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Wyndham Hotels (WH), WaterWalk Team Up, Boost Upscale Line-up

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Wyndham Hotels & Resorts, Inc. (WH - Free Report) recently announced a strategic collaboration with WaterWalk to form the WaterWalk Extended Stay by the Wyndham brand. This marks the company’s third extended stay brand, joining the likes of ECHO SuitesSM Extended Stay by Wyndham and Hawthorn Extended Stay by Wyndham.

The collaboration aligns with the company's ongoing expansion efforts in key markets such as Tucson, Jacksonville and Wichita. The agreement involves the addition of 11 hotels and more than 1,500 rooms into the Wyndham ecosystem.

The addition of WaterWalk bolsters the company's Upscale Extended Stay portfolio, empowering owners to leverage the substantial historical investment in U.S. infrastructure, potentially unlocking a $3.3-billion opportunity in additional room revenues.

Positioned firmly within the upscale segment, WaterWalk offers a fresh perspective on the traditional extended stay concept through its distinctive LIVE|STAY model. Furnished STAY units cater to guests seeking a conventional extended-stay experience, while unfurnished LIVE units provide guests with the flexibility to personalize their long-term living space. This adaptable model serves as a strategic asset for the company, enabling units to respond dynamically to market and guest preferences in real time, benefitting owners, operators and guests alike.

The company is optimistic concerning the collaboration and anticipates the initiative to drive efficiencies, performance, and expansion in the upcoming periods.

Emphasis on Expansion

WH is committed to expanding its global footprint and seizing opportunities in international hotel markets. The company's development pipeline includes more than 1,900 properties and around 240,000 rooms across 57 countries, including eight where it currently has no presence. As of Dec 31, 2023, approximately 42% of the pipeline was located in the United States, with the remaining 58% spread internationally. Within the pipeline, about 79% of projects are designated for new construction properties, with 34% already underway and 21% presenting conversion opportunities.

WH anticipates the momentum in unit additions to persist for some time. Attributes of improvement in franchise retention rate and no slowdown in new construction projects are likely to aid the company in the upcoming periods. For 2024, WH anticipates its net room growth to rise 3-4% on a year-over-year basis.

Zacks Investment Research
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Shares of Wyndham Hotels have gained 10% in the past six months compared with the industry’s 29.7% growth.

Zacks Rank & Key Picks

Wyndham Hotels currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Consumer Discretionary sector include:

Royal Caribbean Cruises Ltd. (RCL - Free Report) sports a Zacks Rank #1 (Strong Buy). RCL has a trailing four-quarter earnings surprise of 26.4% on average. Shares of RCL have surged 115.4% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for RCL’s 2024 sales and earnings per share (EPS) indicates a rise of 14.7% and 47.9%, respectively, from the year-ago levels.

Trip.com Group Limited (TCOM - Free Report) carries a Zacks Rank #2 (Buy). TCOM has a trailing four-quarter earnings surprise of 53.1%, on average. Shares of TCOM have gained 30.2% in the past year.

The Zacks Consensus Estimate for TCOM’s 2024 sales and earnings per share (EPS) indicates a rise of 18.2% and 8%, respectively, from the year-ago levels.

Hyatt Hotels Corporation (H - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 17.8% on average. Shares of H have increased 41.3% in the past year.

The Zacks Consensus Estimate for H’s 2024 sales and EPS indicates a rise of 3.5% and 27%, respectively, from the year-ago levels.

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