Q2 REVIEW
Though performance indicators were healthy , net income was expectedly down , the company said , impacted by marketing-related activities , higher interest expense and transaction-related costs primarily related to the company ' s refinancing of its Term Loan B Facility . Wyndham Hotels & Resorts generated net income of $ 70 million compared to $ 92 million in the second quarter of 2022 .
Adjusted EBITDA was $ 158 million compared to $ 175 million in the second quarter of 2022 .
Fee-related and other revenues was $ 358 million compared to $ 354 million in second quarter 2022 , which included $ 12 million from the company ' s select-service management business and owned hotels . On a comparable basis , fee-related and other revenues increased 5 % YOY primarily reflecting higher royalties and franchise fees resulting from global RevPAR and system growth .
" During the second quarter , we celebrated the tremendous progress we ' ve made in our five-year journey as a new public company with another quarter of solid results ,” said Ballotti . “ We remain very confident in our ability to deliver outstanding value for our franchisees ."
Its franchisees appear to think so , too — and that ’ s good news for Wyndham : There is a battle ahead to keep excising franchisees and not lose them to other franchisors , which are consistently pushing
out competing brands .
Wyndham , Ballotti said , boasts a 95 % retention rate , but said there is still room for improvement . “ We see opportunity to improve that rate . It has moved both domestically and internationally in the right direction . Our longer-term stated goal is to move that to 96 %.”
In order to keep franchisees happy and incentivize new ones to join the system , Wyndham shared that it has a newly implemented program “ with a reputable lender ” to source construction financing . “ The program provides a more programmatic approach to financing with Wyndham and obviously provides our franchisees with very competitive terms ,” said Michele Allen , CFO of Wyndham Hotels & Resorts .
Beyond that , the typical loan for a Wyndham property , as Allen pointed out , is smaller than some of its peers . She offered an example of a recent loan closing that was done between a franchisee and community bank in Kansas on an Echo project .
“ It was a bank that had lent to him multiple times in the past for different business ventures within and outside of the hotel space ,” she said . The franchisee was able get five-year paper at 75 % loan to cost and a fixed rate of 6.75 %. “ If you ' re just reading the headlines , you wouldn ' t think that type of financing exists , but it ' s very much available at the community bank level ,” Allen said .
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September 2023 hotelsmag . com 33