Wyndham's Leading Economy Position Pressured by Softer Low-Income Household Demand

Despite near-term macroeconomic challenges for the consumer—softer employment market, depleted consumer savings—we expect Wyndham Hotels & Resorts to gradually expand room share in the hotel industry and maintain a brand intangible asset and switching cost advantage. This view is supported by the company's 50% share of all US economy and midscale branded hotels (where Wyndham has a handful of the top 10 brands based on guest satisfaction, according to J.D. Power) and the industry’s fourth-largest loyalty program by membership (121 million as of Sept. 30, 2025), which encourages third-party hotel owners to join the platform. Also, Wyndham has around 4% and 2% share of existing US and global hotel rooms, respectively, with a pipeline that represents 30% of its current unit base. As a result, we see room growth averaging over 3% during the next 10 years (2025-34), above the 1%-2% lift we model for the US hotel industry. Further, we forecast 1%-2% annual revenue per available room growth through the rest of this decade, aided by further price and occupancy increases, as well as incremental demand from increased US infrastructure (22% of 2024 gross room revenue from infrastructure workers) build out during the next several years.