Wyndham Hotels & Resorts, in alignment with the American Hotel & Lodging Association's guest checklistand following Marriott International, Hyatt Hotels Corp., InterContinental Hotels Group and others, will require guests to wear face coverings, Wyndham president and CEO Geoff Ballotti said Wednesday during the company's second-quarter earnings call.
A company spokesperson confirmed that the new requirement would go into effect on Aug. 10 for all indoor public spaces at the company's hotels in the United States and Canada.
The company will inform guests of the new policy ahead of their arrival, and there also will be signage at each hotel. Wyndham hopes guests arrive with their own masks, however, should they not, "we're encouraging hotels to have some available or, alternatively, direct guests to where they can acquire one," said the spokesperson in an email. "Should guests refuse, hotels have been advised to ask them to return to their rooms. Hotels reserve the right to refuse service to guests who do not comply with posted policies."
Wyndham also kicked off the hotel company second-quarter earnings season with results released Tuesday evening. Given the continuing effects of Covid-19 on the hospitality industry, all hotel companies are expected to show declines in the three key performance metrics, and Wyndham was no exception, though the figures have begun to improve compared with declines earlier this year.
Global comparable revenue per available room, excluding properties temporarily closed because of the pandemic, dropped 54% year over year for the three-month period ending June 30. RevPAR was down 51% for U.S. properties, and 65% internationally.
Wyndham has been encouraged by some second-quarter trends, including occupancy at select-service hotels improving sequentially each month from a low of 26% in April to absolute levels of more than 45% in June, said Wyndham CFO Michele Allen, adding that those occupancy levels were nearly 60% so far in July. Since mid-April, the company's average daily rate has increased 15% during the weekdays and 32% on weekends, said Allen.
The net loss for the second quarter was $174 million, compared with net income of $22 million in the first quarter. Adjusted net income for the quarter was $9 million, compared with $82 million in the second quarter of 2019.
Open properties and pipeline
About 85% of Wyndham's hotels are open globally. About 93% of the Asia-Pacific region is open, with occupancies over 60% in China, Ballotti said. In Canada, 98% are open with occupancy in the 40s. The Europe, Middle East and Africa region has about two-thirds of its hotels open with occupancies running over 30%. But Latin America is the "most challenged," with 100 hotels still closed and occupancies less than 30%.
In the United States, more than 99% of Wyndham's hotels are open. "They were able to remain open throughout the crisis during the softest days of late March and early April when occupancy across the industry fell to nearly 20%," Ballotti said, noting that 99% of the company's U.S. portfolio is select-service properties, which have performed better than higher chain scales. "During the second quarter, our economy brands outperformed their competitive set by more than 300 basis points, and our midscale brands outperformed their competitive set by over 1,000 basis points."
Systemwide, room numbers remained flat year over year. Wyndham has approximately 9,000 properties and 813,000 rooms. During the second quarter, the company opened 62 hotels with 5,700 rooms, a year-over-year decline of 65%. In the United States, rooms decreased 1% year over year, from 508,300 to 502,000; elsewhere, rooms grew 1% from 308,300 to 310,900. There are 180,000 rooms in the pipeline, a decrease of 4% from 2019. Ballotti reiterated his message from Wyndham's first-quarter earnings call that the company is looking to conversions for rooms growth. Of the 5,700 new rooms opened in the second quarter, more than 2,000 were conversions, he said. "I believe conversions will become a more important growth vehicle for us over the next several years."
Ballotti added that the company "is positioned to outperform for the crisis and longer. Our business is fueled by leisure travelers, representing 70% of our bookings. Yet the other 30% coming from guests where travel is essential to their job is predictable and dependable." He also noted that 90% of Wyndham's U.S. hotels are located in suburban, interstate and small metro markets, which primarily appeal to domestic travelers and drive-to business.
In addition, direct-channel web bookings are up 80% since the April-May timeframe, and volume into Wyndham's call centers is trending near pre-Covid levels, Ballotti said. "As volumes have increased and demand has recovered, we have been able to welcome back thousands of team members to our managed properties and been able to bring back all furloughed team members to our corporate offices."
Source: Business Travel News