PARSIPPANY, NJ—Wyndham Hotels & Resorts saw positive third quarter results as a result of strong development pipeline growth. As of September 30, 2019, Wyndham’s hotel system consisted of more than 9,200 properties and approximately 822,000 rooms, a 3% increase compared with the third quarter of 2018.
The company’s development pipeline consisted of 1,450 hotels and approximately 190,000 rooms, a 7% year-over-year room increase. Wyndham also increased its pipeline sequentially by 1% compared to second quarter 2019. Approximately 56% of the brand’s development pipeline is international and 74% is new construction.
In addition, Wyndham’s family of brands expanded its global reach with the debut of Microtel by Wyndham in China and the debut of the Trademark Collection by Wyndham in Mexico.
“Our team’s sharp execution against our strategic and operating plans allowed us to deliver solid results in the third quarter, despite a softening RevPAR environment, highlighted by continued expansion of our system size and significant growth in adjusted EBITDA,” said Geoffrey A. Ballotti, president/CEO, Wyndham Hotels & Resorts. “In addition, we increased our share repurchase authorization to reflect our strong free cash flow and our sustained focus on returning cash to shareholders. We remain confident that our business is well-positioned for continued success.”
Revenues decreased 7% to $560 million, compared with $604 million in the third quarter of 2018. The decline is primarily due to lower cost-reimbursement revenues in our hotel management business, which have no impact on adjusted EBITDA.
Net income was $45 million, or $0.47 per diluted share, compared to $58 million, or $0.58 per diluted share, in the third quarter of 2018. As previously announced, 2019 results reflect contract-termination expenses and transaction-related items. Prior-year results included separation-related and transaction-related expenses associated with the company’s spin-off and acquisition of La Quinta.
Adjusted net income was $106 million, or $1.10 per diluted share, compared with $85 million, or $0.85 per diluted share, in the third quarter of 2018. Third quarter earnings benefited from higher royalty and franchise fees and other revenues, as well as increased synergies from the acquisition and integration of La Quinta, partially offset by higher marketing expenses. Full reconciliations of GAAP results to the Company’s non-GAAP adjusted measures for all reported periods appear in the tables to this press release.
Third quarter adjusted EBITDA increased 14% to $190 million, compared with $166 million in the third quarter of 2018. The increase in adjusted EBITDA primarily reflected higher fee revenues and increased synergies from the acquisition and integration of La Quinta.