For lodging companies, Q2 2025 will go down as the quarter RevPAR contracted. It’s not to say it won’t be revived with gusto. After Hilton this week reported a year-over-year decrease in RevPAR, Wyndham Hotels & Resorts acknowledged the same, with its global RevPAR declining 3% YOY in the quarter, including a 4% YOY drop in the U.S.
“Interest rates, persistent inflation and uncertainty around immigration and trade have created an environment of ongoing economic volatility for economy and midscale guests who remain especially sensitive to these dynamics,” said Geoff Ballotti, president and CEO of Wyndham Hotels & Resorts, during his company’s earnings call. At one point, Ballotti highlighted and attributed a pithy phrase to David Katz, an analyst with Jefferies: “RevPAR lasts a day; pipeline lasts a lifetime.” Ballotti added a postlude: “It has been more than a day.”
Ballotti noted continued softness in the Sun Belt states, includng Texas, Florida and California, where Wyndham has about a quarter of its system. This softness has been offset by strength in oil markets, such as Ohio and Oklahoma and natural gas states like Pennsylvania. “We are seeing strength in states like Wisconsin, Michigan, Minnesota and Missouri, all indicating steady demand from our blue-collar, everyday travelers,” Ballotti said. “Consumer spending on travel is continuing despite the macro headlines, and we remain optimistic that long-term RevPAR growth is going to return, especially given the low levels of supply.”
Pockets of RevPAR succes included EMEA, where RevPAR grew 7% YOY; Latin America and the Caribbean, where RevPAR was up 18%, and Canada, where RevPAR grew by 7% with lower U.S. outbound travel.
Though RevPAR matters, the Street typically judges lodging companies on their ability to generate growth in new unit openings and pipeline, something Wyndham—and Hilton before it—is having further success with. In the second quarter Wyndham grew system-wide rooms 4% YOY and expanded its development pipeline by 5%, the 20th consecutive quarter of pipeline growth. Ballotti noted that room growth is in the higher-fee-par segments. At the start of the year, Wyndham set its net-room growth range at 3.6% to 4.6%, which it raised to 4% to 4.6%.
Wyndham increased net rooms by 8% internationally, with EMEA growing by 5% with new-construction additions such as Wyndham Alanya in Turkey. It also signed a development agreement with Cygnett Hotels & Resorts to develop brands across India, Bangladesh, Sri Lanka and Nepal. In China, Ballotti reiterated the company’s disatisfaction with its Super 8 master licensee Tian Rui Hotel Corporation, which “has struggled to add new units and retain existing ones,” Ballotti said. Following an operational review this quarter, Wyndham identified violations of the license agreement and issued it a notice of default, a potential outcome of which could include termination. Wyndham has revised its reporting to exclude the Super 8 properties in China from its reported system size and related metrics.
At the same time, Wyndham has relied less on master licenses to grow its network. “We have increased our direct franchising business in China by over 100% since spin to nearly 100,000 rooms,” Ballotti said, referring to when Wyndham spun off its hotel business from Wyndham Worldwide in 2018.
Unlike some of its peers, Wyndham, Ballotti said, is pushing out a healthy supply of new ground-up projects rather than relying heavily on conversions. “Our new-construction pipeline is up 4% year over year,” Ballotti said. Much of that is attributed to its Echo Suites extended-stay brand, which grew another 3% in the quarter. “We’re north of 30,000 rooms, and we’re growing that pipeline,” he said.
Wyndham in the quarter also launched Wyndham Marketplace, a hotel shopping platform that allows owners to find, compare and purchase brand-approved products at deeply negotiated rates.
