Dany Asad

Dany Asad from JPMorgan asked about the Maui EBITDA forecast, specifically if there's conservatism in the $120 million 2026 outlook and the path to reaching $160 million.

Answer

Sourav Ghosh, Executive Vice President and Chief Financial Officer, Host Hotels & Resorts, confirmed the $120 million guide for 2026 is based on current booking pace, noting that the Wailea hotels are almost fully recovered. He highlighted significant expected growth for the Hyatt Regency Maui, projecting an increase from $28 million to $34 million in EBITDA for 2026, with potential upside if group pace picks up.

Dany Asad asked about the Maui EBITDA forecast, specifically if there's an element of conservatism in the $120 million 2026 outlook and the path to reaching $160 million, along with the puts and takes for the current year.

Answer

Executive Vice President and CFO Sourav Ghosh confirmed the $120 million forecast for 2026, noting that the Hyatt Regency Maui's recovery is slower due to group lead times but is expected to grow significantly from $28 million to $34 million EBITDA. He added that the Wailea hotels (Fairmont Kea Lani and Andaz) are almost fully recovered, with Fairmont Kea Lani reaching a high water mark of $49 million EBITDA in 2025. Sourav mentioned potential upside if short-term group pace picks up.

Dany Asad asked for a comparison of RevPAR performance between infrastructure-related demand and leisure travelers, and whether the mix between these segments is expected to change over time.

Answer

CEO Geoff Ballotti explained that infrastructure demand, while slightly below leisure in 2025, is expected to increase and outperform in 2026, driven by the $1.2 trillion infrastructure spend. He noted that infrastructure demand contributed to weekday economy occupancy improvement in Q4 2025 and that contracted room nights are significantly pacing ahead.

Dany Asad asked for a comparison of RevPAR performance between infrastructure-related demand and leisure travelers, and whether the mix of these demand segments is expected to change over time, especially with the addition of higher Fee PAR rooms.

Answer

CEO Geoff Ballotti stated that infrastructure demand, excluding federal government impact, performed slightly below leisure in 2025 but is expected to increase and outperform in 2026. He highlighted the $1.2 trillion infrastructure spend as a multi-year tailwind and noted that contracted infrastructure room nights are currently double the consumed room nights, indicating future pickup.

Dany Asad asked for early reads on Q4 U.S. RevPAR trends, specifically how they are tracking relative to the domestic down 5% expectation mentioned in prepared remarks.

Answer

CFO Michele Allen noted encouraging early October trends in California, Texas, and Florida, with RevPAR tracking about 100 basis points above September performance. She also mentioned stabilization in U.S. booking pace month-to-date in October and a strong Oktoberfest in Germany, while the rest of the portfolio performed in line with Q3 results.

Dany Asad asked for early reads on Q4 U.S. RevPAR trends, specifically how they are tracking relative to the domestic down 5% expectation.

Answer

CFO Michele Allen indicated encouraging early trends in October for Wyndham's three largest states (California, Texas, Florida), with RevPAR tracking about 100 basis points above September performance. She also noted stabilization in U.S. booking pace month-to-date in October and strong Oktoberfest performance in Germany. Allen explained that the rest of the portfolio appears to be performing in line with Q3 results, with the Q4 implied RevPAR midpoint anchored to Q3 results and accounting for last year's hurricane headwinds.

Dany Asad of Bank of America questioned how the compliance issue with the Super 8 master licensee in China might alter Wyndham's strategic approach to China and other international markets, particularly regarding direct franchising.

Answer

CEO Geoffrey Ballotti affirmed the company's long-standing strategy of moving away from master license agreements in favor of direct franchising. He emphasized that Wyndham's direct franchising business in China has grown over 100% since the spin-off, operates at three times the royalty rate, and continues to see double-digit growth and a strong development pipeline, demonstrating their commitment to this model.

Dany Asad of Bank of America requested a regional breakdown of the revised RevPAR outlook, asking for the specific changes in expectations for the U.S. versus the rest of the world.

Answer

CFO Michele Allen clarified that her prior comment of a potential 3% decline for the rest of the year was specific to the U.S. at the low end of the guide. For international markets, she stated they took a consistent approach using recent trends. This implies continued momentum in EMEA and LATAM, pricing pressure in China, and weaker performance in Canada. Overall, international RevPAR is expected to decline about one point on a constant currency basis.

Dany Asad asked for details on the net rooms growth outlook for China specifically and questioned how the strategic push into higher fee PAR rooms might affect the system's natural retention rate over the long term.

Answer

CEO Geoffrey Ballotti explained that as the portfolio mix shifts towards midscale and upscale brands, which naturally have higher retention rates, the overall system retention should benefit. He expressed strong optimism for China, citing accelerated openings and a robust development pipeline with 43% higher license fees, driving 16% net room growth in the direct franchise system.

Dany Asad from Bank of America asked for a detailed breakdown of the revised EBITDA outlook, seeking to quantify the impact from Andaz Miami Beach, Washington D.C., and Wailea.

Answer

EVP & CFO Aaron Reyes attributed approximately two-thirds of the guidance reduction to the slower-than-expected ramp-up at Andaz Miami Beach. The remaining one-third was attributed to softness in Washington D.C. from weaker government demand and in Wailea due to market normalization. He noted these were partially offset by strength in San Francisco and Wine Country.

Dany Asad from Bank of America requested a breakdown of the components driving the revised full-year outlook, specifically the impacts from the Andaz Miami, Wailea, and the rest of the portfolio.

Answer

Executive Aaron Reyes provided a detailed breakdown, attributing the guidance change to three main factors: a ~$2 million reduction from the Andaz due to a later opening, a ~$4 million headwind from a more challenging operating environment in Wailea as Kaanapali reopens, and a ~$2 million impact from softer transient demand in San Diego. CEO Bryan Giglia added that the outlook conservatively extrapolates recent weakness but could see upside if trends stabilize or international travel increases.

Dany Asad inquired about Choice Hotels' international expansion strategy, specifically the rationale for choosing between direct franchising and master franchising models in different regions.

Answer

President & CEO Patrick Pacious explained that the decision hinges on market fundamentals like capital access for small business owners and the regulatory environment. He noted that in markets like Canada, Mexico, and Europe, direct franchising is viable. Following the Canada acquisition, Choice's international portfolio is now predominantly direct franchising, which allows for the full integration of all 22 brands and leverages local teams more effectively.

Dany Asad from Bank of America inquired about the specific impact of hurricane-related activity on Q4 RevPAR and asked about the expected level and focus of investment spending in 2025.

Answer

CFO Scott Oaksmith quantified the hurricane lift at approximately 125 basis points for Q4 RevPAR. He also attributed the strong 4.5% RevPAR growth to broad strength in business transient (up 14%), group travel (up 45% from managed accounts), and government spending. CEO Patrick Pacious added that 2025 investments will focus on enhancing the franchisee value proposition, specifically through tools for dynamic pricing, to drive top-line revenue and reduce costs.

Dany Asad asked if there were different patterns of consumer behavior at higher-end versus non-luxury resorts and questioned the drivers behind non-rooms revenue growing faster than RevPAR during the quarter.

Answer

CFO Sean Dell'Orto stated that there were no significant changes in consumer behavior patterns between luxury and non-luxury properties. He explained that non-rooms revenue outpaced RevPAR primarily due to a 9% increase in group catering contributions, driven by a favorable mix shift towards in-house groups, which generate more on-property food and beverage spend.

Dany Asad asked for insights into how large corporate accounts are shaping up for 2025 and about potential demand softness in November around the U.S. election period.

Answer

CFO Sean Dell'Orto noted that while corporate rate negotiations are ongoing and more dynamic, the segment's outperformance in 2024 bodes well for 2025. He confirmed an expected negative impact from the election on travel pace in November but anticipates a stronger December will balance it out. CEO Thomas Baltimore added that this election-week softness is consistent with patterns seen in 2020 and 2016.

Dany Asad from Bank of America sought clarification on the full-year guidance, noting that maintaining EBITDA while lowering the T&M outlook implies a raised forecast for the Vacation Ownership segment. He also asked about the drivers for the implied tour flow acceleration in the second half of the year.

Answer

CFO Michael Hug explained the T&M guidance adjustment reflects the Q1 shortfall, which was fully offset by outperformance in Vacation Ownership, with the higher provision rate to be managed via strong VPGs and cost controls. President and CEO Michael Brown attributed the expected tour flow acceleration to easier year-over-year comparisons and the ramp-up of new marketing partnerships.

Dany Asad inquired about the factors driving the fourth-quarter variance where VPG exceeded expectations while tour volume was slightly below.

Answer

President and CEO Michael Brown explained that full-year 2024 tour growth was strong at 8%, but Q4 was impacted by softness in Las Vegas and a strategic decision to cull lower-performing marketing channels. This culling created a favorable mix shift toward higher-VPG owners, boosting the quarterly VPG. Brown noted that even without this mix adjustment, VPG would have remained strong, driven by pricing rather than close rates.

Dany Asad from Bank of America requested a breakdown of the puts and takes for the 2025 RevPAR guidance of 1% to 3%, noting its similarity to 2024's actual performance.

Answer

Executive Jonathan Stanner explained that 2025 performance is expected to be a continuation of 2024 trends, with urban and suburban markets leading growth. He noted that growth will be more balanced across the portfolio, with less of a lift from the few lagging markets that drove 2024's outperformance. Stanner identified potential upside in the leisure segment, especially from the newly renovated Courtyard Fort Lauderdale in the second half of the year.