MORE THIRD QUARTER earnings reports from major hotel companies have shown more subdued growth for the industry. Wyndham Hotels & Resorts reported a 1 percent decline in RevPAR for its U.S. and international business while Hilton Worldwide Holdings saw a 0.4 percent RevPAR increase while acknowledging a slowdown in the market overall.
Wyndham also reported that its EBITDA grew 14 percent to $190 million while its diluted EPS grew 29 percent to $1.10, both exceeding expectations. Its system grew 3 percent over last year and its development pipeline grew 7 percent year-over-year to 190,000 rooms.
The RevPAR decline was “in line with industry trends” the company said. Revenues decreased 7 percent to $560 million, compared with $604 million in the third quarter of 2018. The company blamed the decline is primarily due to lower cost-reimbursement revenues in its hotel management business, which have no impact on adjusted EBITDA.
“Our team’s sharp execution against our strategic and operating plans allowed us to deliver solid results in the third quarter, despite a softening RevPAR environment,” Wyndham President and CEO Geoffrey Ballotti said. “In addition, we increased our share repurchase authorization to reflect our strong free cash flow and our sustained focus on returning cash to shareholders. We remain confident that our business is well-positioned for continued success.”
Hilton reported an 85 percent increase in diluted EPS to $1. Net income for the third quarter was $290 million, a 77 percent increase from the same period in 2018.
“Despite the overall slowing macro environment, we are pleased to deliver strong bottom-line results for the third quarter,” President and CEO Christopher Nassetta said. “Adjusted EBITDA was towards the high end of guidance and diluted EPS, adjusted for special items, exceeded our expectations, driven by strong net unit growth. Additionally, we continue to achieve market share gains across all brands and regions year to date.”
The company approved 25,200 new rooms for development during the quarter, growing its development pipeline to 379,000 rooms as of Sept. 30. It opened 17,400 rooms, contributing to 15,600 net additional rooms, on track to deliver approximately 6.5 percent net unit growth for the full year
Last week, Intercontinental Hotel Group reported a 0.8 percent drop in RevPAR for the third quarter, blaming the trade war between the U.S. and China as at least one reason, along with the political unrest in Hong Kong. Nevertheless, the company grew 4.7 percent to more than 860,000 rooms and expects to top 5 percent growth by year’s end.