Wyndham Worldwide Corp , franchiser of Days Inn, Ramada and Super 8 hotels, posted better-than-expected quarterly profit on Wednesday and said it was tripling its quarterly dividend.
The company reported net income of $73 million, or 40 cents per share. A year earlier, it posted a net loss of $1.36 billion, or $7.63 per share, hit by charges linked to its vacation ownership program.
Analysts on average had expected the company to earn 37 cents, according to Thomson Reuters I/B/E/S.
The company's chief executive said travel demand was gradually picking up, and Wyndham's upper-upscale hotels had done particularly well at the end of 2009.
Our view is that there has been a gradual improvement, CEO Stephen Holmes said in an interview. The end of the year was better than the beginning of 2009.
In the fourth quarter, revenue rose to $913 million from $911 million a year earlier. In its hotel group, revenue per available room fell 11.9 percent.
The company said it would boost its quarterly dividend to 12 cents per share from 4 cents and would resume share repurchases under an existing $200 million buyback plan. The repurchase program has $157 million in remaining capacity. The timing of buybacks is subject to market conditions.
Wyndham's upscale hotels include its Wyndham Hotels and Resorts brand. The bulk of its portfolio is in the economy to mid-scale segment of hotels.
Clearly, business travel has been the most impacted portion of the travel industry during this downturn, and that is obviously a big contributor to the upscale and upper-upscale, Holmes said. You may be seeing the return of business travel.
He added that at Wyndham hotels it manages, room rates were higher in January 2010 compared with a year earlier. He said upper-upscale hotels may recover in mid-2010, while economy hotels may be lagging a bit behind.
(Reporting by Deepa Seetharaman; Editing by Lisa Von Ahn and John Wallace)