Wyndham Hotels & Resorts Inc.

07/23/2026 | Press release | Distributed by Public on 07/23/2026 12:41

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
(Unless otherwise noted, all amounts are in millions, except share and per share amounts)
Forward-Looking Statements
This report contains forward-looking statements within the meaning of the federal securities laws. These statements include, but are not limited to, statements related to our views and expectations regarding our strategy and the performance of our business, our financial results, our liquidity and capital resources, share repurchases and dividends. Forward-looking statements are any statements other than statements of historical fact, including those that convey management's expectations as to the future based on plans, estimates and projections at the time we make the statements and may be identified by words such as "will," "expect," "believe," "plan," "anticipate," "predict," "intend," "goal," "future," "forward," "remain," "confident," "outlook," "guidance," "target," "objective," "estimate," "projection" and similar words or expressions, including the negative version of such words and expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.
Factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, general economic conditions, including inflation, higher interest rates and potential recessionary pressures, which may impact decisions by consumers and businesses to use travel accommodations; global trade disputes, including with China; the performance of the financial and credit markets; the economic environment for the hospitality industry; operating risks associated with the hotel franchising business; our relationships with franchisees; the ability of franchisees to pay back loans owed to us; the impact of prior or any future impairment charges related to the credit we extend to our franchisees; the impact of war, terrorist activity, political instability or political strife; global or regional health crises or pandemics including the resulting impact on our business operations, financial results, cash flows and liquidity, as well as the impact on our franchisees, guests and team members, the hospitality industry and overall demand for and restrictions on travel; the Company's ability to satisfy obligations and agreements under its outstanding indebtedness, including the payment of principal and interest and compliance with the covenants thereunder; risks related to our ability to obtain financing and the terms of such financing, including access to liquidity and capital; and the Company's ability to make or pay, plans for and the timing and amount of any future share repurchases and/or dividends, as well as the risks described in our most recent Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the "SEC") and any subsequent reports filed with the SEC. These risks and uncertainties are not the only ones we may face and additional risks may arise or become material in the future. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, subsequent events or otherwise, except as required by law.
We may use our website and social media channels as means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Disclosures of this nature will be included on our website in the Investors section, which can currently be accessed at https://investor.wyndhamhotels.com or on our social media channels, including the Company's LinkedIn account which can currently be accessed at https://www.linkedin.com/company/wyndhamhotels. Accordingly, investors should monitor this section of our website and our social media channels in addition to following our press releases, filings submitted with the SEC and any public conference calls or webcasts.
References herein to "Wyndham Hotels," the "Company," "we," "our" and "us" refer to Wyndham Hotels & Resorts, Inc. and its consolidated subsidiaries.
BUSINESS AND OVERVIEW
We are a leading global hotel franchisor, licensing our renowned hotel brands to hotel owners in approximately 100 countries around the world.
Our primary segment is hotel franchising which principally consists of licensing our lodging brands and providing related services to third-party hotel owners and others.
RESULTS OF OPERATIONS
Discussed below are our key operating statistics, consolidated results of operations and the results of operations for our reportable segment. The reportable segment presented below represents our operating segment for which discrete financial
information is available and used on a regular basis by our chief operating decision maker to assess performance and to allocate resources. In identifying our reportable segment, we also consider the nature of services provided by our operating segment. Management evaluates the operating results of our reportable segment based upon net revenues and adjusted EBITDA. Hotel Franchising adjusted EBITDA, Corporate adjusted EBITDA and adjusted EBITDA are defined as net income/(loss) excluding net interest expense, depreciation and amortization, early extinguishment of debt charges, impairment and other-related charges (including charges related to Revo Hospitality Group ("Revo")), restructuring and other-related charges, contract termination costs, separation-related items, transaction-related items (acquisition-, disposition-, or debt-related), (gain)/loss on asset sales, foreign currency impacts of highly inflationary countries, stock-based compensation expense, income taxes and development advance notes amortization. Adjusted EBITDA is reported on a consolidated basis, while Hotel Franchising adjusted EBITDA and Corporate adjusted EBITDA are reported at a segment level. We believe that Hotel Franchising adjusted EBITDA, Corporate adjusted EBITDA and adjusted EBITDA are useful measures of performance and, when considered with U.S. Generally Accepted Accounting Principles ("GAAP") measures, gives a more complete understanding of our operating performance. We use these measures internally to assess operating performance, both absolutely and in comparison to other companies, and to make day to day operating decisions, including in the evaluation of selected compensation decisions. Hotel Franchising adjusted EBITDA, Corporate adjusted EBITDA and adjusted EBITDA are not recognized terms under U.S. GAAP and should not be considered as an alternative to net income or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. Our presentation of Hotel Franchising adjusted EBITDA, Corporate adjusted EBITDA and adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.
We generate royalties and franchise fees, management fees and other revenues from hotel franchising and hotel management activities, as well as fees from licensing our "Wyndham" trademark, certain other trademarks and intellectual property. In addition, pursuant to our franchise and management contracts with third-party hotel owners, we generate marketing, reservation and loyalty fee revenues and cost reimbursement revenues that over time are offset, respectively, by the marketing, reservation and loyalty costs and property operating costs that we incur.
OPERATING STATISTICS
Beginning in the second quarter of 2025, we revised our reporting methodology to exclude the impact of all rooms under the Super 8 China master license agreement from our reported system size, RevPAR and royalty rate, and corresponding growth metrics. Our financial results will continue to reflect fees due from the Super 8 master licensee in China, which contributed approximately $2 million to our full-year 2025 consolidated adjusted EBITDA.
During the preparation of our year-end 2025 financial statements, we learned that Revo, a large European franchisee, had filed for insolvency proceedings under self-administration for most of its operating entities. We removed all Revo-related revenue recognition from our 2026 reported results and outlook given the uncertainty on expected outcomes and collectability. In addition, our 2026 net room growth outlook also excluded any impact associated with Revo's ongoing insolvency and, as such, our global net room growth metrics are presented excluding Revo-related rooms.
The table below presents our operating statistics for the three and six months ended June 30, 2026 and 2025. "Rooms" represent the number of rooms at the end of the period which are (i) either under franchise and/or management agreements, excluding all rooms associated with the Company's Super 8 master licensee in China, (ii) Company-owned, and (iii) properties under affiliation agreements for which the Company receives a fee for reservation and/or other services provided. "RevPAR" represents revenue per available franchised or managed/owned room and is calculated by multiplying average occupancy rate by average daily rate. "Average royalty rate" represents the average royalty rate earned on our franchised rooms and is calculated by dividing total royalties, excluding the impact of amortization of development advance notes, by total room revenues. These operating statistics are drivers of our revenues and therefore provide an enhanced understanding of our business. Refer to the section below for a discussion as to how these operating statistics affected our business for the periods presented.
As of June 30,
2026 2025
% Change
Rooms
United States
501,100 503,300 -%
International
372,300 343,400 8%
Total rooms
873,400 846,700 3%
Total rooms, ex Revo 853,600 824,200 4%
Three Months Ended June 30,
2026 2025
Change (c)
RevPAR
United States
$ 54.50 $ 53.32 2%
International (a)
37.31 39.45 (5%)
Global RevPAR (a)
47.01 47.55 (1%)
Average Royalty Rate
United States 4.8 % 4.7 % 2 bps
International 2.4 % 2.6 % (24 bps)
Global average royalty rate 4.0 % 4.0 % (7 bps)
Six Months Ended June 30,
2026 2025
Change (c)
RevPAR
United States
$ 48.39 $ 47.86 1%
International (b)
35.51 36.18 (2%)
Global RevPAR (b)
42.79 43.03 (1%)
Average Royalty Rate
United States 4.8 % 4.7 % 1 bp
International 2.4 % 2.6 % (22 bps)
Global average royalty rate 3.9 % 4.0 % (10 bps)
______________________
(a)Excluding currency effects, international RevPAR decreased 6% and global RevPAR decreased 1% .
(b)Excluding currency effects, international RevPAR decreased 4% and global RevPAR decreased 1% .
(c)Amounts may not recalculate due to rounding.
Global rooms grew 3%, or 4% excluding Revo, compared to the prior year, including flat growth in the U.S. and, 8% internationally. Excluding Revo, international rooms grew 10% year-over-year, including 12% direct-franchised growth in the Company's Asia Pacific region and 11% growth in the Company's higher RevPAR EMEA and Latin America regions.
Excluding currency effects, global RevPAR for the three months ended June 30, 2026 decreased by 1% compared to the prior year period, reflecting 2% growth in the U.S. and a 6% decline internationally. In the U.S., the year-over-year results were primarily driven by continued strength across the Midwest and growth in Texas, Florida and California. Internationally, constant currency growth of 2% in Canada reflected sustained pricing power, while growth of 5% in Southeast Asia and the Pacific Rim primarily reflected improved demand. The growth in those regions was more than offset in Latin America, which declined 7% primarily due to lower U.S. cross-border demand in Mexico, EMEA which declined 6% year-over-year largely driven by the geopolitical conflict in the Middle East as well as softness from our Revo properties and a 5% decline in China primarily due to continued deflationary pricing pressure.
Excluding currency effects, global RevPAR for the six months ended June 30, 2026 decreased by 1% compared to the prior year period, reflecting 1% growth in the U.S. and a 4% decline internationally. In the U.S., the RevPAR growth was driven by continued strength across the Midwest and Texas. The international decline was driven by Latin America primarily due to lower U.S. cross-border demand in Mexico, China primarily due to deflationary pricing pressure, and EMEA largely driven by the geopolitical conflict in the Middle East as well as softness from our Revo properties, partially offset by growth in Canada and Southeast Asia and the Pacific Rim.
THREE MONTHS ENDED JUNE 30, 2026 VS. THREE MONTHS ENDED JUNE 30, 2025
Three Months Ended June 30,
2026 2025
Change
% Change
Net revenues $ 375 $ 397 $ (22) (6 %)
Expenses
Marketing, reservation and loyalty expense 131 162 (31) (19 %)
Other expenses 70 85 (15) (18 %)
Total expenses
201 247 (46) (19 %)
Operating income 174 150 24 16 %
Interest expense, net
36 34 2 6 %
Income before income taxes 138 116 22 19 %
Provision for income taxes
36 29 7 24 %
Net income $ 102 $ 87 $ 15 17 %
Net revenues for the three months ended June 30, 2026 decreased $22 million, or 6%, compared to the prior-year period, primarily driven by:
•$20 million of lower marketing, reservation and loyalty revenues primarily due to the absence of pass-through revenues associated with our global franchisee conference in 2025; and
•$8 million of lower royalty and franchise fees primarily due to lower franchise fees and the deferral of fees from Revo; partially offset by
•$3 million of higher ancillary revenues primarily driven by our co-branded credit card program; and
•$3 million of higher management and other fees, which includes revenue from two owned hotels which we took possession of in connection with the Revo insolvency.
Total expenses for the three months ended June 30, 2026 decreased $46 million, or 19%, compared to the prior-year period, primarily driven by:
•$31 million of lower marketing, reservation and loyalty expenses primarily due to the absence of pass-through expenses associated with our global franchisee conference in 2025 and timing of spending;
•$8 million of lower restructuring costs; and
•$6 million of lower operating and general and administrative expenses primarily due to insurance recoveries and timing of variable costs, partially offset by owned hotel expenses in 2026.
During second quarter 2026, marketing, reservation and loyalty revenues of $145 million exceeded marketing, reservation and loyalty expenses of $131 million by $14 million; while in the second quarter 2025, marketing, reservation and loyalty revenues of $165 million exceeded marketing, reservation and loyalty expenses of $162 million by $3 million.
Interest expense, net for the three months ended June 30, 2026 increased $2 million, or 6%, compared to the prior-year period, primarily due to lower interest income.
Our effective tax rates were 26.1% and 25.0% during the three months ended June 30, 2026 and 2025, respectively. During 2026, the effective tax rate was higher primarily due to a lower tax benefit associated with state legislative changes.
As a result of these items, net income for the three months ended June 30, 2026 increased $15 million compared to the prior-year period.
A reconciliation of net income to adjusted EBITDA is represented below:
Three Months Ended June 30,
2026 2025
Hotel Franchising Corporate Total Company Hotel Franchising Corporate Total Company
Net income $ 194 $ (92) $ 102 $ 174 $ (87) $ 87
Provision for income taxes - 36 36 - 29 29
Depreciation and amortization 14 1 15 14 1 15
Interest expense, net - 36 36 - 34 34
Stock-based compensation expense
6 2 8 5 3 8
Development advance notes amortization 9 - 9 8 - 8
Restructuring and other-related costs 1 4 5 12 1 13
Revo-related charges 1 - 1 - - -
Transaction-related - - - 1 - 1
Adjusted EBITDA
$ 225 $ (13) $ 212 $ 214 $ (19) $ 195
Following is a discussion of the results of our Hotel Franchising segment and Corporate for the three months ended June 30, 2026 compared to the three months ended June 30, 2025:
Net Revenues
Adjusted EBITDA
2026 2025
% Change
2026 2025
% Change
Hotel Franchising $ 375 $ 397 (6%) $ 225 $ 214 5%
Corporate
- - n/a (13) (19) 32 %
Total Company
$ 375 $ 397 (6%) $ 212 $ 195 9%
Hotel Franchising
Hotel franchising net revenues decreased $22 million, or 6%, compared to the prior-year period, as discussed above.
Hotel franchising adjusted EBITDA increased $11 million, or 5%, compared to the prior-year period, primarily driven by timing of marketing spend.
Corporate
Corporate adjusted EBITDA was favorable by $6 million compared to the prior-year period primarily due to timing of variable costs.
SIX MONTHS ENDED JUNE 30, 2026 VS. SIX MONTHS ENDED JUNE 30, 2025
Six Months Ended June 30,
2026 2025
Change
% Change
Net revenues $ 702 $ 713 $ (11) (2 %)
Expenses
Marketing, reservation and loyalty expense 262 300 (38) (13 %)
Other expenses 152 151 1 1 %
Total expenses 414 451 (37) (8 %)
Operating income 288 262 26 10 %
Interest expense, net
71 68 3 4 %
Income before income taxes 217 194 23 12 %
Provision for income taxes
54 45 9 20 %
Net income
$ 163 $ 149 $ 14 9 %
Net revenues for the six months ended June 30, 2026 decreased $11 million, or 2%, compared to the prior year period, primarily driven by;
•$19 million of lower royalty and franchise fees primarily due to lower franchise fees and the deferral of fees from Revo; and
•$14 million of lower marketing, reservation and loyalty revenues primarily due to the absence of pass-through revenues associated with our global franchisee conference in 2025; partially offset by
•$18 million of higher ancillary revenues primarily driven by our co-branded credit card program; and
•$4 million of higher management and other fees which includes revenue from two owned hotels which we took possession of in connection with the Revo insolvency.
Total expenses for the six months ended June 30, 2026 decreased $37 million, or 8%, compared to the prior year period, primarily driven by;
•$38 million of lower marketing, reservation and loyalty expenses primarily due to the absence of pass-through expenses associated with our global franchisee conference in 2025 and timing of spend; partially offset by
•$3 million of higher operating and general and administrative expenses primarily due to Revo-related charges and owned hotel expenses incurred in 2026, partially offset by timing of variable costs.
During the six months ended June 30, 2026, marketing, reservation and loyalty revenues of $267 million exceeded marketing, reservation and loyalty expenses of $262 million by $5 million; while the six months ended June 30, 2025, marketing, reservation and loyalty expenses of $300 million exceeded marketing, reservation and loyalty revenues of $281 million by $19 million.
Interest expense, net for the six months ended June 30, 2026 increased $3 million, or 4%, compared to the prior year period primarily due to lower interest income and a higher average debt balance, partially offset by a lower average interest rate.
Our effective tax rates were 24.9% and 23.2% during the six months ended June 30, 2026 and 2025, respectively. During 2026, the effective tax rate was higher primarily due to a lower tax benefit associated with stock-based compensation.
As a result of these items, net income for the six months ended June 30, 2026 increased $14 million compared to the prior year period.
The table below is a reconciliation of net income to adjusted EBITDA.
Six Months Ended June 30,
2026 2025
Hotel Franchising Corporate Total Company Hotel Franchising Corporate Total Company
Net income $ 337 $ (174) $ 163 $ 307 $ (158) $ 149
Provision for income taxes - 54 54 - 45 45
Depreciation and amortization 28 3 31 28 3 31
Interest expense, net - 71 71 - 68 68
Stock-based compensation expense
12 6 18 12 6 18
Development advance notes amortization 16 - 16 14 - 14
Restructuring and other-related costs 3 7 10 12 1 13
Transaction-related - 3 3 1 - 1
Revo-related 3 - 3 - - -
Separation-related - (1) (1) - - -
Foreign currency impact of highly inflationary countries
- - - 1 - 1
Adjusted EBITDA
$ 399 $ (31) $ 368 $ 375 $ (35) $ 340
Following is a discussion of the results of our Hotel Franchising segment and Corporate for the six months ended June 30, 2026 compared to June 30, 2025:
Net Revenues
Adjusted EBITDA
2026 2025
% Change
2026 2025
% Change
Hotel Franchising $ 702 $ 713 (2%) $ 399 $ 375 6%
Corporate
- - n/a (31) (35) 11%
Total Company
$ 702 $ 713 (2%) $ 368 $ 340 8%
Hotel Franchising
Hotel franchising net revenues for the six months ended June 30, 2026 decreased $11 million compared to the prior year period as discussed above.
Hotel franchising adjusted EBITDA for the six months ended June 30, 2026 increased $24 million compared to the prior year period, primarily driven by timing of marketing spend.
Corporate
Corporate adjusted EBITDA was favorable by $4 million compared to the prior year period primarily due to timing of variable costs.
DEVELOPMENT
On June 30, 2026, our global development pipeline consisted of over 2,200 hotels and approximately 261,000 rooms, representing another record-high level and a 4% year-over-year increase, excluding Revo, including 2% growth in the U.S. and 5% internationally, excluding Revo. Approximately 69% of our pipeline is in the midscale and above segments and 17% is in the extended stay segment. Approximately 42% of our pipeline is in the U.S. Additionally, approximately 78% of our pipeline is new construction, of which 35% have broken ground. Rooms under construction grew 4% year-over-year. Our pipeline carries a fee-per-available-room ("FeePAR") premium of approximately 30% to existing domestic and international systems.
RESTRUCTURING AND OTHER-RELATED
During the first quarter of 2026, we approved a restructuring plan that commenced in the second quarter of 2026 which focuses on transitioning certain functions to a global shared service center. As a result, during the three and six months ended June 30, 2026, we incurred $4 million and $6 million, respectively, of restructuring and other-related expenses relating to the 2026 plan, impacting 39 employees. We anticipate that this restructuring should result in approximately $8 - $10 million of costs during 2026 and approximately $5 million of annualized savings.
During the second quarter of 2025, we approved a restructuring plan focused on streamlining our organizational structure, primarily within our marketing, reservation and loyalty functions. As a result, we incurred $1 million and $4 million of restructuring expenses during the three and six months ended June 30, 2026, respectively, and $13 million during both the three and six months ended June 30, 2025 relating to the 2025 plan. Such charges were primarily in our Hotel Franchising segment and impacting a total of 202 employees. We expect that annualized savings realized will be approximately $15 million primarily in marketing, reservation and loyalty expenses which will be reinvested for other revenue-generating activities.
The following table presents activity for the six months ended June 30, 2026:
2026 Activity
Liability as of December 31, 2025 (a)
Costs Recognized (b)
Cash Payments
Liability as of June 30, 2026 (c)
2026 Plan
Personnel-related $ - $ 3 $ - $ 3
Other-related (d)
- 3 (2) 1
Total 2026 Plan - 6 (2) 4
2025 Plan
Personnel-related 4 4 (5) 3
Facility-related 4 - (1) 3
Total 2025 Plan 8 4 (6) 6
Total accrued restructuring $ 8 $ 10 $ (8) $ 10
_____________________
(a)Reported within accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets.
(b)Costs recognized for the six months ended June 30, 2026 were $7 million relating to Corporate and $3 million relating to Hotel Franchising segment.
(c)Reported within accrued expenses and other current liabilities of $8 million and other non-current liabilities of $2 million as of June 30, 2026 on the Condensed Consolidated Balance Sheets.
(d)Other-related expenses consist of professional fees related to restructuring activities under the 2026 plan.
The following table presents activity for the six months ended June 30, 2025:
2025 Activity
Liability as of December 31, 2024 Costs Recognized Cash Payments Liability as of June 30, 2025
2024 Plan
Personnel-related $ 5 $ - $ (3) $ 2
2025 Plan
Personnel-related - 8 (2) 6
Facility-related - 5 - 5
Total 2025 Plan - 13 (2) 11
Total accrued restructuring $ 5 $ 13 $ (5) $ 13
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Financial Condition
June 30, 2026 December 31, 2025
Change
Total assets
$ 4,332 $ 4,182 $ 150
Total liabilities
3,852 3,714 138
Total stockholders' equity
480 468 12
Total assets increased $150 million from December 31, 2025 to June 30, 2026 primarily related to an increase in trade receivables, $20 million of restricted cash received in 2026 related to Revo, assets of two hotels which we took ownership of associated with Revo and an increase in development advance notes in support of our growth strategy. Total liabilities increased $138 million from December 31, 2025 to June 30, 2026 primarily related to a $115 million increase in our outstanding debt including $14 million associated with the owned hotel transaction. Total equity increased $12 million from December 31, 2025 to June 30, 2026 primarily due to our net income and other comprehensive income, partially offset by $105 million of stock repurchases and $66 million of dividends declared.
As of December 31, 2025, we had outstanding development advance notes, loans and accounts receivables with a net book value of $26 million related to Revo. In the first quarter of 2026, we enforced our collateral package on the outstanding obligations owed to us by Revo, and as a result, we exercised our rights to foreclose on and take ownership of two hotel properties in Europe with an estimated aggregate net asset fair value of $23 million. As of June 30, 2026, we have accounts receivables with a remaining net book value of $1 million related to Revo and we also have no remaining net book value on our development advance notes or loans as of June 30, 2026. Such insolvency proceeding may not be resolved for several years and thus we are subject to uncertainty with respect to any potential recovery we may receive, as well as the ongoing viability of our franchise agreements and related loss of rooms and any future revenues.
As of June 30, 2026, we had restricted cash of approximately $20 million related to our Revo collateral package discussed above and is reported within other non-current assets and other non-current liabilities on the Consolidated Balance Sheet. The restricted cash arose as a result of our collateral rights to the relevant bank accounts, thereby enabling the receipt of such funds. Nevertheless, certain court and insolvency administrator approvals are required to determine the amount, if any, to which we are entitled. The adjudication process is anticipated to span several months to years. The insolvency administrator and courts will issue determinations regarding the allocation of funds among creditors, including the amounts and timing of any such distributions. Upon agreement with these determinations by all relevant parties, the funds will be disbursed accordingly.
Liquidity and Capital Resources
Historically, our business generates sufficient cash flow to not only support current operations, future growth initiatives and dividend payments to stockholders, while also enabling us to create additional value for our stockholders in the form of share repurchases.
In February 2026, we issued $650 million aggregate principal amount of senior unsecured notes, which mature in 2033 and bear interest at a rate of 5.625% per year, for net proceeds of $642 million. Interest is payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2026. The notes are redeemable in whole or in part at various times and premiums per their indenture, with the first call date of March 1, 2029 at a price of 102.813%. We used the net cash proceeds from the notes primarily to pay off then-outstanding borrowings under our revolving credit facility and term loan A.
As of June 30, 2026, our liquidity approximated $1.0 billion. Given the minimal capital needs and flexible cost structure of our business, we believe that our existing cash, cash equivalents, cash generated through operations and our expected access to financing facilities, together with funding through our revolving credit facility, will be sufficient to fund our operating activities, anticipated capital expenditures and growth needs.
As of June 30, 2026, we were in compliance with the financial covenants of our credit agreement and expect to remain in such compliance. As of June 30, 2026, we had a term loan B with a principal outstanding balance of $1.5 billion maturing in 2030, $650 million senior unsecured notes due in March 2033, $500 million senior unsecured notes due in August 2028 and a five-year revolving credit facility maturing in 2030 with a maximum aggregate principal amount of $1.0 billion, of which $27 million was outstanding.
The interest rate per annum applicable to our term loan B is equal to, at our option, either a base rate plus an applicable rate of 0.75% or the Secured Overnight Financing Rate ("SOFR") plus an applicable rate of 1.75%. Our revolving credit
facility is subject to an interest rate per annum equal to, at our option, either SOFR, plus a margin of 1.75%, subject to reductions to 1.50%, 1.25%, and 1.00% or a base rate, plus a margin of 0.75%, subject to reductions to 0.50%, 0.25% and 0.00%, in either case based upon our total leverage ratio and our restricted subsidiaries.
As of June 30, 2026, we had pay-fixed/receive-variable interest rate swaps which hedge the interest rate exposure on $1.4 billion, effectively representing over 95% of the outstanding amount of our term loan B. The interest rate swaps have weighted average fixed rates (plus applicable spreads) ranging from 3.31% to 3.84% based on various effective dates for each of the swap agreements, with $475 million expiring in the fourth quarter of 2027, $600 million of swaps that expire in the second quarter of 2028 and $350 million expiring in the third quarter of 2028.
As of June 30, 2026, our credit rating was Ba1 from Moody's Investors Service and BB+ from both Standard and Poor's Rating Agency and Fitch Ratings. A credit rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal by the assigning rating organization. Reference in this report to any such credit rating is intended for the limited purpose of discussing or referring to aspects of our liquidity and of our costs of funds. Any reference to a credit rating is not intended to be any guarantee or assurance of, nor should there be any undue reliance upon, any credit rating or change in credit rating, nor is any such reference intended as any inference concerning future performance, future liquidity or any future credit rating. Our liquidity and access to capital may be impacted by our credit ratings, financial performance and global credit market conditions.
CASH FLOW
The following table summarizes the changes in cash, cash equivalents and restricted cash during the six months ended June 30, 2026 and 2025:
Six Months Ended June 30,
2026 2025
Change
Cash provided by/(used in)
Operating activities
$ 133 $ 129 $ 4
Investing activities
(22) (71) 49
Financing activities
(85) (122) 37
Effects of changes in exchange rates on cash, cash equivalents and restricted cash
(1) 1 (2)
Net change in cash, cash equivalents and restricted cash
$ 25 $ (63) $ 88
Net cash provided by operating activities increased $4 million compared to the prior-year period primarily due to $20 million of restricted cash received in 2026 related to Revo and our net income, partially offset by the timing of working capital.
Net cash used in investing activities decreased $49 million compared to the prior-year period primarily due to lower cash used for loans in connection with development activities.
Net cash used in financing activities decreased $37 million compared to the prior-year period primarily due to $46 million of lower stock repurchases.
Capital Deployment
Our first priority is to invest in the business in support of our strategies in driving long-term growth and enhancing our competitive position. This includes deploying capital to attract high quality assets into our system, funding technology initiatives aligned with our strategic objectives, supporting brand refresh programs that improve quality and protect brand equity, and pursuing acquisitions or similar transactions that are accretive and strategically enhancing to our business. We also expect to maintain a regular dividend payment. Excess cash generated beyond these needs is expected to be available for enhanced stockholder return in the form of stock repurchases.
During the six months ended June 30, 2026, we invested $21 million on capital expenditures primarily related to information technology, including digital innovation. For 2026, we anticipate total capital expenditures of approximately $40-45 million.
In addition, we deployed $57 million during the six months ended June 30, 2026 in development advance notes (net of repayments) and expect to invest approximately $110 million for 2026. These investments play a crucial role in attracting
higher FeePAR hotels into our system, strengthening our portfolio with more premium properties. We may also offer other forms of financial support, such as enhanced credit support, to drive our business growth and increase our competitive position.
We expect all our cash needs to be funded from cash on hand, cash generated through operations, and/or availability under our revolving credit facility.
Stock Repurchase Program
In May 2018, our Board approved a share repurchase plan pursuant to which we were authorized to purchase up to $300 million of our common stock. Our Board has increased the capacity of the program by $300 million in 2019, $800 million in 2022, $400 million in 2023 and $400 million in 2024. Under the plan, we may, from time to time, purchase our common stock through various means, including, without limitation, open market transactions, privately negotiated transactions or tender offers, subject to the terms of the tax matters agreement entered into in connection with our spin-off.
Under our current stock repurchase program, we repurchased approximately 1.3 million shares at an average price of $80.31 for a cost of $105 million during the six months ended June 30, 2026. As of June 30, 2026, we had $169 million of remaining availability under our program.
Dividend Policy
We declared cash dividends of $0.43 per share in the first and second quarters of 2026 ($66 million in aggregate).
The declaration and payment of future dividends to holders of our common stock is at the discretion of our Board and depends upon many factors, including our financial condition, earnings, capital requirements of our business, covenants associated with certain debt obligations, legal requirements, regulatory constraints, industry practice and other factors that our Board deems relevant.
LONG-TERM DEBT COVENANTS
Our credit facilities contain customary covenants that, among other things, impose limitations on indebtedness; liens; mergers, consolidations, liquidations and dissolutions; dispositions, restricted debt payments, restricted payments and transactions with affiliates. Events of default in these credit facilities include, among others, failure to pay interest, principal and fees when due; breach of a covenant or warranty; acceleration of or failure to pay other debt in excess of a threshold amount; unpaid judgments in excess of a threshold amount, insolvency matters; and a change of control. The credit facilities require us to comply with a financial covenant to be tested quarterly, consisting of a maximum first-lien leverage ratio of 5.0 times. The ratio is calculated by dividing consolidated first lien indebtedness (as defined in the credit agreement) net of consolidated unrestricted cash as of the measurement date by consolidated EBITDA (as defined in the credit agreement), as measured on a trailing four-fiscal-quarter basis preceding the measurement date. As of June 30, 2026, our first-lien leverage ratio was 2.0 times.
The indenture, as supplemented, under which the senior notes due 2028 were issued, contains covenants that limit, among other things, our ability and that of certain of our subsidiaries to (i) create liens on certain assets; (ii) enter into sale and leaseback transactions; and (iii) merge, consolidate or sell all or substantially all of our assets. These covenants are subject to a number of important exceptions and qualifications.
As of June 30, 2026, we were in compliance with the financial covenants described above.
SEASONALITY
While the hotel industry is seasonal in nature, periods of higher revenues vary property-by-property and performance is dependent on location and guest base. Based on historical performance, revenues from franchise contracts are generally higher in the second and third quarters than in the first or fourth quarters due to increased leisure travel during the spring and summer months. Our cash from operating activities may not necessarily follow the same seasonality as our revenues and may vary due to timing of working capital requirements and other investment activities. The seasonality of our business may cause fluctuations in our quarterly operating results, earnings, profit margins and cash flows. As we expand into new markets and geographical locations, we may experience increased or different seasonality dynamics that create fluctuations in operating results different from the fluctuations we have experienced in the past.
COMMITMENTS AND CONTINGENCIES
We are involved in claims, legal and regulatory proceedings and governmental inquiries related to our business. Litigation is inherently unpredictable and, although we believe that our accruals are adequate and/or that we have valid defenses in these matters, unfavorable results could occur. As such, an adverse outcome from such proceedings for which claims are awarded in excess of the amounts accrued, if any, could be material to us with respect to earnings and/or cash flows in any given reporting period. As of June 30, 2026, the potential exposure resulting from adverse outcomes of such legal proceedings could, in the aggregate, range up to approximately $7 million in excess of recorded accruals. However, we do not believe that the impact of such litigation should result in a material liability to us in relation to our financial position or liquidity. For a more detailed description of our commitments and contingencies see Note 12 - Commitments and Contingencies to the Condensed Consolidated Financial Statements contained in Part I, Item 1 of this report.
CRITICAL ACCOUNTING POLICIES
In presenting our financial statements in conformity with U.S. GAAP, we are required to make estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they pertain to future events. However, events that are outside of our control cannot be predicted and, as such, they cannot be contemplated in evaluating such estimates and assumptions. If there is a significant unfavorable change to current conditions, it could result in a material impact to our consolidated results of operations, financial position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time. These Condensed Consolidated Financial Statements should be read in conjunction with our 2025 Consolidated Financial Statements included in our most recent Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the "SEC") and any subsequent reports filed with the SEC, which includes a description of our critical accounting policies that involve subjective and complex judgments that could potentially affect reported results.
Wyndham Hotels & Resorts Inc. published this content on July 23, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on July 23, 2026 at 18:41 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]