After emerging from 2025 with downturns in both revenue and earnings, Wyndham Hotels & Resorts reported improvements for the first quarter of the year, with growth in revenue per available room for both February and March and adjusted net income improving 9 percent.
During the Q1 earnings call with investors, President & CEO Geoff Ballotti highlighted the company’s “faster-than-expected RevPAR recovery” for its U.S. select-service hotels, net rooms growth of 4 percent and a pipeline that increased for the 23rd consecutive quarter to a record of more than 259,000 rooms.
System Size and Development
The company’s global system grew 4 percent, including flat growth in the U.S., which includes the impact from the loss of legacy-affiliated rooms, 12 percent direct-franchised growth in the company’s Asia Pacific region and 9 percent growth in the company’s higher-RevPAR EMEA and Latin America regions.
New hotel contracts awarded in the United States increased 8 percent, Ballotti said, and as of March 31, the company’s global development pipeline increased 3 percent year over year to a record high of more than 259,000 rooms and more than 2,200 hotels.
Key highlights include:
- 3 percent pipeline growth in the U.S. and 2 percent growth internationally
- Approximately 70 percent of the pipeline is in the midscale and above segments
- Approximately 17 percent of the pipeline is in the extended stay segment
- Approximately 43 percent of the pipeline is in the U.S.
- Approximately 77 percent of the pipeline is new construction and approximately 35 percent of these projects have broken ground; rooms under construction grew 3 percent year-over-year
Revenue per Available Room
First quarter global RevPAR decreased 1 percent in constant currency compared to 2025, reflecting flat performance in the U.S. and a 1 percent decline internationally.
January's 4 percent RevPAR decline improved to 1 percent growth for February and March. In the U.S., the year-over-year comparison was affected by approximately 40 basis points of unfavorable hurricane impacts related to first quarter 2025; excluding which, RevPAR increased over 600 basis points sequentially and approximately 10 basis points year-over-year reflecting stabilized occupancy and average daily rate levels. Continued strength across the Midwest and growth in Texas was partially offset by performance in Florida and California, which both improved sequentially yet declined year-over-year.
Internationally, constant-currency growth of 8 percent in Canada reflected significant pricing power and continued demand growth, while growth of 5 percent in Southeast Asia and the Pacific Rim and 1 percent in EMEA each primarily reflected improved demand. The growth in those regions was offset by softness in China where RevPAR improved over 500 basis points sequentially, yet declined 5 percent year-over-year, and Latin America, which declined 4 percent year-over-year primarily due to lower U.S. cross-border demand in Mexico.
Operating Results
The comparability of the company’s first quarter results is impacted by marketing fund variability. The company’s reported results and comparable-basis results (adjusted to neutralize these impacts) are presented below to enhance transparency and provide a better understanding of the results of the company’s ongoing operations.
Net revenues grew 3 percent to $327 million compared to $316 million in the first quarter of 2025, reflecting a 21 percent increase in ancillary revenues and global net room growth of 4 percent, partially offset by lower other franchise fees and the deferral of fees from Revo Hospitality Group.
Net income remained flat at $61 million compared to the first quarter of 2025, primarily reflecting higher adjusted earnings before interest, taxes, depreciation and amortization offset by restructuring and other related costs, as well as transaction-related costs resulting from the company’s issuance of 5.625 percent senior unsecured notes. Adjusted net income grew 9 percent to $73 million compared to $67 million in the first quarter of 2025.
Adjusted EBITDA increased 8 percent to $156 million compared to $145million in the first quarter of 2025. This increase included a $13 million favorable impact from marketing fund variability, excluding which adjusted EBITDA declined 1 percent on a comparable basis. This decline primarily reflects lower royalties and franchise fees and the absence of one-time cost reductions, partially offset by increased ancillary revenues.
As part of the company’s efforts to pursue all available remedies related to Revo’s ongoing insolvency proceedings and optimize the recoverability for the company’s shareholders, the company exercised its rights to foreclose on and take ownership of two properties in Europe. The company expects these properties to generate approximately $10 million of net revenues in full-year 2026 with a limited impact to earnings as the company works to stabilize operations and implement an asset management plan to maximize value.
Outlook
Following the quarter’s gains, the company’s forecast suggests continued momentum for the remainder of the year. “We're incredibly optimistic and see clear signs of strengthening consumer and business confidence, which we’re well positioned to capitalize on as RevPAR in the select-service segment continues its recovery,” Ballotti said.
Wyndham updated full-year 2026 outlook as follows:
- The company raised its expectation for full-year constant currency global RevPAR growth to a range of down 1 percent to up 1 percent, which represents an increase of 50 basis points from prior outlook.
- It reaffirmed its expectation for global net room growth of 4 percent to 4.5 percent.
- It raised its expectation for net revenues to range from $1.47 billion to $1.5 billion to reflect approximately $10 million of earnings-neutral revenues that it expects to generate from two hotels that it foreclosed on and took ownership of as part of Revo Hospitality Group’s ongoing insolvency proceedings. The company said it was “working to stabilize operations” on these hotels and implement an asset-management plan to maximize value.
- It is updating its adjusted net income range to $351 million to $365 million to reflect increased interest expense resulting from its issuance of senior unsecured notes.
- There are no changes to Wyndham’s outlook for adjusted EBITDA, development advance spend or free cash flow conversion rate.