Wyndham Hotels & Resorts added nearly 5,000 rooms outside of the U.S. to its portfolio in the first half of 2021, while in the U.S., the company's system size shrank as pandemic-related supply chain delays affected new construction and conversions.

Still, Wyndham's global portfolio has grown this year from 795,900 to 798,000 rooms, and it has more than 1,400 hotels and 190,000 rooms in its development pipeline, representing a 5.8% increase over the second quarter of 2020.

"We opened over 70% more rooms than we did last year," Wyndham President and CEO Geoff Ballotti said on the company's second quarter earnings call.

The company opened 9,800 rooms in the second quarter, "which was nearly 305 more rooms than we opened in the first quarter," he added.

In the second quarter, Wyndham "awarded 154 new contracts to developers, compared to 116 in the second quarter of 2020 and 173 in the second quarter of 2019," according to a company's earnings release.

"Approximately 64% of the company's development pipeline is international and 74% is new construction, of which approximately 34% has broken ground," the release states.

"Net room growth will be strong, especially in China where our direct franchising business has now grown 7% on a year-to-date basis," Ballotti said. "Despite the persistent travel restrictions for our developers across many European countries, our team there still achieved a positive 1% net rooms growth in this region year to date."

He added that conversions and new construction are also picking up.

"We awarded approximately 25% more conversion contracts that were awarded both in the second quarter of 2020 and in the first quarter of this year. Despite a more muted new-construction environment, our team successfully executed over 90 new-construction contracts in the quarter — 20% more than we awarded in 2019, bringing the total of new-construction contracts signed to over 390 since the onset of the global pandemic," he said.

He added that Wyndham is "still expecting to open more than 50,000 rooms this year, which would be over 80% of what we opened back in 2019, when we ran 3% net rooms growth."

"With over a third of that 50,000 rooms now achieved, we feel we're on pace with our historical trends," he said. "And in terms of of what we're seeing on the conversions front, it just continues to pick up. Conversion rooms, as a percentage of our total, continue to increase from 50% of our global revenues last year to 70% this year."

He said financing for new construction "is still out there for franchisees that are looking to develop."

"We haven't seen any developments in our pipeline fall out yet," he said, noting that it's a "much more localized and regionalized lending environment than it is in the more upper-upscale markets."

Wyndham also provided full-year guidance, indicating more clarity into the financial impact of the COVID-19 crisis and the recovery.

For full-year 2021, the company projects:

• Fee-related and other revenues of $1.16 billion to $1.19 billion.
• Adjusted net income of $244 million to $254 million.
• Adjusted earnings before interest, taxes, depreciation and amortization of $525 million to $535 million.
• Rooms growth of 1% to 2%.
• A revenue-per-available-room increase of approximately 40% versus 2020, or a decline of approximately 16% compared to 2019.
• Free cash conversion from adjusted EBITDA of approximately 55%.

Wyndham's performance in the second quarter was still short of the levels achieved pre-pandemic in the same quarter in 2019, but at least in the U.S., it was an improvement over the first quarter of 2021.

The company reported RevPAR at its U.S. hotels was down 5% from 2019 in the second quarter, compared to a decline of 25% in the first quarter.

Over the same period, RevPAR outside of the U.S. was down 44% from 2019, representing a 68% decline in the Europe, Middle East and Africa region and a 7% decline in China.

However, by segment, the company's economy brands outperformed 2019 levels, with second-quarter RevPAR growing by 4%.

In June, Wyndham's performance was stronger overall.

"For the month of June, not only did our domestic economy RevPAR increase by 680 basis points compared to June of 2019, but [RevPAR for] our overall domestic system, including many upscale and upper-upscale brands, exceeded June of 2019 by 70 basis points," Ballotti said. "This was the first month that this has occurred since back in February of 2020."

RevPAR at the company's economy hotels in June was up 7% over June 2019.

The summer leisure demand surge in the U.S. particularly has been good for Wyndham, Ballotti said.

"Our franchisees are naturally feeling considerably more confident than they were at the end of last year. For the first time since 2019, we had no STR markets this quarter with occupancies lower than 30%," he said.

"And with Sunday and Thursday nights now rivaling Friday and Saturday nights from an occupancy improvement standpoint ... as we're approaching 2019 levels, our franchisees have been driving average daily rate. In June, domestic ADR exceeded 2019 by 9%. And this is only accelerated in July, with month-to-date ADR surpassing 2019 ADR by 10%."

Compared to the second quarter of 2020, when the pandemic was at its peak, Wyndham's net income increased 139%, from a net loss of $174 million to $68 million. Adjusted EBITDA was $168 million, compared to $66 million in the second quarter of 2020.

As of press time, Wyndham Hotels & Resorts’ stock was trading at $72.06, up 21.2% year to date. The S&P 400 MidCap Index was up 19.1% for the same period.