Wyndham Hotels CEO: 'No Waning in Leisure Travel Demand'

24.10.2024 - 16:09 / skift.com / Sean Oneill / Michele Allen / Geoff Ballotti

The world’s largest hotel franchisor is seeing resilient demand for leisure and business travel despite economic uncertainty — even at the budget end of the market. Wyndham’s third-quarter results highlighted the benefits of having a heavy mix of hotels and resorts in the economy and midscale segments.

“We believe that we’ll continue to see positive momentum — no waning in leisure travel demand — as we head through the fourth quarter and throughout 2025,” said president and CEO Geoff Ballotti during an earnings call Thursday.

“If interest rates do continue to come down, lower mortgage payments and moderating essential spending should drive an improvement in cash flow for our customers to vacation,” he said.

Hilton, on Wednesday, had painted a more subdued picture of leisure demand through 2025. However, with 9,200 hotels worldwide, Wyndham’s performance also offers key insights into the health of the broader travel industry. Unlike Hilton, the overwhelming majority of Wyndham’s properties are roadside select-service and its customer base is heavily working-class and middle-class families and business people.

Wyndham’s budget and midscale tiers saw a cooling in demand roughly a year ago after a roaring post-pandemic boom, but growth is resuming.

“For the economy segment, Q2 was better than Q1, Q3 was better than Q2,” Ballotti said, referring to financial quarters. “Economy hotel revenue per available room is a full [percentage] point ahead of the pace of overall domestic revenue per available room growth in 2019, so pricing power is strong.”

Average daily rates are holding 17% above pre-pandemic levels, still trailing cumulative inflation of 23% — suggesting room for further rate increases. Economy revenue per available room is “normalizing,” up 260 basis points from the first half.

“For the first three weeks of October, U.S. revenue per available room is trending up 3% year over year,” said Michele Allen, chief financial officer.

The international picture is even brighter. International revenue per available room rose by 7% in the third quarter across segments, including strength in economy and midscale.

What am I looking at? The performance of hotels and short-term rental sector stocks within the ST200. The index includes companies publicly traded across global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares.

The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more hotels and short-term rental financial sector performance.

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