Wyndham Hotels & Resorts, Inc. (NYSE:WH) Q3 2024 Earnings Conference Call October 24, 2024 8:30 AM ET

Company Participants

Matt Capuzzi - SVP, IR
Geoff Ballotti - CEO
Michele Allen - CFO and Head of Strategy

Conference Call Participants

Joe Greff - JP Morgan
Stephen Grambling - Morgan Stanley
Michael Bellisario - Baird
David Katz - Jefferies
Ian Zaffino - Oppenheimer
Patrick Scholes - Truist Securities
Brandt Montour - Barclays
Lizzie Dove - Goldman Sachs
Steve Pizzella - Deutsche Bank
Meredith Jensen - HSBC

Operator

Welcome to the Wyndham Hotels & Resorts Third Quarter 2024 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 [Operator Instructions].

I would now like to turn the call over to Matt Capuzzi, Senior Vice President of Investor Relations. Please go ahead.

Matt Capuzzi

Thank you, operator. Good morning, and thank you for joining us. With me today are Geoff Ballotti, our CEO; and Michele Allen, our CFO and Head of Strategy. 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 Web site at investor.wyndhamhotels.com. 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 Web site. We may continue to provide supplemental information on our Web site and on our social media channels in the future. Accordingly, we encourage investors to monitor our Web site and our social media channels in addition to our press releases, files submitted with the SEC and any public conference calls or webcasts. With that, I will turn the call over to Geoff.

Geoff Ballotti

Thanks, Matt. Good morning, everyone. And thanks for joining us today. Q3 illustrates yet another quarter of success in our team's execution against our long term growth strategy, which we outlined with all of you one year ago this week. Last night, we reported strong earnings with comparable adjusted EBITDA and EPS growth of 7% and 10% respectively. We grew our system 4%. We increased both our US and international royalty rates, and we significantly grew our ancillary fee streams. Year-to-date, we've generated over $265 million of adjusted free cash flow and we've returned nearly $380 million to our shareholders. We sustained strong momentum on the development front, opening over 17,000 rooms, bringing our year-to-date total to more than 48,000 rooms globally, up 13% compared to a year ago. We also improved our global franchisee retention rate by 40 basis points year-over-year. Notably, our franchise sales teams here in the United States signed an impressive 10% more deals in the quarter than they did last year, contributing to the 17th consecutive quarter of growth in our global development pipeline, which increased nearly 5% year-over-year to a record 248,000 rooms. Domestically, net rooms grew sequentially and year-over-year, driven by a solid 3% net room growth in our mid-scale and above brands with new conversions like the Wyndham Bloomington adjacent to the Mall of America in Minnesota and the Wyndham Garden, Louisville East near Churchill Downs, the home of the Kentucky Derby.