Executive Summary

Q1 2025 delivered resilient fundamentals but a softer demand backdrop: adjusted EPS $0.86 vs consensus $0.81 (beat), fee-related and other revenues $316M vs $317M consensus (slight miss), and adjusted EBITDA $145M with comparable growth of 9% after neutralizing marketing fund variability . Consensus figures marked with an asterisk are from S&P Global estimates data (see Estimates Context).*
Management refined FY25 guidance to reflect weaker RevPAR trends (global RevPAR now (2%) to +1% cc; adjusted EBITDA $730–$745M from $745–$755M; adjusted EPS $4.57–$4.74 from $4.66–$4.78) while maintaining net room growth guidance (3.6%–4.6%) .
Development remains a bright spot: record Q1 openings of ~15k rooms (+13% YoY), pipeline at a record 254k rooms (+5% YoY; 19th straight sequential increase), and royalty rate accretion (U.S. +19 bps; International +15 bps) .
Macro mix is the swing factor: U.S. RevPAR grew 2% cc with pricing holding, but leisure demand softened into March/April; EMEA and LATAM remained strong (EMEA +6%, LATAM +25%), while China RevPAR fell 8% on pricing pressure .
Capital returns continued ($109M in Q1: $76M buybacks, $33M dividends) and dividend maintained at $0.41 in May; net leverage at 3.5x within the 3–4x target .

What Went Well and What Went Wrong

What Went Well

Record development momentum: “We opened 15,000 rooms, 13% more than we did last year… pipeline… to a new all-time high of 254,000 rooms” with 19 straight quarters of sequential growth .
Pricing/royalty rate accretion: royalty rate increased 19 bps domestically and 15 bps internationally, reflecting portfolio remix toward higher FeePAR hotels and ancillary fee growth catalysts (renewed co-brand credit card, debit card launch, new partnerships) .
International strength and diversified demand: EMEA RevPAR +6%, LATAM +25% on robust ADR; business model targeted to resilient blue-collar/infrastructure demand; limited exposure to international inbound travel .

What Went Wrong

Softer U.S. leisure/demand visibility: Q1 U.S. RevPAR +2% cc benefitted ~100 bps from hurricanes/Easter; normalized YoY growth ~+60 bps; March/April trends were softer, prompting guidance refinement .
China pricing pressure: China RevPAR down 8% YoY on continued rate pressure despite steady demand; APAC remains a watch item .
Marketing fund variability and higher interest expense are headwinds to reported comparability (marketing fund negative $22M in Q1 vs negative $14M in prior-year; interest expense higher YoY), though management highlights comparable measures to neutralize these effects .

Financial Results

Headline P&L vs Prior Periods and Estimates

Metric	Q1 2024	Q4 2024	Q1 2025	Q1 2025 Consensus
Fee-related & other revenues ($M)	$304	$341	$316	$317.21*
Net income ($M)	$16	$85	$61	—
Adjusted EBITDA ($M)	$141	$168	$145	$148.06*
Diluted EPS ($)	$0.19	$1.08	$0.78	—
Adjusted diluted EPS ($)	$0.78	$1.04	$0.86	$0.814*

Notes: Consensus values marked with an asterisk are from S&P Global and provided for context; see Estimates Context for details. Values retrieved from S&P Global.*

Drivers: Revenues +4% YoY on higher royalties/franchise fees and ancillary revenues; adjusted EBITDA +3% YoY (+9% comparable, excluding $8M marketing fund variability); adjusted EPS +10% YoY (+~20% comparable) .

RevPAR and Royalty Rates

KPI	Q1 2024	Q4 2024	Q1 2025
Global RevPAR ($)	$36.28	$40.01	$36.13
U.S. RevPAR ($)	$41.68	$46.41	$42.37
International RevPAR ($)	$29.38	$32.17	$28.73
Avg Royalty Rate – U.S.	4.6%	4.8%	4.8%
Avg Royalty Rate – Int’l	2.4%	2.6%	2.6%
Avg Royalty Rate – Global	3.8%	4.0%	4.0%

Segment Results (Adjusted EBITDA)

Segment	Q1 2024	Q1 2025
Hotel franchising adj. EBITDA ($M)	$158	$161
Corporate adj. EBITDA ($M)	$(17)	$(16)
Total adj. EBITDA ($M)	$141	$145

Development, System Size, and Pipeline

KPI	Q1 2024	Q4 2024	Q1 2025
Global rooms (period-end)	876,300	903,000	907,200
Openings (rooms added, Qtr)	13,100	—	14,800
Deletions (rooms, Qtr)	(8,600)	—	(10,600)
Net room growth YoY	—	4%	4%
Contracts awarded (Qtr)	171 [implied prior year baseline for YoY calc]	—	181 (+6% YoY)
Development pipeline (rooms)	~242k–248k (Q3)	252,000	254,000

Guidance Changes

Metric	Period	Previous Guidance (Feb 12, 2025)	Current Guidance (Apr 30, 2025)	Change
Global RevPAR growth (cc)	FY 2025	+2% to +3%	(2%) to +1%	Lowered
Fee-related & other revenues	FY 2025	$1.49B–$1.51B	$1.45B–$1.49B	Lowered
Adjusted EBITDA	FY 2025	$745M–$755M	$730M–$745M	Lowered
Adjusted net income	FY 2025	$369M–$379M	$358M–$372M	Lowered (range widened)
Adjusted diluted EPS	FY 2025	$4.66–$4.78	$4.57–$4.74	Lowered
Free cash flow conversion	FY 2025	57%–60%	~57%	Lowered (narrowed)
Net room growth	FY 2025	3.6%–4.6%	3.6%–4.6%	Maintained
Marketing fund	FY 2025	Break-even (seasonality)	Break-even (seasonality)	Maintained

Sensitivity: each ±1% RevPAR ≈ ±$10M revenues and ±$4M adjusted EBITDA .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24)	Previous Mentions (Q4’24)	Current Period (Q1’25)	Trend
Macro/RevPAR	Global RevPAR +1% cc; U.S. (1)%, International +7%	Global RevPAR +5% cc; U.S. +5%, Int’l +6%	Global +2% cc; U.S. +2% (normalized ~+0.6%); Int’l +3%; softness in March/April	Softer vs Q4; cautious near-term
Development & pipeline	Pipeline 248k (+5% YoY); strong signings	Record 252k; 18th straight sequential increase	Record 254k; 19th straight sequential increase; 181 deals (+6% YoY)	Strengthening
Pricing/royalty rate	Royalty accretion continued	Avg royalty rate U.S. 4.8%, Int’l 2.6% in Q4	Royalty rate +19 bps U.S., +15 bps Int’l; ancillary fees growing	Positive mix/fee power
Ancillary revenue & partnerships	Ancillary +8% YoY	Co-brand momentum into 2025	Barclays co-brand renewed (Feb); debit card launch; Carnival partnership cited as drivers
China/APAC	APAC RevPAR (7)%; sequential improvement	China RevPAR (11)% on ADR	China RevPAR (8)% on pricing pressure; steady demand	Still pressured
Supply chain/tariffs	—	—	Sourcing shifts; limited exposure to steel/aluminum; domestic FF&E sourcing; Canadian lumber exempt; managing costs	Managed risk
Infrastructure demand	Economy share gains in key states; oil & gas markets strong	Improving infra demand into Q4	Q1 slowdown from funding pauses; allocations resuming; GSO infra roomnights outperformed industry by ~380 bps	Normalizing/positive medium term

Note: Ancillary program announcements referenced from company releases during Q1 (e.g., debit card, partnerships) to contextualize drivers .

Management Commentary

Strategic positioning: “Our asset-light, franchise-only business model has consistently outperformed during economic downturns… positions us well to deliver long-term value… through all phases of any economic cycle.” — Geoff Ballotti .
Macro and outlook: “U.S. RevPAR started strong in January, momentum softened in February and March… April month-to-date RevPAR… down 3% (normalized)… recent trends are now more encouraging” — Geoff Ballotti .
Mix and demand resilience: “Less than 3% of our [U.S.] bookings… from international inbounds… ~90% of our footprint is drive-to markets… positioned to capture trade-down demand” — Geoff Ballotti .
Fee power and ancillary growth: “Royalty rate increased by 19 bps domestically and 15 bps internationally… strong momentum in our ancillary fee growth… new debit card attracting a much younger demographic… new partnership adding Carnival Cruise Lines” — Geoff Ballotti .
Guidance framework and discipline: “Adjusted EBITDA is now expected to be $730–$745M… EPS $4.57–$4.74… marketing funds will break even for the full year” — Michele Allen .

Q&A Highlights

U.S. RevPAR build and visibility: Management attributes guidance change primarily to softer leisure occupancy and consumer sentiment, with pricing holding; noted late-April improvement and Google search upticks for travel; majority of EBITDA to come in summer months .
Development cadence and conversions: Openings ramp through the year; ability to flex conversions up if needed; new-construction prototypes gaining share; strong international conversion/signing momentum (EMEA/India/Southeast Asia) .
Key money/advances: Selective deployment, prioritizing higher FeePAR geographies and scale markets; recent Germany portfolio (~3,000 rooms) supported by interest-bearing advances with strong structural protections; payback ~2 years .
Supply chain/tariffs: Teams shifting sourcing, domestic FF&E mandates in key programs; Canadian lumber exemption reduces exposure; no notable cost increases on Echo Suites FF&E (manufactured in Minnesota) .
Infrastructure tailwind: Temporary slowdown from funding pause in January; allocations resuming; GSO infrastructure roomnights outperformed U.S. STR by ~380 bps; multi-year tailwind expected .

Estimates Context

Q1 2025 vs consensus: Adjusted EPS $0.86 vs $0.81 consensus (beat); fee-related & other revenues $316M vs $317.2M consensus (slight miss). Consensus EBITDA $148.1M vs reported adjusted EBITDA $145M (definitions may differ) . Consensus values marked with an asterisk are from S&P Global.*
FY 2025 consensus vs guidance: FY25 EPS consensus ~$4.55* vs guidance $4.57–$4.74; FY25 revenues consensus ~$1.433B* vs guidance $1.445–$1.485B — Street likely to bias estimates toward the mid-to-lower end of the updated ranges pending summer RevPAR trends . Values retrieved from S&P Global.*

Key Takeaways for Investors

Resilient beat on EPS with pricing and fee power offsetting softer U.S. leisure demand; revenue essentially in line; watch summer occupancy elasticity as the key stock catalyst .
Guidance reset de-risks near term; sensitivity suggests modest RevPAR changes move EBITDA by ~$4M per point; positive surprise potential if leisure/infrastructure demand firm up into peak season .
Development flywheel intact: record openings, record pipeline, royalty rate accretion and ancillary monetization (co-brand/debit/partnerships) support multi-year EPS/EBITDA CAGR even in a choppy macro .
China a manageable headwind; EMEA/LATAM provide offset with robust ADR trends; portfolio remix to higher FeePAR geographies/chain scales should sustain royalty rate expansion .
Balance sheet flexibility (3.5x net leverage) and consistent capital returns ($109M in Q1; dividend affirmed) create downside support while retaining capacity to lean into high-IRR development advances .
Tactical watch items: weekly RevPAR trajectory through May–August, U.S. leisure booking curves, infrastructure disbursements, and credit-card/ancillary ramp — all potential drivers of estimate revisions and multiple .

Appendix: Additional Q1 2025 Data Points

Marketing fund variability: expenses exceeded revenues by $22M in Q1 (vs $14M prior year), a known seasonal headwind; full year expected to roughly break even .
Liquidity/leverage: ~$637–$640M total liquidity at quarter-end; net debt leverage 3.5x (midpoint of 3–4x target) .
Capital returns: ~$76M repurchases (~797k shares) and $0.41 dividend ($33M) in Q1 .

References:

Q1 2025 press release and financial tables:
Q1 2025 earnings call transcript:
Q4 2024 press release (prior quarter context):
Q3 2024 press release (trend context):
Dividend declaration (May 15, 2025):

Estimates source: Consensus figures marked with an asterisk are from S&P Global. Values retrieved from S&P Global.*

WYNDHAM HOTELS & RESORTS, INC. (WH)·Q1 2025 Earnings Summary