Dive Brief:
- Wyndham Hotels & Resorts lowered its RevPAR growth expectations for the remainder of the year following dampened demand trends amid economic uncertainty, according to a first-quarter earnings report released Thursday.
- Wyndham’s Q1 2025 RevPAR in the U.S. grew 2% year on year, benefiting from hurricane-related stays and the timing of the Easter holiday. Pricing strength, however, was impacted by softer demand following consumer pullback, which was “more pronounced” in March, per the company.
- Though recent trends are “more encouraging” as Wyndham readies for the busier summer travel months, president and CEO Geoff Ballotti indicated on an earnings call that the company is preparing for a possible economic slump, noting “our brands have always outperformed in periods of economic downturn relative to the overall industry.”
Dive Insight:
Wyndham “had anticipated stronger performance, especially in March,” CFO Michele Allen said on the Thursday call.
Wyndham’s revised global RevPAR growth outlook in 2025 ranges from down 2% to up 1%, the former in case of continued downward economic trends, the latter representing an improvement in the economic environment.
“Our track record of industry outperformance [during downturns] is not coincidental,” Ballotti said on the call, noting that Wyndham survived times of economic upheaval such as Sept. 11, 2001, the COVID-19 pandemic and the 2008 financial crisis. “It reflects the structural advantages of our select-service model and the nature of the demand we serve, and limited reliance on white collar corporate and group travel, which tends to contract most during economic downturns.”
Ballotti suggested that Wyndham brands could capture trade-down demand from consumers seeking more value in the event of a downturn. He also cited Wyndham’s primarily domestic business, which makes the company “far less impacted by the current international inbound demand.”
International visitation to the U.S. has dropped in recent months. Also in first-quarter earnings calls this week, MGM Resorts International and Caesars Entertainment noted declines in Canadian visitors.
Development, though, remains strong, with Wyndham posting a record first quarter in terms of room additions — 15,000 rooms, up 13% from the prior-year quarter. The company’s pipeline is now at an all-time high of 254,000 rooms, a 5% increase year over year.
In the U.S., the company opened Echo Suites and Hawthorne Suites properties in Texas, Virginia and Wyoming in the quarter, reflecting “growing developer interest in our extended stay new-construction prototypes,” Ballotti said.
