Wyndham Hotels aims for 3x to 4x leverage, then plans to remain there

By Devika Patel

Knoxville, Tenn., June 7 – Wyndham Hotels & Resorts, Inc. plans to get its debt-to-EBITDA leverage ratio back to its targeted range of 3x to 4x over the next six to 12 months, and it intends to stay within that range unless there is a good growth opportunity to merit going above 4x leverage.

“We came into the pandemic with a target leverage range of 3x to 4x and liquidity of about $750 million, and we continue to believe that that’s the right balance for our business,” chief financial officer Michele Allen said at the Goldman Sachs Travel and Leisure Conference on Monday.

“That leverage range affords us tremendous optionality, and it provides us with plentiful liquidity and access to affordable debt.

“I think, at this balance, we’re optimizing cash flow and shareholder return at the same time,” she said.

The company may climb out of its target range for the right growth opportunity, but expects to stay within that range predominantly.

“We’re not opposed to pushing the leverage for M&A, so long as we can get back within our range within a reasonable timeframe,” Allen said.

Leverage is expected to come down to the target range over the next year, entirely through EBITDA generation.

“We don’t think we’re going to have to spend money to get back within our target leverage range of 3x to 4x,” Allen said.

“We think we’re going to get there all through EBITDA generation over the next six to 12 months,” she said.

Wyndham Hotels is a Parsippany-Troy Hills, N.J.-based international hotel and resort chain.

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