Wyndham Raises Guidance Despite Franchisee Insolvency Hit
Wyndham Hotels & Resorts posted a 9% rise in adjusted EBITDA to $212 million even as it stripped out revenue tied to a collapsed European franchisee and raised its full-year outlook.
Wyndham Hotels & Resorts (WH), the hotel franchisor whose brands include Days Inn and Super 8, raised its full-year 2026 guidance after posting higher profit in the second quarter, even as net revenues fell and the company disclosed for the first time that a large European franchisee had filed for insolvency.
The insolvency of Revo Hospitality Group prompted Wyndham to strip Revo-related revenue and room growth from its 2026 outlook and quarterly results. The company deferred $12 million of royalties and franchise fees tied to Revo and took foreclosure ownership of two Revo hotels, adding roughly $10 million of EBITDA-neutral net revenues along with new mortgage debt.
Net revenues declined 6% to $375 million from $397 million a year earlier, reflecting the absence of prior-year global franchisee conference pass-through revenues, lower other franchise fees and the Revo fee deferral, partially offset by ancillary revenue growth and 4% net rooms growth excluding Revo. Net income rose 17% to $102 million from $87 million, while adjusted net income climbed 8% to $111 million but was flat on a comparable basis once an $8 million marketing fund variability benefit was excluded. Diluted earnings per share grew 20% to $1.36 from $1.13, and adjusted diluted EPS rose 11% to $1.48, though comparable growth was closer to 3% after adjusting for the same marketing fund benefit.
Adjusted EBITDA rose 9% to $212 million from $195 million, but comparable growth was 3% once an $11 million favorable marketing fund variability impact was stripped out. The comparable increase came mainly from lower general and administrative expense tied to insurance recoveries and cost timing, offset by lower other franchise fees and the Revo deferral. Restructuring and other-related expense fell to $5 million from $13 million a year earlier, also supporting the net income gain.
Domestic performance improved sequentially, with U.S. RevPAR up 2% year-over-year and 2% from the first quarter, driven by improved occupancy and average daily rate with particular strength in the Midwest, Texas, Florida and California. Global RevPAR fell 1% in constant currency as that domestic gain was offset by a 6% international decline, a deterioration from the roughly flat international comparison in the first quarter. The international weakness was broad-based: Latin America fell 7%, EMEA fell 6% on geopolitical conflict and Revo-related softness, and Greater China fell 5% on deflationary pricing.
System-wide rooms grew 4% year-over-year excluding Revo to 873,400 total, with U.S. rooms flat at 501,100 while international rooms grew 8% (10% excluding Revo) to 372,300, led by 12% direct-franchised growth in Asia Pacific and 11% growth across EMEA and Latin America. The development pipeline grew 4% excluding Revo to a record roughly 261,000 rooms, with 2% U.S. growth and 5% international growth. The global average royalty rate held flat year-over-year at 4.0% but slipped from 3.9% in the first quarter, while the international royalty rate compressed to 2.4% from 2.6%, partly reflecting a 37 basis-point drag from the Revo deferral.
Wyndham raised its full-year 2026 guidance across every headline metric: net revenues to $1.48 billion-$1.50 billion from $1.47 billion-$1.50 billion, adjusted EBITDA to $735 million-$745 million from $730 million-$745 million, adjusted net income to $355 million-$365 million from $351 million-$365 million, and adjusted diluted EPS to $4.71-$4.83 from $4.62-$4.80. The company also raised its global RevPAR guide to a range of flat to up 1% from a prior range of down 1% to up 1%, with the second-half domestic RevPAR outlook lifted to roughly 2% from roughly flat.
Total debt rose to $2.675 billion from $2.56 billion at year-end 2025, including a new $650 million senior notes issuance, but the net debt leverage ratio held steady at 3.5 times, the midpoint of the company's 3-to-4-times target range. The quarter also closed out a leadership transition that began with Michele Allen's departure as CFO and Kurt Albert's appointment as interim CFO in November 2025, followed by Amit Sripathi's permanent appointment as CFO in March 2026 alongside David Wilner's naming as chief development officer for North America, when the company reaffirmed its prior full-year guidance.