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25.08.2023 - 14:07 / skift.com / Asia Pacific / Sean Oneill / Michele Allen / Geoff Ballotti
Middle-income consumers paid premiums for hotel rooms as pent-up demand and savings boosted people’s taste for travel post-pandemic. Wyndham Hotels & Resorts, the world’s largest hotel franchisor — whose brands mostly target these consumers — enjoyed quarter-after-quarter of room rate gains throughout 2022.
“By any account, it was an outstanding year for Wyndham,” said Geoff Ballotti, president and CEO, on a call with analysts on Thursday. “Our middle-class customers continue to spend more on travel than they ever have, and they are staying longer than they were back in 2019, given hybrid work environments.”
In 2022, Wyndham saw its U.S. revenue per available room — a key industry metric — rise 12 percent compared to 2019, thanks primarily to stronger pricing power. The growth was sequential over 2019’s comparable quarters. Revenue per available room up by 4 percent in the first quarter versus the pre-pandemic period, up 9 percent in the second quarter, up 10 percent in the third quarter, and up 15 percent in the fourth quarter.
In context, Wyndham’s U.S. revenue per available room at the end of 2022 was $45.96, compared with back in 2018 and 2019, when the figure hovered at $40 to $41. Occupancy is relatively lower now worldwide, while inflation has eaten away the value of dollars.
There’s still more growth to come, though it may plateau, according to Wyndham’s management. Consumers’ habits have shifted to seeking experiences, at least for now.
“[In 2023,] the U.S. is certainly going to be lower growth overall compared to international since it will be in recovery mode for sure,” said Michele Allen, chief financial officer. “Probably in the U.S., there will be a few points of occupancy growth and a few points of ADR [average daily rate] growth. Whereas internationally, we expect to see some modest ADR growth again, but a much bigger lift coming out of occupancy.”
In other words, middle-income consumers worldwide may have peaked in their willingness to keep paying ever-higher premiums for rooms. However, Wyndham can still benefit thanks to a recovery in occupancy in markets such as Asia Pacific as China’s outbound travel resumes.
Looking ahead to 2023 and a global picture, Wyndham forecasted its revenue per available room will grow by between 6 percent and 8 percent on top of the growth it has already had compared to 2019, partly reflecting general inflation.
The Parsippany, New Jersey-based hotel operator closed 2022 with nearly 9,100 hotels and 842,500 rooms spanning 24 brands, such as Super 8, Ramada, and Days Inn.
Wyndham Hotels & Resorts is a fairly new company, but it has a complicated spin-off history from a much larger corporation. Here we explain the hospitality company’s beginnings and
Here are the top stories from the Daily Lodging Report newsletter in the past week. Get news on hotel deals, development, stocks, and career moves. Sign up here now.
Hilton said Thursday that it plans to install at least six electric vehicle chargers per property at 2,000 hotels in North America, and will buy devices from Tesla. Once it fully installs them, Hilton will own more electric vehicle chargers than any other U.S.-based hotel group.
From today’s Daily Lodging Report newsletter: Nikkei Asia published an article on Hilton planning to expand its luxury offerings in Asia. Hilton will be bringing its Waldorf Astoria brand to Malaysia, Vietnam, India, and other countries for the first time as part of its plans to open 25 new luxury hotels in the Asia Pacific region over the next few years. That’s up from the 33 luxury hotels it currently runs in the Asia Pacific.
Can hotels exert more influence in policy-making? Where will future development growth come from? Is generative AI relevant to the hotel sector? These and other subjects will be top of mind for us as we interview top bosses at Hilton, Hyatt, Accor, and other hotel leaders on-stage at the Skift Global Forum in New York on September 26-28.
American Express Global Business Travel continues to benefit from the ongoing rebound of business trips. In particular the reopening of countries in Asia Pacific, barring China of course, bodes well for the world’s biggest travel agency.
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While 2022 was a post-pandemic boom year for hotel demand in much of the world, total global hotel investment volume decelerated slightly to $71.9 billion, a decline of 2 percent relative to 2021. The relative lack of outbound Chinese hotel investment, the Russian war in Ukraine, and recessionary pressures in several markets tamped down the pace of growth.
Luxury hotel companies could flash a half-decent report card this year thanks to a post-pandemic surge in demand. But they could do better long-term if management teams sharpen their focus on opportunities to woo well-off consumers who increasingly care about experiences.
Hyatt Hotels Corp., which enjoyed a blockbuster financial performance in 2022, forecasted Thursday continued success this year, especially in the first half. The company expects to benefit from growing consumer interest in its lifestyle, luxury, and resort properties, returning group reservations for its banquet halls, and an expanding room count.
For InterContinental Hotels Group (IHG), soaring hotel rates owing to a post-pandemic surge in pent-up demand for travel have been a boon after the pandemic bludgeoned the travel sector. But IHG Hotels & Resorts said its pricing power would last beyond the present moment thanks partly to its investments in digital technology. The company also anticipated future growth as China, the world’s second-largest economy, reopens.
Here are some excerpts from Daily Lodging Report from the past week. If you’re not a subscriber, you should be. Get news on hotel deals, development, stocks, and career moves. Sign up here, now.
Here are some excerpts from Daily Lodging Report from the past week. If you’re not a subscriber, you should be. Get news on hotel deals, development, stocks, and career moves. Sign up here, now.