Wyndham Hotel Group

[Pages:19]Wyndham Hotel Group

Steven A. Rudnitsky President & CEO

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2

Strategic Overview

Wyndham Hotel Group has evolved from a U.S. economy-centric franchise business to an integrated, multi-segment, international franchise and management company.

2002

2003

2004

2005

2006

Project Restore

Revamped QA/ Rate and Inventory

Processes

Strategic Evolution

Introduced Field Support Organization

Leading Economy segment player Maximize core brand operating performance

International expansion

Upscale management company capabilities

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Global Brand Portfolio

North America Segments

Upper Upscale

Upscale

North America Brands

Wyndham Grand Collection

Wyndham Hotels and Resorts

Wyndham Garden Inn

Mid-scale Economy

Wingate Inn Ramada

Baymont/AmeriHost Inn Howard Johnson

Days Inn Super 8 Travelodge Knights Inn

3

International Segments

Luxury

International Brands

Wyndham Grand Collection

First Class Mid-Market

Wyndham Hotels and Resorts

Ramada Howard Johnson

Budget/Economy

Days Inn Super 8

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4

Customer Value Proposition

Brand strength Three of 10 brands have consumer awareness over 90% Consumer database with over 70 million names Breadth of brands provides range of franchising options Worldwide distribution in all key regions

Brand growth, domestically and internationally Super 8 and Days Inn: 35% of Economy segment; 100+ RevPAR index Ramada International: opened more than 7,000 rooms since December 2004 acquisition

Ability to drive revenue TripRewards members generate 26% of all consumed nights Reservation contribution at approximately 30% Field staff providing operational and revenue management support Brand Web sites: projected 50 million visitors, 17% revenue growth year-over-year through web reservations

Leverage scale and efficiencies Central reservations system Information Technology, franchise support infrastructure Marketing and worldwide sales RCI worldwide footprint

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Franchise Hotel Model

Weighted Average Rooms

X

Average Daily Rate

X

Occupancy X

Royalty Rate

X

365 Days

=

Royalty Revenues

"RevPAR"

Weighted Average Rooms

X

Average Daily Rate

X

Occupancy

X

Marketing & Reservation

Rate

X

365 Days

Marketing &

= Reservation

Revenues

Royalty Revenues

+

Marketing & Reservation Revenues

X 0% + Other Revenue ?

Operating Expenses

=

?TripRewards ?Management Fees ?Reimbursable Costs ?Initial Fees

EBITDA

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Performance

+8.4% RevPAR CAGR over the past four years ? +6.3% CAGR for the industry

2002

2006E

Project Restore

Ongoing Operational Improvement

Franchise sales

International development Wyndham Hotels and Resorts

Baymont

QA

RevPAR

$25.33

Royalty/Mktg. and

Res. Revenue ($M) $366

EBITDA ($M)

$162

For every kind of traveler. For every kind of trip.

$35.00

$465 - $475 $200 - $210

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Performance

7.6% 8.6% 11.7% 9.6%

Wyndham Hotel Group has exceeded Economy segment RevPAR performance since 2003

12% 10%

8% 6% 4% RevPAR 2% Growth 0% -2% -4% -6% -8%

3.0% 4.1% 4.7% 0.6%

-3.3% -6.7% -1.6% -6.8%

Economy Mid-scale w/F&B Mid-scale w/o F&B Wyndham Hotel Group

4.7% 6.1% 7.2% 5.9%

0.7% 2.3%

-1.4% -0.4%

-3.7% -4.0% -0.6% -5.5%

2000

2001

2002

2003

2004

2005(1)

Sources: PricewaterhouseCoopers Hospitality Directions journals, September 2006 (December 2005 for 2000 data) (1) Excludes Ramada International

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Global Distribution

Strong progress toward global diversification

2002

2006E

98.8%

1.2%

0.5% 0.2%

0.5%

90.0%

10.0%

3.4%

5.8%

0.8%

North America EMEA APAC LAM

Note: As measured by number of rooms

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9

North America Segment Distribution

Expanding into the faster-growing Mid-scale w/o F&B and Upscale segments.

2002

3.3%

2006E

11.6%

6.8% 4.8%

30.5%

66.2%

22.9%

65.5%

Economy/Mid-scale w/F&B

Mid-scale w/F&B

Mid-scale w/o F&B

Upscale

Note: As measured by number of rooms

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10

Competitive Comparison

Wyndham Hotel Group is the largest hotel group in the world, measured by number of hotels.

Top Ten Hotel Companies (2005) (Ranked by Total Global Hotels)

Wyndham Worldwide Choice Hotels International Best Western International Accor InterContinental Hotels Group Hilton Hotels Corp. Marriott International Carlson Hospitality Worldwide Starwood Hotels and Resorts Worldwide Global Hyatt Corp.

Number of Hotels

6,344 5,897 4,195 4,065 3,606 2,817 2,741

922 849 731

Number of Rooms

532,284 481,131 315,875 475,433 537,533 485,356 499,165 147,129 257,889 134,296

Sources: Hotels Magazine, July 2006 for competition

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Industry Overview: United States

Industry RevPAR forecasted to grow +5.9% in 2007

RevPAR Growth by Segment in 2007

Economy

5.9%

Mid-scale w/ Food & Beverage

5.9%

Mid-scale w/o Food & Beverage

7.9%

Upscale

7.2%

Upper Upscale

6.3%

Industry supply growing 1.6% in 2007

ADR increases driving growth across all segments

Macroeconomic factors that may affect industry drivers

Corporate profit growth is slowing

RevPAR growth moderating

Sources: PricewaterhouseCoopers September 2006, Merrill Lynch Lodging Supply Watch

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12

Industry Overview: International

Internationally, the industry is also expected to grow.

Total Hotel Revenue by Region

2005 Gross Revenue $U.S. Billion

% Forecast Growth Rate 2006-08

U.S.

124.0

+8.2

Total Europe W. Europe E. Europe

133.2 121.9

11.3

+2.3 +1.2 +14.1

Asia Pacific China India Japan

110.2 15.6 1.3 80.0

+4.3 +15.0 +35.7

-0.4

Latin America Mexico

23.8

+16.3

6.9

+5.9

Sources: Euromonitor Integrated Market Database ? Dec. 2005 for International data; PricewaterhouseCoopers ? Sept. 2006 for U.S. data

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13

Industry Overview: International

Large percentage of small chains/independent hotels offers significant conversion opportunities.

U.S. 33% 67%

Total Europe

Independent Branded

Asia Pacific

Latin America

61%

39%

48%

52%

55%

45%

Small Chain/Independent Large Chain Sources: Euromonitor Integrated Market Database ? Dec. 2005 for International data; STR for U.S. data

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Industry Overview: International

Fastest growing international segments are Mid-market and Budget/Economy.

U.S.

Luxury Upper Upscale Upscale Mid-scale Economy

% Revenue

7.5% 30.8% 16.3% 33.3% 12.0%

RevPAR

% change 2001-2005

$174.60

+4.0%

$100.06

+3.0%

$72.16

+3.2%

$47.91

+3.7%

$28.45

+1.7%

Europe

Luxury First Class Mid-Market Budget/Economy

% Revenue

10.2% 61.3% 24.4%

4.1%

RevPAR

% change 2000-2005

$244.12

-4.2%

$101.28

-1.5%

$72.10

+3.7%

$58.75 +13.6%

Asia

Luxury First Class Mid-Market Budget/Economy

Sources: International data: Deloitte & Touche same store analysis 2005 U.S. data: PricewaterhouseCoopers, September 2006

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% Revenue

20.8% 68.5% 10.3%

0.4%

RevPAR

% change 2000-2005

$102.69

+6.1%

$81.99

-3.7%

$62.96

+16.0%

$59.99

+14.1%

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Growth Strategies

Optimize performance of North American Economy/Mid-scale portfolio

Operating Growth

Revenue management program New property management system Increase sales/marketing efficiency Restructure worldwide sales

System Growth

Identify target markets to fill in distribution Enhance customer service culture Capitalize on Baymont brand value

proposition Pursue portfolio conversions and tuck-in

acquisitions

Position Wyndham flagship and Wingate brands as value-added alternatives to competitive brands

Implement brand standards Integrate loyalty program Invest in sales/marketing Revenue management program

Invest in high RevPAR strategic assets Execute timeshare/mixed-use opportunities Align Wingate

Grow International core brands: Wyndham, Ramada, Days Inn, Super 8, Howard Johnson

Refine global brand positioning Invest in sales/marketing to drive

reservation contribution Implement essential operational

and system efficiencies Utilize RCI global infrastructure

For every kind of traveler. For every kind of trip.

Pursue tuck-in acquisitions and multi-unit development deals

Drive mixed-use opportunities Leverage RCI developer network

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Wyndham Master Brand Strategy

Wyndham Vacation Ownership

Wyndham Collection

Historic Boutique Grand Bay International

Wyndham Hotels and Resorts

Wyndham Garden

AAA 4+ diamond Major markets Original

architecture Distinctive dining/

bar Strong local

identification

AAA 3, 4 diamond Major urban &

resort destinations Restaurant/bar-

casual dining Meeting/event

facilities Full fitness

facilities

AAA 3 diamond Major/Secondary

markets Casual/select- F&B

service Limited meeting

space Fitness center

Wingate by Wyndham

AAA, 2, 3 diamond Secondary markets 80+ rooms 24/7 F&B mart Fitness center

For every kind of traveler. For every kind of trip.

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