lower than than last year, but 24% lower than they were back in the second quarter of 2019.
Our teams retained almost 3000 more rooms than they did back in the second quarter of 2019 to Michelle's point.
Okay.
Got it here with those terminations coming down or are you providing any more.
Leniency to owners given the macro environment, maybe particularly internationally or is your view still the same.
On the termination side as you think about Brent Brent.
Credit quality and clean up going forward, Yeah, I would say from a from a brand standard standpoint, it's it's it's the same it's.
We're we're doing everything we can of course to support owners, but you know our brand standards are coming back.
Yeah.
And important to note, though there is some concern about the environment, we have not yet seen that play out and in our business and our franchisees are still performing very strongly.
<unk>.
Okay.
We'll take our next question from Danny Assad of Bank of America.
Hey, good morning, everybody.
So I wanted to ask a little more questions on the consumer. So if were you know you guys are talking about how how far along the recovery, we are and how we're kind of basically talking about head of 19.
We also returned to a more traditional kind of.
Seasonality and booking behavior, so kind of can you maybe tell us what you saw around.
The couple of holidays that we saw in the quarter and then what does that mean for you know your booking patterns in August .
And labor day, if you can see that far out.
Yeah sure Danny.
Memorial Day weekend, which was the kickoff to the summer with our with our busiest memorial weekend ever and July 4th.
We're still running ahead of 2019 July month to date as we said is up 6% to 2019.
And when it comes to seasonality in the comps to your to your question in and how it compares to last summer's record demand.
We continue to see consumer demand running well ahead of 2019 and and we believe that will continue throughout.
Throughout Q3, and Q4, but yes, the comps do get tougher I don't think there's any better example of that Danny than in Florida.
July month to date. This is through Saturday of last week, our Florida Revpar is actually down by 12% to 2021, but it's running ahead of 2019.
<unk> 34 per cent and Florida is one of our biggest states.
And we just continue to see that demand to 2019 in Florida was was our best.
Year ever until until last summer.
As I said, our web traffic demand is up we continue to see really strong revpar performance and so many of our largest markets.
I think we will continue throughout the summer in states, like Florida, and Georgia, and Alabama, which all saw again big States for us double digit July month to date Revpar growth.
Through last last weekend versus 2019, and if you look out into the National Park States like.
Gosh, Montana, Idaho, Utah, I mean, they're all running.
Nir to above double digit Revpar ahead of where they were back in 2019 in fact.
I saw a stat yesterday that 47% of our 52 states are running above 2019 levels.
Which is again, all keeping our domestic revpar growth growing over 19.
As we expected to run for for the rest of the year.
And as our to Michelle's point international regions start to recover.
Our continued to recover I mean, some of them are actually back to where they were at 19.
Got it and in July so month to date, it was down 12% for Florida.
State like Florida.
What's offsetting that on the other hand, that's kind of driving your month to date number one.
So many of the states that I just talked about I mean, we have big states that are.
They are doing that just add I'd say July month to date Revpar is probably a one to two points down right now are two last year.
With arc down a little bit in ADR ADR is still really strong two last year.
Got it I do have one follow up question on <unk>.
Your markets.
When we think about kind of.
Where we are today with gas prices.
But you know.
You also have a decent amount of exposure.
The oil like the oil patch in general in terms of hotels, and so our gas prices, where they are today is that net headwind or tailwind for wyndham portfolio, well compared to where they were earlier in the summer I would say, it's it's a bit of a tailwind I mean historically changes in gas prices has had a as we've talked about.
One on ones, a very weak correlation to our to our Revpar and our you know the last time oil averaged $90 a barrel.
Our revpar.
Back in 11, 12, 13 14 was growing.
At a 6% CAGR I, what what what does it mean for gas to go from four to $5 for us It adds about $20 in total direct fuel costs for our consumers trip about 350 miles.
But we're not seeing you know we do not believe that factor is materially impacting our customers' travel decisions right now.
Understood. Thank you.
Thanks Danny.
We'll take our next question from Ian Zaffino of Oppenheimer.
Great. Thank you.
To go back to some of your prepared comments.
On the whole booking window getting longer.
And also longer screws.
Sort of kind of stuck out to me because I know you folks talked about booking windows for your business being very short now I guess youre seeing them expanded.
What necessarily is driving that and what do you think is driving that and then also maybe wire stays long or is it just.
The customer is better he old and they're staying longer what is actually driving that.
It's a great question, you know, what's driving it specifically R. R.
Multi night bookings those are seven and eight at night plus bookings. Those are are those are significantly up obviously, we still have a lot of state say same day bookings, but those are really the bookings that are pushed out.
12 day advanced booking window to 15 days and people are willing to drive further I mean with the chaos at the airports. This year. They are in their cars are there, they're looking to vacation they're willing to drive further they have the flexibility.
That they've never had before in the past in terms of checking in on a Thursday and checking out on a sunday or or are using using.
Using all of the unused vacation days that.
Groups like U S travel say are at record levels.
I think those are the big things.
Okay, Perfect and then maybe for Michelle.
We talked about some of the comps getting tougher, but if we look into.
2023.
Can you maybe talk about some of the tailwind you're expecting into 2023.
Just as a reminder.
<unk> dot and and and Jeff I'm sure you're going to want to add on here, but I'll get us started and I think from a 23 perspective going into the year. We're gonna be looking at continued recovery internationally, we still have the occupancy yet to fully recover.
That's something we're really excited about is that is the b.
The growth we've been seeing on the infrastructure side of our business bookings, which I believe are up 10% year to date and that's a number we expect to continue to grow with the new infrastructure Bill out of the bite and administration I just need to get allocated down to the state levels Jeff.
Jeff anything else you know I am.
Until that yeah, I think that's a huge upside in tailwind is as you point out Michelle I mean, there is just so much significant opportunity for us on that.
Dave.
I can give you if you look at the industry data.
Over the last eight weeks.
You know the weekends are still 20% running ahead of 2019 weekday there's such an opportunity there at plus 5% versus 2019 through.
The last the last eight weeks of Smith data are our brands are gaining share on the weekends.
Versus 2019, but theyre, gaining more index during the weekday.
For exactly the reason that Michelle put put points out I mean, we are attracting more of our fair share of that everyday business traveler, and we're adding more sellers and we're shining more infrastructure related accounts there.
There is so much so.
So much good news out there coming in daily from our global sales offices, who.
Our focus first and foremost on all.
All of those companies contracting for for the public work projects first I mean that $600 billion of public work project is meaningful.
And where are our GSO as they're finding and identifying the general contractors for for airport expansions across the Midwest and Theres a securing the room nights. So that's that's going to be a tailwind for us as we head into the fall and we're also picking up a lot of significant private work on the infrastructure side that we continue just to pick up you mentioned the oil.
Fields in refineries and are undergoing maintenance right now and we're winning bids for for that but look I think the big tailwind for US is is going to be on the net room growth side, I mean, our growing pipeline.
Is is I think where our biggest opportunity lies.
Our pipeline composition as you see in our investor deck that might put out on page seven it has never been stronger and we think that the reason for that is is our franchisee engagement given all the support that we've shown our franchisees and small business owners throughout this.
This pandemic has never been higher and with the launch of four new by Wyndham brands organically.
If you think back to trademark, which I talked about in my prepared remarks, Altra, who has.
And we're working very well with player who has a.
Pipeline, that's now up 10% our registry collection, which you know just continues to power on with what we announced.
Just last week and Echo these brands are organically growing in there there under the by Wyndham distribution platform and they're doing really really well.
Thank you very much for the color.
Thanks, a lot here.
Okay.
We will take our final question from Brandt month tour of Barclays.
Hey, thanks, everyone. Thanks.
Thanks for squeezing me in here I have I have two questions and they're both recession related I apologize.
If they if they seem pessimistic, but I'm just curious on a couple of different views of yours Jafar Michelle.
If we did go into a garden variety recession, and I'm curious, what you think or how you think your retention metric would would trend and what I mean by that is you know in a slowdown or a slowdown of fundamentals.
Brands become dearer right to the owners of your hotels, but at the same time they might have less cash.
To keep up with brand standards I'm, just curious how those two factors could offset each other went out or they are great and fair questions, Brent and welcome back to the call.
Thank you.
Matt threw in a slide on slide 26, which which talks to.
You know how our select service brands have performed in past downturns I mean, our brands are significantly question less volatile during the recession and we've been more resilient and we've outperformed during the past two downturns.
The revpar for the for our brands declined I think 14% and overnight, but it outperformed the higher segments by 500 basis points and we were also to your question.
On both the on both the.
Opening and retention side, we were able to grow our system through that downturn.
2% organically with.
Which offset some of the revpar growth so.
Look we think that you know, we're there to be a downturn and 80% of our system additions would would come from conversions as independency distribution support from our brands.
As we've been doing throughout this pandemic and we believe we would still be very well positioned.
To grow both our revenue and our EBITDA there wouldn't be any any downturn.
Great. Thanks for that and then my follow up is regarding right.
Which is by all accounts been very strong robust across all segments, especially especially yours versus 19.
What you think how the industry would react to a slowdown in leisure demand. If you think talking to your franchisees that they'd be that they would try and hold rate at.
At the expense of demand or if you think that it would be the other way around or if you think that they would probably soften together, how you think the industry would would sort of react to that.
Yes, it's again a great question that we talk with our franchisees and small business owners, all the time and I think they'll hold rate.
We are we've been doing such a great job with them driving rate index and that continues to be our team's focus just equipping those franchisees with the knowledge and tools.
The pivot.
If demand falls to to hold onto it to create much more optionality for them around pricing power I mean, what we're what we're trying to do with Oliver.
All of our state of the art in new inventory revenue management pricing tools is to allow them to just create more optionality around pricing power.
And to train them to reduce their alliance, obviously on more highly discounted.
Opaque rates that might be out there and to realize that what they really should be doing right now.
Especially as they come into the winter and fall is responding to those rfps for contracted business, where it makes sense.
And again, just a significant opportunity for us with those everyday business travelers on during the during the weekday.
And given the pricing and the tools to do that but we we we believe we're much better positioned than we've ever been.
And that.
The travel landscape will be much more.
Resilient than in prior downturns, because pricing has just shown to be so considerably more resilient.
Great. Thanks for the thoughts congrats on the results.
Thanks Brent.
This concludes our question and answer session for today I'd be happy to return the call to Jeff <unk> for closing remarks.
Thanks, Leo and thanks, everyone for your time this morning, Michele Matt and I very much appreciate your continued interest in Wyndham hotels and resorts.
We look forward to talking with you and seeing you soon but before we go we'd like to remind everybody to please tune in to the 80 surging 83rd annual Wyndham Championship from.
August four through August 7th which will be airing on CBS in the golf channel with live coverage beginning on Thursday of next week and.
Enjoy your summer everyone.
Yeah.
Thank you. This does conclude today's Wyndham hotels and resorts second quarter 2022 earnings Conference call. Please disconnect. Your line at this time and have a wonderful day.
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