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Wyndham U.S. Hotel RevPAR Grows 2.8% in Q2

Wyndham Worldwide Corporation (NYSE:WYN) announced its second quarter earnings results on August 2. Domestic same-store revenue per available room (RevPAR) increased 2.8 percent at Wyndham hotels compared to the second quarter of 2016. Worldwide, its same-store RevPAR increased 3.3 percent when adjusted in constant-dollars.

In an earnings call* with stock analysts, Wyndham's chairman and CEO Stephen P. Holmes mentioned that franchise fees had increased. “EBITDA increased 6% on a currency neutral basis and excluding acquisitions, reflecting higher franchise fees and growth in the Wyndham Rewards credit card program,” said Holmes.

The franchising firm of brands that range from Super 8 to Dolce Hotels and Resorts reported that its earnings before income tax depreciation and amortization (EBITDA) was down to $214 million in this quarter compared to $340 million the year before, influenced by the write-down of undeveloped land. For the six months ended June 30, 2017, net cash provided by operating activities was $663 million, compared with $706 million in the prior year period.

There was little spoken about the firm’s 8,100 franchises in the earnings call, other than fees.

"With summer closing in on the half-way point, all of our businesses are performing well," said chairman and CEO Holmes. "Our hotel group is seeing constant currency RevPAR growth both domestically and internationally. Our vacation rentals business is benefiting from continued strong booking trends, and sales sharply accelerated at our vacation ownership business as we continue to execute on our new owner growth strategy. This strong top line momentum further reflects how these businesses are poised for continued success as stand-alone public companies."

A day later, August 3, Wyndham announced that it would split into two separate publicly-traded firms — a hotel group and a time share group. The chairman and CEO said that he judged that splitting the firm into two would allow focus and the value of both firms to be more fully released.

Moody’s Investor Service announced the next day that it was placing the Wyndham’s commercial paper rating under review for a downgrade. Its concern was a standalone timeshare company. “Moody's estimates the remaining Wyndham Worldwide will derive a majority of its revenue from timeshare sales, and without the higher margin and more stable hotel group business Wyndham will be more exposed to the risks inherent in the timeshare business,” stated Moody’s.

*Earnings Call transcript from

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