Good morning and welcome to the Wyndham Worldwide first quarter 2008 earnings call. (Operator Instructions)
I would now like to introduce today's conference host, Ms. Margo Happer, Senior Vice President of Investor Relations of Wyndham Worldwide. Ma'am, you may begin.
Thank you, [Candy]. Good morning and welcome to the first quarter 2008 Wyndham Worldwide earnings conference call. Joining us today are Steve Holmes, our CEO, and Gina Wilson, our CFO.
Before we get started, I just want to remind you that our remarks today contain forward-looking information that is subject to a number of risk factors that may cause our actual results to differ materially from those expressed or implied. These risk factors are discussed in detail in our Form 10K filed February 29, 2008 with the SEC.
We will also be referring to a number of non-GAAP measure. The reconciliation of these measures to the comparable GAAP measure is provided in the tables to the press release and is available on the Investor Relations section of our website, www.WyndhamWorldwide.com.
Stephen P. Holmes
Good morning. Thank you for joining us.
As you saw from our earnings release, we had a solid first quarter, with strong sales across all three businesses despite continued softening of the U.S. economy. We believe our global diversification and the flexibility of our model give us the ability to navigate economic weakness in the U.S., take advantage of opportunities internationally, and continue to grow and generate substantial value for our shareholders.
As you saw from the press release, we posted strong first quarter results, with net income excluding a rebranding charge of $62 million or 35% diluted earnings per share. That's at the top end of our guidance. Excluding the impact of deferred vacation ownership revenues in both periods - so really on an apples to apples basis diluted earnings per share for the first quarter 2008 would have been $0.48 compared to $0.42 in the prior year, a 14% increase in EPS.
We will close our first timeshare securitized financing for 2008 today. Gina will provide more details in a few minutes but let me hit the highlights.
The credit market is clearly challenging and the pricing of this recent financing was wider than previous deals. While timeshare sales in the industry remain strong, taking this financing as well as other planned securitizations into account, we are lowering the EBITDA range for our vacation ownership group by $10 million. We have also lowered our corporate expense range by the same amount to reflect additional cost containment measures we are implementing. Therefore, we are reaffirming our 2008 financial guidance for the overall company. And again, to reiterate, the Timeshare business remains very strong. the impact of higher financing costs are creating this lowering of the guidance.
Driver guidance remains unchanged except for some fine tuning in the rental transaction and price drivers at RCI. Gina will have more details on that in a few minutes.
Now let me review our results.
Results in Wyndham Hotel Group were in line with our plan, with revenues of $170 million and EBITDA of $46 million. Systemwide RevPAR for the first quarter of 2008 increased 2.7% from last year and comparable RevPAR was up 2.2%. In line with the rest of the industry, the RevPAR improvement was largely rate driven.
Our Super 8 and Days Inn brands again outperformed their competitive set, with domestic RevPAR growth of 2.4% and 1% respectively compared to a 1.4% decline in the economy segment.
Ramada also achieved domestic RevPAR growth in excess of its competitive set, with growth of 1.5%, while the midscale of food and beverage segment was essentially flat.
Our brands offer compelling value for their price point, an advantage in a soft economic environment as leisure and business travelers trade down. For example, Days Inn was recently nominated the top choice for travel buyers in the economy tier in the 2008 U.S. hotel chain survey conducted by Business Travel News.
While we are seeing some weakness in U.S. RevPAR growth, as I said earlier, we expect to remain within the guidance we provided in February. We have implemented cost containment measures and several initiatives to drive further value to our franchisees with the goal of increasing RevPAR.
Specifically, we're focusing on yield and revenue management, and from April through Memorial Day our field teams will primarily be focused on ensuring that our nearly 6,100 North American properties are positioned to maximize penetration, rate and yield indices.
Another key revenue generating initiative will be the launch of Wyndham Rewards, supported by our summer promotion in midMay. Importantly, Wyndham Rewards will offer consumers the opportunity to earn and/or redeem points at inventory across all our brands, giving us a great competitive advantage over other loyalty programs.
We're also benefiting from our geographic diversification. International RevPAR was strong, up 13%. We're achieving critical mass brand awareness in several areas. For example, in the U.K. the Ramada brand awareness grew from 58% to 68% over the past two years, and Days Inn brand awareness grew from 35% to 42% during the same period.
We had targeted China as one of our most significant growth opportunities and continue to strengthen our leading position as China's largest U.S.-based hotel chain, with 140 hotels open today and another 90 properties or 20,000 rooms under development.
We recently expanded our management business to the Ramada brand in China, where we will be managing 8 Ramada Plaza and Ramada Resort Hotels. The first property is a new build, 214-room Ramada Plaza in [Singshing], followed by a 321-room Ramada Plaza in Jiujiang. These two hotels are expected to open by year end.
We are about to launch a new Chinese website that will focus on cross-selling all of our brands in China, but also offer all of our products around the world. This will enable one-stop shopping for Chinese clients whether they are traveling domestically or anywhere else in the world.
With respect to the Wyndham brand, RevPAR at our managed hotels increased almost 9%. We have increased the international presence of the brand over the past two years from 20% to almost 35% of the total Wyndham room portfolio.
Our geographic diversity helps offset our exposure to the slowing U.S. economy, and we intend to continue growing the international portion of our lodging portfolio.
Turning to development, in the first quarter of 2008 we opened over 10,000 rooms, the highest of any first quarter since 2001. Overall, system size was up 2% compared to a year ago, which is slightly below our plan but we expect to catch up over the remaining three quarters.
The majority of this growth comes from international openings. Our total international room portfolio is now 20%, up from 17% a year ago. We are also seeing steady room growth in the Wyndham portfolio, which has increased by 11% from a year ago. We signed 158 contracts across all of our brands representing an increase of almost 13% from a year ago, adding a contract every 14 hours during the quarter.
Last quarter we told you that we had not seen a significant impact from the current credit markets on our franchise pipeline. This remains true today. Although some larger deals, mostly new construction deals are taking a little longer and credit terms may be tighter, financing is still available for them.
In terms of conversion, we are seeing some hesitancy where the property improvement plans require significant cash investments from the franchisees. However, we've been successful mitigating this through the breadth of our product offering. Where it may be too expensive to upgrade to one brand, we are able to offer the potential franchisee a less-expense option.
Our pipeline is strong, with almost 107,000 rooms, up 2% from December 2007 and 12% from a year ago, evidence of the continued interest in our brands. More than 35% of our pipeline is international, a significant increase from 21% a year ago. Almost half of the international pipeline represents new construction, positioning us well to achieve our international growth objectives. And further, the Wyndham brand makes up 21% of our total pipeline, with close to two-thirds of those being new construction deals.
Now turning to vacation exchange and rentals, first I want to welcome Jeff Ballotti to the Wyndham Worldwide team as the new leader of Group RCI. Jeff started at the end of March and has already made a strong impression on our associates and the developer community. We're all looking forward to working with him, and I am confident he will have a great impact on the Group RCI business.
Now in the business results, Group RCI had a solid quarter, with revenue and EBITDA both increasing 9%. These results are in line with our expectations and primarily reflect continued strong growth of our European rental businesses. Foreign currency translation helped results in the quarter, but underlying business growth, excluding currency impact, continued to be very positive.
In the Vacation Exchange business, the average number of exchange members was up 5%, reaching approximately 3.6 million members. Annual dues and exchange revenue per member was down 3% for the quarter, reflecting the very early Easter holiday this year, which shortened the peak booking season for our members.
RCI had a strong showing at the annual ARDA conference, where we had a chance to meet with many of our developer customers and industry participants. The industry as a whole is guardedly optimistic despite the current macro economic environment in the U.S. Developers were excited to meet Jeff and are enthusiastic about our commitment to help them grow using our services, including lead generation tools, data mining expertise, the relaunch of Ventures, which is our affiliate publication in the U.S., and Extreme Search, our new and well-received member rental web capability.
With Extreme Search, we are continuing to improve and expand our online search capabilities for the RCI business. We launched our enhanced web-based U.S. member rental platform in December and saw significant increase in web transactions during the first quarter. Online share of member rental transactions increased by 13 points for the quarter, up to 40%. We're building on this success by bringing these search tools to our online resort directory. The objective is to greatly enhance the member experience, gain efficiencies of online booking, and drive increased member exchanges and satisfaction.
The rental business was strong in Q1, with revenue up 15% or 6% excluding favorable foreign currency translation. Average net price per vacation rental was robust, increasing 18%, reflecting a weaker U.S. dollar as well as increased pricing. It improved transaction mix and the conversion of two Landal parts from franchise to managed properties.
The strong pricing offset some lower rental transactions, which were down 3% primarily due to softness in the U.K. rental market. We believe a cautious consumer outlook in the U.K. is resulting in shorter booking windows as well as lower U.S. member rental transactions, which are partially offset by increased yield as a result of our North American price increases. In Europe, Landal and Novasol continued to lead performance.
Turning to our Vacation Ownership business, we're pleased to report that the significant momentum we experienced in 2007 continues in 2008 with gross VOI revenues for the first quarter increasing 7% versus prior year. Our marketing programs continue to generate strong tour flow, driving 255,000 consumers to our network of sales centers in the first three months of 2008, a 6.3% increase year-over-year. And most importantly, we continued to efficiently convert these consumers into buyers, recording a 3.8% increase in volume per guest compared to the first quarter of 2007.
Our Timeshare business remains stable and well positioned, supported by a marketing strategy that leverages multiple channels and partners to continue to bring consumers into our showrooms. We've also seen the value of operating both on-site and off-site sales centers, making our product accessible to both the vacating and nonvacationing consumer. And we're seeing the very clear advantage of selling a points-based product, which creates flexible price points, ensuring that we can offer today's prospective buyers a purchase tailored to their needs. So even if some consumers may be tightening their belts, our model is proving effective at matching buyers with products they can afford and enjoy.
Our sales base remains strong, and we're driving continued long-term growth with new projects and additional inventory in several key locations.
For example, we recently unveiled the only major branded vacation ownership resort in West Yellowstone, Montana, with the opening of WorldMark Yellowstone Resort.
In Southern California we opened new resorts in both San Diego and nearby Oceanside, and added the Wyndham Palm Spring Hotel to the portfolio of products now available to our timeshare owners.
In Waikiki, we've acquired the Royal Garden Hotel and Spa, which, following a two-phase renovation and conversion, will become our industry leading 14th property in the Hawaiian Islands.
In Las Vegas, we announced plans to build the Wyndham Desert Blue, and in Washington, D.C., construction of the Wyndham Vacation Resorts and National Harbor property is now under way.
In keeping with our strategy to develop resort properties in both major destinations and regional, drive-to locations, we've added new inventory in Panama City, Florida, New Braunfels, Texas, and Santee, South Carolina.
We made considerable progress last year in fully leveraging the Wyndham brand across the company. A significant portion of this was accomplished within Vacation Ownership, where we aligned our historical brands Fairfield and Trendwest with Wyndham.
In 2008, we will push further and evolve our timeshare branding to an umbrella of Wyndham brand with some exciting new products. The new products are designed to offer more flexibility and benefit to our current and future owners. We will allow greater access to Wyndham Hotel properties through Wyndham Rewards and access to additional usage options outside our owner's home club, as well as allowing full promotion of the Wyndham brand through Wyndham Vacation ownership.
The conversion to the Wyndham brand resulted in a $17 million noncash after-tax charge for some trademark write-offs. Wyndham Vacation Ownership tours more than 1 million consumers per year. These changes allow the Wyndham brand to be more prominently displayed in our Timeshare sales presentations, benefiting the continued development of the brand. We're excited to take this important next step in the evolution of the Wyndham brand.
As many others have noted before, the Timeshare segment as a whole is extraordinarily resilient and has historically performed well through economic downturns and other external, uncontrollable events. That's a big part of why we find this business so attractive.
We're maintaining our sales and marketing momentum even as we face some macro economic headwinds because of the strong business fundamentals that we've been sharing with you since day one. Based on our performance during the first three months of 2008, we remain confident in our ability to execute our strategies and deliver solid results through the balance of the year.
Let me now pass the call over to Gina, who will provide some more detail and walk you through the financials, and then I'll come back to briefly wrap up before we take your questions. Gina?
Thank you, Steve. Let me take a few minutes to go through our results and then we'll take your questions.
First, in the Lodging business, as Steve mentioned, results were in line with our expectations. Reported results for 2008 include an additional $12 million in property management reimbursable revenues, a 74% increase over the first quarter of last year, reflecting the additions of the Rio Mar, Chelsea London, Princeton, New Jersey, and other properties into the system since last year. These revenues produced no EBITDA and therefore depressed reported margins.
Our Royalty, Marketing and Reservation revenue compared to 2007 was depressed despite RevPAR growth of 3% and a 2% increase in rooms primarily due to a higher mix of international properties which generally carry lower rates than domestic properties as well as amortization relating to development advances which previously had been recorded as an operating expense and is now recorded as an offset to revenue. This had no impact on EBITDA.
For a clearer look at efficiency in this business, first quarter 2008 adjusted franchise margin remained strong at 72% compared to 71% in the first quarter of last year. As Steve discussed, overall the business is tracking to plan despite the slowing U.S. economy and we remain comfortable with our guidance for the year.
Now moving on to Vacation Exchange and Rental, Group RCI revenues and EBITDA were solid and in line with our expectations, so we are making no change to guidance. Vacation Exchange drivers are also in line with our expectations for 2008, however we are rebalancing our Vacation Rental drivers to reflect recent shifts in the mix of business and improved pricing. Our current view is that Vacation Rental transactions will increase 2% to 4% and price per Vacation Rental transaction will increase 8% to 10% this year. We went to remind you that this business has had some benefit from a weaker dollar and a reversal of that trend could affect our future results.
Now let's turn to Vacation Ownership. First quarter results, which reflect the effect of $82 million in deferred revenues, were in line with expectations. Gross VOI sales for the quarter were 7% ahead of last year, also in line with our expectations. The performance of the business is solid, particularly when you remember that Q1 '07 gross VOI results were exceptional at 20% growth over '06 as a result of new marketing programs, price increases and sales office openings throughout the last three quarters of 2006. Drivers in this business are all tracking to plan and are on target for the year.
The way we're thinking about this segment's performance for the quarter, adjusting for the effect of the deferred revenue in '08 and '07 as well as the re-branding charge of $28 million as well as separation and related costs of $3 million would show revenues up 9% and EBITDA up 14%, which we consider very good performance. The revenues we deferred in Q1 will show up in GAAP revenues as we complete the projects under construction and that's embedded in our sense of how the rest of the year's reported results should play out.
As we told you on the last call, our 2008 growth assumptions for gross VOI sales is low double-digits and, again, what we see so far this year leads us to conclude that we'll achieve it.
Remember that Vacation Ownership guidance for the full year reflects $40 to $100 million in deferred revenue. On our last call, our guidance for second quarter deferred revenue was $5 to $20 million. We now expect deferred revenues of $25 to $35 million in the second quarter, only a small amount from deferred revenue in Q3, and a pickup in reported revenues in Q4 from deferred revenue becoming reportable under GAAP.
Again, I caution you that construction schedules are variable and subject to change, especially in the out months. These estimates represent our current best view, and we'll keep you updated as appropriate.
Regarding the consumer finance portfolio, as we told you in February, we're seeing some stress, as you would expect in this environment. We're watching the consumer credit environment closely and stepping up our collections activities for these portions of the portfolio that are showing more signs of stress, however the securitizations are performing within their pre-determined tolerances and we don't see any difficulties in continuing to operate within them at this point.
You'll notice that on Table 4 that the Q1 '08 provision for uncollectible receivables is higher relative to gross VOI sales than it has been in recent quarters, which we think is appropriate in the current environment. We'll issue our 10Q shortly and you'll see that write-offs at about $86 million or 2.6% of the portfolio for the quarter are up slightly from 2.1% last year, but is consistent with Q4 '07.
We're currently expecting to see defaults run at a slightly higher rate than last year, and if that plays out the way we think you should expect to see corresponding increases in the provision, which, again, we believe is prudent. This could put some pressure on the top line since the provision is netted against reported revenues, but at this point we remain comfortable with our current revenue guidance for the year.
We're very pleased to announce a term securitization of $200 million, and we're still looking at other securitization options to supplement this liquidity. The all-in cost of the term deal came in right around 8%, or just over 200 basis points above the cost of our November 2007 transaction on a weighted average basis. The difference between the cost of this recent securitization and our last term deal translates to a P&L impact of about $2 million in 2008 and is included in our guidance.
As Steve mentioned, we had a $17 million non-cash after-tax charge in the quarter due to the Wyndham re-branding initiative. We expect another incremental $3 million in trademark amortization over the next 12 months, with about threequarters of that in 2008.
Let's move to update our 2008 guidance now.
As we mentioned before, both Lodging and Vacation Exchange and Rentals are performing much as we expected so far this year, and we're reaffirming their guidance and EBITDA ranges for 2008.
For Vacation Ownership, although we're pleased with the execution of our current securitization activity, the volatility of the financial markets is causing our borrowing rates to increase. At this point, we do not expect the trend to reverse for the remainder of the year. As I mentioned, our current expectation for 2008 defaults is slightly higher, but we're countering that with a series of cost containment activities that should not impact the strength of the business overall.
Consequently, we're updating our Vacation Ownership EBITDA guidance principally to reflect the impact of external market conditions, and we're reducing this segment's EBITDA range to $405 to $425 million, down from our previous guidance of $415 to $435.
We've been especially mindful of overhead costs given the uncertain economic environment, as you can see in our first quarter Corporate segment's results, and we will continue to manage them carefully. As a result, we're reducing our corporate expense range to $50 to $60 million for the year, down from $60 to $70 million.
The changes to our Vacation Ownership and Corporate EBITDA expectations for the rest of the year offset each other, so we are not changing our full year 2008 adjusted net income guidance of $401 to $429 - that's $401 to $429 million - or our EPS guidance of $2.23 to $2.38, which assumes approximately 180 million shares outstanding. Each of these ranges exclude the impact of the re-branding charge we took in Q1 as well as legacy items.
For the second quarter, we are offering diluted EPS guidance of $0.46 to $0.48 based on weighted average shares of approximately 180 million. This is slightly lower than consensus, reflecting our updated deferred revenue assumptions for the quarter and, again, $25 to $35 million or $0.04 to $0.06 per share, assuming an average margin of 50% which will be recognized in future quarters as construction progresses. Again, this is updated versus our prior Q2 deferred revenue expectation of $5 to $20 million.
And now I'll turn it back to Steve.
Stephen P. Holmes
I hope you come away from today's call with the sense that, despite some softening in the U.S. economy, our business continues to perform well and we're maintaining a sharp focus on executing our strategic plan. We're mindful that the economic headwinds could get stronger over the remainder of the year, and we're taking prudent steps today to manage costs and deliver the results we set out to achieve.
As the closing thought for our prepared remarks, I'd like to suggest that you consider spending some or all of your economic stimulus check to enhance your vacation plans for 2008. And if you aren't one of those fortunate folks getting a check from President Bush, please pass the thought along to your friends and family. We love helping to put people on vacation through our Hotels, Vacation Exchange and Rentals or our Timeshare offerings.
With that, let me open the call to your questions. Candy?
Thank you. (Operator Instructions) Your first question comes from Steven Kent - Goldman Sachs.
Steven Kent - Goldman Sachs
Steve, could you just talk a little bit about the deferred revenue on the Timeshare? I guess I'm still not completely sure of how this is laying out. I think Gina mentioned that there was some construction issues that are causing this quarterly volatility so could you just review that again? And maybe, especially in light of the construction issues, how secure are you that these construction delays or construction issues won't go into '09 or further?
Stephen P. Holmes
It's not really a construction issue. It's not a matter of construction being delayed or there being some slowdown in construction. Really what it is is it's a sales mix issue, and let me try to walk you through an example.
We're building a project in Orlando in our Bonnet Creek site. Because we sell with a distributed system, that Orlando product can be sold in any one of our 100-plus sales offices around the country. Depending on how sales are going in different offices, we'll shift inventory from being sold just out of Orlando, for example, to also selling an Orlando product in both Orlando and Las Vegas, as well as other offices. If that shift results in greater sales in a location that is in the process of being constructed, we then only recognize the revenue to the degree that the site has been built.
So it really is not that there's a slowdown in construction and, in fact, our construction team is incredibly good at meeting their schedules and their timing. It's really just a question of where the sales mix is, both how we're putting the sales product out to the sales offices as well as what offices may have a great month or a great quarter and they're selling a lot of that particular product. So it's really not a function of construction at all.
And what we talked about in the second quarter is a similar situation. We see the mix of the product as we're putting it out to the market through our sales offices to be resulting in a little bit more deferred revenue. The fact is that we're [in] all of our construction plans and so we're confident that that will turn around as that product that is being sold right now is completed for construction and is put into use.
Does that describe the question? We do get a lot of questions around deferred revenue.
Steven Kent - Goldman Sachs
I think that was helpful, thanks.
Stephen P. Holmes
I mean, as we said, there's no change in the full year. This is just a shift between the second quarter basically and the second half of the year.
Your next question comes from Joseph Greff - Bear Stearns.
Joseph Greff - Bear Stearns
Can you just remind us when the next time is that you really need or would like to do the next Timeshare securitization?
Stephen P. Holmes
Well, we're constantly in the market, Joe, and we're constantly feeling out where the best opportunities lie.
We wanted to get something done in the first half of the year, and we obviously are announcing today this $200 million securitization. We will continue to work on securitizations during the second quarter and also the third quarter. We do want to get some more securitizations done, and we'll continue to work on it.
We're very mindful of the costs that we're incurring by going into the market right now, so we're being very cautious and we try to execute as well as possible.
Joseph Greff - Bear Stearns
So I presume within the Vacation Ownership EBITDA guidance you have at least one more securitization in there and you're assuming - I'll put it this way - assuming higher costs similar to the higher costs that you saw in this more recent one that you closed today?
Stephen P. Holmes
Yes, absolutely. We've built that in. That's why we guided down a little bit for WVO, for our Vacation Ownership group, because we're assuming that these higher costs we're seeing - which are, frankly, a little bit higher than we had originally thought - that this will continue at at least this level for the rest of the year as we get other securitizations done.
Kind of the good news is, because we don't report gain on sale, this is really just a cost that we will cover over time as opposed to a hit in any particular period of time.
Joseph Greff - Bear Stearns
And if I could go back to that Table 4 that you guys referred to, as you think about provision for loan losses as a percentage of receivables or a percentage of sales, are you assuming that that percentage bumps up from Q1 levels?
Yes, we pretty much are at roughly the same level that we were seeing in the fourth quarter.
Joseph Greff - Bear Stearns
And going forward, the 1Q was the same percentage as the 4Q but going forward you have the same, I guess, year-over-year delta.
I said we're expecting to have a higher level of defaults compared to prior year for the remainder of this year, and that's included in our updated guidance.
Your next question comes from William Truelove - UBS.
William Truelove - UBS
In terms of, now that you've got the re-branding done on your Timeshare division and I believe that re-branding was being done over time, can you tell us what the differential has been in terms of your sales expense as a percentage of the revenues from those that have been, let's say, re-branded for quite some time, so we can get a sense as to the cost savings associated on the marketing expense? And then secondly, I believe you just recently announced your first Wyndham project - or Wyndham brand - out in China. What's your outlook for the Wyndham brand in China going forward?
Stephen P. Holmes
On the re-branding side, it's still pretty early to tell. The fact is we re-branded quite a few of the properties during 2007 and we started to shift the marketing over to the Wyndham brand marketing. But honestly, it's a little bit too early to tell.
We have seen great efficiencies in some of the markets where we made an early changeover, but I wouldn't conclude too much from it, honestly, until we have a chance to really see the results and analyze the results. I don't mean to be evasive on that. I just don't think we know completely yet.
We're still confident and certainly if you stopped into any of our sales offices and talked to our sales force as well as our marketing team, they teem with exuberance. But I just want to make sure we're cautious about setting expectations because it's not a flip the switch, as we've said before; it's more of a gradual improvement that will ultimately result in improved margins in this business.
With respect to the second part of the question, which is the question about China, we announced that we will be managing our first Wyndham in China, which will hopefully open later this year, beginning of next year. That's down in [Shaman]. What I was talking about today was the Ramada properties that we'll be managing there.
With respect to the Wyndham property, with the Wyndham brand, we do expect to continue to grow that brand in China. We think there's tremendous opportunity to fill the needs in not only the Tier 1 but the Tier 2 cities as well, where the domestic travel - that group of 400 million people who up to now really haven't traveled all that heavily, that middle class will start to travel. It will need hotel accommodations. We are heavily focused on helping to meet that need.
Your last question comes from Amanda Bryant - Merrill Lynch.
Amanda Bryant - Merrill Lynch
I'm assuming given that you're holding your lodging guidance for the segment for the full year, implied in that was RevPAR growth of 3% to 5%, I'm assuming you're still holding that, and if so, what kind of gives you confidence that you can hit that RevPAR assumption given the continued weakness in the U.S. economy?
Stephen P. Holmes
Well, as you're aware, we brought down our RevPAR guidance in the fourth quarter call and adjusted it down from 4% to 6% to 3.5%, so we did take into account what we're seeing as trending.
There's two factors that I think will influence that outcome. One is our international growth is becoming a more and more significant portion of our overall mix of business on the Hotel side. In addition, we're adding Wyndham properties that tend to have a higher RevPAR, obviously, which will help our lift.
So when we give you this guidance, we're taking the best information we have available into account and coming up with what we think is achievable based on our business mix, both internationally as well as our brand mix.
Amanda Bryant - Merrill Lynch
So it's safe to assume that if you back out changes in the mix that on a same-store basis the RevPAR growth would certainly be lower than the indicated 3% to 5% range, that's fair. Is that correct?
Stephen P. Holmes
Well, sure. As we've said, the Super 8 and Days Inn brands outperformed the economy segment, which was actually negative in the quarter, but it certainly wasn't - even our growth, which beat the economy as a whole, wasn’t up in that 3% to 5% range.
At this time we're showing no questions.
Stephen P. Holmes
Okay. Well, we love to be clear with our presentation, and obviously we were this quarter. So we appreciate everybody's participation on the call and look forward to talking to you on the next quarter's call. Thank you very much, Candy.
Thank you, and thank you for participating in today's conference. Have a good day.
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