As earnings season for the third quarter of 2022 shifts into high gear, we have heard from giants Hilton Worldwide and Wyndham Hotels & Resorts – both beating The Street estimates, leaning into the post-COVID travel bump that continues to drive results.
Improved performance by Hilton reflected the continued strength in leisure travel, as well as recovering business transient and group demand, according to CEO Chris Nassetta. It reported diluted earnings per share of US$1.26 and a net income of US$346 million, exceeding the high end of guidance. Adjusted EBITDA was US$732 million, also exceeding high end of guidance.
At the same time, system-wide comparable RevPAR increased 29.9% versus the same period in 2021 and 5% compared to 3Q 2019, exceeding the same period in 2019 for the first time since the pandemic began. Hilton said the big beat versus last year was due to increases in both occupancy and ADR, and fee revenues increased 33%.
Hilton approved 19,900 new rooms for development during the third quarter, bringing its development pipeline to 416,000 rooms as of September 30, 2022. It added 12,900 rooms in 3Q, contributing 12,100 net additional rooms. Gross openings in 3Q were the lowest quarterly total since 2Q20 and also below the pre-pandemic 3Q average.
Looking ahead, Hilton expects 2022 system-wide comparable RevPAR to increase between 40% and 43% compared to 2021; net income is projected to be between US$1,219 million and US$1,240 million; adjusted EBITDA is projected to be between US$$2.5 billion and US$2.53 billion. Full-year 2022 capital return is projected to be between US$1.5 billion and US$1.9 billion
Wyndham reported another strong quarter, delivering US$407 million of revenue and US$191 million of adjusted EBITDA. It also raised its full-year 2022 outlook by US$19 million of adjusted EBITDA and 30 cents of adjusted diluted EPS.
Wyndham grows pipeline
In 3Q, Wyndham grew its development pipeline by 10%, surpassed its full-year development goal for its new extended-stay brand and completed the acquisition of its 23rd brand, Vienna House, which added more than 6,400 rooms in Europe.
Wyndham’s development pipeline now stands at 212,000 rooms and the company awarded 214 new contracts, including 48 for the new extended-stay brand Project ECHO, which now has 120 new construction properties in the pipeline. System-wide net room growth of 4% included 1% of growth in the U.S. and 9% internationally.
Wyndham’s U.S. portfolio delivered the highest quarterly RevPAR on record at 110% of 2019 levels, while global RevPAR grew 12% compared to 2021 and exceeded 2019 levels by 11%.
Wyndham returned US$161 million to shareholders through US$132 million of share repurchases and a quarterly cash dividend of US$0.32 per share, bringing its year-to-date capital return to approximately US$400 million, or 5% of our market cap.
“Wyndham’s 3Q22 earnings topped forecasts with the main driver being better-than-expected RevPAR growth, particularly internationally,” wrote R.W. Baird analyst Michael Bellisario. “The quarter was clean, full-year guidance was raised, and – perhaps most importantly from an investor sentiment perspective – domestic RevPAR improved after July’s tough comparison, which spooked some investors last quarter who were worried about slowing growth trends in the lower-end chain scales.”
Wyndham also increased its full-year 2022 outlook and expects year-over-year global RevPAR growth of 14% to 16% and global net room growth of approximately 4%. Fee-related and other revenues are expected to be US$1.33 billion to US$1.34 billion, an increase of US$34 million from July’s outlook, reflecting the higher RevPAR and net room growth expectations.
Positive momentum for Paris-based Accor continued in 3Q with RevPAR and revenue results well above their 2019 levels. Excluding Asia Pacific, where activity is now recovering, all regions saw growth compared with 2019, according to Chairman and CEO Sébastien Bazin.
“These strong performances, coupled with strict operational and financial discipline, give us confidence in our ability to reach the upper end of our full-year EBITDA guidance range, which should be between €610 million and €640 million,” Bazin said on Wednesday.
Accor opened 93 hotels in 3Q, representing 15,300 rooms and net unit growth of 2.4% in the last 12 months. For 2022, the group confirmed its forecast of 3.5% net network growth.
The group reported Q3 revenue of €1,149 million, up 83% like-for-like compared with 3Q21. To provide a comparison with RevPAR, the like-for-like increase in revenue versus 3Q19 is 9%. Changes in the consolidation scope, mainly due to the consolidation of Ennismore, and the reopening of Pullman Montparnasse contributed positively by €14 million.
HotelServices for Accor, which includes management and franchise fees, as well as services to owners, reported €874 million in revenue, up 84% like-for-like versus 3Q21 (up 9% like-for-like versus 3Q19).
Accor’s RevPAR was up 14% overall in 3Q22 versus 3Q19. Group RevPAR exceeded its 2019 level for the second consecutive quarter.