DALLAS, May 6, 2002 (BUSINESS WIRE)—Wyndham International, Inc. (NYSE:WYN) today reported results for the first quarter ended Mar. 31, 2002.
On a pro forma basis, which reflects adjustments for acquisitions and dispositions, earnings before interest, taxes, depreciation and amortization (EBITDA), as adjusted, was $114.3 million for the three months ending Mar. 31, 2002, versus $172.3 million for the same period in 2001 and an increase from the original guidance, $100.0 million to $105.0 million, based on strong operating margins and returning demand. Total company comparable owned and leased revenue per available room (RevPAR) declined 16.9 percent versus the same period in 2001. This decline was comprised of a 10.4 percent decline in average daily rate, created by the change in market segmentation mix, and a five percentage point decline in occupancy. Wyndham Hotels & Resorts out performed the total company portfolio for the quarter, with a RevPAR decline of 13.9 percent from the prior year composed of a 9.5 percent decline in average daily rate and a three-percentage point drop in occupancy.
Importantly, occupancy grew each month in the first quarter indicating the return in demand. Specifically, Wyndham-branded comparable owned and leased monthly occupancy was 59.5 percent, 69.2 percent and 72.5 percent for January, February and March, respectively. Total occupancy for first quarter 2002 on Wyndham-branded comparable owned and leased properties was 67.0 percent compared to an occupancy of 58.8 percent in fourth quarter 2001 and 70.9 percent for first quarter 2001. A further indication of Wyndham`s vitality is the consecutive monthly gain in market share experienced in the first quarter for owned, leased, managed and franchised hotels within their competitive sets. Accordingly, Wyndham`s RevPAR penetration index improved 20 basis points from the same period the prior year.
Operating margins improved for the quarter; total company comparable owned and leased properties increased their operating margins by 540 basis points versus the fourth quarter 2001. Further, Wyndham-branded comparable owned and leased properties increased their operating margins by 730 basis points over the fourth quarter 2001. During first quarter 2002, the increase in operating margins led to the two-to-one ratio with respect to the change in EBITDA versus the change in RevPAR.
“We are proud of the first quarter results and especially in our ability to operate efficiently and deliver better than anticipated margins,” stated Wyndham International Chairman and Chief Executive Officer Fred J. Kleisner. “We believe that the first quarter results are indicative of a growing demand and return for both the industry and Wyndham.”
The company anticipates the monthly improvement in demand from the first quarter to continue. For the second quarter 2002, RevPAR is expected be a 5.0 to 8.0 percent decline over the same period the prior year. EBITDA projections for the second quarter 2002 are from $122.0 million to $127.0 million. While cautiously optimistic about the future business, given the changing dynamics of the market, Wyndham has not increased guidance for the full year, but will provide revisions to the guidance on a quarterly basis.
As the industry momentum continues, the independent business traveler, who typically pays higher rates for their hotel stays, will drive an increase in average daily rates and RevPAR. As a result, Wyndham will become even more aggressive to capture this premium business. Wyndham ByRequest(SM), the brand`s guest recognition program, was created directly from consumer feedback to uniquely deliver the most personalized guest stay. Building upon the program`s success, Wyndham will announce a major enhancement to ByRequest that has a relevant and immediate benefit to the business traveler. This will further differentiate Wyndham, with its focus on the guest experience to drive preference, from its competitors with their focus on points to build loyalty.
Wyndham remains committed to its business plan focused on growing the Wyndham brand and the disposition of non-strategic assets. Since its implementation in June 1999, 83 assets have sold for gross proceeds of approximately $903 million. There are 56 non-strategic assets remaining to be sold, and the company has stated it will continue to hold these assets until lodging fundamentals return and values increase. Additionally, Wyndham entered into options to sell four parcels of vacant land adjacent to premier properties to develop high-end residential units. This transaction would allow non-EBITDA producing assets to deliver a long-term income stream through a carried interest in the venture`s profits and management of the units.
On May 3, Wyndham International amended its credit facilities to allow for the issuance of debt securities. This underscores, once again, the confidence that the banking syndicate has in the Wyndham International management team, as evidenced earlier in the year with the permanent amendment to the senior credit facilities approved in January 2002.
Wyndham International, Inc. offers upscale and luxury hotel and resort accommodations through proprietary lodging brands and a management services division. Based in Dallas, Wyndham owns, leases, manages and franchises hotels and resorts in the United States, Canada, Mexico, the Caribbean and Europe. For more information, visit www.wyndham.com. For reservations, call 800-Wyndham.