Operator: Please stand by. Your meeting is about to begin. Welcome to the Wyndham Hotels & Resorts third quarter 2026 earnings conference call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star one on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. Lastly, if you should require operator assistance, please press star zero. I would now like to turn the call over to Matt Capuzzi, Senior Vice President, Financial Planning and Analysis and Investor Relations.
Matt Capuzzi: Thank you, operator. Good morning, and thank you for joining us. With me today are Geoff Ballotti, our CEO, and Amit Sripathi, 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 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 reports filed with the SEC. We will also 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 and investor presentation, which are available on our investor relations website at investor.wyndhamhotels.com.
Matt Capuzzi: 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 and on our social media channels in the future. Accordingly, we encourage investors to monitor our website and our social media channels in addition to our press releases, filings submitted with the SEC, and any public conference calls or webcasts. With that, I will turn the call over to Geoff. Geoff?
Geoff Ballotti: Thanks, Matt, and good morning, everyone. We appreciate you joining us today. Many thanks to those of you who have reached out over the past few months. My treatment for multiple myeloma is going as well as I could have hoped. The doctors are happy with my progress, and I am seeing exceptional clinical results. I feel great, my energy is high, and our leadership team has never been more focused on execution and driving shareholder value. On that note, our Q3 results reflect yet another successful quarter executing against our long-term growth strategies. We reported strong earnings with comparable basis adjusted EBITDA and EPS growth of 5% and 9%, respectively. US RevPAR grew 6%, and we grew our system by 4%, excluding Revo.
Geoff Ballotti: On a year-to-date basis, our resilient, highly cash generative business has produced nearly $270 million of free cash flow, and we have returned over $290 million to our shareholders. In addition, last month, our board increased our share repurchase authorization by $400 million, demonstrating continued confidence in our ability to generate significant cash flow and its commitment to continued shareholder returns. Global RevPAR increased 2% in constant currency, a nearly 400 basis point improvement sequentially, driven primarily by domestic RevPAR, which also improved nearly 400 basis points sequentially to up 6% year over year. This 6% growth was well ahead of our H2 growth expectations and included a favorable impact of approximately 10 basis points from the World Cup. Consistent with historical trends, travel demand for our middle income consumers remains strong despite elevated gas prices.
Geoff Ballotti: RevPAR growth was fueled by stronger demand, with occupancy increasing approximately 300 basis points, driven by everyday business travel and broad-based leisure demand. Importantly, our franchisees also experienced continued pricing power, with ADR increasing approximately 280 basis points. Combined strength in demand and pricing created meaningful revenue and margin improvements for our small business owners. We saw sustained growth across nearly all regions, including our three largest states, Texas, California, and Florida, representing approximately one-quarter of our US room count, which together improved roughly 400 basis points sequentially to up 8% RevPAR growth in Q3. We continued to see strong performance across our Midwest and industrial states, with significant growth in Iowa, up 16%, Illinois, up 15%, Ohio, up 10%, and Indiana, up 9%, highlighting a portfolio well-positioned to benefit from increasing infrastructure-related demand with nearly 80% of the infrastructure built yet to be deployed.
Geoff Ballotti: Higher midweek demand is driving much of this strength, especially at hotels in markets near major transportation, manufacturing, AI, data center, and industrial projects. As these investments continue to ramp up, they are creating a durable growth tailwind for our franchisees. October month to date, US RevPAR has remained relatively consistent with Q3 results, reinforcing our confidence in underlying demand trends as we close out 2026. International RevPAR continued to recover, declining 3% year over year in constant currency in Q3, an improvement of nearly 400 basis points sequentially. Canada RevPAR increased 7%, supported by sustained pricing power and improving domestic demand. Southeast Asia and Pacific RevPAR increased 5%, led by Korea, Thailand, and Indonesia. Latin America RevPAR rose 2%, improving 900 basis points sequentially, driven by Mexico. EMEA RevPAR grew 2% year over year, driven by strong performance in Turkey, India, and Spain.
Geoff Ballotti: This growth represents an 800 basis point sequential improvement, which reflects a substantial recovery in Germany, where performance improved 1,100 basis points sequentially, coupled with RevPAR stabilization in the Middle East, where RevPAR improved from down 45% in Q2 to down 13% in Q3. Strength across these international markets was offset by China, where RevPAR declined 10%, as softer travel demand, most notably in Tier 2 cities, continues to pressure performance. On the development front, Wyndham's owner-first value proposition continues to drive strong openings and net room growth. We opened over 18,000 rooms in the quarter, or 3% more than we opened in Q3 of last year.
Geoff Ballotti: Our development pipeline grew for the 25th consecutive quarter to a record of approximately 264,000 rooms across nearly 70 countries, with a FeePAR premium of approximately 30%, both domestically and internationally. Reflecting our strategy of adding hotels in higher chain scales, and in geographies and markets with stronger long-term economics. We are increasingly focused on adding higher FeePAR hotels that strengthen system quality and strategic positioning, while increasing revenue potential that supports long-term fee and adjusted EBITDA growth. The termination of substandard rooms, which accounted for the majority of our rooms leaving the system this quarter, creates an opportunity to secure franchise agreements for higher quality hotels in attractive markets. In Q3, US room openings carried a FeePAR premium of more than 45% over terminations, while international openings carried a premium of nearly 40%.
Geoff Ballotti: In the United States, conversion openings included the Hayes Street Hotel Nashville Downtown in the heart of Music City, and The Blennerhassett, an 1889 landmark boutique hotel in downtown Parkersburg, West Virginia. Both proud new members of our rapidly growing Trademark Collection by Wyndham. Since introducing Dazzler Select by Wyndham one year ago, we converted the Big Horn Lodge last month in historic downtown Moab, Utah, in the heart of Red Rock Country. It is our 14th Dazzler Select by Wyndham opening, validating demand for our latest brand extension and our distribution network, along with our ability to bring more high-quality, independent economy hotels into the Wyndham global system. New construction openings this quarter included the La Quinta by Wyndham Roanoke, Virginia, the La Quinta by Wyndham Shonto, Arizona, the La Quinta by Wyndham Tracy, California, and the Microtel by Wyndham Nephi, Utah in the Topaz Mountain Range.
Geoff Ballotti: We also opened 3 new construction ECHO Suites, which USA Today readers recently named the number 1 extended stay hotel brand in the United States, including our 23rd ECHO Suites by Wyndham in Middleburg, outside of Jacksonville, Florida. EMEA net room growth was 13%, excluding Revo. Notable new construction openings included the Ramada Encore Kochi, our first Ramada Encore in Kerala, India, and a TRYP by Wyndham in the Netherlands, a newly renovated beachfront property in The Hague. Conversion activity was also strong in EMEA, highlighted by over a dozen new hotel additions, including the Wyndham Residences Piraeus Marina in Athens, overlooking the superyacht Zea Marina on the Aegean Sea. Latin America and the Caribbean also delivered 13% net room growth. Notable new construction openings included the Wyndham Garden São Paulo, further strengthening our presence in one of Brazil's largest urban markets.
Geoff Ballotti: Over 2 dozen conversion openings, including the Wyndham Garden Resort along the Belize City riverside, featuring fine dining, a casino, pools, and fitness facilities. In Southeast Asia and the Pacific Rim, net room growth reached 10% for the second consecutive quarter. Notable new construction openings included the luxurious The Orion Kuala Lumpur, our first Registry Collection hotel in Malaysia, located in the heart of KL's premier shopping, dining, nightlife, and entertainment district. In China, our direct and overall franchising system also again delivered double-digit net room growth. We opened 16 new Days hotels, bringing this former master license brand to 177 directly franchised hotels, nearly triple the size, or a 17% compounded annual growth rate since 2019.
Geoff Ballotti: Conversion openings included the Wingate by Wyndham Furong, our 20th Wingate in Greater China, and the La Quinta Lishui, our ninth La Quinta now open in China, and our 12th in Asia Pacific since introducing La Quinta in this part of the world. Ancillary revenues have increased 10% year to date. Growth has been supported by expanded strategic partnerships, ongoing technology innovations, and the continued adoption of our refreshed and award-winning suite of Wyndham Rewards credit cards. Our Wyndham Rewards Earner card has been named the number 1 travel and hotel credit card in the USA Today 10 Best Readers' Choice Awards for the ninth consecutive year.
Geoff Ballotti: Our card portfolio has gotten even better with our new Earner Premier card, our very first premium card, whose success is driven by its ability to easily offset its $395 annual fee through 30,000 guaranteed annual anniversary points, over $400 in everyday lifestyle statement credits, complimentary Wyndham Rewards Insider membership, top-tier diamond status, and a 25% discount on award stays. Wyndham Rewards is central to ancillary revenue growth, with members contributing more than 1 out of every 2 domestic check-ins. Global enrollments grew 10% year over year, bringing total membership to approximately 129 million members. As our membership grows, we remain focused on creating new ways for members to engage, to access differentiated travel experiences, and benefit from a program consistently ranked as the number 1 hotel loyalty program in the industry by the readers of both USA Today and US News and World Report.
Geoff Ballotti: Through Wyndham Rewards experiences, members are increasingly redeeming points for memorable events and behind-the-scenes access. These offerings are especially effective at attracting younger, more affluent travelers who book earlier, who stay longer, and who engage with us more intently through this program. This experiential focus also continues to shape the evolution of our brand portfolio. Earlier this month, we announced the expansion of our partnership with Travel + Leisure to bring Sports Illustrated Resorts into the hotel sector. Together, we see an opportunity to create immersive year-round destinations in college towns and major urban markets, featuring distinctive programming, premier sporting events, and unique guest experiences. For Wyndham Rewards members, these properties will provide access to new sports-focused destinations and new travel experiences.
Geoff Ballotti: Supported by our loyalty, distribution, and marketing platforms, we believe Sports Illustrated Resorts will become a differentiated and attractive offering among our growing affiliate base of aspirational hotels that further deepens member engagement and expands our reach across high-growth segments. Beyond expanding our brands and loyalty ecosystem, we continue to invest in technology that helps franchisees grow revenue, lower costs, and improve the guest experience. Wyndham Connect, our Wyndham-trained LLM-powered guest engagement platform, is now deployed at more than 5,100 hotels and has generated tens of millions of dollars in year-to-date upsell opportunities for participating franchisees. Wyndham AI Concierge, our AI-powered voice platform, is autonomously handling calls at more than 1,700 hotels worldwide today, up 17% sequentially. The platform is answering tens of thousands of previously missed calls and services guests immediately with no hold times.
Geoff Ballotti: Additionally, Wyndham AI Concierge converts reservation requests at an average daily rate that is 15% above hotel book rates, generating meaningful incremental revenue and driving over 500 basis points of increased direct contribution for franchisees as former lost calls are captured before migrating to third-party channels. Finally, Wyndham Gateway, our new guest Wi-Fi portal that is standardizing the login experience and providing franchisees with revenue-generating upsell opportunities, is also ramping, and it is now live at more than 1,100 hotels, up 35% sequentially. Wyndham Gateway has become one of our most effective new member enrollment channels for Wyndham Rewards, providing valuable first-party guest insights that help drive repeat business while importantly creating new local advertising and ancillary revenue opportunities for franchisees.
Geoff Ballotti: The investments that we have made over the years in our technology stack that moved us off of multiple legacy central platforms onto one, that consolidated dozens of property management systems onto two, have optimized and accelerated our AI readiness via a 100% cloud-based, fully optimized infrastructure across best-in-class partners like Oracle, AWS, Salesforce, Adobe, and Canary Technologies. This investment has allowed us to deploy AI at scale across all guest touchpoints and establish ourselves as a leader within our industry and within the AI space as booking behavior continues to evolve. Google AI Mode is now live alongside our apps in ChatGPT and Claude, supporting end-to-end direct booking, including payment, without ever leaving the LLM conversation.
Geoff Ballotti: We are also now bookable on Muse, on Instinct, and on OpenAI's newly launched Dot, as we continue to enhance agentic booking flows that drive increased direct contribution and help hotels lower costs and increase revenue. These technology investments exemplify how we are turning innovation into stronger hotel-level economics, with franchisee profitability and engagement remaining our top priority. In recent years, we have introduced owner-focused reimbursement and incentive programs that reward hotels for strong guest satisfaction and strong quality scores. These include performance-based reductions in guest response fees, enhanced Wyndham Rewards reimbursement opportunities, and loyalty fee incentives tied directly to the guest experience. Combined with industry-leading and cost-effective technology, these programs are lowering the total cost of ownership, improving hotel-level economics, and further differentiating Wyndham's owner-first value proposition for our franchisees. Looking ahead, we are very encouraged by the accelerating RevPAR recovery across both our domestic and our international markets.
Geoff Ballotti: Our teams are well positioned to build on this momentum through the scale of our network, our award-winning loyalty program, our industry-leading technology platform, and our presence in markets benefiting from continued infrastructure and industrial investment. As always, we thank our team members around the world for their dedication and their commitment to our franchisees and guests, the very foundation of our success. With that, Amit will now walk us through our financial highlights and full year outlook. Amit?
Amit Sripathi: Thanks, Geoff, and good morning, everyone. I will begin my remarks today with a detailed review of our Q3 financial performance, followed by an update on our cash flows, balance sheet, and outlook. Before I begin, let me remind everyone that the comparability of our financial results continues to be impacted by the timing of our marketing fund spend. In the Q3 of this year, marketing fund revenues exceeded expenses by $1 million, while revenues exceeded expenses by $18 million in the Q3 of last year. To enhance transparency and provide a better understanding of the results of our ongoing operations, I will be highlighting our results on a comparable basis, which neutralizes the marketing fund impact. In the Q3, we generated $410 million of net revenues and $207 million of adjusted EBITDA.
Amit Sripathi: Net revenues increased 7% year over year, primarily due to higher royalty and franchise fees, increased ancillary revenues, and revenue from our two owned hotels. Importantly, royalty and franchise fees grew in line with the underlying revenue drivers of our business. On a year to date basis, ancillary revenues grew 10%, driven by higher credit card and partnership fees. We expect full year ancillary revenue growth of low double digits supported by accelerating Q4 performance as the impact from our credit card program refresh and our new premier earner card continues to ramp and drive increased member engagement. Adjusted EBITDA increased 5% on a comparable basis, primarily reflecting higher revenues, partially offset by the timing of variable costs and the lapping of one-time variable cost reductions made during Q3 of 2025.
Amit Sripathi: Adjusted diluted EPS for the quarter was $1.43, a 9% increase on a comparable basis, reflecting growth in comparable basis adjusted EBITDA and the benefit of share repurchase activity. Free cash flow was $100 million in the third quarter and $269 million year to date. We continue to expect full year free cash flow to convert at approximately 55% to 60% of adjusted EBITDA. At our current trading levels, our free cash flow yield of over 7% continues to lead the lodging sector. Development advance spend totaled $18 million in the third quarter, reflecting our consistent and disciplined approach to investing in higher FeePAR hotels that enhance the quality of our portfolio and drive long-term adjusted EBITDA growth. We continue to see strong demand for our brands, with year to date openings up 3% year over year, and our pipeline up 4%, excluding Revo.
Amit Sripathi: Historically, hotels with development advances have entered our system at a FeePAR premium of approximately 40% relative to our system average. We returned $123 million to our shareholders in the third quarter through $91 million of share repurchases, which increased 30% year over year, and $32 million of common stock dividends. In the third quarter, we opportunistically repurchased nearly twice the number of shares as we did in the second quarter. Year to date, we have repurchased 2.5 million shares for $196 million. We ended the quarter with nearly $1 billion in total liquidity, and our net leverage ratio of 3.6 times remained near the midpoint of our target range. Now turning to outlook. As Geoff mentioned, third quarter US RevPAR growth of 6% exceeded our H2 expectations.
Amit Sripathi: Based on our Q3 performance, we have increased our global RevPAR outlook to 0.5% to 1%, or up 50 bps from the previous low end of our range. Our revised outlook assumes Q4 US performance is consistent with Q3, as well as continued improvement internationally. We have narrowed our outlook for net room growth from 4% to 4.5%, excluding Revo, to approximately 4%, reflecting the termination of substandard quality rooms and accelerating mix shift of our portfolio towards higher value opportunities. While this approach modestly impacts net room growth in 2026, it aims to improve the overall quality of our system and support stronger royalty generation and long-term economic value. As previewed on last quarter's earnings call, we expect the majority of Revo related rooms to terminate before year end.
Amit Sripathi: Net revenues are now expected to be $1.48 billion to $1.5 billion, increasing the bottom end of the range by $5 million. Adjusted EBITDA is now expected to be $740 million to $745 million, raising the bottom end of the range by $5 million, reflecting the flow through of strong US RevPAR performance in the third quarter and the continuation of those trends through the remainder of 2026. Our expectation for the marketing fund to break even on a full year basis remains unchanged. Adjusted net income is projected to be $363 million to $369 million. Adjusted diluted EPS is projected at $4.84 to $4.92, which is based on a diluted share count of 74.9 million shares, and as usual, does not assume future share repurchase activity or incremental interest expense from any potential new borrowings.
Amit Sripathi: There are no changes to our outlook for development advance spend or free cash flow conversion. In closing, our Q3 results underscore the continued strength of our asset-light business model and accelerating momentum in US select service RevPAR trends. Our royalties and franchise fees increased year over year in line with our organic. We delivered comparable basis growth in adjusted EBITDA and adjusted EPS, and we maintained a strong balance sheet and disciplined leverage profile. Additionally, we continue to balance targeted investments in high return development opportunities and meaningful shareholder returns through stock buybacks. Our increased outlook for RevPAR, adjusted EBITDA, and EPS reflects our expectation for continued strength in the US and further recovery in international regions. We remain confident in our ability to drive sustainable long-term value for our shareholders. With that, Geoff and I would be happy to answer your questions. Operator?
Operator: The floor is now open for your questions. At this time, if you have a question or comment, please press star one on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. We ask that you limit yourself to one question. Thank you. Our first question comes from Brandt Montour with Barclays. Please go ahead. Your line is open.
Brandt Montour: Good morning, everybody, and thanks for taking the question. I wanted to start with the domestic US strengths. Maybe you can talk a little bit, Geoff, on what is really driving that sequential step up, whether it is more business travel or more leisure that you are seeing. There is a lot of calendar noise and uneven comparisons when you look at last year between Q3, Q4, or even the year before that with the hurricane comps. I want you to maybe scrub that for us in terms of what the underlying US run rate growth is here in the back half and what the implications are for that and how we should think about 2027 based on that.
Amit Sripathi: Sure. Thanks, Brandt, for the question. There is a lot of calendar noise, Hanukkah, Christmas, New Year's, but it is all positive. Our days of the week shifts that should help, we believe, and many of you have been reporting more leisure versus last year for the remainder of the year. Looking ahead, and for the remainder of the quarter, of course, our comps continue to get easier. As you know, our Q3 comp was down 5. Our Q4 last year, we are comping again, is down 8. We are feeling good about the comps. We are feeling good about the noise and the calendar shifts for the remainder of the year. Looking ahead to 2027, really all of our leading indicators, which we look at daily, remain just so strong.
Amit Sripathi: If we look at the economy demand over the last eight weeks, it outperformed the industry by 50 basis points. As we had talked about on the last call, we were starting to see, we are seeing it. Our booking windows have improved from June into July, from July into August into September, and our booking pace, while it is short term, has not been stronger since coming out of COVID. We have now over 7% more business on the books for the next 60 days versus the same time last year. Cancellation rates, they continue to improve. Average drive distance continues to go up from Q2 to Q3, and it should continue to, as airfares, as we all know, are running 30% ahead for Thanksgiving, 25%, they are saying, for Christmas. People are driving, and our lengths of stay continue to lengthen.
Amit Sripathi: We think that the H2 tax refunds, we talked about this on the last call, are unlocking increased discretionary spending. Our middle income consumers, they remain financially resilient and we think fundamentally healthy, and that is driven by, and we see no change to that going into next year, strong employment, strong wage growth, which is supporting increased leisure spending. The banks reporting last week, they all talked about travel spend growing, especially that drive to leisure. All of the research that is out there, MMGY's Fall Travel Edition just came out, and it confirms the same. Travel demand is bouncing back this fall, and consumers are becoming more strategic about when they go and what they consider is worth paying for.
Amit Sripathi: With rising costs pushing more consumers to travel domestically versus internationally, we see the continued truism is that vacations for these consumers have remained, this quarter, next quarter into next year, a priority. We are feeling really good on the leisure side. On the business side for us, GBTA just came out in its September survey last week saying that business confidence is at its highest level since October of 2024, with a continued focus on cost and justification. There is no better business travel justification than that blue collar, essential infrastructure related frontline travel that we cater to. For the remainder of the year, we are feeling good. Looking ahead into 2027, all the trends are positive. Bernd, if I could just put some numbers around your question on weekday business versus leisure. We saw strength in both.
Amit Sripathi: Weekdays were ahead by 150 basis points over a weekend. It was broad-based demand strength, and both ADR and OCC were strong about equally. That kind of gives us confidence about not only into Q4, the continuation of the trends, but really the momentum into 2027 to return to that select service CAGR we have seen over the last 20 years of 2.5% to 3% RevPAR growth.
Geoff Ballotti: That is a great point, Amit. The ADR opportunity ahead for our economy and our midscale franchisees, they have a ton of room to grow rate. The ADR differential right now between the chain scales has never been higher, and it just presents a huge opportunity for these franchisees to recover that lost ground, as we are starting to see. We are very bullish about being able to continue to recover demand, but more importantly, pick up rate. Great point, Amit.
Operator: Thank you. We will move on now to Steve Pizzella with Deutsche Bank. Please go ahead.
Steve Pizzella: Hey, good morning, and thank you for taking our question. On fees, the royalty and franchise fees accelerated nicely in the quarter, growing north of 6%, which was above the implied algorithm. Can you unpack the drivers of that strength and how we should think about the fee growth relative to the algorithm moving forward?
Amit Sripathi: Hey, Steve. Good morning, and thanks for the question. Geoff touched on the RevPAR strength, and that was really a momentum we had throughout the year, exceeding expectations. As we talked about when we gave our outlook at the beginning of the year and the other quarter as well as in the last quarter, we had some noise from Grego and the lapping of that, as well as some timing of franchise fees. We said our expectation was that we would kind of be back in line with algo starting in the back half of the year. We were really pleased to see that happen. As you noted, royalty and franchise fees were up 6%, comparable adjusted EBITDA was up 5%. As we look ahead to your question about, we expect to be back in line with algo.
Amit Sripathi: You look at our full-year guidance, what that implies for Q4 is also royalty and franchise fees, kind of consistent with growth with Q3, and same thing with comparable adjusted EBITDA. We expect that to continue into Q4 and beyond. The only thing in terms of the puts and takes in Q4 is marketing fund. We obviously are going in with about $7 million of underspend into Q4, and our expectation is we will end up at break even for the full year. So right in line, all the drivers should be, we expect, will be in line with algo.
Operator: Thank you. We will move on now to Shaun Kelley with Bank of America. Your line is open.
Shaun Kelley: Hey, good morning, everyone. Geoff, glad to hear about the health update and best wishes in the continued recovery there. For me, guys, I would love to just touch on some of the comments you made around AI, actually. I think in the prepared remarks, you talked a little bit about you are now live in Google AI Mode, some of your integrations with the LLMs. I specifically wanted to ask about agents. You talked about some integrations or you are bookable through Muse and Instinct. I am wondering if you could tell us a little bit more about how that actually works. Just specifically, are agents able to see your inventory through some sort of direct connection? Are they going through the front door?
Shaun Kelley: I think more strategically, what incentives are you providing to kind of get agents to make sure that they book direct, do not go through an OTA channel? I think this is a quite big debate in the industry. Lastly, if you could talk at all about just traffic you are seeing from these channels. Are these starting to move the needle at all? I know it is extremely early, but the types of adoption curves we are hearing out there are significant. Thanks.
Geoff Ballotti: It is extremely early. Thanks, Shaun, for the wishes. Yes, it is low traffic, but it is a great question. It is this morning's Skift headline, Meta citing travel as a top use case, and listening to their call last night. Meta Muse, Instinct AI, OpenAI Dots. We now have a new type of guest, and these are our new autonomous agents, as you refer to, who we are built to service. We are excited about this, and we are embracing it. We are embracing these agents through our brand websites, through our MCP engines, which we can do with very little investment given the technology-forward, best-in-class foundation that Scott Strickland and his team have put in place.
Geoff Ballotti: We are providing our inventory, to your question, directly to these agents as they query and they come in to our CRS via brand web, via our MCP or via our voice channels. On the brand web queries, they are acting just like a guest would. On voice queries, they are talking to our Wyndham Connect agents that we have talked a lot about, who are interacting with these Muse agents or these Instinct agents or these Dot agents, who want to talk to our hotels, just like a guest might want to talk to a hotel front desk agent for any special request, if you think about it that way. The team is working with various AI labs. We are making these bookings faster and easier for these agents.
Geoff Ballotti: To the last part of your question, in terms of incentives, with Wyndham Rewards becoming our differentiator from the OTAs, given the personalized data, the context that we could provide, the third party simply cannot. We envision a future in which these new autonomous agents are explicitly instructed by our guests, and especially by our Wyndham Rewards members, to use our hotel loyalty program as preferences as a requisite in their search criteria. We think it is a big deal, and we think it could really help us grow when it comes to driving direct traffic to our franchisees as the other tools that we outlined in our IP are already doing.
Operator: Thank you. We will move on now to Michael Bellisario with Baird. Your line is open.
Michael Bellisario: Thanks. Good morning, everyone. Jeff, I want to focus on franchisee feedback and what you are hearing from, particularly, your US partners. Any feedback on higher rates weighing on sentiment, any change in development starts and conversion activity there? Similarly, in Europe, what is the health of the franchisee there? Any lingering Middle East impacts? Can you quantify France for us, just in terms of system-wide earnings in your pipeline? Thank you.
Geoff Ballotti: Yeah, a lot in there. France is a very limited impact for us. We have very few hotels, as I think you know, in France right now. So that has not been and won't be an impact for us going forward. The Middle East, fluid situation, but really no disruption to opportunities and business continuity. It remains intact across the portfolio. It is still negative, as we said in the script, but certainly improving. We are down 45% in Q2, down 13% in Q3. Our teams there on the ground, they are expecting gradual stability. We are not assuming any further escalation, but our hotels in the KSA and in Dubai, across the UAE, Abu Dhabi, Bahrain, Qatar, they have all seen obviously some improvement with a pickup from some inbound group travel from China, some military personnel. I think most importantly, from a development standpoint, the pipeline is strong.
Geoff Ballotti: We have over two dozen hotels in our development pipeline in the Middle East, and we have recently executed five new contracts across Saudi Arabia and the UAE. All of those projects are still moving forward. In terms of the US, we are feeling very good about our franchisees. Our retention internationally picked up sequentially about 20 bps internationally, 20 bps domestically. So far, we have opened a record of over 50,000 rooms globally, 4% more than last year, excluding Revo. International opens have been really strong and should continue to be so. We have been ramping, actually, and accelerating. We are 10% up year to date. That accelerated to 24% more opens in Q3 than last year. Domestically, we had a record year of domestic openings last year. Q1 was a record, Q2 was a record, both record quarters.
Geoff Ballotti: We have opened, I think it is about 19,000 rooms year to date versus last year, we were about, I think, 20,000 rooms. So we are tracking last year's record despite the rising interest rates and a significant drop in buy-sell transactions, which slowed us down in the economy segment. We are obviously very pleased with the 2% net room growth in the mid-scale, upper mid-scale segments. Yeah, we are looking forward to a strong Q4 and a good 2027.
Operator: Thank you. We will move on now to David Katz with Jefferies. Your line is open. Please go ahead.
David Katz: Morning, everybody. Thanks for taking my question. Good to hear from you, Geoff, and the update. Look, I think there is a lot in the quarter, so I would love, Geoff, for you to just pull out for us what you think is really the most important development. I know I have asked this question in the past, but I always value your perspective on what is your favorite part out of the whole report? Frankly, just following on the AI stuff, to the degree that you can help us measure statistically franchisees that are either engaging or actually signing up based on those initiatives, which obviously are industry leading, those would help. Thanks very much.
Geoff Ballotti: Sure. David, I would say the most favorite part for all of us in the quarter was looking at the outperformance of our domestic RevPAR, which we have been waiting for, talking a lot about, and really how well, I think what was exciting for us was how well our brands are performing, especially from a market share standpoint and an overall satisfaction standpoint. This past quarter, and really throughout the whole year, we have seen our strongest year-over-year gains in our overall satisfaction and our quality score since going public. That is just huge for us. Our economy brands are seeing some of the highest net promoter score growth and improvement year over year that we have ever seen. Super 8 up 800 basis points, Days Inn up 900 basis points.
Geoff Ballotti: We are seeing huge gains in our overall satisfaction, which was up over 400 basis points, and net promoter score is up 600 basis points. So these brands are resonating with our consumers. Our Medallia OSR index, which is our Overall Social Review index we look at every month comparing our overall social review scores to our peer competitors, is running well over fair share and it continues to grow. That is just a great testament to our franchisees, obviously, in terms of their engagement with our teams and importantly to our directors of franchise operations who do not always receive the credit that they deserve. Relationships in this franchise world matter, and there is no more important relationship that franchisees have than their relationship with their director of franchise operation. It is consistently ranked at the very top of what owners value the most.
Geoff Ballotti: These directors of franchise operations, they are out there traveling all the time. It is nonstop. They do over 10,000 site visits annually. We survey after every visit to each franchisee, "How was your visit?" Not all of them respond, but many of them do. They are running a 98.9% overall satisfaction score. That is year to date, which just blows me away. Franchisees tell me all the time how great their DFO is, citing their responsiveness, their professionalism, their willingness to listen. That just results in franchisees being more engaged than ever today. Over 6,000 of our 75% of our hotels had their customer service fees waived last month due to higher quality, because they are engaged. That is, for me, I am passionate about that and very excited about that.
Geoff Ballotti: When it comes to these franchisees in terms of what they are most excited about, to the last part of your question, it is really the achievements that they are starting to see with just massive rollouts of these tools. Our Wyndham Connect tool now, to think that we are over 5,100 of our hotels. These franchisees are making extra room revenue and extra ancillary revenue. It is amazing how easy it is for them as they embrace it, how excited they become as they embrace it. It is allowing these upscale franchisees to drive, as we said in Matt's deck, $100,000, $200,000, $300,000 of increased annual revenues. Even for small franchisees, they are generating anywhere between, gosh, at the low end, $500 to more like $2,000 per month. That is a big deal, especially it has been in this environment, which up until now, we have not seen the rate growth that we are getting.
Geoff Ballotti: That is obviously making it a lot better, but it is a really big deal that delights them. I could go on and on with the other tools. The Wyndham AI Concierge is just huge. It is really early days. 1,700 hotels enrolled on it. When you think that on average, over 25% of inbound calls are dropped by these franchisees because they cannot get to them in time. We have now AI agents with this tool preventing that from happening. These AI agents on Wyndham AI Concierge, they have answered over 3 million calls year to date. That is driving increased direct contribution because we are capturing all those calls, yielding zero dropped calls that might otherwise migrate to an OTA. A lot of exciting stuff going on, and that was a long answer to your question.
Operator: Thank you. We will move on now to Patrick Scholes with Truist Securities. Your line is open.
Patrick Scholes: Great. Good morning, everyone. Geoff, very happy to hear that your treatment is going well. My question. You had briefly mentioned about increased terminations, I think it was in the economy segment. Is that something that you see impacting or continuing into 2027, or would that alter at all your multi-year net room growth targets? Any changes related to key money strategy? Thank you.
Geoff Ballotti: Okay. I will let Amit take the key money. No changes. We talked about this on the last call. We do have domestic substandard quality terms in the economy. We have been focused on that. We are focused on it, obviously, whenever the OSAT score or the RevPAR, the market share drops below. When we look at where we have had year to date throughout the year, some of the biggest deletions, if you will, of substandard terminations in brands like Howard Johnson by Wyndham and even Super 8. Those two brands in the economy space have seen some of the highest OSAT improvements year to date of any of our brands. Howard Johnson by Wyndham overall satisfaction is up 800 basis points in the quarter over last quarter. That has been growing as we have been focused on it. Super 8 is up 600 basis points.
Geoff Ballotti: They have also seen the most significant year-over-year RevPAR index gain. We will continue to be focused on that. Our economy brands domestically lead the industry from a retention standpoint. It is something we are very focused on. We want obviously to continue that. We lead by about 100 basis points. That again is our continued focus, our DFO's focus, our operations team's focus on quality. We are confident that we could get back to that 96% domestic retention, which we have moved it to nearly before, from the 93s, which is where we were at Spin. Amit, maybe you will talk about the back part of this question.
Amit Sripathi: Yeah. Hey, good morning, Patrick. Regarding key money strategy, really no changes to our outlook in terms of the $110 million for the full year. As far as the sentiment itself, look, key money has always been a tool we selectively use to prioritize investing in high quality growth and when returns meet or exceed our hurdle rates. You look at the sites that we are bringing in with key money, they come in at attractive FeePAR premiums. The priority is always, our development teams, as Geoff touched on, lead with the value proposition of our segment leading brands, our loyalty program, and all of the tech initiatives and AI initiatives that we have invested in to promote franchisee health. So really no changes to our key money strategy or outlook. It remains a tool.
Amit Sripathi: We have ample balance sheet capacity, and within the year, as well as outlook for the $110 million we have to deploy that.
Operator: Thank you. We will move on now to Stephen Grambling with Morgan Stanley. Your line is open.
Stephen Grambling: Hey, thanks. I want to go back to the agentic AI question, perhaps consumer use of LLMs in general. You mentioned the upsell opportunity. We have also heard from some hotel owners that there has been some material declines in top of funnel costs from search already. Are you seeing benefits to customer acquisition costs that you can quantify at this point? Then as you think about the magnitude and cadence of various benefits, how would you rank improved mix of direct bookings versus lowering third party commission rates, versus lowering the cost of direct bookings, or simply just improving conversion across all channels? Thanks.
Geoff Ballotti: Yeah. It is the million dollar question. I think first and foremost, Stephen, we sort of lay that out on page 3 of the IP. How we think about it, we always think about it from our own value proposition. First, we think about our franchisees, and we think about the benefits that we could drive to them, as opposed to driving to our marketing fund. If we could increase their direct bookings, if we could drive increased direct revenues, and we could lower their operating costs, which we are doing with these tools, it is a home run. To the first part of your question, in terms of distribution cost declines, they do have significant potential.
Geoff Ballotti: The AI interactions are all going through our brand websites, our MCP servers, or our voice channels, which whether it is, as I talked about a little while ago in the last question, a Wyndham Connect AI agent answering a Muse AI agent. Those are obviously less costly for us. The ADR lift from Wyndham AI Concierge has huge potential for all the reasons I mentioned on the last question, as we roll this out way beyond the 1,700 hotels who are subscribed to it today. That is driving occupancy index gains, rate index gains, because the AI agent is delivering a 15% increase in rate, RPI gains, and labor savings. Obviously, back to the lens we look at this through for our franchisees. On the LLM search equation, it is still really early days, as I said earlier.
Geoff Ballotti: GEO may well prove to be for us and for our marketing fund, a whole lot less expensive than SEO. That is still to be determined. It is a great question. As AI transactions ramp, you have Meta's Muse out there, again, Skift headline, building in right now a small commission, but it is the space to watch, and it will shape the economics of AI distribution for every brand and every OTA in the coming years. Our focus on our strategy is to make our availability, our rates, our inventory, the most readable, the most actionable data source for the LLMs. If we could offer a direct booking path that an AI agent can execute on easily, then we capture that guest.
Operator: Thank you. We will move on now to Dan Politzer with JP Morgan. Your line is open.
Dan Politzer: Hey, good morning, everyone, and thanks for the question. Geoff, it is great to hear from you. I will follow up on the domestic net unit growth and maybe ask from a different angle. How much of the kind of pivot here or kind of evolving landscape do you attribute to reducing or terminating some of those substandard hotels versus competition from new brands coming into the segment? Or maybe just a change in the macro construction environment. Is there any kind of detail you could give on the conversation with developers and maybe any early thoughts on getting back to positive net unit growth there in the coming years? Thanks.
Geoff Ballotti: Yeah. Growing our domestic network we achieved, as we have said all along, by increasing our gross adds to where it has been before, around 6%, and reducing those terms to 4%, which is where they have been before flattening out this year with the unexpected buy-sell transaction slowdown. I would say that because of rising interest rates was one of the biggest impacts that we saw this year. Interest rates, as we all know, which were expected to fall in the H2 of the year. We think have temporarily widened that bid-ask spread on buy-sell transactions, which are so important to our conversion engine. With transactions in our segments falling over 30% in both the economy and the midscale segments, select service segments, this quarter to historic all-time lows. On top of that, the subdued industry new construction activity.
Geoff Ballotti: You take transaction volumes, you take industry new construction being muted. It is really building pent-up transaction demand for when those transaction-driven conversions pick back up in our segments in the quarters ahead, as we saw in late 2024 and into 2025. We are very confident that as economy buy-sell transactions resume, U.S. net room growth will pick back up as it has before in the past.
Amit Sripathi: Yeah. Dan, the only thing I would add to that is, to your question around new competitors versus just a slowdown in transaction volume or the termination of what really had an impact. Listen, I think we have talked about this before on the competitor side, brand launches, the first of the new brands kind of launched in 2023, and a couple have followed suit since then. You look at that three-year period, really less than 1% of our system has switched over to those brands. You look at it in terms of year-over-year, that has been a declining trend. Really what we are looking at, what Geoff talked about in the terms of the transaction volume, it is not just about the higher interest rates, it is kind of like the shift in expectations, right?
Amit Sripathi: You enter the year thinking you are going to have rate cuts, and midway through the year, you ended up with rate hikes and expectations for more rate hikes. Rate hikes in itself, we have seen this before, right? That in itself does not really cause it. Of course, we want lower is better, but it is more the stability. I think the market is just looking for. They want to understand it is going to normalize, and transaction activity is going to pick back up. We have seen this multiple times throughout the cycle, so we feel good about our setup. We feel good about our segment leading brands, our loyalty program, and all the technology. We are expecting U.S. to be back in sequential growth, really make up for.
Amit Sripathi: We were just lapping some very outsized terms in the beginning of the year that has kind of had an impact this year.
Geoff Ballotti: And you also asked, Dan, about developer sentiment, which I forgot to address. Just looking at my notes, it remains really positive given the strong long-term fundamentals. Historically low supply, less than 2% with. When you think about the U.S. active pipeline supply down 8% year-over-year. Out at the lodging conference, many owners were up on stage talking about industry fundamentals being the best they have seen in a decade. That is showing up for us with our institutional developers with record openings, executions, and pipeline growth. The market is so undersupplied with new quality, affordable select service accommodations to serve the lodging demand from the public and private investment across the U.S. As Amit said, we are confident.
Operator: Thank you. We will move on now to Ben Chaiken with Mizuho. Your line is open. Please go ahead.
Ben Chaiken: Hey, good morning. The organic fee growth relationship was very impressive in Q3 as you touched on. Specifically, I would love to touch on how you are thinking about royalty rate expansion, I guess both in Q4 but also longer term. I think Q2 net of Revo, there was theoretically around 100 basis points of contribution to the organic from royalty rate expansion. I think Q3 was maybe more flattish ex Revo. Just curious how you think about royalty rate expansion and the moving parts both in Q3, Q4, but more importantly, longer term. Thanks.
Amit Sripathi: Hey, Ben. Good morning. Thanks for the question. Our royalty rate, our expectations within the organic is 5 basis points of growth both domestically and internationally on the long term. That is not necessarily 5 basis points every single year, but you look at it on a multi-year period, we expect it to be 5 basis points on average. We have seen U.S. royalty rate increase 10 basis points in 2024, 7 basis points in 2025. It is down approximately 2 basis points year to date in 2026. Again, you look at it across the three-year period, the average is approximately to 5 basis points, so in line with our objectives. Individual years may vary, but the multi-year target is unchanged. Same thing internationally. As you mentioned, there was some Revo related noise which we strip out and disclose, adjusting for that.
Amit Sripathi: You did see royalty rate growth there, and it is really a testament to both expansion into higher chain scale segments as well as the midscale and plus above strategies, both domestically and internationally. That is obviously bearing fruit as we have seen. You look at a three-year average on the royalty rates.
Operator: Thank you. We will move on now to Alex Brignall with Rothschild & Co. Your line is open.
Alex Brignall: Thank you very much for taking the questions and great to hear from you, Geoff. Just one on US net unit growth. Obviously, it continues to be relatively subdued. But the commentary you have made on signings is very encouraging. I wonder if you could just run us through the cadence of how that progresses in the next quarters and years, and how the RevPAR performance of maybe, perhaps most importantly, relative RevPAR performance of the low and high-end segments might affect that. Thank you.
Amit Sripathi: Yeah. Hey, Alex. Good morning. I think since you asked about what is the outlook, I will take the question. I think in terms of sequential growth, US, obviously we saw pipeline growth both domestically and in the US, and pipeline is really the reflection of the execution sentiment. We are pleased to see continued growth, 25 consecutive quarters of global pipeline growth. Then US, we saw again year-over-year growth. As far as the RevPAR sentiment, listen, obviously, we were coming back in an environment last year where we saw sequential declines in RevPAR growth every year. So obviously, having the opposite of that and getting up to above the 20-year select service average of 2.5% to 3% is a positive, and that is what Geoff was touching on earlier about the owner sentiment.
Amit Sripathi: Our expectation is to see sequential growth in the US continue, get to that 4% globally. Too early to talk about 2027 in terms of RevPAR outlook, but our expectation is that this momentum continues, then translating that into net unit growth, transaction volume should pick back up. As I said, really, the market is just looking for stability. As we see that, we should see some continued improvement.
Operator: Thank you. We will move on now to Ian Zaffino with Oppenheimer. Your line is open. Please go ahead.
Ian Zaffino: Hi. Great. Thank you for taking my call, and Geoff, glad to hear everything is going well on the health side. Question would be, just given where the business is and how it is performing versus your expectations, how are you thinking about capital allocation here? You have the dividend, you have a buyback. Are you more encouraged by what you are seeing here and would that then mean accelerate more buyback or how are we thinking about returning the cash to shareholders? Thanks.
Amit Sripathi: Hey, Ian. Good morning. Thanks for the question. We repurchased approximately 91 million shares in Q3, about 30% more than last year, and materially more than the prior quarter. The stock traded at a significant discount to the 52-week average, and we believe it is trading at an unwarranted discount, so we continue to support the stock, and we have ample liquidity and balance sheet capacity to do so. I think our board's authorization of an additional $400 million share repurchase obviously reflects confidence in the strength of our business and ability to generate a significant amount of free cash flow. While we do not guide towards what our future share repurchases are, I think we will continue to support the stock when it trades at an unwarranted discount.
Amit Sripathi: Barring any attractive deployments into M&A and investments within the business, we have ample free cash flow to deploy to both dividends as well as repurchases.
Operator: Thank you. We will move on now to Lizzie Dove with Goldman Sachs. Your line is open.
Lizzie Dove: Hi. Good morning. Thanks for taking the question, and Geoff, great to hear that you are doing well. There is clearly so much investment going into data centers, manufacturing, broader infrastructure projects, as you mentioned and gave some great data points earlier and on the slides. I am wondering how you are thinking about the potential for this to create a multi-year demand tailwind for Wyndham? Is there a way to quantify that impact to total US RevPAR in aggregate? Is this something you think is accelerating as we look to 2027 and beyond?
Geoff Ballotti: Hey, Lizzie. Thanks for the question. Absolutely accelerating and strengthening. It is performing right now. It was up about 6% in line with the rest of North America, but it is no longer the drag from an acceleration standpoint to my point that it was during the DOGE quarters and the government slowdowns of last year. Our teams are out there contracting. They are seeing ongoing highway expansion. They are seeing ongoing and increasing manufacturer builds, big utility grid upgrades, and companies that are just continuing to deploy field crews and regional service teams across the country. These teams operate on, and these companies operate on strict per diems, really anchoring them to our select service brands across the US. Where it is really showing up for us is in terms of what has been booked by our GSO.
Geoff Ballotti: In Q3, our GSO booked 16% more revenue in Q3 than they did last year. That was up from booking 12%, I talked about on the last call, more revenue in Q2 than they did in last year, so continued acceleration. GSO contracted infrastructure on the books, which gives us looking into 2027, a lot of confidence continues to pace well ahead of where we were same time last year. We continue to place infrastructure business into more hotels than we ever have. This quarter, we put it into 5,000, almost 6,000, I believe, of our hotels this year, which was up quarter-over-quarter. We are seeing business from oil and gas room night production. That was up 350 basis points, I think I talked about in our remarks versus the rest of the portfolio.
Geoff Ballotti: Hotels near data centers continue to the first part of your question to see great strength. We have about 350 data centers that we are circling that are around approaching 1,000 of our hotels in those markets, which have seen a couple of hundred basis points of RevPAR growth this year. You look at, gosh, Arizona, TSMC semiconductor corridor remains one of our strongest markets, and we are seeing hotels servicing this project seeing big double-digit increases year-over-year in both their revenues, their bookings, their market share. Absolutely, it should become a tailwind, assuming it continues to pick up as it has over the last two quarters, and not be the drag it was last year. So much of it, as we said in the script, has yet to be spent.
Geoff Ballotti: This bipartisan Build America Act, we think should really help as those funds become authorized from 2027 into the 2030s.
Operator: Thank you. We will move on now to Meredith Jensen with HSBC. Your line is open. Ms. Jensen, please check your mute switch. Your line is now open.
Geoff Ballotti: I know we are running late, Leo, she might have exited the call.
Operator: We will move next to Trey. Oh, Ms. Jensen.
Meredith Jensen: Sorry about that.
Operator: Oh, hey, Meredith.
Meredith Jensen: Yeah, sorry about that. Good morning. I was hoping you might speak a little bit about mainland China, obviously facing some headwinds to this day on the macro side. If you could speak to the strong net unit growth that continues despite that, what maybe is driving investment decisions for franchisees, and any trends you are seeing in development activity there, and the types of owners who are entering your system. Thank you.
Geoff Ballotti: Sure. Yeah. If I was to answer the least favorite part, which David often asks of the quarter, it was how China RevPAR of your question came in. As we talked about in the script, we do have a much heavier weight in Tier 2 cities, which underperformed the industry by about 500 basis points, which was not unique to us. The good news is that despite that slowdown, our hotels were able to hold rate flat to prior year, which is a big deal. As our teams look ahead, they do believe, and there are a lot of analysts out there that believe that the deflationary cycle that China has been in is beginning to bottom. We have seen this year PPI turn positive for the first time in several years. We have seen CPI recently also turn positive.
Geoff Ballotti: There is just so much tailwind potential there in terms of how far occupancy is below where it has been historically. It was great again to see our hotels hold rate. China is doing a lot to boost consumption. We are really optimistic for the long term, as is the industry. Horwath recently put out a sentiment survey which has hotelier market confidence climbing to a seven-quarter high, breaking out of a prolonged period of pessimism. If we look at a pipeline, LE's reported pipeline in China actually saw a tick up. 3,600 projects saw early planning up 4%, with construction starts up 7%, as hotel conversions hit a record high, rising over 20%. That is certainly helping us to the back part of your question from a development standpoint. Once again, we have got a fantastic team over there.
Geoff Ballotti: Jun Na and Bill Wang are doing just a great job quarter after quarter, delivering double-digit net room growth for both our direct franchising and our overall China system. Two-thirds of the contracts that we signed were new construction, which was great to see. The other third, conversions. We are also seeing a lot of same-year sell and same-year opens. To your question in terms of what we are hearing from people that are signing with us in the quarter or in the year to open that year, is they are looking for that incremental distribution as demand has been so soft. We are super bullish as our growth has pivoted from master license agreements to direct franchise agreements at three times the royalty rate, that double-digit net room growth is going to really help us continue to grow our international royalty rate.
Geoff Ballotti: And we see no signs of that business slowing down.
Operator: Thank you. Our final question is from Trey Bowers with Wells Fargo. Your line is open.
Trey Bowers: Hey, guys. Thanks for sneaking me in. Geoff, great to hear things are going well. Just two quick ones. One, you have talked to this, but I will ask it quite directly. Is there a chance that domestic NUG growth next year gets back to that 6% growth with a 4% churn rate against it, so we could see 1 or 2 points of domestic NUG? Two, just so I understand the Revo numbers. We started about 22,000 rooms, and now it says there is 13,000. Are those deltas of 8,000 or 9,000 rooms, ones that have run through the deletion counts already? Or are those rooms that have graduated to returning to the system? Thanks so much, guys.
Geoff Ballotti: Hey, Trey. Good morning. Domestic net unit growth, I think we are expecting sequential growth in the year. We are obviously lapping outsized terms from the beginning of the year that we expected to make up in our seasonally Q3 and Q4, which are our strongest net unit growth quarters. Obviously, transaction volumes slowed down, which had an impact. I think looking ahead, we obviously are expecting sequential growth in Q4. Out beyond that, we want to get back to see the transaction volumes resume, construction starts with, again, not necessarily predicated upon interest rates coming down, but just more stability there, which should give owners confidence. We are seeing that. That is really how we think about that on the domestic side. To your question around Revo, we started with about 22,000 rooms.
Geoff Ballotti: We have disclosed in the earnings release about 9,100 Revo rooms left the system. Of the 13,000 that are remaining, our expectation is that of the 23,000, about 20% to 25% will be retained. Call it 5,000, 6,000-ish rooms. The Revo insolvency process is nearly finalized, but it is still in the putting the finishing touches. Other than the 6,000-ish rooms that we expect, 5,000 to 6,000 rooms that we expect to retain, the rest will be leaving the system in Q4. Whatever that 20% to 25% should be upside for 2027.
Operator: Thank you. At this time, I will now turn the meeting back to Geoff Ballotti for closing comments.
Geoff Ballotti: Well, thanks, Leo, and thanks to anyone still on the line. I believe this is a record in terms of 75 minutes. We appreciate your questions and your interest in Wyndham Hotels & Resorts. We know how busy your days are. Amit, Matt, and I look forward to talking to many of you in the weeks ahead. In the meantime, have a great weekend, and happy Halloween next Saturday. Thanks everybody again for joining us today.
Operator: Thank you. This does conclude today's Wyndham Hotels & Resorts Third Quarter 2026 Earnings Conference Call. Please disconnect your line at this time, and have a wonderful day.
