Wyndham Hotels & Resorts Inc Ordinary Shares WH

Wyndham's US Demand and AI Investment Lifting Performance Despite Geopolitical Headwinds

Despite higher gas prices due to the Iran war, Wyndham's US demand is stable, helped by easier comparisons (2025's government shutdown and the April 2 tariffs), the tailwinds of this year's World Cup and US economic stimulus, and the start of a multiyear artificial intelligence, onshoring and infrastructure spending cycle. Additionally, 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 (122 million as of Dec. 31, 2025), which encourages third-party hotel owners to join the platform. Also, Wyndham has around 5% and 2% share of existing US and global hotel rooms, respectively, with a pipeline that represents more than 30% of its current unit base. As a result, we see room growth averaging 3% during the next 10 years (2026-35), above the 1%-2% lift we model for the US hotel industry and forecast 2% annual revenue per available room growth during this time, aided by incremental demand from increased US infrastructure (20% of 2025 gross room revenue from infrastructure workers) build out during the next several years.