No waning in leisure travel demand

Wyndham Hotels is seeing resilient demand for leisure and business travel despite economic uncertainty - even at the budget end of the market

Wyndham's third quarter results demonstrated the benefits of having a robust portfolio of economy and midscale hotels and resorts. During Thursday's earnings call, President and CEO Geoff Ballotti expressed optimism, stating, "We expect to see continued positive momentum, with leisure travel demand remaining strong as we move into the fourth quarter and throughout 2025."

Key takeaways

• Demand for Wyndham's budget and midscale offerings slowed about a year ago after a significant post-pandemic surge, but growth is now picking up;
• "If you look at the economy segment, Q2 was better than Q1 and Q3 was better than Q2," Ballotti said, referring to the fiscal quarters. "Revenue per available room in the economy segment is now one percentage point higher than overall domestic revenue per available room growth in 2019, indicating robust pricing power;"
• Average daily rates remain at a level 17% above pre-pandemic levels, although they still lag behind cumulative inflation of 23%, indicating potential for further rate increases. Revenue per available room in the economy sector is "normalizing," up 260 basis points from the first half of the year;
• The international outlook is even more promising, with international ADRs up 7% in the third quarter across all segments, particularly in the economy and midscale categories.

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