Hotel franchising company Wyndham (NYSE: WH) fell short of the market’s revenue expectations in Q3 CY2025, with sales falling 3.5% year on year to $382 million. Its non-GAAP profit of $1.46 per share was 2% above analysts’ consensus estimates.
Is now the time to buy WH? Find out in our full research report (it’s free for active Edge members).
Wyndham (WH) Q3 CY2025 Highlights:
- Revenue: $382 million vs analyst estimates of $401 million (3.5% year-on-year decline, 4.7% miss)
- Adjusted EPS: $1.46 vs analyst estimates of $1.43 (2% beat)
- Adjusted EBITDA: $213 million vs analyst estimates of $210.6 million (55.8% margin, 1.1% beat)
- Management lowered its full-year Adjusted EPS guidance to $4.55 at the midpoint, a 3% decrease
- EBITDA guidance for the full year is $720 million at the midpoint, below analyst estimates of $735.1 million
- Operating Margin: 46.6%, up from 43.2% in the same quarter last year
- RevPAR: $50.05 at quarter end, down 4.8% year on year
- Market Capitalization: $5.80 billion
StockStory’s Take
Wyndham’s third quarter was met with a negative market reaction, as revenue fell below Wall Street expectations and RevPAR (revenue per available room) continued to decline. Management attributed the softness to persistent consumer caution, especially in price-sensitive segments and key Sunbelt states. CEO Geoffrey Ballotti noted, “RevPAR declined 5% in constant currency, both globally and domestically, reflecting continued consumer caution in an uncertain economic environment, especially within the select service segments here in the United States.” Ancillary fee streams and net room growth were positive contributors, but these factors were not enough to offset the broader headwinds.
Looking ahead, Wyndham’s lowered guidance reflects management’s expectation that RevPAR trends will remain challenged, with U.S. performance expected to lag international regions. CFO Michele Allen highlighted ongoing cost containment efforts but cautioned, “Our fourth quarter implied RevPAR is at the midpoint anchored to those third quarter results and also includes the headwinds from last year’s hurricane.” Management is focused on expanding higher-margin brands, growing the pipeline, and driving ancillary revenue, but acknowledges continued uncertainty around consumer demand and macroeconomic conditions.
Key Insights from Management’s Remarks
Management identified declining RevPAR, geographic mix, and ancillary revenue growth as major factors shaping the quarter’s results.
- U.S. RevPAR declines: Softness in key Sunbelt states such as Texas, California, and Florida drove domestic RevPAR lower, offsetting strength in Midwest markets. Management pointed to ongoing consumer uncertainty and heightened price sensitivity among guests in the economy and midscale segments as the main causes.
- International performance mixed: While international net room growth remained robust—up 9% overall—RevPAR declines were most pronounced in the Asia Pacific region, particularly China and Latin America. Conversely, Europe, the Middle East, and Canada showed relative resilience, with Canada reporting an 8% year-over-year RevPAR increase.
- Ancillary fee momentum: Ancillary revenues, such as those from co-branded credit cards and new technology partnerships, grew 18% year-over-year. This growth was fueled by increased cardholder spend, new account openings, and technology-driven upsell opportunities, partially offsetting RevPAR headwinds.
- AI-driven efficiencies: Wyndham’s rollout of AI-powered guest service and booking tools contributed to direct booking conversion, reduced handle times, and incremental revenue opportunities for franchisees. Only a small portion of hotels currently use this technology, suggesting room for further contribution in future quarters.
- New brand and loyalty initiatives: The launch of Dazzler Select by Wyndham in the U.S. and the Wyndham Rewards Insider subscription program represent strategic moves into new market segments and efforts to deepen customer loyalty, though management expects limited near-term profitability impact from these initiatives.
Drivers of Future Performance
Wyndham expects continued pressure on U.S. RevPAR and is leaning on international growth, ancillary revenues, and cost controls to support margins.
- Ongoing U.S. demand headwinds: Management anticipates that consumer price sensitivity and uncertain economic conditions will continue to weigh on domestic RevPAR growth. Franchisees are being encouraged to maintain pricing discipline, but some discounting may persist in challenged markets.
- International and pipeline expansion: The company is prioritizing room growth in higher-fee segments and international markets, particularly in Europe, Middle East, and Asia Pacific, to balance domestic softness. Management described the pipeline as robust, with 21 consecutive quarters of growth and a shift toward higher FeePAR (fees per available room) brands.
- Ancillary revenue and technology adoption: Wyndham is banking on further expansion of ancillary fee streams, such as credit card partnerships and AI-enabled guest services, to drive non-room revenue. Full rollout of AI tools and the new loyalty subscription service are expected to enhance franchisee profitability and guest engagement over the next several years.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will closely watch (1) whether RevPAR stabilizes or improves in key U.S. markets, (2) the pace of international net room growth and franchise pipeline additions, and (3) the adoption and revenue impact of new ancillary offerings and AI-driven technology. Execution on loyalty and brand extensions, as well as the ability to manage cost pressures, will also be critical signposts for Wyndham’s performance.
Wyndham currently trades at $76.40, down from $80.32 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).
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