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

Oct 25, 2024

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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