EX-99.1 2 filename2.htm

Use these links to rapidly review the document
TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS

Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

Exhibit 99.1

LOGO

                    , 2018
Dear Wyndham Worldwide Corporation Stockholder:

         I am pleased to inform you that the board of directors of Wyndham Worldwide Corporation ("Wyndham Worldwide") has approved the spin-off (the "spin-off") of Wyndham Hotels & Resorts, Inc. ("Wyndham Hotels"), a wholly-owned subsidiary of Wyndham Worldwide. Upon completion of the spin-off, the stockholders of Wyndham Worldwide will own 100% of the outstanding shares of common stock of Wyndham Hotels, and will continue to own 100% of the outstanding shares of common stock of Wyndham Worldwide. Wyndham Hotels will be a new, publicly traded hotel franchising and management company with a portfolio of renowned brands. This business is comprised primarily of the operations that have constituted the Hotel Group operating segment of Wyndham Worldwide. Wyndham Hotels is the global leader in the economy segment of the hotel industry and has a substantial and growing presence in the midscale and upscale segments. Following the spin-off, Wyndham Worldwide will continue to be the world's largest developer and marketer of vacation ownership products and the world's largest vacation exchange company.

         We believe the spin-off is in the best interests of Wyndham Worldwide, its stockholders and other constituents, as it will result in two publicly traded companies, each with increased strategic flexibility and an enhanced ability to maintain its focus on its core business and growth opportunities, facilitate future capital raising as needed, and make the changes necessary to respond to developments in its respective markets.

         The spin-off will be completed by way of a pro rata distribution of Wyndham Hotels common stock to Wyndham Worldwide's stockholders of record as of 5:00 p.m., Eastern time, on                     , 2018, the spin-off record date. Each Wyndham Worldwide stockholder will receive one share of Wyndham Hotels common stock for each share of Wyndham Worldwide common stock held by such stockholder on the record date. The distribution of these shares will be made in book-entry form, meaning no physical share certificates will be issued. Wyndham Worldwide stockholder approval of the distribution is not required, and you will automatically receive your shares of Wyndham Hotels common stock.

         The distribution is subject to the satisfaction or waiver of certain conditions, including among other things: final approval of the distribution by the Wyndham Worldwide board of directors; the Registration Statement on Form 10, of which this information statement forms a part, being declared effective by the Securities and Exchange Commission; Wyndham Hotels common stock being approved for listing on                ; the receipt of opinions with respect to certain tax matters related to the distribution from Wyndham Worldwide's spin-off tax advisors; the receipt of solvency and surplus opinions from a nationally recognized valuation firm; the receipt of all material governmental approvals; no order, injunction or decree issued by any governmental entity preventing the consummation of all or any portion of the distribution being in effect; and the completion of the financing transactions described in this information statement. We expect that your receipt of shares of Wyndham Hotels common stock in the spin-off will be tax-free for U.S. federal income tax purposes, except for cash received in lieu of fractional shares. You should consult your own tax advisor as to the particular tax consequences of the distribution to you, including potential tax consequences under state, local and non-U.S. tax laws.

         Immediately following the spin-off, you will own common stock in Wyndham Worldwide and Wyndham Hotels. Wyndham Worldwide common stock will continue to trade on the New York Stock Exchange under the symbol
"                ." We intend to have Wyndham Hotels common stock listed on the                under the symbol
"                ."

         We have prepared the enclosed information statement, which describes the spin-off in detail and contains important information about Wyndham Hotels, including historical financial statements. Wyndham Worldwide stockholders will receive via mail a notice with instructions on how to access the information statement online. We urge you to carefully read the information statement.

         For more than a decade, we have remained focused on providing great experiences for our millions of guests around the world and delivering value and return on capital for our stockholders. Throughout this journey, we have remained guided by a fundamental commitment to deliver reliable growth in a disciplined and responsible way. These stockholder-focused principles will continue to guide Wyndham Hotels in the years to come. We thank you for supporting our mission to welcome people to experience travel the way they want, and look forward to your continued support in the future.

    Very truly yours,

 

 

Stephen P. Holmes
    Chairman and Chief Executive Officer
Wyndham Worldwide Corporation

Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83


Wyndham Hotels & Resorts, Inc.

                        , 2018

Dear Wyndham Hotels & Resorts, Inc. Stockholder:

        It is my pleasure to welcome you to Wyndham Hotels & Resorts, Inc. ("Wyndham Hotels"). We are the world's largest hotel franchisor, with more than 8,400 affiliated hotels located in over 80 countries and with the largest network of franchised hotels of any global hotel company. We are the leading brand provider to economy hotels in the world, and we have a substantial and growing presence in the midscale and upscale segments of the global hotel industry. Our portfolio of 20 renowned brands, including Wyndham, Super 8 and Days Inn, enables us to franchise hotels in virtually any market at a range of price points, catering to both our guests' and franchisees' preferences.

        Our business model is asset-light and easily adaptable to changing economic environments due to low operating cost structures, which, together with our recurring fee streams and limited capital expenditures, yield attractive margins and predictable cash flows.

        We invite you to learn more about Wyndham Hotels by reviewing the enclosed information statement. We look forward to our future as an independent, publicly traded company and to your support as a holder of Wyndham Hotels common stock. We also look forward to welcoming you as a new or returning guest at one of our hotels around the world.

    Sincerely,

 

 

Geoff A. Ballotti
President and Chief Executive Officer
Wyndham Hotels & Resorts, Inc.

Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

Information contained herein is subject to completion or amendment. A Registration Statement on Form 10 relating to these securities has been confidentially submitted with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.

SUBJECT TO COMPLETION, DATED FEBRUARY 5, 2018

INFORMATION STATEMENT

Wyndham Hotels & Resorts, Inc.

Common Stock
(par value $0.01 per share)


        This information statement is being sent to you in connection with the separation of Wyndham Hotels & Resorts, Inc. from Wyndham Worldwide Corporation (collectively with its consolidated subsidiaries, "Wyndham Worldwide"), following which Wyndham Hotels & Resorts, Inc. will be an independent, publicly traded company. As part of the separation, Wyndham Worldwide will undergo an internal reorganization, after which it will complete the separation by distributing all of the outstanding shares of common stock of Wyndham Hotels & Resorts, Inc. on a pro rata basis to the holders of Wyndham Worldwide Corporation's common stock. We refer to this pro rata distribution as the "distribution" and we refer to the separation, including the internal reorganization and distribution, as the "spin-off." We expect that the distribution will be tax-free to the stockholders of Wyndham Worldwide Corporation for U.S. federal income tax purposes, except to the extent of cash received in lieu of fractional shares. Each Wyndham Worldwide stockholder will receive one share of our common stock for each share of Wyndham Worldwide common stock held by such stockholder on                , 2018, the record date. The distribution of shares will be made in book-entry form only. Wyndham Worldwide will not distribute any fractional shares of Wyndham Hotels common stock. Instead, the distribution agent will aggregate fractional shares into whole shares, sell the whole shares in the open market at prevailing market prices and distribute the aggregate net cash proceeds from the sales pro rata to each holder who would otherwise have been entitled to receive a fractional share in the spin-off. The distribution will be effective as of 5:00 p.m., Eastern time, on                , 2018. Immediately after the distribution becomes effective, Wyndham Hotels & Resorts, Inc. will be an independent, publicly traded company.

        No vote or other action of Wyndham Worldwide stockholders is required in connection with the spin-off. We are not asking you for a proxy and you should not send us a proxy. Wyndham Worldwide stockholders will not be required to pay any consideration for the shares of Wyndham Hotels common stock they receive in the spin-off, and they will not be required to surrender or exchange their shares of Wyndham Worldwide common stock or take any other action in connection with the spin-off.

        All of the outstanding shares of Wyndham Hotels common stock are currently owned, directly or indirectly, by Wyndham Worldwide Corporation. Accordingly, there is no current trading market for Wyndham Hotels common stock. We expect, however, that a limited trading market for Wyndham Hotels common stock, commonly known as a "when-issued" trading market, will develop at least one trading day prior to the record date for the distribution, and we expect "regular-way" trading of Wyndham Hotels common stock will begin on the first trading day following the distribution date. We intend to list Wyndham Hotels common stock on the                under the ticker symbol "             ."

        In reviewing this information statement, you should carefully consider the matters described in "Risk Factors" beginning on page 27 of this information statement.

        Neither the Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

        This information statement is not an offer to sell, or a solicitation of an offer to buy, any securities.

        The date of this information statement is                        , 2018.


        A Notice of Internet Availability of Information Statement Materials containing Instructions describing how to access this Information Statement was first mailed to Wyndham Worldwide stockholders on or about                , 2018.


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

TABLE OF CONTENTS

SUMMARY

    1  

RISK FACTORS

   
27
 

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

   
43
 

THE SPIN-OFF

   
44
 

TRADING MARKET

   
55
 

DIVIDEND POLICY

   
57
 

CAPITALIZATION

   
58
 

SELECTED HISTORICAL COMBINED FINANCIAL DATA

   
59
 

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

   
61
 

THE HOTEL INDUSTRY

   
69
 

OUR BUSINESS

   
71
 

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   
88
 

MANAGEMENT

   
106
 

EXECUTIVE AND DIRECTOR COMPENSATION

   
111
 

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

   
131
 

DESCRIPTION OF CERTAIN INDEBTEDNESS

   
139
 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   
140
 

DESCRIPTION OF CAPITAL STOCK

   
141
 

WHERE YOU CAN FIND MORE INFORMATION

   
145
 

INDEX TO FINANCIAL STATEMENTS

   
F-1
 

         Unless otherwise indicated or the context otherwise requires, references herein to "Wyndham Hotels & Resorts," "Wyndham Hotels," "we," "our," "us," the "Company" and "our company" refer (i) prior to the consummation of our internal reorganization described under "The Spin-Off—Manner of Effecting the Spin-Off—Internal Reorganization," to the entities holding substantially all of the assets and liabilities of the Wyndham Worldwide Hotel Group business used in managing and operating the hotel business of Wyndham Worldwide Corporation (the "Wyndham Hotels & Resorts businesses") and (ii) after the consummation of such internal reorganization, to Wyndham Hotels & Resorts, Inc. and its consolidated subsidiaries. Unless otherwise indicated or the context otherwise requires, references herein to "Wyndham Worldwide" and "Parent" refer to Wyndham Worldwide Corporation and its consolidated subsidiaries.

        Unless otherwise indicated or the context otherwise requires, all information in this information statement gives effect to the effectiveness of our amended and restated certificate of incorporation and amended and restated by-laws, the forms of which are filed as exhibits to the registration statement of which this information statement forms a part.

I


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

FINANCIAL STATEMENT PRESENTATION

        This information statement includes certain historical combined financial and other data for the Wyndham Hotels & Resorts businesses. To effect the separation, Wyndham Worldwide Corporation will undertake an internal reorganization, following which Wyndham Hotels & Resorts, Inc. will hold, directly or through its subsidiaries, the Wyndham Hotels & Resorts businesses. Wyndham Hotels & Resorts, Inc. is the registrant under the registration statement of which this information statement forms a part and will be the financial reporting entity following the consummation of the spin-off. Our historical combined financial information as of and for the years ended December 31, 2017, 2016 and 2015 has been derived from our audited Combined Financial Statements included elsewhere in this information statement.

        Our historical combined financial information as of and for the years ended December 31, 2014 and 2013 has been derived from our unaudited combined financial statements that are not included in this information statement. We have prepared our unaudited combined financial statements on the same basis as our audited Combined Financial Statements and, in our opinion, have included all adjustments, which include only normal recurring adjustments, necessary to present fairly in all material respects our financial position and results of operations. Our selected historical financial data is not necessarily indicative of our future performance and does not necessarily reflect what our financial position and results of operations would have been had we been operating as an independent, publicly traded company during the periods presented, including changes that will occur in our operations and capitalization as a result of the spin-off from Wyndham Worldwide.

        In January 2018, Wyndham Worldwide Corporation agreed to acquire the franchising and management businesses of La Quinta Holdings Inc. ("La Quinta"). Accordingly, this information statement includes certain historical combined financial and other data for of Lodge Holdco II LLC and its related subsidiaries, and LQ Management L.L.C. and its related subsidiaries (collectively referred to as "New La Quinta"), wholly-owned subsidiaries of La Quinta, which comprise its hotel franchising and management businesses. The audited Combined Financial Statements of New La Quinta include the balance sheets as of December 31, 2017 and 2016, and the related statements of operations, changes in equity, and cash flows for the years ended December 31, 2017, 2016 and 2015, and the related notes thereto.

        This information statement also includes an unaudited pro forma combined balance sheet as of December 31, 2017 and unaudited pro forma combined statements of operations data for the year ended December 31, 2017, which present our combined financial position and results of operations after giving effect to the spin-off, including the internal reorganization and the distribution, the acquisition of La Quinta and the other transactions described under "Unaudited Pro Forma Combined Financial Statements." The unaudited pro forma combined financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or financial position that would have occurred if the relevant transactions had been consummated on the date indicated, nor is it indicative of future operating results.

        You should read the sections titled "Selected Historical Combined Financial Data" and "Unaudited Pro Forma Combined Financial Statements," each of which is qualified in its entirety by reference to our audited Combined Financial Statements and related notes thereto, the audited Combined Financial Statements of New La Quinta and related notes thereto and the financial and other information, including in the sections titled "Risk Factors," "Capitalization" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in each case included elsewhere in this information statement.

        Wyndham Hotels & Resorts, Inc. was formed in connection with the spin-off. Other than the audited balance sheet as of December 31, 2017, the financial statements of Wyndham Hotels & Resorts, Inc. have not been included in this information statement as it is a newly incorporated entity and has no business transactions or activities to date. In connection with the internal reorganization, Wyndham Hotels & Resorts, Inc. will become the parent of the Wyndham Hotels & Resorts businesses.

II


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83


INDUSTRY AND MARKET DATA

        The market data and certain other statistical information used in this information statement are based on independent industry publications, government publications or other published independent sources. These sources generally state that the information they provide has been obtained from sources believed to be reliable, but that the accuracy and completeness of the information are not guaranteed. The forecasts and projections are based on industry surveys and the preparers' experience in the industry, and there is no assurance that any of the projected amounts will be achieved. We believe that the surveys and market research others have performed are reliable, but we have not independently verified this information. STR is the primary source for third-party market data and industry statistics and forecasts. STR does not guarantee the performance of any company about which it collects and provides data. The reproduction of STR's data without their written permission is strictly prohibited. Nothing in the STR data should be construed as advice. Some data are also based on our good faith estimates.

III


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83


CERTAIN DEFINED TERMS

        Except where the context suggests otherwise, we define certain terms in this information statement as follows:

    "Adjusted EBITDA" is defined as net income excluding interest expense, depreciation and amortization, impairment charges, restructuring and related charges, contract termination costs, transaction-related costs (acquisition-, disposition- or separation-related), stock-based compensation expense, early extinguishment of debt costs and income taxes. See "Summary—Summary Historical and Unaudited Pro Forma Combined Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operation" for information regarding our use of Adjusted EBITDA, which is a non-GAAP financial measure, and a reconciliation of Adjusted EBITDA to net income;

    "ADR" or "average daily rate" is defined as total room revenue divided by the number of room nights sold. It represents the average price of a room at a hotel or group of hotels;

    "affiliated hotels" means all of our franchised, managed or owned hotels;

    "contracts under negotiation" means hotels in our pipeline for which we have received an application to join one of our brands and are actively negotiating the terms of the underlying contract, including those for which we have received signed letters of intent but excluding early-stage applications for which we have yet to determine the viability of the potential contract;

    "executions" mean hotels in our pipeline that are either under construction or currently making the necessary preparations to transition to one of our brands and for which we have already negotiated all the terms of the underlying contracts;

    "guests" means the guests of our franchised, managed and owned hotels;

    "occupancy" means the total number of room nights sold divided by the total number of room nights available at a property or group of properties;

    "pipeline" means hotels that have not yet opened but for which franchising and/or management contracts have been either signed or are under application awaiting approval;

    "RevPAR" or "revenue per available room" is calculated by multiplying the average occupancy rate by ADR;

    "STR" means Smith Travel Research, an independent research firm recognized as an industry leader in the United States in providing hotel performance information and analysis; and

    "system growth" is derived from the number of gross rooms or properties opened or added less rooms or properties terminated or closed during the period.

IV


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

SUMMARY

        This summary highlights information contained in this information statement and provides an overview of the Company, our spin-off from Wyndham Worldwide and the distribution of our common stock by Wyndham Worldwide to its stockholders. For a more complete understanding of our business and the spin-off, you should read this entire information statement carefully, particularly the sections titled "Risk Factors" and "Unaudited Pro Forma Combined Financial Statements" and our audited Combined Financial Statements and the notes thereto included in this information statement.


Our Company

        Wyndham Hotels is the world's largest hotel franchisor, with more than 8,400 affiliated hotels located in over 80 countries. We license our 20 renowned hotel brands to franchisees, who pay us royalty and other fees to use our brands and services. We are the leader in the economy segment and have a substantial and growing presence in the midscale and upscale segments of the global hotel industry. We have grown our franchised hotel portfolio over time both organically and through acquisitions, and we have a robust pipeline of hotel owners and developers looking to affiliate with our brands. In 2017, Wyndham Hotels generated revenues of $1,347 million, net income of $243 million and Adjusted EBITDA of $395 million.

        We enable our franchisees, who range from sole proprietors to public real estate investment trusts, to optimize their return on investment. We drive guest reservations to our franchisees' properties through strong brand awareness among consumers and businesses, our global reservation system, our award-winning Wyndham Rewards loyalty program and our national, local and global marketing campaigns. We establish brand standards, provide our franchisees with property-based operational training and turn-key technology solutions, and help reduce their costs by leveraging our scale. These capabilities enhance returns for our franchisees and therefore help us to attract and retain franchisees. With over 5,700 franchisees, we have built the largest network of franchised hotels of any global hotel company.

        Our portfolio of brands enables us to franchise hotels in virtually any market at a range of price points, catering to both our guests' and franchisees' preferences. We welcome nearly 140 million guests annually worldwide. We primarily target economy and midscale guests, as they represent the largest demographic in the United States and around the world. We have the leading position in the economy segment, where our hotel brands represent approximately two of every five branded rooms in the United States. Approximately 68% of the hotels affiliated with our brands are located in the United States and approximately 32% are located internationally. The following table summarizes our brand portfolio as of December 31, 2017:

1


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

GRAPHIC

        Our business model is asset-light, as we generally receive a percentage of each franchised hotel's room revenues but do not own the underlying properties. Our business is easily adaptable to changing economic environments due to a low operating cost structure, which, together with our recurring fee streams and limited capital expenditures, yields attractive margins and predictable cash flows. Our franchise agreements are typically 10 to 20 years in length, providing significant visibility into future cash flows. Under these agreements, our franchisees pay us royalty fees and marketing and reservation fees, which are based on a percentage of their gross room revenues. We are required to spend marketing and reservation fees on marketing and reservation activities, enabling us to predictably match these expenses with an offsetting revenue stream on an annual basis. We also license the "Wyndham" trademark and certain other trademarks and intellectual property to Wyndham Worldwide through existing license agreements under which we receive royalty fees, and will continue to earn royalty fees following the spin-off under a long-term licensing agreement. In addition to hotel franchising, we provide hotel management services on a select basis. Our portfolio of managed hotels includes 116 third-party-owned properties and two owned properties. Approximately 99% of the hotels in our system are franchised to third parties, and substantially all of our Adjusted EBITDA is generated by our Hotel Franchising segment.

        We pursue multiple avenues of growth to generate returns for our stockholders. We use our scale, brands, guest loyalty and franchisee network to add new hotels to our system. Our long-established franchising experience and ability to innovate, together with favorable macroeconomic and lodging industry fundamentals, continue to support our organic growth around the world. Additionally, we intend to use our cash flow to continue to return capital to stockholders and to invest in the business and pursue external growth opportunities.

2


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

Our Competitive Strengths

        We believe our success has been and will be driven by significant competitive strengths that we have developed over time:

Industry-leading footprint in the hotel industry

        Wyndham Hotels is the world's largest hotel franchisor, with more than 8,400 affiliated hotels in over 80 countries. Our brands have substantial presence, welcoming nearly 140 million guests annually worldwide. The following chart presents the number of branded hotels associated with each of the six largest hotel companies:


Global Hotel Companies by Number of Branded Hotels as of December 31, 2017

GRAPHIC

*    As of June 30, 2017.

Source: Companies' public disclosures.

        Our scale enhances brand awareness among consumers and businesses and provides numerous benefits to franchisees. Our global reservation system, extensive distribution network and our award-winning Wyndham Rewards program drive over 60 million guest reservations annually to our franchisees. We also help our franchisees reduce overall costs through our marketing campaigns, our technology solutions and our purchasing programs with third-party suppliers. Our ability to provide these benefits helps us to attract and retain franchisees.

Strong portfolio of well-known brands

        We have assembled a portfolio of 20 well-known hotel brands, from leading economy brands such as Super 8 and Days Inn to upscale brands such as Wyndham and Dolce. Our Super 8 brand, with over 2,800 affiliated hotels, has more hotel properties than any other hotel brand in the world. Our brands are located in primary, secondary and tertiary cities and are among the most recognized in the industry. Over 80% of the U.S. population lives within ten miles of one or more of our affiliated hotels.

        Our brands offer a breadth of options for franchisees and a wide range of price points and experiences for our guests, including members of our award-winning Wyndham Rewards loyalty program. Our brands have also won numerous industry awards, both for guest satisfaction and as franchise opportunities for entrepreneurs. With many of our affiliated hotels located along major highways, our brands not only drive online and telephone reservations to hotels, they also help attract guests on a "walk-in" or direct-to-hotel basis.

Global leader in the economy segment

        We have built a leading position in the economy segment of the hotel industry, with our brands representing approximately 30% of the branded global economy hotel inventory. Our central reservation

3


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

channels generate nearly half of our franchisees' occupied room-nights annually and approximately 60% of guests at our franchised hotels in the United States. In addition, we have substantial experience in property design, establishing brand standards, advertising, structuring promotional offerings and online marketing for economy brands. Four of our hotel brands have been consistently ranked in the top five in J.D. Power's North American Hotel Guest Satisfaction Index Study for the economy segment.

        Our strength in the economy segment is attractive to potential franchisees and positions us well to benefit from favorable demographic and consumer demand trends. According to the Brookings Institution, the global middle class is expected to more than double from 2.0 billion to 4.9 billion people by 2030. As this population increasingly participates in the global travel and leisure industry, we expect the economy segment will be a natural entry point.

Award-winning loyalty program

        Wyndham Rewards, our award-winning loyalty program, is a key component of our ongoing efforts to build consumer and franchisee engagement while driving more guest reservations directly to our affiliated hotels. Nearly 55 million people have enrolled in Wyndham Rewards since its inception, and substantially all 8,422 hotels affiliated with our hotel brands participate in the program. In addition, over 20,000 Wyndham Worldwide vacation ownership and rental properties participate in the program. Wyndham Rewards generates significant repeat business by rewarding frequent stays with points. Since being redesigned in 2015, Wyndham Rewards has been recognized as one of the simplest, most rewarding loyalty programs in the hotel industry, providing more value to members than any other program. It has won more than 50 awards, including "Best Hotel Loyalty Program" from US News & World Report and "Most Rewarding Hotel Loyalty Program" from IdeaWorks.

        Wyndham Rewards loyalty program members now account for approximately one-third of occupancy at our affiliated hotels. Total membership has been growing by approximately 10% annually. Our franchisees benefit from the program through increased guest loyalty and the more than one million room-nights for which award points are redeemed each year. These members are an important driver of our growth, as they stay nearly twice as often and spend 95% more than other guests, on average.

Proven ability to create value through acquisitions

        We have built our portfolio of renowned hotel brands primarily through acquisitions, beginning with the Howard Johnson brand and the U.S. franchise rights for the Ramada brand in 1990. Since then, we have acquired 17 economy, midscale, upscale and extended-stay brands, enabling us to meet travelers' leisure and business travel needs across a wide range of price points, experiences and geographies. We have established an extensive track record of successfully integrating franchise systems and enhancing the performance of brands post-acquisition by leveraging our operating best practices, significant economies of scale, award-winning Wyndham Rewards loyalty program and access to global distribution networks, while producing significant cost synergies for us and our franchisees. We intend to build upon our past success as we continue to opportunistically acquire and integrate brands into our franchising platform.

        In addition, we have grown many of the franchise systems we have acquired to be significantly larger than at acquisition. For example, after acquiring the economy-focused Baymont Inn portfolio in 2006, we re-positioned the brand within the midscale segment as Baymont Inn & Suites and have more than tripled its size from 115 hotels to 483 hotels in North and Latin America. Similarly, we have nearly doubled the size of our flagship Wyndham brand since we acquired it in 2005. We believe these capabilities, combined with our scale, enable us to be highly competitive for acquisition opportunities.

Strong and experienced management team

        Our executive management team is focused on building upon Wyndham Hotel Group's past success and track record of growth through its deep industry experience and leadership continuity. We benefit

4


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

significantly from the experience of our executive officers who have an average of 18 years of experience in the travel and hospitality industries. Our chief executive officer, Geoffrey Ballotti, spent 20 years with Starwood Hotels & Resorts before joining Wyndham Worldwide in 2008 and has been instrumental in transforming our business over the past several years through acquisitions and technology-related initiatives. Our non-executive chairman, Stephen Holmes, has more than 27 years of experience in the hospitality industry and has served as Wyndham Worldwide's chief executive officer since 2006. Our chief financial officer, David Wyshner, has 18 years of experience in the travel industry and previously served as president and chief financial officer of Avis Budget Group. As a group, our executive officers have extensive experience with leading global hospitality and consumer-brand companies.


Our Strategy

        Our objective is to continue to strengthen our position as the world's leading hotel franchisor and help our franchisees drive profitability through the brands, technology and reservation services we provide. We expect to achieve our goals by focusing on the following core strategic initiatives:

Attract, retain and develop franchisees

        We intend to attract and retain franchisees and to grow our system size by maintaining and increasing the value we provide to franchisees. With more than 5,700 franchisees, we have built the largest network of franchised hotels of any global hotel company. These hotel owners and developers provide the engine and platform for future growth. In order to attract, retain and serve franchisees, we plan to:

    continually enhance the competitive position and awareness of our brands;

    provide best-in-class, cost-effective technology solutions; and

    drive reservations to our franchisees through our proprietary booking and third-party distribution channels.

        We are focused on building brand awareness, brand preference and reservations by presenting the value propositions of each of our hotel brands in all relevant channels to consumers who are likely to have the greatest propensity to stay with us. We also provide our franchisees with fully integrated, turn-key property management, reservations and revenue management systems that have capabilities that were not previously affordable to hotels in the economy and midscale sectors. We continuously innovate in our e-commerce channels, including websites and mobile applications for our brands, to enhance the consumer experience and drive reservations to our franchisees. We also operate telephone reservation and customer service centers around the world, and provide easy access to third-party distribution channels for our franchisees. Finally, we develop strong, consultative relationships with our franchisees, beginning with the sales process, where we work with hotel owners to determine how our brands will optimize their investment. We nurture this relationship throughout the life of the contract, continually assessing our franchisees' needs, providing solutions to meet those needs and partnering with them to grow their business. These efforts help us to retain approximately 95% of our total properties each year and to welcome an average of two new hotels into our system every day.

"Elevate the economy experience"

        We believe every type of traveler should have a great travel experience, regardless of price point. We are building on our leading position in the economy hotel segment to reshape and elevate the economy hotel experience. This process starts with our iconic economy brands—Days Inn, Super 8, Howard Johnson and Travelodge—which we have redefined to create new brand standards and new guest experiences. For instance, we have developed innovative new construction prototypes and have introduced new design concepts and plans for conversion properties and renovations, such as the Super 8 Innovate room package. These changes enable our franchisees to create an upscale guest experience at an economy price point.

5


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

        Our economy brands are among the most respected in the industry and have won numerous awards for the quality and consistency of service they provide. We intend to continue to drive favorable consumer perception of our brands through our brand standards, quality assurance, marketing and franchisee relations. As a result, we believe our reshaped and elevated economy brands will be a natural entry point for millennials and other price-conscious travelers, who are looking for quality branded experiences at an economy price point.

Expand our presence in the midscale space and beyond

        Our leading position in the economy segment provides a strong platform for our accelerated growth in the midscale sector, where our share of branded rooms is approximately 15%. We are able to effectively and easily leverage our industry-leading technology, marketing platform and infrastructure to serve midscale and upscale hotels. This capability provides an opportunity for our existing franchisees to "trade up" as their businesses grow and for us to attract hotel owners and developers focused on these segments.

        In addition to expanding our revenue opportunities, growing our presence outside the economy segment offers many advantages, including strengthening brand equity and building brand loyalty among higher-paying guests. Growth in the midscale and upscale segments, all within the Wyndham Rewards loyalty program, will provide our loyalty members with increased flexibility to redeem points at a Wyndham Hotels brand that fits a member's specific preferences, further increasing brand loyalty.

Grow our footprint in new and existing international markets

        With a diverse, global network of brands already represented in more than 80 countries, we intend to expand in new and existing international markets. Over the past five years, our international portfolio has grown at a compound annual rate of 12%, nearly 2,700 hotels, and now represents approximately 32% of the hotels in our system.

        We have built a strong, flexible international franchise sales platform, with more than 100 sales professionals in key locations around the world, including in Europe, Latin America, India, China, Singapore and Australia. We typically focus on rapidly developing countries that are under-served by the hotel industry. We also look for flagship opportunities in higher-traffic markets throughout the world to aid international brand awareness and loyalty. We believe our flexibility as a sales organization and our diverse portfolio of brands enable us to effectively adapt our sales strategies in response to franchisees' and hotel developers' needs, and to changes in global supply and demand.

        Currently, our pipeline of franchise contracts and applications consists of approximately 1,200 hotels with 148,000 rooms, of which more than half are international. As we grow internationally, we are particularly focused on brand quality and property design, with approximately 90% of our existing international pipeline being new-construction projects.

Use cash flow to create value for stockholders

        We intend to use the cash flow generated by our operations to create value for stockholders. Our asset-light business model, with low fixed costs and stable, recurring franchise fee revenue, generates attractive margins and cash flow. In addition to investments in the business, including acquisitions of brands and businesses that would expand our presence and capabilities in the lodging industry, we expect to return capital to our stockholders through dividends and/or share repurchases. We expect to pay a regular dividend and use excess cash to repurchase shares.


Recent Developments

        In January 2018, Wyndham Worldwide Corporation entered into an agreement with La Quinta Holdings Inc. to acquire its hotel franchising and management businesses for $1.95 billion in cash. The La

6


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

Quinta brand is one of the largest midscale/upper midscale brands in the hotel industry, with 902 hotels (585 third-party franchised and 317 managed) in the United States, Mexico, Canada, Honduras and Colombia. The acquisition is expected to close in the second quarter of 2018, prior to our spin-off from Wyndham Worldwide Corporation.

        With the acquisition of La Quinta's asset-light, fee-based hotel management and franchising businesses, Wyndham Hotels will span 21 brands and over 9,000 hotels across more than 80 countries. In addition to adding over 900 hotels to the world's largest hotel network, the acquisition of La Quinta will strengthen our position in the midscale and upper midscale segments of the hotel industry, which has been and continues to be one of our strategic priorities. Following the La Quinta acquisition, Wyndham Hotels will have the largest number of midscale and economy hotels in the industry. We expect to leverage our development capabilities to further grow the La Quinta brand in the United States and across Latin America where we already have 198 properties. The transaction will also expand our managed hotel network by more than 250%, from 116 hotels today to more than 430 properties, making us the sixth-largest hotel manager in the United States. Hotel management represents an attractive expansion opportunity to grow our asset-light business and further penetrate the midscale and higher segments.

        The La Quinta Returns loyalty program, with over 15 million enrolled members, will be combined with the award-winning Wyndham Rewards loyalty program, with nearly 55 million enrolled members.

        We expect to generate substantial synergies when integrating La Quinta into our existing business by eliminating redundant public company expenses and reducing operating costs associated with technology, distribution and marketing as we leverage our scale and existing infrastructure. Additional revenue benefits are expected to come from incremental domestic and international expansion as well as RevPAR growth from a broader distribution platform.

        The table below provides key system metrics as of December 31, 2017 giving pro forma effect to the La Quinta acquisition:

 
  Wyndham Hotels   La Quinta   Pro Forma
Combined
  Rank*

Number of Hotels

  8,422   902   9,324   #1

Rooms

  728,195   88,400   816,595   #3

Brands

  20   1   21   #2

Managed Hotels

  116   317   433    

*
Rankings based on a comparable set that includes Hilton, Hyatt, InterContinental, Choice, Accor and Marriott.

7


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

Summary Risk Factors

        There are a number of risks relating to our business, our industry, the spin-off, the La Quinta acquisition and our common stock, including:

    The hotel industry is highly competitive, and we are subject to risks relating to competition that may adversely affect our performance and growth.

    We are subject to business, financial, operating and other risks common to the hotel, franchising and hotel management industries and which affect our franchisees, any of which could reduce our revenues and growth.

    Our revenues are highly dependent on the travel industry, and declines in or disruptions to the travel industry, such as those caused by economic conditions, terrorism, political strife, pandemics or threats of pandemics, acts of God and war, may adversely affect us.

    Third-party Internet reservation systems, peer-to-peer online networks and alternative lodging channels may adversely impact us.

    We may be unable to enter into new, or renew existing, hotel management arrangements on favorable terms or at all, and certain of our management agreements may require that we fund shortfalls, any of which could reduce our revenue and the growth of our hotel management business.

    Our international operations are subject to additional risks not generally applicable to our domestic operations.

    We will be subject to certain risks related to our future indebtedness, hedging transactions, the cost and availability of capital and the extension of credit by us.

    Failure to maintain the security of personally identifiable and proprietary information, non-compliance with our contractual obligations regarding such information or a violation of our privacy and security policies with respect to such information could adversely affect us.

    We rely on information technologies and systems to operate our business, which involves reliance on third-party service providers and on uninterrupted operation of service facilities.

    We may be unable to achieve some or all of the benefits that we expect to achieve from our spin-off from Wyndham Worldwide.

    We may have received better terms from unaffiliated third parties than the terms we received in our agreements with Wyndham Worldwide entered into in connection with the spin-off.

    We expect to incur indebtedness as part of our spin-off from Wyndham Worldwide and possibly in the future, which may subject us to various restrictions and decrease our profitability.

    Our accounting and other management systems and resources may not meet the financial reporting and other requirements to which we will be subject following the spin-off, and failure to achieve and maintain effective internal controls could have a material adverse effect on our business and the price of our common stock.

    If the distribution, together with certain related transactions, were to fail to qualify as a reorganization for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Internal Revenue Code of 1986, as amended (the "Code"), then our stockholders, we and Wyndham Worldwide might be required to pay substantial U.S. federal income taxes (including as a result of indemnification under the Tax Matters Agreement).

8


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

    Our ability to engage in acquisitions and other strategic transactions is subject to limitations because we are agreeing to certain restrictions intended to support the tax-free nature of the distribution.

    The anticipated benefits of the acquisition of La Quinta's hotel franchising and management businesses may not be realized fully or at all and may take longer to realize than expected.

    The acquisition of La Quinta's hotel franchising and management businesses may not be consummated.

    There is no existing market for our common stock, and a trading market that will provide you with adequate liquidity may not develop for our common stock. In addition, once our common stock begins trading, the market price of shares of our common stock may fluctuate widely.

    Your percentage ownership in Wyndham Hotels may be diluted in the future.

    Provisions in our amended and restated certificate of incorporation, amended and restated by-laws and Delaware law may prevent or delay an acquisition of Wyndham Hotels, which could decrease the trading price of our common stock.

        These and other risks relating to our business, our industry, the spin-off and our common stock are discussed in greater detail under the heading "Risk Factors" in this information statement. You should read and consider all of these risks carefully.

9


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 


The Spin-Off

        The following provides only a summary of the terms of the spin-off. For a more detailed description of the matters described below, see "The Spin-Off."

Overview

        On August 2, 2017, Wyndham Worldwide announced its intention to implement the spin-off of Wyndham Hotels from Wyndham Worldwide, following which Wyndham Hotels & Resorts, Inc. will be an independent, publicly traded company, and Wyndham Worldwide will have no continuing stock ownership interest in Wyndham Hotels.

        Before our spin-off from Wyndham Worldwide, we will enter into a Separation and Distribution Agreement and several other agreements with Wyndham Worldwide related to the spin-off. These agreements will govern the relationship between us and Wyndham Worldwide after completion of the spin-off and provide for the allocation between us and Wyndham Worldwide of various assets, liabilities, rights and obligations. These agreements will also include arrangements with respect to employee matters, tax matters, the licensing of trademarks and certain other intellectual property between us and Wyndham Worldwide, transitional services to be provided by Wyndham Worldwide to us, and by us to Wyndham Worldwide, and access to the Wyndham Rewards loyalty program. See "Certain Relationships and Related Party Transactions—Agreements with Wyndham Worldwide Related to the Spin-Off."

        The distribution is subject to the satisfaction or waiver of certain conditions. In addition, until the distribution has occurred, the board of directors of Wyndham Worldwide Corporation (the "Wyndham Worldwide board of directors") has the right to not proceed with the distribution, even if all of the conditions are satisfied. See "The Spin-Off—Conditions to the Distribution."

10


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

Organizational Structure

        The diagrams below, simplified for illustrative purposes, show (i) the current structure of the entities conducting the Wyndham Worldwide business and (ii) the structure of Wyndham Worldwide and Wyndham Hotels immediately after completion of the spin-off.

Structure Before
the Spin-Off

LOGO

Structure Following
the Spin-Off

LOGO

11


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

Financing Transactions

        Subject to market conditions, we expect to complete one or more financing transactions on or prior to the completion of the spin-off. As a result of these financing transactions we expect to have total indebtedness of approximately $2 billion. Wyndham Worldwide Corporation has obtained financing commitments of $2.0 billion related to the La Quinta acquisition, which will be assigned to us if we do not obtain other long-term financing. The financing transactions will be described in greater detail in a subsequent amendment to the registration statement of which this information statement forms a part. See "The Spin-Off—Financing Transactions" and "Description of Certain Indebtedness."

Questions and Answers About the Spin-Off

The following provides only a summary of the terms of the spin-off. For a more detailed description of the matters described below, see "The Spin-Off."

        Q:    What is the spin-off?

        A:    The spin-off is the method by which we will separate from Wyndham Worldwide. In the spin-off, Wyndham Worldwide Corporation will distribute to Wyndham Worldwide stockholders all of the outstanding shares of Wyndham Hotels common stock. We refer to this as the distribution. Following the spin-off, Wyndham Hotels & Resorts, Inc. will be an independent, publicly traded company, and Wyndham Worldwide will not retain any ownership interest in Wyndham Hotels.

        Q:    What will I receive in the spin-off?

        A:    As a holder of Wyndham Worldwide common stock, you will retain your shares of Wyndham Worldwide common stock and will receive one share of Wyndham Hotels common stock for each share of Wyndham Worldwide common stock you own as of the record date. The number of shares of Wyndham Worldwide common stock you own and your proportionate interest in Wyndham Worldwide will not change as a result of the spin-off. See "The Spin-Off."

        Q:    What is Wyndham Hotels?

        A:    After the spin-off is completed, Wyndham Hotels & Resorts, Inc. will be a new independent, publicly traded hotel franchising and management company with a portfolio of well-known hotel brands. Wyndham Hotels & Resorts, Inc. is currently a wholly owned subsidiary of Wyndham Worldwide Corporation.

        Q:    Why is the separation of Wyndham Hotels from Wyndham Worldwide structured as a spin-off?

        A:    Wyndham Worldwide determined, and continues to believe, that a spin-off that is generally tax-free to Wyndham Worldwide and Wyndham Worldwide stockholders for U.S. federal income tax purposes will enhance the long-term value of both Wyndham Worldwide and Wyndham Hotels. Further, Wyndham Worldwide believes that a spin-off offers the most efficient way to accomplish a separation of its hotel business from Wyndham Worldwide, a higher degree of certainty of completion in a timely manner and a lower risk of disruption to current business operations. See "The Spin-Off—Reasons for the Spin-Off."

        Q:    What are the conditions to the distribution?

        A:    The distribution is subject to the satisfaction, or waiver by Wyndham Worldwide Corporation, of the following conditions:

    the final approval of the distribution by the Wyndham Worldwide board of directors, which approval may be given or withheld in its absolute and sole discretion;

12


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

    our Registration Statement on Form 10, of which this information statement forms a part, shall have been declared effective by the SEC, with no stop order in effect with respect thereto, and a notice of internet availability of this information statement shall have been mailed to Wyndham Worldwide stockholders;

    Wyndham Hotels common stock shall have been approved for listing on the                        , subject to official notice of distribution;

    Wyndham Worldwide shall have obtained opinions from its spin-off tax advisors, in form and substance satisfactory to Wyndham Worldwide, to the effect that the distribution of Wyndham Hotels common stock, together with certain related transactions, will qualify as a reorganization under Sections 368(a)(1)(D) and 355 of the Code in which no gain or loss is recognized by Wyndham Worldwide Corporation or its stockholders, except, in the case of Wyndham Worldwide stockholders, for cash received in lieu of fractional shares;

    Wyndham Worldwide shall have obtained opinions from a nationally recognized valuation firm, in form and substance satisfactory to Wyndham Worldwide, with respect to (i) the capital adequacy and solvency of both Wyndham Worldwide and Wyndham Hotels after giving effect to the spin-off and (ii) the adequate surplus of Wyndham Worldwide to declare the applicable dividend;

    all material governmental approvals and other consents necessary to consummate the distribution or any portion thereof shall have been obtained and be in full force and effect;

    no order, injunction or decree issued by any governmental entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of all or any portion of the distribution shall be in effect, and no other event shall have occurred or failed to occur that prevents the consummation of all or any portion of the distribution; and

    the financing transactions described herein shall have been completed on or prior to the distribution date.

        See "The Spin-Off—Conditions to the Distribution."

        Q:    Can Wyndham Worldwide decide to not proceed with the distribution even if all of the conditions to the distribution have been met?

        A:    Yes. Until the distribution has occurred, the Wyndham Worldwide board of directors has the right to not proceed with the distribution, even if all of the conditions are satisfied.

        Q:    What is being distributed in the spin-off?

        A:    Approximately            shares of Wyndham Hotels common stock will be distributed in the spin-off, based on the number of shares of Wyndham Worldwide common stock expected to be outstanding as of            , 2018, the record date, and assuming each holder of Wyndham Worldwide common stock will receive one share of Wyndham Hotels common stock for each share of Wyndham Worldwide common stock. The actual number of shares of Wyndham Hotels common stock distributed will be calculated as of the record date. The shares of Wyndham Hotels common stock distributed by Wyndham Worldwide Corporation will constitute all of the issued and outstanding shares of Wyndham Hotels common stock immediately prior to the distribution. See "Description of Capital Stock—Common Stock."

        Q:    When is the record date for the distribution?

        A:    The record date will be the close of business of the New York Stock Exchange on            , 2018.

        Q:    When will the distribution occur?

        A:    The distribution date of the spin-off is            , 2018. We expect that it will take the distribution agent, acting on behalf of Wyndham Worldwide, up to two weeks after the distribution date to fully distribute the shares of Wyndham Hotels common stock to Wyndham Worldwide stockholders.

13


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

        Q:    What do I have to do to participate in the spin-off?

        A:    Nothing. You are not required to take any action, although we urge you to read this entire information statement carefully. No stockholder approval of the distribution is required or sought. You are not being asked for a proxy. No action is required on your part to receive your shares of Wyndham Hotels common stock. You will neither be required to pay anything for the new shares nor be required to surrender any shares of Wyndham Worldwide common stock to participate in the spin-off.

        Q:    Do I have appraisal rights in connection with the spin-off?

        A:    No. Holders of Wyndham Worldwide common stock are not entitled to appraisal rights in connection with the spin-off.

        Q:    How will fractional shares be treated in the spin-off?

        A:    Fractional shares of Wyndham Hotels common stock will not be distributed. Fractional shares of Wyndham Hotels common stock to which Wyndham Worldwide stockholders of record would otherwise be entitled will be aggregated and sold in the public market by the distribution agent at prevailing market prices. The distribution agent, in its sole discretion, will determine when, how, at what prices to sell these shares and through which broker-dealers, provided that such broker-dealers are not affiliates of Wyndham Worldwide or Wyndham Hotels. The aggregate net cash proceeds of the sales will be distributed ratably to those stockholders who would otherwise have received fractional shares of Wyndham Hotels common stock. See "The Spin-Off—Treatment of Fractional Shares" for a more detailed explanation. Receipt by a stockholder of proceeds from these sales in lieu of a fractional share generally will result in a taxable gain or loss to those stockholders for U.S. federal income tax purposes. Each stockholder entitled to receive cash proceeds from these shares should consult his, her or its own tax advisor as to such stockholder's particular circumstances. We describe the material U.S. federal income tax consequences of the distribution in more detail under "The Spin-Off—Material U.S. Federal Income Tax Consequences of the Distribution."

        Q:    Why has Wyndham Worldwide determined to undertake the spin-off?

        A:    The Wyndham Worldwide board of directors has determined that the spin-off is in the best interests of Wyndham Worldwide, Wyndham Worldwide stockholders and other constituents because the spin-off will provide a number of benefits, including: (1) enhanced strategic and management focus on the core business and growth of each company; (2) more efficient capital allocation, direct access to capital and expanded growth opportunities for each company; (3) the ability to implement a tailored approach to recruiting and retaining employees at each company; (4) improved investor understanding of the business strategy and operating results of each company; and (5) enhanced investor choice by offering investment opportunities in separate entities. For a more detailed discussion of the reasons for the spin-off, see "The Spin-Off—Reasons for the Spin-Off."

        Q:    What are the U.S. federal income tax consequences of the spin-off?

        A:    The spin-off is conditioned on the receipt of opinions of Wyndham Worldwide's spin-off tax advisors, confirming that the distribution and certain related transactions will be treated as a reorganization for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code in which no gain or loss is recognized by Wyndham Worldwide Corporation or its stockholders, except, in the case of Wyndham Worldwide stockholders, for cash received in lieu of fractional shares. Although Wyndham Worldwide has no current intention to do so, such condition is solely for the benefit of Wyndham Worldwide and Wyndham Worldwide stockholders and may be waived by Wyndham Worldwide in its sole discretion. In addition, Wyndham Worldwide has received certain rulings (the "IRS Ruling") from the U.S. Internal Revenue Service (the "IRS") regarding certain U.S. federal income tax

14


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

consequences of aspects of the spin-off. The material U.S. federal income tax consequences of the distribution are described in more detail under "The Spin-Off—Material U.S. Federal Income Tax Consequences of the Distribution."

        Q:    Will the Wyndham Hotels common stock be listed on a stock exchange?

        A:    Yes. Although there is not currently a public market for Wyndham Hotels common stock, before completion of the spin-off, Wyndham Hotels will apply to list its common stock on the            under the symbol "            ." It is anticipated that trading of Wyndham Hotels common stock will commence on a "when-issued" basis at least one trading day prior to the record date. "When-issued" trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. "When-issued" trades generally settle within three trading days after the distribution date. On the first trading day following the distribution date, any "when-issued" trading with respect to Wyndham Hotels common stock will end, and "regular-way" trading will begin. "Regular-way" trading refers to trading after a security has been issued and typically involves a transaction that settles on the second full trading day following the date of the transaction. We cannot predict the trading prices of our common stock before, on or after the distribution date. See "Trading Market."

        Q:    Will my shares of Wyndham Worldwide common stock continue to trade?

        A:    Yes. Wyndham Worldwide common stock will continue to be listed and trade on the New York Stock Exchange under the symbol "             ."

        Q:    If I sell, on or before the distribution date, shares of Wyndham Worldwide common stock that I held as of the record date, am I still entitled to receive shares of Wyndham Hotels common stock distributable with respect to the shares of Wyndham Worldwide common stock I sold?

        A:    Beginning on or shortly before the record date and continuing through the distribution date for the spin-off, Wyndham Worldwide common stock will begin to trade in two markets on the New York Stock Exchange: a "regular-way" market and an "ex-distribution" market. If you hold shares of Wyndham Worldwide common stock as of the record date for the distribution and choose to sell those shares in the "regular-way" market after the record date for the distribution and on or before the distribution date, you will also be selling the right to receive the shares of Wyndham Hotels common stock in connection with the spin-off. However, if you hold shares of Wyndham Worldwide common stock as of the record date for the distribution and choose to sell those shares in the "ex-distribution" market after the record date for the distribution and on or before the distribution date, you will still receive the shares of Wyndham Hotels common stock in the spin-off.

        Q:    Will the spin-off affect the trading price of my Wyndham Worldwide common stock?

        A:    Yes. The trading price of shares of Wyndham Worldwide common stock immediately following the distribution is expected to be lower than immediately prior to the distribution because its trading price will no longer reflect the value of the hotel business. However, we cannot predict the price at which the shares of Wyndham Worldwide common stock will trade following the spin-off.

        Q:    What financing transactions will be undertaken in connection with the spin-off?

        A:    Subject to market conditions, we expect to complete one or more financing transactions on or prior to the completion of the spin-off. As a result of these financing transactions we expect to have total indebtedness of approximately $2 billion. Wyndham Worldwide Corporation has obtained financing commitments of $2.0 billion related to the La Quinta acquisition, which will be assigned to us if we do not obtain other long-term financing. The financing transactions will be described in greater detail in a

15


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

subsequent amendment to the registration statement of which this information statement forms a part. See "The Spin-Off—Financing Transactions" and "Description of Certain Indebtedness."

        Q:    Who will form the senior management team and board of directors of Wyndham Hotels & Resorts, Inc. after the spin-off?

        A:    The executive officers and members of the board of directors of Wyndham Hotels & Resorts, Inc. ("our Board of Directors") following the spin-off will include: Stephen P. Holmes, Non-Executive Chairman of our Board of Directors; Geoffrey A. Ballotti, President, Chief Executive Officer and a member of our Board of Directors; David B. Wyshner, Chief Financial Officer; Thomas H. Barber, Chief Strategy and Development Officer; Robert D. Loewen, Chief Operating Officer; Barry S. Goldstein, Chief Marketing Officer; Paul F. Cash, General Counsel; Mary R. Falvey, Chief Administrative Officer; and Scott R. Strickland, Chief Information Officer. We are in the process of identifying additional individuals who will serve as members of our Board of Directors following the spin-off. See "Management" for information on our executive officers and Board of Directors.

        Q:    What will the relationship be between Wyndham Worldwide and Wyndham Hotels after the spin-off?

        A:    Following the spin-off, Wyndham Hotels & Resorts, Inc. will be an independent, publicly traded company, and Wyndham Worldwide will have no continuing stock ownership interest in Wyndham Hotels. We will have entered into a Separation and Distribution Agreement and several other agreements with Wyndham Worldwide related to the spin-off. These agreements will govern the relationship between us and Wyndham Worldwide after completion of the spin-off and provide for the allocation between us and Wyndham Worldwide of various assets, liabilities, rights and obligations. These agreements will also include arrangements with respect to employee matters, tax matters, the licensing of trademarks and certain other intellectual property between us and Wyndham Worldwide, transitional services to be provided by Wyndham Worldwide to us, and by us to Wyndham Worldwide, and access to the Wyndham Rewards loyalty program. See "Certain Relationships and Related Party Transactions—Agreements with Wyndham Worldwide Related to the Spin-Off."

        Q:    What will Wyndham Hotels' dividend policy be after the spin-off?

        A:    We intend to pay regular quarterly cash dividends beginning            , 2018. However, any decision to declare and pay dividends will be made at the sole discretion of our Board of Directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions and other factors that our Board of Directors may deem relevant. There can be no assurance that a payment of a dividend will occur in the future. See "Dividend Policy."

        Q:    What are the anti-takeover effects of the spin-off?

        A:    Some provisions of Delaware law, certain of our agreements with Wyndham Worldwide, and the amended and restated certificate of incorporation of Wyndham Hotels and the amended and restated by-laws of Wyndham Hotels (as each will be in effect immediately following the spin-off) may have the effect of making it more difficult to acquire control of Wyndham Hotels in a transaction not approved by our Board of Directors. For example, our amended and restated certificate of incorporation and amended and restated by-laws will, among other things, require advance notice for stockholder proposals and nominations, place limitations on convening stockholder meetings and authorize our Board of Directors to issue one or more series of preferred stock. Further, under the Tax Matters Agreement, Wyndham Hotels will agree, subject to certain terms, conditions and exceptions, not to enter into any transaction for a period of two years following the distribution involving an acquisition (including issuance) of Wyndham Hotels common stock or certain other transactions that could cause the distribution to be taxable to Wyndham Worldwide. The parties will also agree to indemnify each other for any tax resulting from any transaction to the extent a party's actions caused such tax liability, regardless of whether the indemnified party

16


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

consented to such transaction or the indemnifying party was otherwise permitted to enter into such transaction under the Tax Matters Agreement, and for all or a portion of any tax liabilities resulting from the distribution under certain other circumstances. Generally, Wyndham Worldwide will recognize a taxable gain on the distribution if there are (or have been) one or more acquisitions (including issuances) of Wyndham Hotels capital stock representing 50% or more of Wyndham Hotels common stock, measured by vote or value, and the acquisitions are deemed to be part of a plan or series of related transactions that include the distribution. Any such acquisition of Wyndham Hotels common stock within two years before or after the distribution (with exceptions, including public trading by less-than-5% stockholders and certain compensatory stock issuances) generally will be presumed to be part of such a plan unless that presumption is rebutted. As a result, these obligations may discourage, delay or prevent a change of control of Wyndham Hotels. See "Description of Capital Stock—Anti-Takeover Effects of Our Amended and Restated Certificate of Incorporation, Amended and Restated By-laws and Delaware Law" and "The Spin-Off—Treatment of the Spin-Off" for more information.

        Q:    What are the risks associated with the spin-off?

        A:    There are a number of risks associated with the spin-off and ownership of Wyndham Hotels common stock. These risks are discussed under "Risk Factors."

        Q:    Who will be the distribution agent, transfer agent and registrar for Wyndham Hotels common stock?

        A:    The distribution agent, transfer agent and registrar for Wyndham Hotels common stock will be             . For questions relating to the transfer or mechanics of the stock distribution, you should contact            toll-free at            .

        Q:    Where can I get more information?

        A:    If you have any questions relating to the mechanics of the distribution, you should contact the distribution agent at:

    Address:
    Toll-Free Number:

        Before the spin-off, if you have any questions relating to the spin-off, you should contact Wyndham Worldwide at:

    Wyndham Worldwide Corporation
    Investor Relations
    22 Sylvan Way
    Parsippany, New Jersey 07054
    Phone: 973-753-6000
    Email: ir@wyn.com
    http://investor.wyndhamworldwide.com

        After the spin-off, if you have any questions relating to Wyndham Hotels, you should contact Wyndham Hotels at:

    Wyndham Hotels & Resorts, Inc.
    Investor Relations
    22 Sylvan Way
    Parsippany, New Jersey 07054
    Phone: (973) 753-6000
    Email:           
    www.                        .com

17


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

Summary of the Spin-Off

Distributing Company   Wyndham Worldwide Corporation, a Delaware corporation. After the distribution, Wyndham Worldwide will not own any shares of Wyndham Hotels common stock.

Distributed Company

 

Wyndham Hotels & Resorts, Inc., a Delaware corporation and, prior to the spin-off, a wholly owned subsidiary of Wyndham Worldwide Corporation. After the spin-off, Wyndham Hotels & Resorts, Inc. will be an independent, publicly traded company.

Distributed Securities

 

All of the outstanding shares of Wyndham Hotels common stock owned by Wyndham Worldwide Corporation, which will be 100 percent of the Wyndham Hotels common stock issued and outstanding immediately prior to the distribution.

Record Date

 

The record date for the distribution is            , 2018.

Distribution Date

 

The distribution date is            , 2018.

Internal Reorganization

 

As part of the spin-off, Wyndham Worldwide will undergo an internal reorganization, pursuant to which, among other things: (i) all of the assets and liabilities (whether accrued, contingent or otherwise) associated with the hotel business, subject to certain exceptions, will be retained by or transferred to Wyndham Hotels; and (ii) all other assets and liabilities (whether accrued, contingent or otherwise) of Wyndham Worldwide, subject to certain exceptions (including the shared contingent assets and the shared contingent liabilities), will be retained by or transferred to Wyndham Worldwide. See "The Spin-Off—Manner of Effecting the Spin-Off—Internal Reorganization."

 

 

After completion of the spin-off:

 

Wyndham Hotels & Resorts, Inc. will be an independent, publicly traded company (        :        ), and will own and operate Wyndham Worldwide's hotel business; and

 

Wyndham Worldwide Corporation will continue to be an independent, publicly traded company (New York Stock Exchange:            ) and continue to own and operate its timeshare, vacation exchange and vacation rentals businesses.


Distribution Ratio

 

Each holder of Wyndham Worldwide common stock will receive one share of Wyndham Hotels common stock for each share of Wyndham Worldwide common stock held at 5:00 p.m., Eastern time, on            , 2018.

18


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

    Immediately following the spin-off, Wyndham Hotels & Resorts, Inc. expects to have approximately            record holders of shares of its common stock and approximately            shares of common stock outstanding, based on the number of stockholders and outstanding shares of Wyndham Worldwide common stock on             , 2018 and the distribution ratio. The actual number of shares to be distributed will be determined as of the record date and will reflect any repurchases of shares of Wyndham Worldwide common stock and issuances of shares of Wyndham Worldwide common stock in respect of awards under Wyndham Worldwide Corporation equity-based incentive plans between the date the Wyndham Worldwide board of directors declares the dividend for the distribution and the record date for the distribution.

The Distribution

 

On the distribution date, Wyndham Worldwide Corporation will release the shares of Wyndham Hotels common stock to the distribution agent to distribute to Wyndham Worldwide stockholders. The distribution of shares will be made in book-entry form only, meaning that no physical share certificates will be issued. It is expected that it will take the distribution agent up to two weeks to issue shares of Wyndham Hotels common stock to you or to your bank or brokerage firm electronically on your behalf by way of direct registration in book-entry form. Trading of our shares will not be affected during that time. You will not be required to make any payment, surrender or exchange your shares of Wyndham Worldwide common stock or take any other action to receive your shares of Wyndham Hotels common stock.

Fractional Shares

 

The distribution agent will not distribute any fractional shares of Wyndham Hotels common stock to Wyndham Worldwide stockholders. Fractional shares of Wyndham Hotels common stock to which Wyndham Worldwide stockholders of record would otherwise be entitled will be aggregated and sold in the public market by the distribution agent. The aggregate net cash proceeds of the sales will be distributed ratably to those stockholders who would otherwise have received fractional shares of Wyndham Hotels common stock. Receipt of the proceeds from these sales generally will result in a taxable gain or loss to those stockholders for U.S. federal income tax purposes. Each stockholder entitled to receive cash proceeds from these shares should consult his, her or its own tax advisor as to such stockholder's particular circumstances. The material U.S. federal income tax consequences of the distribution are described in more detail under "The Spin-Off—Material U.S. Federal Income Tax Consequences of the Distribution."

Conditions to the Distribution

 

The distribution is subject to the satisfaction, or waiver by Wyndham Worldwide Corporation, of the following conditions:

 

the final approval of the distribution by the Wyndham Worldwide board of directors, which approval may be given or withheld in its absolute and sole discretion;

19


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

 

our Registration Statement on Form 10, of which this information statement forms a part, shall have been declared effective by the SEC, with no stop order in effect with respect thereto, and a notice of internet availability of this information statement shall have been mailed to Wyndham Worldwide stockholders;

 

Wyndham Hotels common stock shall have been approved for listing on the            , subject to official notice of distribution;

 

Wyndham Worldwide shall have obtained opinions from its spin-off tax advisors, in form and substance satisfactory to Wyndham Worldwide, to the effect that the distribution of Wyndham Hotels common stock and certain related transactions will qualify as a reorganization under Sections 368(a)(1)(D) and 355 of the Code, in which no gain or loss is recognized by Wyndham Worldwide Corporation or its stockholders, except, in case of Wyndham Worldwide stockholders, for cash received in lieu of fractional shares;

 

Wyndham Worldwide shall have obtained opinions from a nationally recognized valuation firm, in form and substance satisfactory to Wyndham Worldwide, with respect to (i) the capital adequacy and solvency of both Wyndham Worldwide and Wyndham Hotels after giving effect to the spin-off and (ii) the adequate surplus of Wyndham Worldwide to declare the applicable dividend;

 

all material governmental approvals and other consents necessary to consummate the distribution or any portion thereof shall have been obtained and be in full force and effect;

 

no order, injunction or decree issued by any governmental entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of all or any portion of the distribution shall be in effect, and no other event shall have occurred or failed to occur that prevents the consummation of all or any portion of the distribution; and

 

the financing transactions described herein shall have been completed on or prior to the distribution date.


 

 

We are not aware of any material U.S. federal, non-U.S. or state regulatory requirements that must be complied with or any material approvals that must be obtained, other than compliance with the rules and regulations of the SEC, approval for listing on the            and the declaration of effectiveness of the Registration Statement on Form 10, of which this information statement forms a part, by the SEC, in connection with the distribution. Wyndham Worldwide and Wyndham Hotels cannot assure you that any or all of these conditions will be met and Wyndham Worldwide Corporation may waive any of the conditions to the distribution. In addition, until the distribution has occurred, the Wyndham Worldwide board of directors has the right to not proceed with the distribution, even if all of the conditions are satisfied. For more information, see "The Spin-Off—Conditions to the Distribution."

20


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

Trading Market and Symbol   We intend to list Wyndham Hotels common stock on the            under the ticker symbol "            ." We anticipate that, at least one trading day prior to the record date, trading of shares of Wyndham Hotels common stock will begin on a "when-issued" basis and will continue up to and including the distribution date, and we expect "regular-way" trading of Wyndham Hotels common stock will begin on the first trading day following the distribution date. We also anticipate that, at least one trading day prior to the record date, there will be two markets in Wyndham Worldwide common stock: (i) a "regular-way" market on which shares of Wyndham Worldwide common stock will trade with an entitlement for the purchaser of Wyndham Worldwide common stock to shares of Wyndham Hotels common stock to be distributed pursuant to the distribution; and (ii) an "ex-distribution" market on which shares of Wyndham Worldwide common stock will trade without an entitlement for the purchaser of Wyndham Worldwide common stock to shares of Wyndham Hotels common stock. For more information, see "Trading Market."

Tax Consequences of the Distribution

 

The distribution is conditioned upon, among other things, the receipt of opinions of Wyndham Worldwide's spin-off tax advisors to the effect that the distribution, and certain related transactions, will be treated as a reorganization for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code, in which no gain or loss is recognized by Wyndham Worldwide Corporation or its stockholders, except, in the case of Wyndham Worldwide stockholders, for cash received in lieu of fractional shares. In addition, Wyndham Worldwide has received the IRS Ruling from the IRS regarding certain U.S. federal income tax consequences of aspects of the spin-off. See "The Spin-Off—Material U.S. Federal Income Tax Consequences of the Distribution."

 

 

Each stockholder is urged to consult his, her or its tax advisor as to the specific tax consequences of the spin-off to such stockholder, including the effect of any state, local or non-U.S. tax laws and of changes in applicable tax laws.

Relationship with Wyndham Worldwide after the Spin-Off

 

Before our spin-off from Wyndham Worldwide, we will enter into a Separation and Distribution Agreement and several other agreements with Wyndham Worldwide related to the spin-off. These agreements will govern the relationship between us and Wyndham Worldwide after completion of the spin-off and provide for the allocation between us and Wyndham Worldwide of various assets, liabilities, rights and obligations. These agreements include:

 

a Separation and Distribution Agreement with Wyndham Worldwide Corporation, which will provide for the allocation of assets and liabilities between us and Wyndham Worldwide and will establish certain rights and obligations between the parties following the distribution;

21


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

 

a Transition Services Agreement with Wyndham Worldwide, pursuant to which certain services will be provided on an interim basis following the distribution;

 

an Employee Matters Agreement with Wyndham Worldwide Corporation, which will set forth the agreements between us and Wyndham Worldwide concerning certain employee, compensation and benefit-related matters;

 

a Tax Matters Agreement with Wyndham Worldwide, regarding the sharing of tax liabilities incurred, and tax assets generated, before and after completion of the spin-off, certain indemnification rights with respect to tax matters and certain restrictions on our conduct following the distribution intended to preserve the tax-free status of the distribution; and

 

a long-term license, development and noncompetition agreement with Wyndham Worldwide, which will govern (i) the grant by Wyndham Hotels to Wyndham Worldwide of a license to use the "Wyndham" trademark, "The Registry Collection" trademark and certain other trademarks and intellectual property, which shall be exclusive for the vacation ownership, vacation rental (in the United States, Canada, Mexico and the Caribbean) and vacation ownership exchange businesses, with certain limited exceptions; (ii)  arrangements between Wyndham Hotels and Wyndham Worldwide with respect to the brand positioning, development and management of new projects; and (iii) non-compete obligations of Wyndham Hotels and Wyndham Worldwide.


 

 

We describe these arrangements in greater detail under "Certain Relationships and Related Party Transactions—Agreements with Wyndham Worldwide Related to the Spin-Off," and describe some of the risks of these arrangements under "Risk Factors—Risks Relating to the Spin-Off."

Dividend Policy

 

We intend to pay regular quarterly cash dividends beginning             , 2018. However, any decision to declare and pay dividends will be made at the sole discretion of our Board of Directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions and other factors that our Board of Directors may deem relevant. There can be no assurance that a payment of a dividend will occur in the future. See "Dividend Policy."

Financing Transactions

 

Subject to market conditions, we expect to complete one or more financing transactions on or prior to the completion of the spin-off. As a result of these financing transactions, we expect to have total indebtedness of approximately $2 billion. Wyndham Worldwide Corporation has obtained financing commitments of $2.0 billion related to the La Quinta acquisition, which will be assigned to us if we do not obtain other long-term financing. The financing transactions will be described in greater detail in a subsequent amendment to the registration statement of which this information statement forms a part. See "The Spin-Off—Financing Transactions" and "Description of Certain Indebtedness."

22


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

Transfer Agent                       .

Risk Factors

 

We face both general and specific risks and uncertainties relating to our business and our industry, the spin-off and our common stock. We also are subject to risks relating to our relationship with Wyndham Worldwide and our being an independent, publicly traded company following the spin-off. You should carefully read the risk factors set forth in the section titled "Risk Factors" in this information statement.

23


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

Summary Historical and Unaudited Pro Forma Combined Financial Data

        We derived the summary historical statement of income data for the years ended December 31, 2017, 2016 and 2015 and the summary historical balance sheet data as of December 31, 2017 and 2016 from the audited Combined Financial Statements of the Wyndham Hotels & Resorts businesses included elsewhere in this information statement. We derived the summary historical balance sheet data as of December 31, 2015 from unaudited combined financial statements of the Wyndham Hotels & Resorts businesses that are not included in this information statement. We have prepared our unaudited combined financial statements on the same basis as our audited Combined Financial Statements and, in our opinion, have included all adjustments, which include only normal recurring adjustments, necessary to present fairly in all material respects our financial position and results of operations.

        Following the consummation of the spin-off, Wyndham Hotels & Resorts, Inc. will hold, directly or through its subsidiaries, the Wyndham Hotels & Resorts businesses and will be the financial reporting entity. The following summary unaudited pro forma combined financial data of Wyndham Hotels as of and for the year ended December 31, 2017 has been prepared to reflect the La Quinta acquisition, the spin-off and related transactions described under "Unaudited Pro Forma Combined Financial Statements." The summary unaudited pro forma combined balance sheet data as of December 31, 2017 has been prepared to reflect the La Quinta acquisition, the spin-off and related transactions as if they had occurred on December 31, 2017. The summary unaudited pro forma combined statement of income data for the year ended December 31, 2017 has been prepared to reflect the La Quinta acquisition, the spin-off and related transactions as if they had occurred on January 1, 2017. The summary unaudited pro forma financial data is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the relevant transactions had been consummated on the date indicated, nor is it indicative of future operating results. The assumptions used and pro forma adjustments derived from such assumptions are based on currently available information, and we believe such assumptions are reasonable under the circumstances.

        This summary historical and unaudited pro forma combined financial data is not indicative of our future performance and does not necessarily reflect what our financial position and results of operations would have been had we been operating as an independent, publicly traded company during the periods presented, including changes that will occur in our operations and capitalization as a result of the spin-off from Wyndham Worldwide. For example, the historical combined financial statements of the Wyndham Hotels & Resorts businesses include certain indirect general and administrative costs allocated by Wyndham Worldwide Corporation for certain functions and services, including executive officer, finance and other administrative support. These costs may not be representative of the future costs we will incur as an independent, public company.

        The summary historical and unaudited pro forma combined financial data below should be read together with our audited Combined Financial Statements and related notes thereto, and the audited Combined Financial Statements of New La Quinta and related notes thereto, as well as the sections titled "Capitalization," "Selected Historical Combined Financial Data," "Unaudited Pro Forma Combined Financial Statements," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Description of Certain Indebtedness," and the other financial information included elsewhere in this information statement.

24


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

($ in millions, except for Operating Statistics)
  Pro Forma
2017
  2017   2016   2015  

Operating Statistics:

                 

Total Company

                                                          

Number of properties(1)

  9,324   8,422   8,035   7,812  

Number of rooms(2)

    816,595     728,195     697,607     678,042  

RevPAR(3)

  $ 40.13   $ 37.63   $ 36.67   $ 37.26  

Average royalty rate(4)

    3.81 %   3.66 %   3.65 %   3.68 %

United States

                                          

Number of properties(1)

    6,614     5,726     5,525     5,582  

Number of rooms(2)

  526,748   440,132   429,020   435,312  

RevPAR(3)

  $ 44.33   $ 41.04   $ 39.77   $ 39.13  

Average royalty rate(4)

  4.46 4.45 4.35 % 4.37 %

Summary Statement of Income Data:

   
          
         
          
   
          
 

Net revenues

  $ 2,040   $ 1,347   $ 1,312   $ 1,301  

Total expenses

    1,671     1,086     1,024     1,051  

Operating income

  369   261   288   250  

Interest expense, net

    74     6     1     1  

Income before income taxes

  295   255   287   249  

Provision for income taxes

    24     12     115     100  

Net income

  271   243   172   149  

Other Financial Data:

   
          
   
          
   
          
   
          
 

Royalties and franchise fees

  $ 477   $ 375   $ 353   $ 347  

License and other fees from Parent

    114     75     65     64  

Adjusted EBITDA(5):

                                          

Hotel Franchising segment

  $ 540   $ 414   $ 394   $ 366  

Hotel Management segment

  58   21   26   28  

Corporate and other(6)

    (66 )   (40 )   (39 )   (41 )

Total(7)

  $ 532   $ 395   $ 381   $ 353  

Summary Balance Sheet Data:

   
          
   
          
   
          
   
          
 

Cash

  $ 180   $ 57   $ 28   $ 38  

Total assets

    4,480     2,122     1,983     1,959  

Debt due to Parent

    184   174   95  

Total liabilities

    3,055     822     872     780  

Total stockholders' equity/net investment

  1,425   1,300   1,111   1,179  

(1)
Represents the number of hotels at the end of the period.
(2)
Represents the number of rooms in hotel properties at the end of the period that are under franchise and/or management agreements, or are Company-owned.
(3)
Represents revenue per available room and is calculated by multiplying the average occupancy rate by the average daily rate.
(4)
Represents royalties divided by the gross room revenues of our franchisees.
(5)
Adjusted EBITDA is defined as net income excluding interest expense, depreciation and amortization, impairment charges, restructuring and related charges, contract termination costs, transaction-related costs (acquisition-, disposition- or separation-related), stock-based compensation expense, early extinguishment of debt costs and income taxes. Adjusted EBITDA is not a recognized term under generally accepted accounting principles in the United States of America and should not be considered as an alternative to net income or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. For further discussion on Adjusted EBITDA, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Business and Financial Metrics and Terms Used by Management—Adjusted EBITDA." For a reconciliation of Adjusted EBITDA to net income, which we believe is the most closely comparable U.S. GAAP financial measure, see the table in footnote 6 below and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Reconciliation of Net Income to Adjusted EBITDA."
(6)
Corporate and other reflects unallocated corporate costs that are not attributable to an operating segment.

25


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

 

(7)
The reconciliation of Net Income to Adjusted EBITDA is as follows:


Reconciliation of Net Income to Adjusted EBITDA

($ in millions)
  Pro Forma 2017  

Net Income

  $ 271  

Provision for income taxes

    24  

Depreciation and amortization

    98  

Interest expense, net

    74  

Stock-based compensation

    22  

Transaction-related expense

    1  

Restructuring expense

    1  

Impairment expense

    41  

Adjusted EBITDA

  $ 532  

26


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

RISK FACTORS

        You should carefully consider each of the following risk factors and all of the other information set forth in this information statement. Unless the context otherwise suggests, references to "we," "us" and "our" in this Risk Factors section only refer to Wyndham Hotels and La Quinta's franchising and management businesses on a combined basis as if the La Quinta acquisition has been consummated. The risk factors generally have been separated into four groups: risks relating to our business and our industry, risks relating to the spin-off, risks relating to the La Quinta acquisition and risks relating to our common stock. Based on the information currently known to us, we believe that the following information identifies the most significant risk factors affecting our company in each of these categories of risks. However, the risks and uncertainties we face are not limited to those set forth in the risk factors described below. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business. In addition, past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods.

        If any of the following risks and uncertainties develops into actual events, these events could have a material adverse effect on our business, financial condition or results of operations. In such case, the trading price of our common stock could decline.


Risks Relating to Our Business and Our Industry

The hotel industry is highly competitive and we are subject to risks related to competition that may adversely affect our performance and growth.

        We will be adversely impacted if we cannot compete effectively in the highly competitive hotel industry. Our continued success depends upon our ability to compete effectively in markets that contain numerous competitors, some of whom may have significantly greater financial, marketing and other resources than we have. Competition in the hotel industry is based primarily on brand name recognition and reputation, as well as location, room rates, property size and availability of rooms and conference space, quality of the accommodations, guest satisfaction, amenities and the ability to earn and redeem loyalty program points. New hotels may be constructed and these additions to supply create new competitors, in some cases without corresponding increases in demand for lodging. Competition may reduce fee structures, potentially causing us to lower our fees, which may adversely impact our profits. New competition or existing competition that employs a business model that is different from our business model may require us to change our model so that we can remain competitive.

We are subject to business, financial, operating and other risks common to the hotel, franchising and hotel management industries and which affect our franchisees, any of which could reduce our revenues and growth.

        A significant portion of our revenue is derived from fees based on room revenues at hotels franchised under our hotel brands. As such, our business is subject, directly or through our franchisees, to risks common in the hotel, franchising and hotel management industries, including risks related to:

    our ability to increase the number of our franchised hotels;
    the number, occupancy and room rates of hotels operating under franchise and management agreements;
    our ability to develop and maintain positive relations and contractual arrangements with current and potential franchisees and hotel owners;
    competition from other franchised hotel brands, which may require us to offer terms to future franchisees and hotel owners less favorable to us than current franchise agreements;
    our franchisees' pricing decisions, which may indirectly affect our revenues;
    the quality of the services provided by franchisees or licensees, which may adversely affect our image, reputation and brand value for both prospective guests and prospective franchisees and hotel owners;

27


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

    the bankruptcy or insolvency of a significant number of our franchised or managed hotels, which could impair our ability to collect outstanding fees or other amounts due or otherwise exercise our contractual rights and result in the early termination of our contracts;
    financial difficulties of franchisees, owners or other developers that have development advance notes with us or who have received loans or other financial incentives from us;
    disputes with franchisees, which may result in litigation and the loss of management contracts;
    the failure of our franchisees to make investments necessary to maintain or improve their properties;
    adverse events occurring at one of our franchisees' or licensees' locations, such as personal injuries, food tampering, contamination or the spread of illness;
    negative publicity from online social media postings and related media reports, which could damage our hotel brands;
    the delay of hotel openings in our and, after the consummation of the La Quinta acquisition, La Quinta's pipeline;
    our ability to successfully market our hotel brands, programs or service or pilot new initiatives;
    the termination of our management contracts by one of the two developers who, in aggregate, own approximately 30% of our managed hotels;
    the laws, regulations and legislation internationally and domestically, and on a federal, state or local level, concerning the franchise or hotel industry, which may make franchising or managing hotels more onerous, more expensive or less profitable;
    the supply and demand for hotel rooms;
    our failure to adequately protect and maintain our trademarks and other intellectual property rights including, after the consummation of the La Quinta acquisition, La Quinta's trademarks and other intellectual property;
    competition from short-term online rental properties and agencies;
    the relative mix of branded hotels in the various hotel industry price categories;
    corporate budgets and spending and cancellations, deferrals or renegotiations of group business;
    seasonal volatility in our business;
    operating costs, including as a result of inflation, energy costs and labor costs such as minimum wage increases and unionization, workers' compensation and health-care related costs and insurance;
    our ability to keep pace with technological developments, which could impair our competitive position;
    disruptions, including non-renewal or termination of agreements, in relationships with third parties; including marketing alliances and affiliations with e-commerce channels; and
    disputes concerning our operations, including consumer disputes, organized labor activities, class actions and associated disputes.

        Any of these factors could reduce our revenues, increase our costs or otherwise limit our opportunities for growth.

Our revenues are highly dependent on the travel industry and declines in or disruptions to the travel industry, such as those caused by economic conditions, terrorism, political strife, pandemics or threats of pandemics, acts of God and war, may adversely affect us.

        Declines in or disruptions to the travel and hotel industries may adversely impact us. Risks affecting the travel and hotel industries include: economic slowdown and recession; economic factors such as increased costs of living and reduced discretionary income adversely impacting decisions by consumers and businesses to use and consume travel services and products; terrorist incidents and threats and associated heightened travel security measures; political and regional strife; acts of God such as earthquakes, hurricanes, fires, floods, volcanoes and other natural disasters; war; concerns with or threats of pandemics, contagious diseases or health epidemics; environmental disasters; lengthy power outages; increased pricing, financial instability and capacity constraints of air carriers; airline job actions and strikes; and

28


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

increases in gasoline and other fuel prices. Any such disruptions to the travel or hotel industries may adversely affect our affiliated hotels, the operations of current and potential franchisees and developers and owners of hotels with which we have hotel management contracts, thereby impacting our operations and the market price of our common stock.

Third-party Internet reservation systems, peer-to-peer online networks and alternative lodging channels may adversely impact us.

        Consumers increasingly use third-party Internet travel intermediaries and peer-to-peer online networks to search for and book their lodging accommodations. As the percentage of internet reservations increases, travel intermediaries may be able to obtain higher commissions and reduced room rates to the detriment of our business. Additionally, such travel intermediaries may divert reservations away from our direct online channels or increase the overall cost of Internet reservations for our affiliated hotels through their fees. As the use of these third-party reservation channels and peer-to-peer online networks increases, consumers may rely on these channels, adversely impacting our hotel brands, reservations and rates. In addition, if we fail to reach satisfactory agreements with intermediaries, our affiliated hotels may not appear on their websites and we could lose business as a result.

        In addition to competing with traditional hotels and lodging facilities, our franchisees compete with alternative lodging channels, including third-party providers of short-term rental properties and serviced apartments. Increasing use of these alternative lodging channels could materially adversely affect the occupancy and/or average rates at franchised hotels and our revenues.

We may be unable to enter into new, or renew existing, hotel management arrangements on favorable terms or at all, and certain of our management agreements may require that we fund shortfalls, any of which could reduce our revenue and the growth of our hotel management business.

        We provide hotel management services to certain of our hotel owners. Our current and future management arrangements may not continue and we may not be able to enter into new management arrangements in the future on favorable terms. Some of our management contracts with hotel owners, constituting approximately 30% of rooms under management contracts, require that we compensate the hotel owners for any shortfalls over the life of the management agreement up to a specified aggregate amount if the hotels do not attain specified levels of operating profit or owners do not receive a guaranteed minimum income. We may not be able to recover any funding of such performance guarantees. Any such factors could reduce our revenue and the growth of our hotel management business.

Our international operations are subject to additional risks not generally applicable to our domestic operations.

        Our international operations are subject to numerous risks including: exposure to local economic conditions; potential adverse changes in the diplomatic relations of foreign countries with the United States; hostility from local populations; political instability; threats or acts of terrorism; the effect of disruptions caused by severe weather, natural disasters, outbreak of disease or other events that make travel to a particular region less attractive or more difficult; the presence and acceptance of varying levels of business corruption in international markets; restrictions and taxes on the withdrawal of foreign investment and earnings; government policies against businesses or properties owned by foreigners; investment restrictions or requirements; diminished ability to legally enforce our contractual rights in foreign countries; forced nationalization of hotel properties by local, state or national governments; foreign exchange restrictions; fluctuations in foreign currency exchange rates; conflicts between local laws and U.S. laws including laws that impact our rights to protect our intellectual property; withholding and other taxes on remittances and other payments by subsidiaries; and changes in and application of foreign taxation structures including value added taxes. After the consummation of the La Quinta acquisition, we will also be subject to risks to the international operations of La Quinta's hotel franchising and management businesses. Any adverse outcome resulting from the financial instability or performance of foreign

29


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

economies, the instability of other currencies and the related volatility on foreign exchange and interest rates could impact our results of operations, financial position or cash flows.

Changes in U.S. federal, state and local or foreign tax law, interpretations of existing tax law or adverse determinations by tax authorities could increase our tax burden or otherwise adversely affect our financial condition or results of operations.

        We are subject to taxation at the federal, state and local levels in the United States and various other countries and jurisdictions. Our future effective tax rate and cash flows could be affected by changes in the composition of earnings in jurisdictions with differing tax rates, changes in statutory rates and other legislative changes, changes in the valuation of our deferred tax assets and liabilities, changes in determinations regarding the jurisdictions in which we are subject to tax, and our ability to repatriate earnings from foreign jurisdictions. From time to time, U.S. federal, state and local and foreign governments make substantive changes to tax rules and their application, which could result in materially higher corporate taxes than would be incurred under existing tax law and could adversely affect our financial condition or results of operations. We are subject to ongoing and periodic tax audits and disputes in U.S. federal and various state, local and foreign jurisdictions. An unfavorable outcome from any tax audit could result in higher tax costs, penalties and interest, thereby adversely affecting our financial condition or results of operations.

        In addition, we are directly and indirectly affected by new tax legislation and regulation and the interpretation of tax laws and regulations worldwide. Changes in such legislation, regulation or interpretation could increase our taxes and have an adverse effect on our operating results and financial condition. This includes potential changes in tax laws or the interpretation of tax laws arising out of the Base Erosion Profit Shifting project initiated by the Organization for Economic Co-operation and Development.

We will be subject to certain risks related to our future indebtedness, hedging transactions, the cost and availability of capital and the extension of credit by us.

        In connection with and following the consummation of the La Quinta acquisition and the spin-off, we may borrow funds under credit facilities, senior notes, term loans and other debt structures. We extend credit when we provide development advance notes and mezzanine or other forms of subordinated financing to assist franchisees and hotel owners in converting to or building a new hotel under one of our hotel brands. We may use financial instruments to reduce or hedge our financial exposure to the effects of currency and interest rate fluctuations. In connection with our debt obligations, hedging transactions, the cost and availability of capital and the extension of credit by us, we may be subject to numerous risks, including:

    our cash flows from operations or available lines of credit may be insufficient to meet required payments of principal and interest, which could result in a default and acceleration of the underlying debt and under other debt instruments that contain cross-default provisions;
    we may be unable to comply with the terms of the financial covenants under future financing facilities, which could result in a default and acceleration of the underlying debt and under other debt instruments that contain cross-default provisions;
    our leverage may adversely affect our ability to obtain additional financing on favorable terms or at all;
    our leverage may require the dedication of a significant portion of our cash flows to the payment of principal and interest, thus reducing the availability of cash flows to fund working capital, capital expenditures, dividends, share repurchases or other operating needs;
    increases in interest rates may adversely affect our financing costs and associated increases in hedging costs;
    rating agency downgrades of our debt could increase our borrowing costs and prevent us from obtaining additional financing at favorable terms or at all;

30


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

    failure or non-performance of counterparties to foreign exchange and interest rate hedging transactions could result in losses; and
    the inability of franchisees that have received mezzanine and other loans from us to pay back such loans.

        Our access to credit and capital also depends in large measure on market liquidity factors, which we do not control. Our ability to access the credit and capital markets may be restricted at times when we require or want access, which could impact our business plans and operating model. Uncertainty or volatility in the equity and credit markets may also negatively affect our ability to access short-term and long-term financing on reasonable terms or at all, which would negatively impact our liquidity and financial condition. In addition, if one or more of the financial institutions that support our credit facilities fail, we may not be able to find a replacement, which would negatively impact our ability to borrow under the credit facilities. Disruptions in the financial markets may adversely affect our credit rating and the market value of our common stock. While we believe we have adequate sources of liquidity to meet our anticipated requirements for working capital, debt service and capital expenditures for the foreseeable future, if we are unable to refinance or repay our outstanding debt when due, our results of operations and financial condition will be materially and adversely affected.

Changes to estimates or projections used to assess the fair value of our assets or operating results that are lower than our current estimates may cause us to incur impairment losses and require us to write-off all or a portion of the remaining value of our goodwill or other intangibles of companies we have acquired.

        Our total assets include goodwill and other intangible assets. We evaluate our goodwill for impairment on an annual basis or at other times during the year if events or circumstances indicate that it is more likely than not that the fair value is below the carrying value. We may be required to record a significant non-cash impairment charge in our financial statements during the period in which any impairment of our goodwill, other intangible assets or other assets is determined, negatively impacting our results of operations and stockholders' equity.

Acquisitions and other strategic transactions may not prove successful and could result in operating difficulties and failure to realize anticipated benefits.

        We regularly consider a wide array of acquisitions and other potential strategic transactions, including acquisitions of businesses and real property, joint ventures, business combinations, strategic investments and dispositions. Any of these transactions could be material to our business. We often compete for these opportunities with third parties, which may cause us to lose potential opportunities or to pay more than we may otherwise have paid absent such competition. We may not be able to identify and consummate strategic transactions and opportunities on favorable terms and any such strategic transactions or opportunities, if consummated, may not be successful.

We are subject to risks related to litigation.

        We and La Quinta's hotel franchising and management businesses are subject to a number of claims and legal proceedings. We may also be subject to future litigation as described in this information statement and otherwise, including in connection with our spin-off, the La Quinta acquisition and the La Quinta spin-off as defined herein. We cannot predict with certainty the ultimate outcome and related liability and costs of litigation and other proceedings filed by or against us. Unfavorable rulings or outcomes in litigation and other proceedings may materially harm our business.

Our operations are subject to extensive regulation and the cost of compliance or failure to comply with such regulations may adversely affect us.

        Our operations are regulated by federal, state and local governments in the countries in which we operate. In addition, U.S. and international federal, state and local regulators may enact new laws and regulations that may reduce our revenues, cause our expenses to increase or require us to modify our business practices substantially. If we are not in compliance with applicable laws and regulations, including,

31


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

among others, those governing franchising, hotel operations, lending, information security, data protection and privacy (including the General Data Protection Regulation), credit card security standards, marketing, sales, consumer protection and advertising, unfair and deceptive trade practices, fraud, bribery and corruption, telemarketing (including do-not-call and call-recording regulations), licensing, labor, employment, anti-discrimination, health care, health and safety, accessibility, immigration, gaming, environmental, intellectual property, securities, stock exchange listing, accounting, tax and regulations applicable under the Dodd-Frank Act, Office of Foreign Asset Control, Americans with Disabilities Act, the Sherman Act, the Foreign Corrupt Practices Act and local equivalents in international jurisdictions, including the United Kingdom Bribery Act, we may be subject to regulatory investigations or actions, fines, civil and/or criminal penalties, injunctions and potential criminal prosecution.

        While we continue to monitor all such laws and regulations, the cost of compliance with such laws and regulations impacts our operating costs. Future changes to such laws and regulations and the cost of compliance or failure to comply with such regulations may adversely affect us.

Failure to maintain the security of personally identifiable and proprietary information, non-compliance with our contractual obligations regarding such information or a violation of our privacy and security policies with respect to such information could adversely affect us.

        In connection with our business, we and our service providers collect and retain large volumes of certain types of personal and proprietary information pertaining to guests, stockholders and employees. Such information includes, but is not limited to, large volumes of guest credit and payment card information. We are at risk of attack by cyber-criminals operating on a global basis attempting to gain access to such information. In connection with data security incidents involving a group of Wyndham brand hotels that occurred between 2008 and 2010, we and one of our hotel group subsidiaries are subject to a stipulated order with the U.S. Federal Trade Commission (the "FTC"), pursuant to which, among other things, our subsidiary is required to maintain an information security program for payment card information within our subsidiary's network, and which provides our subsidiary with a safe harbor provided it continues to meet certain requirements for reasonable data security as outlined in the stipulated order.

        While we maintain what we believe are reasonable security controls over personal and proprietary information, including the personal information of guests, stockholders and employees, a breach of or breakdown in our systems that results in the unauthorized release of personal or proprietary information could nevertheless occur or we could fail to comply with the stipulated order with the FTC, any of which could have a material adverse effect on our hotel brands, reputation, business, financial condition and results of operations, as well as subject us to significant regulatory actions and fines, litigation, losses, third-party damages and other liabilities. Such a breach or a breakdown could also materially increase our costs to protect such information and to protect against such risks.

        Additionally, the legal and regulatory environment surrounding information security and privacy in the U.S. and international jurisdictions is constantly evolving. Should we violate or not comply with any of these laws or regulations, contractual requirements relating to data security and privacy, or with our own privacy and security policies, either intentionally or unintentionally, or through the acts of intermediaries, it could have a material adverse effect on our hotel brands, reputation, business, financial condition and results of operations, as well as subject us to significant fines, litigation, losses, third-party damages and other liabilities.

        Our information technology infrastructure, including but not limited to our, and our third-party service providers', information systems and legacy proprietary online reservation and management systems, has been and will likely continue to be vulnerable to system failures, computer hacking, cyber-terrorism, computer viruses and other intentional or unintentional interference, negligence, fraud, misuse and other unauthorized attempts to access or interfere with these systems and our personal and proprietary information. In addition, as we transition from our legacy systems to new, cloud-based technologies, we may face start-up issues that may negatively impact guests. The increased scope and complexity of our

32


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

information technology infrastructure and systems could contribute to the potential risk of security breaches or breakdown.

The insurance we carry may not always pay, or be sufficient to pay or reimburse us, for our liabilities, losses or replacement costs.

        We carry insurance for general liability, property, business interruption and other insurable risks with respect to our business and franchised, managed and owned hotels. We also self-insure for certain risks up to certain monetary limits. The terms and conditions or the amounts of coverage of our insurance may not at all times be sufficient to pay or reimburse us for the amount of our liabilities, losses or replacement costs, and there may also be risks for which we do not obtain insurance in the full amount or any amount concerning a potential loss or liability, or at all, due to the cost or availability of such insurance. As a result, we may incur liabilities or losses in the operation of our business that are substantial, which are not sufficiently covered by the insurance we maintain, or at all, which could have a material adverse effect on our business, financial condition and results of operations.

We rely on information technologies and systems to operate our business, which involves reliance on third-party service providers and on uninterrupted operation of service facilities.

        We rely on information technologies and systems to operate our business, which involves reliance on third-party service providers and uninterrupted operations of service facilities, including those used for reservation systems, hotel/property management, communications, procurement, call centers, operation of our loyalty programs and administrative systems. We also maintain physical facilities to support these systems and related services. Any natural disaster, disruption or other impairment in our technology capabilities and service facilities or those of our vendors could harm our business. In addition, any failure of our ability to provide our reservation systems may deter prospective franchisees or hotel owners from entering into agreements with us, and may expose us to liability from existing franchisees or other parties with whom we have contracted to provide reservation services. Similarly, failure to keep pace with developments in technology could impair our operations or competitive position.

We are dependent on our senior management and the loss of any member of our senior management could harm our business.

        We believe that our future growth depends in part on the continued services of our senior management team. Losing the services of any members of our senior management team could adversely affect our strategic relationships and impede our ability to execute our business strategies. The market for qualified individuals may be highly competitive and finding and recruiting suitable replacements for senior management may be difficult, time consuming and costly.

We are subject to risks related to corporate social responsibility.

        Many factors influence our reputation and the value of our hotel brands including the perception held by guests, our franchisees, our other key stakeholders and the communities in which we do business. Our business faces increasing scrutiny related to environmental, social and governance activities and the risk of damage to our reputation and the value of our hotel brands if we fail to act responsibly or comply with regulatory requirements in a number of areas, such as safety and security, responsible tourism, environmental stewardship, supply chain management, climate change, modern slavery, diversity, human rights, philanthropy and support for local communities.


Risks Relating to the Spin-Off

The distribution may not be completed on the terms or timeline currently contemplated, if at all.

        While we are actively engaged in planning for the distribution, unanticipated developments could delay or negatively affect the distribution, including those related to the filing and effectiveness of appropriate filings with the SEC, the listing of our common stock on a trading market and receiving any

33


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

required regulatory approvals. In addition, until the distribution has occurred, the Wyndham Worldwide board of directors has the right to not proceed with the distribution, even if all of the conditions are satisfied. Therefore, the distribution may not be completed on the terms or timeline currently contemplated, if at all.

We may be unable to achieve some or all of the benefits that we expect to achieve from our spin-off from Wyndham Worldwide.

        We believe that as a standalone, independent public company, our business will benefit from, among other things, allowing our management to design and implement corporate policies and strategies that are based primarily on the characteristics of our business, allowing us to focus our financial resources wholly on our own operations and implement and maintain a capital structure designed to meet our own specific needs. However, by separating from Wyndham Worldwide, we may be more susceptible to market fluctuations and other adverse events than we would have been were we still a part of Wyndham Worldwide. If we fail to achieve some or all of the benefits that we expect to achieve as an independent company, or do not achieve them in the time we expect, our results of operations and financial condition could be materially adversely affected.

We have no operating history as a separate public company; our historical and pro forma financial information is not necessarily representative of the results we would have achieved as a separate publicly traded company or as a combined company following the consummation of the La Quinta acquisition and may not be a reliable indicator of our future results; we may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as an independent company, and as a result, we may experience increased costs.

        Prior to the spin-off, Wyndham Worldwide performed various corporate functions for us, including tax administration, governance, compliance, accounting, internal audit and external reporting. Our historical and pro forma financial results reflect allocations of corporate expenses from Wyndham Worldwide for these and similar functions that may be less than the comparable expenses we would have incurred had we operated as a separate publicly traded company. Prior to the spin-off, we shared economies of scope and scale in costs, employees, vendor relationships and relationships with our guests. While we expect to enter into short-term transition agreements and longer-term licensing, marketing and other agreements that will govern certain commercial and other relationships between us and Wyndham Worldwide, those arrangements may not capture the benefits our business has enjoyed as a result of being integrated with the other businesses of Wyndham Worldwide.

        Generally, our working capital requirements, including acquisitions and capital expenditures, have historically been satisfied as part of the corporate-wide cash management policies of Wyndham Worldwide. Following the completion of the spin-off, Wyndham Worldwide will not be providing us with funds to finance our working capital or other cash requirements, and we may need to obtain financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements. We may be unable to replace in a timely manner or on comparable terms and costs the services or other benefits that Wyndham Worldwide previously provided to us.

        The loss of the benefits from being a part of Wyndham Worldwide could have an adverse effect on our business, results of operations and financial condition following the completion of the spin-off. Other significant changes may occur in our cost structure, management, financing and business operations as a result of our operating as a company separate from Wyndham Worldwide.

        Additionally, the pro forma financial information included in this information statement is derived from the historical audited Combined Financial Statements of the Wyndham Hotels & Resorts businesses and the historical audited Combined Financial Statements of New La Quinta. As such, it may be materially different from what the combined company's actual results of operations and financial condition would have been had the La Quinta acquisition and the spin-off occurred during the periods presented or what

34


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

the combined company's results of operations and financial position will be after the consummation of the La Quinta acquisition and the spin-off.

We may have received better terms from unaffiliated third parties than the terms we received in our agreements with Wyndham Worldwide entered into in connection with the spin-off.

        The agreements related to the spin-off from Wyndham Worldwide were negotiated in the context of the spin-off from Wyndham Worldwide while we were still part of Wyndham Worldwide. Although these agreements are intended to be on an arm's-length basis, they may not reflect terms that would have resulted from arm's-length negotiations among unaffiliated third parties. The terms of the agreements being negotiated in the context of the separation are related to, among other things, allocations of assets and liabilities, rights and indemnification and other obligations between us and Wyndham Worldwide. To the extent that certain terms of those agreements provide for rights and obligations that could have been procured from third parties, we may have received better terms from third parties because third parties may have competed with each other to win our business. See "Certain Relationships and Related Party Transactions—Agreements with Wyndham Worldwide Related to the Spin-Off."

We expect to incur indebtedness as part of our spin-off from Wyndham Worldwide and possibly in the future, which may subject us to various restrictions and decrease our profitability.

        In connection with the spin-off, we expect to incur indebtedness, which may include indebtedness related to the La Quinta acquisition, and we will be responsible for servicing our own indebtedness and obtaining and maintaining sufficient working capital and other funds to satisfy our cash requirements. Our financing arrangements may contain restrictions, covenants and events of default that could limit our ability to respond to market conditions, provide for capital investment needs or take advantage of business opportunities by restricting our ability to incur or guarantee additional indebtedness or requiring us to offer to repurchase such indebtedness in the event of a change of control; pay dividends or make distributions; make investments or acquisitions; sell, transfer or otherwise dispose of certain assets; create liens; consolidate or merge; enter into transactions with affiliates; and prepay and repurchase or redeem certain indebtedness. In addition, our financing costs may be higher than they were as part of Wyndham Worldwide.

Our accounting and other management systems and resources may not meet the financial reporting and other requirements to which we will be subject following the spin-off, and failure to achieve and maintain effective internal controls could have a material adverse effect on our business and the price of our common stock.

        As a result of the spin-off, we will be directly subject to reporting and other obligations under U.S. securities laws and will be required to comply with internal controls and reporting requirements thereunder. These reporting and other obligations may place significant demands on our management, administrative and operational resources, including accounting systems and resources and may require us to upgrade our systems, implement additional financial and management controls, reporting systems and procedures and hire additional accounting and finance staff. If we are unable to obtain or maintain adequate financial and management controls, reporting systems, information technology systems and procedures in a timely and effective fashion, our ability to comply with the financial reporting requirements and other rules that apply to reporting companies under U.S. securities laws may be impaired. We expect to incur additional annual expenses for the purpose of addressing these requirements that may be significant.

The spin-off and related transactions may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws and legal distribution requirements.

        While we will receive a solvency opinion from an investment bank confirming that we and Wyndham Worldwide will be adequately capitalized immediately after the spin-off, the spin-off could be challenged under various state and federal fraudulent conveyance laws. An unpaid creditor could claim that Wyndham

35


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

Worldwide did not receive fair consideration or reasonably equivalent value in the spin-off, and that the spin-off left Wyndham Worldwide insolvent or with unreasonably small capital or that Wyndham Worldwide intended or believed it would incur debts beyond its ability to pay such debts as they mature. If a court were to agree with such a plaintiff, then such court could void the spin-off as a fraudulent transfer and could impose a number of different remedies, including without limitation, returning our assets or your shares in our company to Wyndham Worldwide or providing Wyndham Worldwide with a claim for money damages against us in an amount equal to the difference between the consideration received by Wyndham Worldwide and the fair market value of our company at the time of the spin-off.

Our success will depend in part on our ongoing relationship with Wyndham Worldwide after the spin-off.

        In connection with the spin-off, we will enter into a number of agreements with Wyndham Worldwide that will govern the ongoing relationships between Wyndham Worldwide and us after the spin-off. Our success will depend, in part, on the maintenance of these ongoing relationships with Wyndham Worldwide, Wyndham Worldwide's performance of its obligations under these agreements, including Wyndham Worldwide's maintenance of the quality of products and services it sells under the "Wyndham" trademark, and certain other trademarks and intellectual property that we license to Wyndham Worldwide. In addition, pursuant to the license, development and noncompetition agreement, Wyndham Worldwide will pay us royalties that are projected to increase by $39 million to $114 million annually. If we are unable to maintain a good relationship with Wyndham Worldwide, or if Wyndham Worldwide does not perform its obligations under these agreements, does not renew such agreements following their expiration, fails to maintain the quality of the products and services it sells under the "Wyndham" trademark, and certain other trademarks or intellectual property or fails to pay such royalties, our profitability and revenues could decrease and our growth potential may be adversely affected.

Certain Directors who serve on our Board of Directors will serve as directors of the Wyndham Worldwide board of directors, and ownership of shares of Wyndham Worldwide common stock or equity awards of Wyndham Worldwide Corporation by Directors and executive officers of Wyndham Hotels & Resorts, Inc. may create conflicts of interest or the appearance of conflicts of interest.

        Certain of our Directors who serve on our Board of Directors will continue to serve on the Wyndham Worldwide board of directors. This could create, or appear to create, potential conflicts of interest when our or Wyndham Worldwide's management and directors face decisions that could have different implications for us and Wyndham Worldwide, including the resolution of any dispute regarding the terms of the agreements governing the spin-off and the relationship between us and Wyndham Worldwide after the spin-off, any commercial agreements entered into in the future between us and Wyndham Worldwide and the allocation of such directors' time between us and Wyndham Worldwide.

        Because of their current or former positions with Wyndham Worldwide, substantially all of our executive officers and some of our non-employee Directors will own shares of Wyndham Worldwide common stock. The continued ownership of Wyndham Worldwide common stock by Wyndham Hotels & Resorts, Inc.'s Directors and executive officers following the spin-off creates or may create the appearance of conflicts of interest when these Directors and executive officers are faced with decisions that could have different implications for us and Wyndham Worldwide.

If the distribution, together with certain related transactions, were to fail to qualify as a reorganization for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code, then our stockholders, we and Wyndham Worldwide might be required to pay substantial U.S. federal income taxes (including as a result of indemnification under the Tax Matters Agreement).

        The distribution is conditioned upon Wyndham Worldwide's receipt of opinions of its spin-off tax advisors, to the effect that the distribution, together with certain related transactions, will qualify as a reorganization for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code in which no gain or loss is recognized by Wyndham Worldwide Corporation or its stockholders, except, in the case of Wyndham Worldwide stockholders, for cash received in lieu of fractional shares. The opinions of its

36


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

spin-off tax advisors will be based on, among other things, certain assumptions as well as on the continuing accuracy of certain factual representations and statements that we and Wyndham Worldwide make to the spin-off tax advisors. In rendering their opinion, the spin-off tax advisors will also rely on certain covenants that we and Wyndham Worldwide enter into, including the adherence by Wyndham Worldwide and us to certain restrictions on our future actions contained in the Tax Matters Agreement. If any of the representations or statements that we or Wyndham Worldwide make are or become inaccurate or incomplete, or if we or Wyndham Worldwide breach any of our covenants, the distribution and such related transactions might not qualify for such tax treatment. The opinions of its spin-off tax advisors are not binding on the IRS or a court, and there can be no assurance that the IRS will not challenge the validity of the distribution and such related transactions as a reorganization for U.S. federal income tax purposes under Sections 368(a)(1)(D) and 355 of the Code eligible for tax-free treatment, or that any such challenge ultimately will not prevail.

        In addition, Wyndham Worldwide has received the IRS Ruling regarding certain U.S. federal income tax aspects of transactions related to the spin-off. Although the IRS Ruling generally is binding on the IRS, the continued validity of the IRS Ruling will be based upon and subject to the continuing accuracy of factual statements and representations made to the IRS by Wyndham Worldwide. In addition, there is a risk that the IRS could promulgate new administrative guidance prior to the spin-off that could adversely impact the tax-free treatment of the distribution (even taking into account the receipt of the IRS Ruling). The IRS Ruling is limited to specified aspects of the spin-off under Sections 355 and 361 of the Code and does not represent a determination by the IRS that all of the requirements necessary to obtain tax-free treatment to holders of Wyndham Worldwide common stock and to Wyndham Worldwide have been satisfied.

        If the distribution does not qualify as a tax-free transaction for any reason, including as a result of a breach of a representation or covenant, Wyndham Worldwide would recognize a substantial gain attributable to the hotel business for U.S. federal income tax purposes. In such case, under U.S. Treasury regulations, each member of the Wyndham Worldwide consolidated group at the time of the spin-off (including us and certain of our subsidiaries) would be jointly and severally liable for the entire resulting amount of any U.S. federal income tax liability. Additionally, if the distribution of our common stock does not qualify as tax-free under Section 355 of the Code, Wyndham Worldwide stockholders will be treated as having received a taxable distribution equal to the value of our stock distributed, treated as a taxable dividend to the extent of Wyndham Worldwide Corporation's current and accumulated earnings and profits, and then would have a tax-free basis recovery up to the amount of their tax basis in their shares, and then would have taxable gain from the sale or exchange of the shares to the extent of any excess.

Our ability to engage in acquisitions and other strategic transactions is subject to limitations because we are agreeing to certain restrictions intended to support the tax-free nature of the distribution.

        The U.S. federal income tax laws that apply to transactions like the spin-off generally create a presumption that the distribution would be taxable to Wyndham Worldwide (but not to Wyndham Worldwide stockholders) if we engage in, or enter into an agreement to engage in, a transaction that would result in a 50% or greater change by vote or by value in our stock ownership during the four-year period beginning two years before the distribution date, unless it is established that the transaction is not pursuant to a plan or series or transactions related to the distribution. U.S. Treasury regulations currently in effect generally provide that whether an acquisition transaction and a distribution are part of a plan is determined based on all of the facts and circumstances, including specific factors listed in the Treasury regulations. In addition, these Treasury regulations provide several "safe harbors" for acquisition transactions that are not considered to be part of a plan that includes a distribution.

        There are other restrictions imposed on us under current U.S. federal income tax laws with which we will need to comply in order for the distribution and certain related transactions to qualify as a transaction that is tax-free under Sections 368(a)(1)(D) and 355 of the Code. For example, we will generally be required to continue to own and manage our hotel business, and there will be limitations on issuances, redemptions and sales of our stock for cash or other property following the distribution, except in

37


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

connection with certain stock-for-stock acquisitions and other permitted transactions. If these restrictions are not followed, the distribution could be taxable to Wyndham Worldwide and Wyndham Worldwide stockholders.

        We will enter into a Tax Matters Agreement with Wyndham Worldwide under which we will allocate, between Wyndham Worldwide and ourselves, responsibility for U.S. federal, state and local and non-U.S. income and other taxes relating to taxable periods before and after the spin-off and provide for computing and apportioning tax liabilities and tax benefits between the parties. In the Tax Matters Agreement, we will agree that, among other things, we may not take, or fail to take, any action following the distribution if such action, or failure to act: would be inconsistent with or prohibit the spin-off and certain restructuring transactions related to the distribution and certain related transactions from qualifying as a tax-free reorganization under Sections 368(a)(1)(D) and 355 and related provisions of the Code to Wyndham Worldwide and Wyndham Worldwide stockholders (except with respect to the receipt of cash in lieu of fractional shares of our stock); or would be inconsistent with, or cause to be untrue, any representation, statement, information or covenant made in connection with the IRS Ruling, the tax opinions provided by Wyndham Worldwide's spin-off tax advisors or the Tax Matters Agreement relating to the qualification of the distribution and certain related transactions as a tax-free transaction under Sections 368(a)(1)(D) and 355 and related provisions of the Code.

        In addition, we will agree that we may not, among other things, during the two-year period following the spin-off, except under certain specified circumstances, issue, sell or redeem our stock or other securities (or those of certain of our subsidiaries); liquidate, merge or consolidate with another person; sell or dispose of assets outside the ordinary course of business or materially change the manner of operating our business; or enter into any agreement, understanding or arrangement, or engage in any substantial negotiations with respect to any transaction or series of transactions which would cause us to undergo a specified percentage or greater change in our stock ownership by value or voting power. These restrictions could limit our strategic and operational flexibility, including our ability to finance our operations by issuing equity securities, make acquisitions using equity securities, repurchase our equity securities, or raise money by selling assets or enter into business combination transactions. We will also agree to indemnify Wyndham Worldwide for certain tax liabilities resulting from any such transactions. Further, our stockholders may consider these covenants and indemnity obligations unfavorable as they might discourage, delay or prevent a change of control.


Risks Relating to the Acquisition of La Quinta's Hotel Franchising and Management Businesses

Our ability to achieve the anticipated benefits of the La Quinta acquisition will depend in part on the success of the La Quinta spin-off and our relationship with CorePoint.

        In connection with the La Quinta acquisition, La Quinta Holdings Inc. and its subsidiaries (excluding CorePoint and its subsidiaries), which will become indirect wholly-owned subsidiaries of Wyndham Hotels & Resorts, Inc. following the completion of the acquisition, have entered and will enter into agreements with CorePoint and its subsidiaries that will govern the ongoing relationships between CorePoint and us after the consummation of the La Quinta acquisition, the internal reorganization and the spin-off. These agreements will, among other things, include arrangements with respect to employee matters, tax matters, transitional services and hotel management and franchise matters, as well as the allocations of assets and liabilities, rights and indemnification and other obligations between La Quinta and CorePoint. Our success will depend, in part, on the maintenance of these relationships with CorePoint and its performance of its obligations under these agreements. If we are unable to maintain a good relationship with CorePoint, if it does not perform its obligations under these agreements, does not renew such agreements following their expiration or the CorePoint spin-off exposes us to liabilities and legal proceedings, our profitability and revenues could decrease, we may not realize the anticipated benefits of the La Quinta acquisition and our growth potential may be adversely affected.

38


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

The anticipated benefits of the acquisition of La Quinta's hotel franchising and management businesses may not be realized fully or at all and may take longer to realize than expected.

        The acquisition of La Quinta's hotel franchising and management businesses involves the integration of two companies that have previously operated independently with principal offices in two distinct locations. The integration process may be complex, costly and time-consuming, which could adversely affect the combined company's businesses, financial results and financial condition. Our management team will be required to devote significant attention and resources to integrating the two companies. Even if we are able to integrate the business operations of the two companies successfully, this integration may not result in the realization of the full benefits of synergies, cost savings, innovation and operational efficiencies that we expect to realize or these benefits may not be achieved within a reasonable period of time.

        The difficulties of integration may include: integrating the acquired hotel franchising and management businesses of La Quinta into Wyndham Hotels; implementing our business plan for the combined company; integrating information, communications and other systems and internal controls over accounting and financial reporting; consolidating corporate and administrative functions; conforming standards, controls, procedures and policies, business cultures and compensation structures between Wyndham Hotels and La Quinta's hotel franchising and management businesses; retaining franchisees; establishing a mutually beneficial relationship with CorePoint, which will own the more than 300 hotels in the La Quinta hotel management portfolio; and retaining key personnel.

        The success of our acquisition of La Quinta's hotel franchising and management businesses will depend in part on the retention of franchisees and key employees. We may not be able to retain franchisees, senior executives or key personnel. Furthermore, uncertainty about the effect of the La Quinta acquisition on La Quinta's employees may impair its ability to retain and motivate key personnel until and after the consummation of the La Quinta acquisition and to progress signed franchise agreements to property construction and opening. If such franchisees and key employees are not retained or if signed franchise agreements do not give rise to property openings at a typical pace, Wyndham Hotels may not realize the anticipated benefits of the La Quinta acquisition.

The acquisition of La Quinta's hotel franchising and management businesses may not be consummated.

        Completion of the acquisition of La Quinta's hotel franchising and management businesses is subject to the satisfaction of various conditions, including the receipt of approval from the La Quinta Holdings Inc. stockholders and government agencies. All of the various conditions to the La Quinta acquisition may not be satisfied, and the La Quinta acquisition may not be completed on the proposed terms, within the expected timeframe, or at all. If Wyndham Worldwide is unable to complete the proposed transaction, it will have incurred substantial expenses and diverted significant management time and resources from its ongoing business without the intended benefit. For more information about the acquisition of La Quinta's hotel franchising and management businesses, see "Summary—Recent Developments" and "Our Business—Recent Developments."

We will incur significant one-time transaction costs in connection with the La Quinta acquisition.

        We expect to incur significant one-time integration costs and capital investments in connection with the La Quinta acquisition, including legal, financing, accounting and financial advisory fees and expenses, which we currently estimate to be approximately $100 million. The substantial majority of these costs will be non-recurring expenses related to the La Quinta acquisition. These costs and expenses are not reflected in the pro forma financial information included in this information statement.

39


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83


Risks Relating to Our Common Stock

There is no existing market for our common stock, and a trading market that will provide you with adequate liquidity may not develop for our common stock. In addition, once our common stock begins trading, the market price of shares of our common stock may fluctuate widely.

        There is currently no public market for our common stock and an active trading market for our common stock may not develop as a result of the distribution or be sustained in the future. The lack of an active trading market may make it more difficult for you to sell your shares and could lead to our share price being depressed or more volatile.

        We cannot predict the prices at which our common stock may trade after the distribution. The market price of our common stock may fluctuate widely, depending upon many factors, some of which may be beyond our control, including:

    our business profile and market capitalization may not fit the investment objectives of Wyndham Worldwide stockholders, especially stockholders who hold Wyndham Worldwide common stock based on Wyndham Worldwide Corporation's inclusion in the S&P 500 Index, as our common stock may not be included in the S&P 500 Index, and as a result, Wyndham Worldwide stockholders may sell our shares after the distribution;

    a shift in our investor base;

    success or failure of our business strategies;

    failure to achieve our growth and performance objectives;

    our quarterly or annual earnings, or those of other companies in our industry;

    our ability to obtain financing as needed;

    changes in laws and regulations affecting our business;

    changes in accounting standards, policies, guidance, interpretations or principles;

    announcements by us or our competitors of significant acquisitions or dispositions;

    the failure of securities analysts to cover our common stock after the distribution or negative views about our stock or our business expressed by securities analysts;

    changes in earnings estimates by securities analysts or our ability to meet those estimates;

    the operating and stock price performance of other comparable companies;

    overall market fluctuations;

    actual or anticipated fluctuations in our operating results due to the seasonality of our business and other factors related to our business; and

    general economic conditions.

        For many reasons, including the risks identified in this information statement, the market price of our common stock following the spin-off may be more volatile than the market price of Wyndham Worldwide common stock before the spin-off. These factors may result in short-term or long-term negative pressure on the value of our common stock. Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations may adversely affect the trading price of our common stock.

Your percentage ownership in Wyndham Hotels may be diluted in the future.

        Your percentage ownership in Wyndham Hotels may be diluted in the future because of equity awards that we expect will be issued to our Directors, officers and employees, the accelerated vesting of certain equity awards with respect to our common stock, and any future sales of stock by the Company or any issuances thereof in connection with an acquisition.

        Upon completion of the spin-off, pursuant to the Employee Matters Agreement outstanding performance-vesting Wyndham Worldwide Corporation equity awards will fully time vest, without

40


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

pro-ration, and performance vest based on actual performance determined as of the spin-off and will be settled in both Wyndham Worldwide common stock and our common stock; and holders of outstanding time-vesting Wyndham Worldwide Corporation equity awards will retain such Wyndham Worldwide Corporation equity awards and receive an equal number of time-vesting equity awards with respect to our common stock. Unvested time-vesting awards with respect to our common stock held by directors, officers and employees of Wyndham Worldwide will vest upon completion of the spin-off, generally subject to the relevant individual's continued employment with Wyndham Worldwide through completion of the spin-off. Unvested time-vesting awards with respect to our common stock held by our Directors, officers and employees will generally vest upon the earliest to occur of (i) the six-month anniversary of the completion of the spin-off, subject to the relevant individual's continued employment with us through such six-month anniversary date, (ii) our termination of the relevant individual's employment without "cause," or (iii) the date on which such equity award would have vested in accordance with the terms of the existing award agreement, subject to the relevant individual's continued employment with us through the applicable vesting date. We expect that up to 1.4 million shares of Wyndham Hotels common stock will be issued pursuant to equity awards vesting in connection with the spin-off.

        Additionally, in connection with the spin-off, on March 1, 2018, the Wyndham Worldwide board of directors awarded, in the aggregate, 90,412 restricted stock units with respect to Wyndham Worldwide common stock, in order to encourage continued employment with Wyndham Hotels after consummation of the spin-off. Pursuant to the Employee Matters Agreement, upon completion of the spin-off, holders of these Wyndham Worldwide Corporation restricted stock units will retain such Wyndham Worldwide Corporation restricted stock units and receive an equal number of restricted stock units with respect to Wyndham Hotels common stock, totaling 90,412 in the aggregate. These restricted stock units are expected to fully vest at the earlier of 30 days after the first anniversary of the consummation of the spin-off or December 31, 2019, subject to certain customary conditions, and are not subject to acceleration in connection with the spin-off.

Provisions in our amended and restated certificate of incorporation, amended and restated by-laws and Delaware law may prevent or delay an acquisition of Wyndham Hotels, which could decrease the trading price of our common stock.

        Our amended and restated certificate of incorporation, amended and restated by-laws and Delaware corporate law contain or will contain provisions that are intended to deter or delay coercive takeover practices and inadequate takeover bids. For example, our amended and restated certificate of incorporation and amended and restated by-laws will require advance notice for stockholder proposals, place limitations on convening stockholder meetings and authorize our Board to issue one or more series of preferred stock. Further information on such provisions in the amended and restated certificate of incorporation and by-laws can be found in the section titled "Description of Capital Stock."

        Delaware law also imposes some restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock. We believe these provisions protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirors to negotiate with our Board of Directors and by providing our Board of Directors with more time to assess any acquisition proposal. These provisions are not intended to make us immune from takeovers. However, these provisions apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our Board of Directors determines is not in the best interests of our company and our stockholders.

41


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

Our amended and restated bylaws will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our Directors, officers or employees.

        Our amended and restated certificate of incorporation will provide that, subject to limited exceptions, the State of Delaware will be the sole and exclusive forum for derivative actions; claims related to a breach of a fiduciary duty, corporate law, our certificate of incorporation or our bylaws; or under the internal affairs doctrine. This choice of forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our Directors, officers or other employees, which may discourage such lawsuits against us and our Directors, officers and employees.

We may not pay dividends on our common stock, and the terms our indebtedness could limit our ability to pay dividends on our common stock.

        We intend to pay regular quarterly cash dividends beginning                    , 2018. However, any decision to declare and pay dividends will be made at the sole discretion of our Board of Directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions and other factors that our Board of Directors may deem relevant. There can be no assurance that a payment of a dividend will occur in the future.

42


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

        This information statement contains forward-looking statements including in the sections titled "Summary," "Risk Factors," "The Spin-Off," "Trading Market," "Dividend Policy," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Our Business," that are based on our management's beliefs and assumptions and on information currently available to our management. Forward-looking statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, the benefits resulting from the spin-off, the benefits resulting from the La Quinta acquisition, the effects of competition and the effects of future legislation or regulations and other non-historical statements. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words "outlook," "believes," "expects," "outlook," "potential," "continues," "may," "might," "will," "should," "could," "seeks," "approximately," "goals," "future," "projects," "predicts," "guidance," "target," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words.

        The risk factors discussed in "Risk Factors" could cause our results to differ materially from those expressed in forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include general economic conditions, the performance of the financial and credit markets, the economic environment for the hotel industry, the impact of war, terrorist activity or political strife, operating risks associated with our hotel businesses, uncertainties that may delay or negatively impact the spin-off or cause the spin-off to not occur at all, uncertainties related to our ability to realize the anticipated benefits of the spin-off, uncertainties related to our ability to successfully complete the spin-off on a tax-free basis within the expected time frame or at all, unanticipated developments that delay or otherwise negatively affect the spin-off, uncertainties related to our ability to obtain financing or the terms of such financing, unanticipated developments related to the impact of the spin-off and the La Quinta acquisition on our relationships with franchisees, hotel owners, guests, suppliers, employees, Wyndham Worldwide and others with whom we and La Quinta have relationships, unanticipated developments resulting from possible disruption to our operations resulting from the spin-off and the La Quinta acquisition, the potential impact of the spin-off, the La Quinta acquisition and related transactions on our and La Quinta's hotel franchising and management businesses' credit ratings, uncertainties that may delay or negatively impact the La Quinta acquisition or cause it to not occur at all, including the timing, receipt and terms of any required governmental and regulatory approvals and the ability to satisfy the other conditions to the La Quinta acquisition, uncertainties related to the successful integration of La Quinta's hotel franchising and management businesses and our ability to realize the anticipated benefits of the La Quinta acquisition, unanticipated developments resulting from possible disruption to our and La Quinta's hotel franchising and management businesses' operations as a result of the La Quinta acquisition and uncertainties related to La Quinta Holdings Inc.'s ability to successfully complete its spin-off as contemplated or at all and to realize the anticipated benefits thereof. There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business. Any such risks could cause our results to differ materially from those expressed in forward-looking statements.

        Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. You should not place undue reliance on any forward-looking statements in this information statement. We do not have any obligation to update forward-looking statements after we distribute this information statement except as required by law.

43


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83


THE SPIN-OFF

Background

        On August 2, 2017, Wyndham Worldwide announced its intention to spin-off Wyndham Hotels, following which Wyndham Hotels & Resorts, Inc. will be an independent, publicly traded company. As part of the spin-off, Wyndham Worldwide will effect an internal reorganization to properly align the appropriate businesses within each of Wyndham Hotels and Wyndham Worldwide whereby, among other things: (i) all of the assets and liabilities (whether accrued, contingent or otherwise) associated with the hotel business, subject to certain exceptions, will be retained by or transferred to Wyndham Hotels; and (ii) all other assets and liabilities (whether accrued, contingent or otherwise) of Wyndham Worldwide, subject to certain exceptions (including the shared contingent assets and the shared contingent liabilities), will be retained by or transferred to Wyndham Worldwide. See "—Manner of Effecting the Spin-Off—Internal Reorganization."

        To complete the spin-off, Wyndham Worldwide will, following the internal reorganization, distribute to Wyndham Worldwide stockholders all of the outstanding shares of Wyndham Hotels common stock. The distribution will occur on the distribution date, which is expected to be                        , 2018. Each holder of Wyndham Worldwide common stock will receive one share of our common stock for each share of Wyndham Worldwide common stock held at 5:00 p.m., Eastern time, on                        , 2018, the record date. After completion of the spin-off:

    Wyndham Hotels & Resorts, Inc. will be an independent, publicly traded company (listed on the                under the ticker symbol                ), and will own and operate Wyndham Worldwide's hotel business; and

    Wyndham Worldwide Corporation will continue to be an independent, publicly traded company (listed on the New York Stock Exchange under the ticker symbol            ) and will continue to own and operate its vacation ownership, timeshare exchange and vacation rental businesses.

        Each holder of Wyndham Worldwide common stock will continue to hold his, her or its shares in Wyndham Worldwide. No vote of Wyndham Worldwide stockholders is required or is being sought in connection with the spin-off, including the internal reorganization, and Wyndham Worldwide stockholders will not have any appraisal rights in connection with the spin-off.

        The distribution is subject to the satisfaction or waiver of certain conditions. In addition, until the distribution has occurred, the Wyndham Worldwide board of directors has the right to not proceed with the distribution, even if all of the conditions are satisfied. See "—Conditions to the Distribution."


Reasons for the Spin-Off

        The Wyndham Worldwide board of directors believes that the spin-off is in the best interests of Wyndham Worldwide and Wyndham Worldwide stockholders because the spin-off is expected to provide various benefits, including: (i) enhanced strategic and management focus for each company; (ii) more efficient capital allocation, direct access to capital and expanded growth opportunities for each company; (iii) the ability to implement a tailored approach to recruiting and retaining employees at each company; (iv) improved investor understanding of the business strategy and operating results of each company; and (v) enhanced investor choices by offering investment opportunities in separate entities.

        Enhanced Strategic and Management Focus.    The hotel business and the vacation ownership, timeshare exchange and vacation rental businesses currently compete with each other for management attention and resources. The spin-off should permit each company to tailor its business strategies to best address market opportunities in its industry. In addition, the spin-off should allow the management of each company to enhance its strategic vision and focus on the core business and growth of each company. The

44


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

spin-off should provide each company with the flexibility needed to pursue its own goals and serve its own needs.

        More Efficient Capital Allocation, Direct Access to Capital and Expanded Growth Opportunities.    As part of Wyndham Worldwide, the hotel business effectively competes with the vacation ownership, timeshare exchange and vacation rental businesses for capital resources. After the spin-off, however, each company should be able to access the capital markets directly to fund its growth strategy and to establish a capital structure tailored to its business needs. Each company should be able to allocate capital and make investments as its management determines in order to grow its business. Moreover, the liquidity of its stock should enable Wyndham Hotels to use its securities to fund future growth. Accordingly, following the spin-off, Wyndham Hotels is expected to have additional flexibility to pursue acquisitions, including using its stock.

        Tailored Approach to Recruiting and Retaining Employees.    After the spin-off, each company should be able to recruit and retain employees with expertise directly applicable to its needs under compensation policies appropriate for its specific business. In particular, following the distribution, the value of equity-based incentive compensation arrangements reflected in each company's stock price should be more closely aligned with the performance of its business. Such equity-based compensation arrangements should also provide enhanced incentives for employee performance and improve the ability of each company to attract, retain and motivate qualified personnel, including management and key employees considered essential to that company's future success.

        Improved Investor Understanding.    After the spin-off, investors will receive disclosure about our operating results and Wyndham Worldwide's operating results on a stand-alone basis, which should enable them to better evaluate the financial performance of each company, as well as each company's strategy within the context of its industry, thereby increasing the likelihood that each company's common stock will be appropriately valued by the market.

        Enhanced Investor Choices by Offering Investment Opportunities in Separate Entities.    The Wyndham Worldwide board of directors believes that the hotel business and the vacation ownership, timeshare exchange and vacation rental businesses each appeal to different types of investors with different investment goals and risk profiles. Finding investors who want to invest in both industries together may be more challenging than finding investors for each individually. After the spin-off, investors will be able to pursue investment goals in either or both companies. In addition, the management of each company will be able to establish goals, implement business strategies and evaluate growth opportunities in light of investor expectations specific to that company's respective business, without undue consideration of investor expectations for the other business. Each company will also be able to focus its public relations efforts on cultivating its own separate identity.


Manner of Effecting the Spin-Off

        The general terms and conditions relating to the spin-off will be set forth in the Separation and Distribution Agreement between Wyndham Hotels & Resorts, Inc. and Wyndham Worldwide Corporation.

Internal Reorganization

        As part of the spin-off, Wyndham Worldwide will effect an internal reorganization to properly align the appropriate businesses within each of Wyndham Hotels and Wyndham Worldwide. The internal reorganization will be described in greater detail in a subsequent amendment to the registration statement of which this information statement forms a part.

45


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

Distribution of Shares of Our Common Stock

        Under the Separation and Distribution Agreement, the distribution will be effective as of 5:00 p.m., Eastern time, on                        , 2018, the distribution date. As a result of the spin-off, on the distribution date, each holder of Wyndham Worldwide common stock will receive one share of our common stock for each share of Wyndham Worldwide common stock that he, she or it owns as of 5:00 p.m., Eastern time, on                        , 2018, the record date. The actual number of shares to be distributed will be determined based on the number of shares of Wyndham Worldwide common stock expected to be outstanding as of the record date and will be reduced to the extent that cash payments are to be made in lieu of the issuance of fractional shares of Wyndham Hotels common stock. The actual number of shares of Wyndham Hotels common stock to be distributed will be calculated as of the record date. The shares of Wyndham Hotels common stock to be distributed by Wyndham Worldwide Corporation will constitute all of the issued and outstanding shares of Wyndham Hotels common stock immediately prior to the distribution. The diagrams below, simplified for illustrative purposes, show (i) the current structure of the entities conducting the Wyndham Worldwide business and (ii) the structure of Wyndham Worldwide and Wyndham Hotels immediately after completion of the spin-off.

Structure Before
the Spin-Off

LOGO

46


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

Structure Following
the Spin-Off

LOGO

        On the distribution date, Wyndham Worldwide Corporation will release the shares of our common stock to our distribution agent to distribute to Wyndham Worldwide stockholders. Our distribution agent will credit the shares of our common stock to the book-entry accounts of Wyndham Worldwide stockholders established to hold their shares of our common stock. Our distribution agent will send these stockholders a statement reflecting their ownership of our common stock. Book-entry refers to a method of recording stock ownership in our records in which no physical certificates are issued. For stockholders who own Wyndham Worldwide common stock through a broker or other nominee, their shares of our common stock will be credited to these stockholders' accounts by the broker or other nominee. It may take the distribution agent up to two weeks to distribute shares of our common stock to Wyndham Worldwide stockholders or to their bank or brokerage firm electronically by way of direct registration in book-entry form. Trading of our stock will not be affected by this delay in distribution by the distribution agent. As further discussed below, we will not issue fractional shares of our common stock in the distribution.

        Wyndham Worldwide stockholders will not be required to make any payment or surrender or exchange their shares of Wyndham Worldwide common stock or take any other action to receive their shares of our common stock. No vote of Wyndham Worldwide stockholders is required or sought in connection with the spin-off, including the internal reorganization, and Wyndham Worldwide stockholders have no appraisal rights in connection with the spin-off.


Treatment of Fractional Shares

        The distribution agent will not distribute any fractional shares of our common stock to Wyndham Worldwide stockholders. Instead, as soon as practicable on or after the distribution date, the distribution agent will aggregate fractional shares of our common stock to which Wyndham Worldwide stockholders of record would otherwise be entitled into whole shares, sell them in the open market at the prevailing market prices and then distribute the aggregate net sale proceeds ratably to Wyndham Worldwide stockholders who would otherwise have been entitled to receive fractional shares of our common stock. The amount of this payment will depend on the prices at which the distribution agent sells the aggregated fractional shares of our common stock in the open market shortly after the distribution date and will be reduced by any amount required to be withheld for tax purposes and any brokerage fees and other expenses incurred in connection with these sales of fractional shares. Receipt of the proceeds from these sales generally will result in a taxable gain or loss to those Wyndham Worldwide stockholders. Each

47


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

stockholder entitled to receive cash proceeds from these shares should consult his, her or its own tax advisor as to the stockholder's particular circumstances. The tax consequences of the distribution are described in more detail under "—Material U.S. Federal Income Tax Consequences of the Distribution."


Transaction and Separation Costs

        One-time separation costs related to the spin-off are expected to be approximately $330 million, consisting of estimated transaction costs, including debt issuance costs, legal, accounting, capital markets fees and expenses, investment banking, transaction bonuses, severance, modifications to incentive equity awards, and other costs relating to the internal reorganization. Separation costs related to non-cash incentive equity awards are estimated to be $160 million. Pursuant to the Separation and Distribution Agreement, these separation costs and expenses are to be primarily borne by Wyndham Worldwide, which amount to approximately $280 million, with a portion of employee-related costs being borne by Wyndham Hotels which are estimated to be $50 million.


Material U.S. Federal Income Tax Consequences of the Distribution

        The following is a summary of the material U.S. federal income tax consequences to the holders of shares of Wyndham Worldwide common stock in connection with the distribution and certain related transactions. This summary is based on the Code, the Treasury regulations promulgated thereunder, and judicial and administrative interpretations thereof, all as in effect as of the date of this information statement, and all of which are subject to differing interpretations and may change at any time, possibly with retroactive effect. Any such change could affect the tax consequences described below. This summary assumes that the spin-off will be consummated in accordance with the Separation and Distribution Agreement and as described in this information statement.

        This summary is limited to holders of shares of Wyndham Worldwide common stock that are U.S. Holders, as defined immediately below. For purposes of this summary, a U.S. Holder is a beneficial owner of Wyndham Worldwide common stock that is, for U.S. federal income tax purposes:

    an individual who is a citizen or a resident of the United States;

    a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States or any state thereof or the District of Columbia;

    an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

    a trust (i) with respect to which a court within the United States is able to exercise primary jurisdiction over its administration and one or more U.S. persons have the authority to control all of its substantial decisions, or (ii) that has a valid election in place under applicable Treasury regulations to be treated as a U.S. person.

        This summary does not discuss all tax considerations that may be relevant to Wyndham Worldwide stockholders in light of their particular circumstances, nor does it address the consequences to Wyndham Worldwide stockholders subject to special treatment under the U.S. federal income tax laws, such as:

    persons acting as nominees or otherwise not as beneficial owners;

    dealers or traders in securities or currencies;

    broker-dealers;

    traders in securities that elect to use the mark-to-market method of accounting;

    tax-exempt entities;

    cooperatives;

48


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

    banks, trusts, financial institutions or insurance companies;

    persons who acquired shares of Wyndham Worldwide common stock pursuant to the exercise of employee stock options or otherwise as compensation;

    stockholders who own, or are deemed to own, at least 10% or more, by voting power or value, of Wyndham Worldwide Corporation equity;

    holders owning Wyndham Worldwide common stock as part of a position in a straddle or as part of a hedging, conversion, constructive sale, synthetic security, integrated investment, or other risk reduction transaction for U.S. federal income tax purposes;

    regulated investment companies;

    REITs;

    former citizens or former long-term residents of the United States or entities subject to Section 7874 of the Code;

    holders who are subject to the alternative minimum tax;

    pass-through entities (such as entities treated as partnerships for U.S. federal income tax purposes); or

    persons that own Wyndham Worldwide common stock through partnerships or other pass-through entities.

        This summary does not address the U.S. federal income tax consequences to Wyndham Worldwide stockholders who do not hold shares of Wyndham Worldwide common stock as a capital asset. Moreover, this summary does not address any state, local or non-U.S. tax consequences, or any federal tax other than U.S. federal income tax consequences (such as estate or gift tax consequences or the Medicare tax on certain investment income).

        If a partnership (or any other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of Wyndham Worldwide common stock, the tax treatment of a partner in that partnership generally will depend on the status of the partner and the activities of the partner and the partnership. Such a partner or partnership is urged to consult its tax advisor as to the tax consequences of the spin-off.

        WE URGE YOU TO CONSULT WITH YOUR TAX ADVISOR AS TO THE SPECIFIC U.S. FEDERAL, STATE AND LOCAL, AND NON-U.S. TAX CONSEQUENCES OF THE SPIN-OFF IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES.


Treatment of the Spin-Off

        The distribution is conditioned upon Wyndham Worldwide's receipt of the opinions of its spin-off tax advisors to the effect that the distribution of our common stock and certain related transactions will qualify as a reorganization under Sections 368(a)(1)(D) and 355 of the Code that is tax-free to Wyndham Worldwide Corporation and its stockholders, except, in the case of Wyndham Worldwide stockholders, for cash received in lieu of fractional shares. In addition to obtaining the opinions, Wyndham Worldwide has received the IRS Ruling related to certain U.S. federal income tax consequences of aspects of the spin-off. Assuming the distribution of our common stock qualifies for such treatment, for U.S. federal income tax purposes:

    no gain or loss will be recognized by Wyndham Worldwide as a result of the spin-off (except possible gain or loss arising out of the internal reorganizations undertaken in connection with the spin-off and with respect to certain items required to be taken into account under Treasury regulations relating to consolidated federal income tax returns);

49


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

    no gain or loss will be recognized by, or be includible in the income of, a U.S. Holder solely as a result of the receipt of our common stock in the spin-off;

    the aggregate tax basis of the shares of Wyndham Worldwide common stock and shares of our common stock, including any fractional share deemed received, in the hands of each U.S. Holder immediately after the spin-off will be the same as the aggregate tax basis of the shares of Wyndham Worldwide common stock held by such holder immediately before the spin-off, allocated between the shares of Wyndham Worldwide common stock and shares of our common stock, including any fractional share deemed received, in proportion to their relative fair market values immediately following the spin-off; and

    the holding period with respect to shares of our common stock received by U.S. Holders will include the holding period of their shares of Wyndham Worldwide common stock, provided that such shares of Wyndham Worldwide common stock are held as capital assets immediately following the spin-off.

        U.S. Holders that have acquired different blocks of Wyndham Worldwide common stock at different times or at different prices are urged to consult their tax advisors regarding the allocation of their aggregate adjusted basis among, and their holding period of, our common stock and Wyndham Worldwide common stock.

        If a U.S. Holder receives cash in lieu of a fractional share of our common stock as part of the distribution, the U.S. Holder will be treated as though it first received a distribution of the fractional share in the distribution and then sold it for the amount of cash actually received. Such U.S. Holder will generally recognize capital gain or loss measured by the difference between the cash received for such fractional share and the U.S. Holder's tax basis in that fractional share, as determined above. Such capital gain or loss will be long-term capital gain or loss if the U.S. Holder's holding period for the Wyndham Worldwide common stock exceeds one year on the date of the distribution. The deductibility of capital losses is subject to significant limitations.

        The opinions of the spin-off tax advisors will not address any U.S. state or local or non-U.S. consequences of the spin-off. The opinions will assume that the distribution and certain related transactions will be completed according to the terms of the Separation and Distribution Agreement, and will rely on the IRS Ruling and the facts as stated in the Separation and Distribution Agreement, the Tax Matters Agreement, the other ancillary agreements, this information statement and a number of other documents. The opinions will also be based on, among other things, current law and certain assumptions and representations as to factual matters made by Wyndham Worldwide and us. Any change in currently applicable law, which may or may not be retroactive, or the failure of any factual representation or assumption to be true, correct and complete in all material respects, could adversely affect the conclusions reached by the spin-off tax advisors in the opinions. The opinions will be expressed as of the date issued and do not cover subsequent periods. The opinions will represent the spin-off tax advisors' best legal judgment based on current law. The opinions of the spin-off tax advisors will not be binding on the IRS or the courts, and the IRS or the courts may not agree with the conclusions expressed in the opinions. We cannot assure you that the IRS will agree with the conclusions set forth in the opinions, and it is possible that the IRS or another tax authority could adopt a position contrary to one or all of those conclusions and that a court could sustain that contrary position. If any of the facts, representations, assumptions or undertakings described or made in connection with the opinions are not correct, are incomplete or have been violated, our ability to rely on the opinions could be jeopardized. We are not aware of any facts or circumstances, however, that would cause these facts, representations or assumptions to be untrue or incomplete, or that would cause any of these undertakings to fail to be complied with, in any material respect.

        If, notwithstanding the conclusions included in the opinion and the IRS Ruling, it is ultimately determined that the distribution of our common stock and certain related transactions do not qualify for tax-free treatment for U.S. federal income tax purposes, then Wyndham Worldwide could recognize

50


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

taxable gain or loss in an amount equal to the difference, if any, of the fair market value of the shares of our common stock over its tax basis in such shares. In addition, if the distribution of our common stock does not qualify as tax-free under Section 355 of the Code, each Wyndham Worldwide stockholder that receives shares of our common stock in the spin-off would be treated as receiving a distribution in an amount equal to the fair market value of our common stock that was distributed to the stockholder, which would generally be taxed as a dividend to the extent of the stockholder's pro rata share of Wyndham Worldwide Corporation's current and accumulated earnings and profits, including Wyndham Worldwide Corporation's taxable gain, if any, on the spin-off, then treated as a non-taxable return of capital to the extent of the stockholder's basis in the Wyndham Worldwide stock and thereafter treated as capital gain from the sale or exchange of Wyndham Worldwide common stock.

        Under current U.S. federal income tax law, certain non-corporation citizens or residents of the United States (including individuals) currently are subject to U.S. federal income tax on dividends (assuming certain holding period requirements are met) and long-term capital gains (i.e., capital gains on assets held for more than one year) at reduced rates.

        Even if the distribution otherwise qualifies for tax-free treatment under Section 355 of the Code, the spin-off may result in corporate level taxable gain to Wyndham Worldwide under Section 355(e) of the Code if 50% or more, by vote or value, of the Wyndham Worldwide stock or our stock is treated as acquired or issued as part of a plan or series of related transactions that includes the distribution (including as a result of transactions occurring before the spin-off). The process for determining whether an acquisition or issuance triggering these provisions has occurred is complex, inherently factual and subject to interpretation of the facts and circumstances of a particular case, and any such acquisitions may not be within our or Wyndham Worldwide's control. For this purpose, any acquisitions or issuances of Wyndham Worldwide stock within two years before the distribution, and any acquisitions or issuances of our stock or Wyndham Worldwide stock within two years after the distribution generally are presumed to be part of such a plan (subject to certain exceptions and safe harbors), although we or Wyndham Worldwide, as applicable, may be able to rebut that presumption. If an acquisition or issuance of our stock or Wyndham Worldwide stock triggers the application Section 355(e) of the Code, Wyndham Worldwide or we could incur significant U.S. federal income tax liabilities attributable to the distribution and certain related transactions, but the distribution would generally be tax-free to each of Wyndham Worldwide stockholders, as described above.

        Treasury regulations require each U.S. Holder that owns at least 5% of the total outstanding Wyndham Worldwide common stock to attach to their U.S. federal income tax returns for the year in which the spin-off occurs a statement setting forth certain information with respect to the transaction. U.S. Holders are urged to consult their tax advisors to determine whether they are required to provide the foregoing statement and the contents thereof.


Results of the Spin-Off

        After the spin-off, we will be an independent, publicly traded company. Immediately following the spin-off, we expect to have approximately                         record holders of shares of our common stock and approximately                        shares of our common stock outstanding, based on the number of stockholders and outstanding shares of Wyndham Worldwide common stock on                        , 2018 and assuming each holder of Wyndham Worldwide common stock will receive one share of Wyndham Hotels common stock for each share of Wyndham Worldwide common stock. The actual number of shares to be distributed will be determined as of the record date and will reflect any repurchases of shares of Wyndham Worldwide common stock and issuances of shares of Wyndham Worldwide common stock in respect of awards under Wyndham Worldwide Corporation equity-based incentive plans between the date the Wyndham Worldwide board of directors declares the dividend for the distribution and the record date for the distribution.

51


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

        The spin-off will result in the acceleration of certain outstanding equity awards issued to our Directors, executive officers and employees under the Wyndham Worldwide Corporation equity incentive plan. Such equity awards will be converted into equity awards with respect to both Wyndham Worldwide common stock and our common stock. Time-vesting equity awards with respect to Wyndham Worldwide common stock and all performance-vesting equity awards will vest and become exercisable or be settled, as applicable, immediately upon completion of the spin-off. Time-vesting equity awards with respect to our common stock will vest upon the earliest to occur of (i) the six-month anniversary of the completion of the spin-off, subject to the relevant individual's continued employment with us through such six-month anniversary date, (ii) our termination of the relevant individual's employment without "cause," or (iii) the date on which such equity award would have vested in accordance with the terms of the existing award agreement, subject to the relevant individual's continued employment with us through the applicable vesting date. The foregoing accelerated vesting treatment does not apply to the Wyndham Worldwide Corporation restricted stock units granted on March 1, 2018. For information regarding the treatment of equity awards of Directors and executive officers of Wyndham Hotels & Resorts, Inc. which will either become exercisable or be settled in shares of Wyndham Worldwide common stock and our common stock and will be outstanding after the distribution, see "Certain Relationships and Related Party Transactions—Agreements with Wyndham Worldwide Related to the Spin-Off—Employee Matters Agreement" and "Management."

        Before the spin-off, we will enter into several agreements with Wyndham Worldwide to effect the spin-off and provide a framework for our relationship with Wyndham Worldwide after the spin-off. These agreements will govern the relationship between us and Wyndham Worldwide after completion of the spin-off and provide for the allocation between us and Wyndham Worldwide of the assets, liabilities, rights and obligations of Wyndham Worldwide. See "Certain Relationships and Related Party Transactions—Agreements with Wyndham Worldwide Related to the Spin-Off."

        In connection with the spin-off, Wyndham Worldwide expects to pay transaction bonuses to certain of its officers and employees who will become our executive officers and employees following the spin-off in connection with their prior service and to ensure retention of such executive officers and employees following the consummation of the spin-off. See "Executive and Director Compensation—Agreements with Named Executive Officers" for a description of the transaction bonuses expected to be paid to our named executive officers.


Trading Prior to the Distribution Date

        It is anticipated that, at least one trading day prior to the record date and continuing up to and including the distribution date, there will be a "when-issued" market in our common stock. When-issued trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. The when-issued trading market will be a market for shares of our common stock that will be distributed to Wyndham Worldwide stockholders on the distribution date. Any Wyndham Worldwide stockholder who owns shares of Wyndham Worldwide common stock at 5:00 p.m., Eastern time, as of the record date will be entitled to shares of our common stock distributed in the spin-off. Wyndham Worldwide stockholders may trade this entitlement to shares of our common stock, without the shares of Wyndham Worldwide common stock they own, on the when-issued market. On the first trading day following the distribution date, we expect when-issued trading with respect to our common stock will end and "regular-way" trading will begin. See "Trading Market."

        Following the distribution date, we expect shares of our common stock to be listed on the                , under the ticker symbol "                        ." We will announce the when-issued ticker symbol if and when it becomes available.

        It is also anticipated that, at least one trading day prior to the record date and continuing up to and including the distribution date, there will be two markets in Wyndham Worldwide common stock: a

52


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

"regular-way" market and an "ex-distribution" market. Shares of Wyndham Worldwide common stock that trade on the regular-way market will trade with an entitlement to shares of our common stock distributed pursuant to the distribution. Shares that trade on the ex-distribution market will trade without an entitlement to shares of our common stock distributed pursuant to the distribution. Therefore, if shares of Wyndham Worldwide common stock are sold in the regular-way market up to and including the distribution date, the selling stockholder's right to receive shares of our common stock in the distribution will be sold as well. However, if Wyndham Worldwide stockholders own shares of Wyndham Worldwide common stock as of 5:00 p.m., Eastern time, as of the record date and sell those shares on the ex-distribution market up to and including the distribution date, the selling stockholders will still receive the shares of our common stock that they would otherwise receive pursuant to the distribution. See "Trading Market."


Financing Transactions

        In connection with the spin-off, subject to market conditions, Wyndham Worldwide and Wyndham Hotels will undertake a number of financing transactions. As a result of these financing transactions, we expect to have total indebtedness of approximately $2 billion. Wyndham World Corporation has obtained financing commitments of $2.0 billion related to the La Quinta acquisition, which will be assigned to us if we do not obtain other long-term financing. We have not yet identified the specific sources of funds and any financing transactions may not be completed in the timeframe or size indicated, or at all. The financing transactions undertaken in connection with the spin-off will be described in greater detail in a subsequent amendment to the registration statement of which this information statement forms a part. See "Description of Certain Indebtedness."


Conditions to the Distribution

        We expect that the distribution will be effective as of 5:00 p.m., Eastern time, on                        , 2018, the distribution date. The distribution is subject to the satisfaction, or waiver by Wyndham Worldwide Corporation, of the following conditions:

    the final approval of the distribution by the Wyndham Worldwide board of directors, which approval may be given or withheld in its absolute and sole discretion;

    our Registration Statement on Form 10, of which this information statement forms a part, shall have been declared effective by the SEC, with no stop order in effect with respect thereto, and a notice of internet availability of this information statement shall have been mailed to Wyndham Worldwide stockholders;

    Wyndham Hotels common stock shall have been approved for listing on the                        , subject to official notice of distribution;

    Wyndham Worldwide shall have obtained opinions from its spin-off tax advisors, in form and substance satisfactory to Wyndham Worldwide, to the effect that the distribution of Wyndham Hotels common stock and certain related transactions will qualify as a reorganization under Sections 368(a)(1)(D) and 355 of the Code, in which no gain or loss is recognized by Wyndham Worldwide Corporation or its stockholders, except, in the case of Wyndham Worldwide stockholders, for cash received in lieu of fractional shares;

    Wyndham Worldwide shall have obtained opinions from a nationally recognized valuation firm, in form and substance satisfactory to Wyndham Worldwide, with respect to (i) the capital adequacy and solvency of both Wyndham Worldwide and Wyndham Hotels after giving effect to the spin-off and (ii) the adequate surplus of Wyndham Worldwide to declare the applicable dividend;

    all material governmental approvals and other consents necessary to consummate the distribution or any portion thereof shall have been obtained and be in full force and effect;

53


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

    no order, injunction or decree issued by any governmental entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of all or any portion of the distribution shall be in effect, and no other event shall have occurred or failed to occur that prevents the consummation of all or any portion of the distribution; and

    the financing transactions described herein shall have been completed on or prior to the distribution date.

        We are not aware of any material federal, foreign or state regulatory requirements that must be complied with or any material approvals that must be obtained, other than compliance with SEC rules and regulations, approval for listing on the                        and the declaration of effectiveness of the Registration Statement on Form 10, of which this information statement forms a part, by the SEC, in connection with the distribution. Wyndham Worldwide and Wyndham Hotels cannot assure you that any or all of these conditions will be met and Wyndham Worldwide Corporation may waive any of the conditions to the distribution. In addition, until the distribution has occurred, the Wyndham Worldwide board of directors has the right to not proceed with the distribution, even if all of the conditions are satisfied. In the event the Wyndham Worldwide board of directors determines to waive a material condition to the distribution, to modify a material term of the distribution or not to proceed with the distribution, Wyndham Worldwide intends to promptly issue a press release or other public announcement and file a Current Report on Form 8-K to report such event.


Reasons for Furnishing this Information Statement

        This information statement is being furnished solely to provide information to Wyndham Worldwide stockholders that are entitled to receive shares of Wyndham Hotels common stock in the spin-off. This information statement is not, and is not to be construed as, an inducement or encouragement to buy, hold or sell any of our securities or any securities of Wyndham Worldwide. We believe that the information in this information statement is accurate as of the date set forth on the cover. Changes may occur after that date and neither Wyndham Worldwide nor we undertake any obligation to update the information.

54


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

TRADING MARKET

Market for Our Common Stock

        There is currently no public market for our common stock and an active trading market may not develop or may not be sustained. We anticipate that trading of our common stock will commence on a "when-issued" basis at least one trading day prior to the record date and continue through the distribution date. When-issued trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. When-issued trades generally settle within three trading days after the distribution date. If you own shares of Wyndham Worldwide common stock as of 5:00 p.m., Eastern time, as of the record date, you will be entitled to shares of our common stock distributed pursuant to the spin-off. You may trade this entitlement to shares of our common stock, without the shares of Wyndham Worldwide common stock you own, on the when-issued market. On the first trading day following the distribution date, any when-issued trading with respect to our common stock will end and "regular-way" trading will begin. We intend to list our common stock on the                under the ticker symbol "                ." We will announce our when-issued trading symbol when and if it becomes available.

        It is also anticipated that, at least one trading day prior to the record date and continuing up to and including the distribution date, there will be two markets in Wyndham Worldwide common stock: a "regular-way" market and an "ex-distribution" market. Shares of Wyndham Worldwide common stock that trade on the regular-way market will trade with an entitlement to shares of our common stock distributed pursuant to the distribution. Shares that trade on the ex-distribution market will trade without an entitlement to shares of our common stock distributed pursuant to the distribution. Therefore, if you sell shares of Wyndham Worldwide common stock in the regular-way market up to and including the distribution date, you will be selling your right to receive shares of our common stock in the distribution. However, if you own shares of Wyndham Worldwide common stock as of 5:00 p.m., Eastern time, as of the record date and sell those shares on the ex-distribution market up to and including the distribution date, you will still receive the shares of our common stock that you would otherwise receive pursuant to the distribution.

        We cannot predict the prices at which our common stock may trade before the spin-off on a "when-issued" basis or after the spin-off. Those prices will be determined by the marketplace. Prices at which trading in our common stock occurs may fluctuate significantly. Those prices may be influenced by many factors, including anticipated or actual fluctuations in our operating results or those of other companies in our industry, investor perception of Wyndham Hotels and the hotel industry, market fluctuations and general economic conditions. In addition, the stock market in general has experienced extreme price and volume fluctuations that have affected the performance of many stocks and that have often been unrelated or disproportionate to the operating performance of these companies. These are just some factors that may adversely affect the market price of our common stock. See "Risk Factors—Risks Relating to Our Common Stock" for further discussion of risks relating to the trading prices of our common stock.


Transferability of Shares of Our Common Stock

        On                , 2018, Wyndham Worldwide Corporation had approximately                shares of its common stock issued and outstanding. Based on this number, we expect that upon completion of the spin-off, we will have approximately                shares of common stock issued and outstanding. The shares of our common stock that you will receive in the distribution will be freely transferable, unless you are considered an "affiliate" of ours under Rule 144 under the Securities Act. Persons who can be considered our affiliates after the spin-off generally include individuals or entities that directly, or indirectly through one or more intermediaries, control, are controlled by, or are under common control with, us, and may include certain of our officers and Directors. As of the distribution date, we estimate that our Directors and officers will beneficially own in the aggregate less than                  percent of our shares. In addition,

55


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

individuals who are affiliates of Wyndham Worldwide on the distribution date may be deemed to be affiliates of ours. Our affiliates may sell shares of our common stock received in the distribution only:

    under a registration statement that the SEC has declared effective under the Securities Act; or

    under an exemption from registration under the Securities Act, such as the exemption afforded by Rule 144.

        In general, under Rule 144 as currently in effect, an affiliate will be entitled to sell, within any three-month period commencing 90 days after the date that the registration statement of which this information statement is a part is declared effective, a number of shares of our common stock that does not exceed the greater of:

    1.0 percent of our common stock then outstanding; or

    the average weekly trading volume of our common stock on the                during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

        Sales under Rule 144 are also subject to restrictions relating to manner of sale and the availability of current public information about us.

        In the future, we expect to adopt new equity-based compensation plans and issue stock-based awards. We currently expect to file a registration statement under the Securities Act to register shares to be issued under these equity plans. Shares issued pursuant to awards after the effective date of that registration statement, other than shares issued to affiliates, generally will be freely tradable without further registration under the Securities Act.

        Except for our common stock distributed in the distribution and employee-based equity awards, we will have no equity securities outstanding immediately after the spin-off.

56


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83


DIVIDEND POLICY

        We intend to pay regular quarterly cash dividends beginning                    , 2018. However, any decision to declare and pay dividends will be made at the sole discretion of our Board of Directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions and other factors that our Board of Directors may deem relevant. There can be no assurance that a payment of a dividend will occur in the future.

57


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83


CAPITALIZATION

        The following table sets forth the cash and capitalization of Wyndham Hotels as of December 31, 2017 on a historical basis and on a pro forma basis to give effect to the La Quinta acquisition, the spin-off and related transactions, as if they occurred on December 31, 2017. Explanation of the pro forma adjustments made to our audited Combined Financial Statements can be found under the section titled "Unaudited Pro Forma Combined Financial Statements." The following table should be reviewed in conjunction with the sections titled "Unaudited Pro Forma Combined Financial Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," our audited Combined Financial Statements and related notes thereto, the audited Combined Financial Statements of New La Quinta and related notes thereto, in each case included elsewhere in this information statement.

 
  December 31, 2017  
(in millions, except share amounts)
  Actual   Pro Forma  

Cash

  $ 57   $ 180  

             

Debt

         

Debt due to Wyndham Worldwide

  $ 184   $  

Debt

    2,068  

Total debt

    184     2,068  

Equity

         

Preferred stock, $0.01 par value;            shares authorized, none issued and outstanding,             pro forma

             

Common stock, $0.01 par value;            shares authorized, 99,909,376 shares issued and outstanding,            pro forma

      1  

Additional paid-in capital

          1,419  

Parent's net investment

  1,295    

Accumulated other comprehensive income

    5     5  

Total stockholders' equity / net investment

  1,300   1,425  

Total Capitalization

  $ 1,484   $ 3,493  

58


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83


SELECTED HISTORICAL COMBINED FINANCIAL DATA

        The following selected historical combined statement of income data for the years ended December 31, 2017, 2016 and 2015 and the selected historical combined balance sheet data as of December 31, 2017 and 2016 are derived from the audited Combined Financial Statements of the Wyndham Hotels & Resorts businesses included elsewhere in this information statement. The selected historical combined statement of income data for the years ended December 31, 2014 and 2013 and the selected historical combined balance sheet data as of December 31, 2015, 2014 and 2013 are derived from unaudited combined financial statements of the Wyndham Hotels & Resorts businesses that are not included in this information statement. We have prepared our unaudited combined financial statements on the same basis as our audited Combined Financial Statements and, in our opinion, have included all adjustments, which include only normal recurring adjustments, necessary to present fairly in all material respects our financial position and results of operations.

        This selected historical financial data is not necessarily indicative of our future performance and does not necessarily reflect what our financial position and results of operations would have been had we been operating as an independent, publicly traded company during the periods presented, including changes that will occur in our operations and capitalization as a result of the spin-off from Wyndham Worldwide. For example, the historical combined financial statements of the Wyndham Hotels & Resorts businesses include allocations of expenses for certain functions and services provided by Wyndham Worldwide. These costs may not be representative of the future costs we will incur as an independent, public company.

        The selected historical combined financial data below should be read together with the audited Combined Financial Statements of the Wyndham Hotels & Resorts businesses, including the notes thereto, the sections titled "Capitalization," "Unaudited Pro Forma Combined Financial Statements," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Description of Certain Indebtedness" and the other financial information included elsewhere in this information statement.

 
  For the Year Ended December 31,  
($ in millions)
  2017   2016   2015   2014   2013  

Statement of Income Data:

                     

Net revenues

  $ 1,347   $ 1,312   $ 1,301   $ 1,103   $ 1,028  

Total expenses

  1,086   1,024   1,051   867   828  

Operating income

    261     288     250     236     200  

Interest expense (income), net

  6   1   1   (1)   1  

Income before income taxes

    255     287     249     237     199  

Provision for income taxes

  12   115   100   85   80  

Net income

    243     172     149     152     119  

 

 
  As of December 31,  
($ in millions)
  2017   2016   2015   2014   2013  

Balance Sheet Data:

                     

Cash

  $ 57   $ 28   $ 38   $ 25   $ 26  

Total assets

  2,122   1,983   1,959   1,891   1,900  

Total debt due to Parent

    184     174     95     105     128  

Total liabilities

  822   872   780   702   681  

Total net investment

    1,300     1,111     1,179     1,189     1,219  

        In presenting the financial data above in conformity with U.S. GAAP, we are required to make estimates and assumptions that affect the amounts reported. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Financial Condition, Liquidity and Capital

59


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

Resources—Critical Accounting Policies," for a detailed discussion of the accounting policies that we believe require subjective and complex judgments that could potentially affect reported results.

Acquisitions

        Between January 1, 2013 and the date of this filing, we completed the following acquisitions:

    In October 2017, we acquired the AmericInn hotel brand and its portfolio of approximately 200 franchised hotels in the United States;

    In November 2016, we acquired Fen Hotels, adding the Dazzler and Esplendor Boutique brands to our portfolio, as well as a Latin America-based hotel management company; and

    In January 2015, we acquired Dolce Hotels and Resorts, a manager of properties focused on group accommodations in Europe and North America.

        The results of operations and financial position of these acquisitions have been included beginning from the respective acquisition dates. See Note 3—Acquisitions to our audited Combined Financial Statements included herein for a discussion of acquisitions completed during 2017, 2016 and 2015.

Impairment, Restructuring and Other Charges

        During 2017, we recorded $1 million of charges related to restructuring initiatives, primarily focused on realigning our brand operations. Additionally, in 2017, we recorded $41 million of non-cash impairment charges, of which $25 million was for a write-down of a guarantee asset and a development advance note receivable related to a hotel management agreement and $16 million was primarily related to a partial write-down of management agreement assets.

        During 2016, we recorded $2 million of charges related to restructuring initiatives, which were primarily focused on enhancing organizational efficiency. Additionally, in 2016, we recorded a $7 million charge related to the termination of a management contract.

        During 2015, we recorded $3 million of restructuring costs resulting from a realignment of brand services and call center operations. Additionally, in 2015, we recorded a $7 million non-cash impairment charge related to the write-down of terminated in-process technology projects resulting from our decision to outsource our reservation system to a third-party partner and a $14 million charge associated with the anticipated termination of a management contract within our hotel management business.

        During 2014, we recorded $6 million of restructuring and related costs associated with the departure of an executive, as well as initiatives targeted at improving the alignment of the organizational structure of our business with our strategic objectives. In addition, we reversed $1 million of previously recorded contract termination costs related to our 2013 organizational realignment initiative. Additionally, in 2014 we recorded an $8 million non-cash impairment charge related to the write-down of an investment in a joint venture.

        During 2013, we recorded $9 million of restructuring costs related to an organizational realignment initiative primarily focused on optimizing our marketing structure. In addition, we recorded $8 million of non-cash impairment charges primarily related to a partial write-down of our Hawthorn Suites trademark due to lower than anticipated growth in the brand.

60


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

        The following unaudited pro forma combined balance sheet as of December 31, 2017 and unaudited pro forma combined statement of income for the year ended December 31, 2017 have been prepared to reflect the La Quinta acquisition, the spin-off and related transactions, as described below, as if they had occurred on December 31, 2017 for the unaudited pro forma combined balance sheet and as of January 1, 2017 for the unaudited pro forma combined statement of income. The unaudited pro forma combined financial statements of Wyndham Hotels have been derived from the audited historical combined financial statements of the Wyndham Hotels & Resorts businesses and the audited Combined Financial Statements of New La Quinta.

        On August 2, 2017, Wyndham Worldwide Corporation announced a plan to spin-off its hotel business as a separate, publicly traded company. The spin-off transaction, which is expected to be tax-free to Wyndham Worldwide stockholders, will be effected through a pro rata distribution of our stock to existing Wyndham Worldwide stockholders. Immediately following completion of the spin-off, Wyndham Worldwide stockholders will own 100% of the outstanding shares of our common stock. After the spin-off, we will operate as an independent, publicly traded company.

        We intend to enter into a license, development and noncompetition agreement with Wyndham Worldwide pursuant to which we will grant Wyndham Worldwide the right to use certain trademarks and other intellectual property, including the "Wyndham" trademark, in their business for the term of the agreement. Wyndham Worldwide will pay us royalties under the agreement that are projected to increase by $39 million to $114 million annually. See "Certain Relationships and Related Party Transactions—Agreements with Wyndham Worldwide Related to the Spin-Off—License, Development and Noncompetition Agreement" for additional discussion of the agreement. On February 15, 2018, Wyndham Worldwide accepted a binding offer to sell its European vacation rental business. In connection with that anticipated sale, the European vacation rental business will enter into a 20-year trademark license agreement, pursuant to which it will pay Wyndham Hotels an annual royalty of 1% of net revenue for the right to use the "by Wyndham Vacation Rentals" endorser brand.

        In January 2018, Wyndham Worldwide Corporation entered into an agreement with La Quinta Holdings Inc. to acquire its hotel franchising and management businesses for $1.95 billion in cash. The acquisition is expected to close in the second quarter of 2018. Upon completion of the internal reorganization and the spin-off, La Quinta will be a wholly-owned subsidiary Wyndham Hotels & Resorts, Inc. See "Our Business—Recent Developments."

        The La Quinta acquisition will be accounted for as a business combination using the purchase method of accounting. The pro forma information presented, including the allocation of the purchase price, is based on preliminary estimates of the fair values of the assets acquired and liabilities assumed, available information as of the date of this filing. The assumptions will be revised as additional information becomes available. The final purchase price allocation is dependent on, among other things, the finalization of the preliminary asset and liability valuations assisted by an independent valuation firm. The actual adjustments to the Wyndham Hotels audited historical combined financial statements upon the closing of the transactions will depend on a number of factors, including additional information available and the actual balance of our net assets on the closing date. Therefore, the actual adjustments will differ from the pro forma adjustments, and the differences may be material. Any final adjustments will change the allocation of purchase price, which could affect the fair value assigned to the assets and liabilities and could result in a change to the unaudited pro forma combined financial statements, including a change to goodwill.

        Subject to market conditions, we expect to complete one or more financing transactions on or prior to the completion of the spin-off. As a result of these financing transactions, we expect to have total indebtedness of approximately $2 billion. Wyndham Worldwide Corporation has obtained financing commitments of $2.0 billion related to the La Quinta acquisition, which will be assigned to us if we do not obtain other long-term financing. The financing transactions will be described in greater detail in a

61


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

subsequent amendment to the registration statement of which this information statement forms a part. In connection with the La Quinta acquisition, the credit facilities governed by the La Quinta Holdings Inc. credit agreement will be repaid and terminated and, consequently, New La Quinta will no longer be pledged as collateral under that credit agreement.

        The unaudited pro forma combined financial statements should be read in conjunction with the sections titled "Capitalization," "Selected Historical Combined Financial Data," "Our Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," as well as our audited Combined Financial Statements and notes thereto and the audited Combined Financial Statements of New La Quinta and notes thereto, which are included elsewhere in this information statement.

        The unaudited pro forma combined financial statements have been prepared for illustrative purposes only and are not necessarily indicative of our financial position or results of operations had the transactions described herein for which we are giving pro forma effect actually occurred on the dates or for the periods indicated, nor is such unaudited pro forma financial information indicative of the results to be expected for any future period. The unaudited pro forma condensed combined financial information does not reflect any cost savings, operating or revenue synergies that Wyndham Hotels may achieve as a result of the La Quinta acquisition, the costs to integrate the operations of La Quinta or the costs necessary to achieve these cost savings, operating and revenue synergies. A number of factors may affect our results. See "Risk Factors" and "Special Note About Forward-Looking Statements."

62


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

WYNDHAM HOTELS & RESORTS, INC.
Unaudited Pro Forma Combined Balance Sheet
As of December 31, 2017
($ in millions, except share amounts)

 
  Wyndham
Hotels
Historical
  New
La Quinta
Historical
  New
La Quinta
Pro Forma
Adjustments
(a)
   
  Spin-off
Adjustments
   
  Financing
Adjustments
   
  Pro Forma  

Assets

                                     

Current assets

                                                 

Cash and cash equivalents

  $ 57   $ 123   $     $     $     $ 180  

Trade receivables, net

    194     24                             218  

Prepaid expenses

  29                 29  

Other current assets

    50     6                               56  

Total current assets

  330   153               483  

Property and equipment, net

    250     49     2         56   (c)             357  

Goodwill

  423     1,261             1,684  

Intangible assets, net of accumulated amortization

        171     (171 ) (b)                      

Trademarks, net

  692     550             1,242  

Franchise agreements and other intangibles, net

    251         260                         511  

Other non-current assets

  176   27               203  

Total assets

  $ 2,122   $ 400   $ 1,902       $ 56       $       $ 4,480  

Liabilities and net investment

                                     

Current liabilities

                                                 

Current portion of debt due to Parent

  $ 103   $   $     $ (103)   (d)   $     $  

Current portion of long-term debt

                    4   (c)             4  

Accounts payable

  38   25               63  

Deferred income

    79                                 79  

Accrued payroll and employee benefits

    52   (52)   (b)            

Accrued expenses and other current liabilities

    186     32     52                         270  

Total current liabilities

  406   109       (99       416  

Debt due to Parent

    81                 (81 ) (d)              

Long-term debt

          64   (c)   2,000   (f)   2,064  

Deferred income taxes

    181     19     211         (3 ) (c)             408  

Deferred income

  76                 76  

Other non-current liabilities

    78     13                             91  

Total liabilities

  822   141   211     (119   2,000       3,055  

EQUITY

                                                 

Common stock $0.01 par value

          1   (e)       1  

Additional paid-in capital

            1,691         1,728   (d)     (2,000 ) (f)     1,419  

Parent Company's net investment

  1,295   259       (1,554)   (d)        

Accumulated other comprehensive income

    5                                 5  

Total stockholders' equity / net investment

  1,300   259   1,691     175     (2,000     1,425  

Total liabilities and stockholders' equity / net investment

  $ 2,122   $ 400   $ 1,902       $ 56       $       $ 4,480  

See notes to unaudited pro forma combined financial statements.

63


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

WYNDHAM HOTELS & RESORTS, INC.
Unaudited Pro Forma Combined Statement of Income
For the Year Ended December 31, 2017
($ in millions, except per share amounts)

 
  Wyndham
Hotels
Historical
  New
La Quinta
Historical
  New
La Quinta
Pro Forma
Adjustments
   
  Spin-off
Adjustments
   
  Financing
Adjustments
   
  Pro Forma    
 

Revenues

                                         

Royalties and franchise fees

  $ 375   $ 98   $ 4   (g)   $       $       $ 477      

Marketing, reservation and loyalty

  407   148   8   (g)               563      

Hotel management

    108     21     21   (g)                     150      

License and other fees from Parent

  75           39   (h)       114      

Cost reimbursements

    264     363                             627      

Other

  118           (9)   (h)         109      

Net revenues

    1,347     630     33         30                 2,040      

                                         

Expenses

                                                     

Marketing, reservation and loyalty

  406     148   (b)               554      

Operating

    205                                 205      

General and administrative

  88   216   (148)   (b)   ​(12)   (i)         144      

Cost reimbursements

    264     363                             627      

Depreciation and amortization

  75   4   13   (g)   6   (j)         98      

Separation-related

    3                 (3 ) (i)                  

Transaction-related

  3           (2)   (i)         1      

Impairment

    41                                 41      

Restructuring

  1                       1      

Total expenses

    1,086     583     13         (11 )               1,671      

                                         

Operating income

    261     47     20         41                 369      

Interest expense (income), net

  6   (1       (3)   (k)   72   (k)   74      

                                                     

Income/(loss) before income taxes

  255   48   20       44       (72     295      

Provision/(benefit) for income taxes

    12     15     8   (l)     17   (l)     (28 ) (l)     24      

Net income/(loss)

  $ 243   $ 33   $ 12       $ 27       $ (44     $ 271      

                                                     

                                         

Earnings per share:

                                                     

Basic

                                  $ 2.71      

Diluted

                                            $ 2.71      

                                         

Weighted average shares outstanding:

                                                     

Basic

                                  99.9   (m)  

Diluted

                                              99.9   (m)  

See notes to unaudited pro forma combined financial statements.

64


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

1. Basis of Pro Forma Presentation

        The unaudited pro forma adjustments are based on preliminary estimates, accounting judgments and currently available information and assumptions that management believes are reasonable. These adjustments are included only to the extent they are directly attributable to the spin-off, the La Quinta acquisition and related transactions and the appropriate information is known and factually supportable.

        Our historical combined financial statements include allocations of expenses for certain functions and services provided by Wyndham Worldwide, including expenses for costs related to functions such as executive office, finance, a shared service technology platform and other administrative support. Effective with the spin-off, we will assume responsibility for all of these functions and related costs though certain of these activities will continue to be performed by Wyndham Worldwide under transition service agreements for a limited period of time. The allocated costs may not be representative, either positively or negatively, of the future costs we will incur as a separate, public company. Due to the scope and complexity of these activities, the amount and timing of the actual costs could vary and, therefore, are not included as adjustments within the unaudited pro forma combined financial statements. We expect such incremental costs will range from $20 million to $30 million on an annual basis. See "Certain Relationships and Related Party Transactions."

2. Acquisition of La Quinta

        On January 17, 2018, Wyndham Worldwide Corporation and La Quinta Holdings Inc. entered into a definitive agreement under which Wyndham Worldwide agreed to acquire La Quinta's hotel franchise and management businesses for $1.95 billion in cash. Under the terms of the agreement, stockholders of La Quinta Holdings Inc. will receive $8.40 per share or $16.80 per share (if a reverse stock split has been effected) in cash (approximately $1.0 billion in aggregate), and Wyndham Worldwide will repay approximately $715 million of La Quinta Holdings Inc. debt net of cash and set aside a reserve of $240 million for estimated taxes expected to be incurred in connection with the taxable spin-off of La Quinta Holdings Inc.'s owned real estate assets into CorePoint. Immediately prior to the sale of La Quinta to Wyndham Worldwide, La Quinta Holdings Inc. will spin off its owned real estate assets into a publicly-traded real estate investment trust, CorePoint.

        The acquisition of La Quinta's asset-light, fee-for-service business consisting of over 900 managed and franchised hotels will expand Wyndham Hotels' portfolio to 21 brands and over 9,000 hotels across more than 80 countries.

        The unaudited pro forma combined financial statements do not include expected cost and revenue synergies associated with the La Quinta acquisition, which are expected to total $55 million to $70 million annually when the integration of the businesses has been completed.

3. License, Development and Noncompetition Agreement

        We intend to enter into a license, development and noncompetition agreement with Wyndham Worldwide pursuant to which we will grant Wyndham Worldwide the right to use certain trademarks and other intellectual property, including the "Wyndham" trademark, in their business for the term of the agreement. Wyndham Worldwide will pay us royalties under the agreement that are projected to increase by $39 million to $114 million annually. See "Certain Relationships and Related Party Transactions—Agreements with Wyndham Worldwide Related to the Spin-Off—License, Development and Noncompetition Agreement" for additional discussion of the agreement.

4. Financing Transaction

        Subject to market conditions, we expect to complete one or more financing transactions on or prior to the completion of the spin-off. As a result of these financing transactions we expect to have total indebtedness of approximately $2 billion. Wyndham Worldwide Corporation has obtained financing

65


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

commitments of $2.0 billion in the form of a 364-day senior unsecured bridge term loan facility to fund the La Quinta acquisition, which will be assigned to us if we do not obtain other long-term financing. The financing transactions will be described in greater detail in a subsequent amendment to the registration statement of which this information statement forms a part. In connection with the La Quinta acquisition, the credit facilities governed by the La Quinta Holdings Inc. credit agreement will be repaid and terminated and, consequently, New La Quinta will no longer be pledged as collateral under that credit agreement.

5. Pro Forma Adjustments

        The preliminary purchase price allocation estimate is based on Wyndham Worldwide's limited access to information, and final allocations are subject to the terms of the definitive agreement and will be determined based on the ongoing operations of La Quinta through the date of acquisition. Where appropriate, valuations will be performed by a third-party valuation specialist based on valuation techniques that Wyndham Worldwide deems appropriate for measuring the fair value of the assets acquired and are liabilities assumed. The pro forma adjustments are based on our preliminary estimates and assumptions and subject to change. The following adjustments have been reflected in the unaudited pro forma combined financial information:

    (a)
    The pro forma balance sheet has been adjusted to reflect the allocation of the preliminary estimated purchase price to identified assets to be acquired and liabilities to be assumed, with the excess recorded as goodwill. The final purchase price allocation may be different than that reflected in the pro forma purchase price allocation presented herein, and this difference may be material. The purchase price allocation in these pro forma financial statements is based upon the estimated purchase price of approximately $1.95 billion as described in Note 2.

     The preliminary estimated purchase price is allocated as follows (in millions):

Total consideration

        $ 1,950  

Cash received from CorePoint (i)

          985  

La Quinta Holdings Inc. long-term debt (i)

  $ (985 )      

La Quinta Holdings Inc. long-term debt (ii)

    (715 )      

Total payment of La Quinta Holdings Inc. long-term debt

          (1,700 )

Payment of La Quinta Holdings Inc. estimated tax liability (ii)

          (240 )

Net cash consideration

        $ 995  

Total current assets (iii)

        $ 153  

Property and equipment

          51  

Trademarks (iv)

          550  

Franchise agreements (iv)

          220  

Management contracts (iv)

          40  

Other assets

          27  

Total assets acquired

        $ 1,041  

Total current liabilities (iii)

        $ 109  

Deferred income taxes (v)

          230  

Assumed long-term debt

          715  

Assumed tax liability

          240  

Other liabilities

          13  

Total liabilities assumed

          1,307  

Net identifiable liabilities acquired

          (266 )

Goodwill

          1,261  

Total consideration to be transferred

        $ 995  

(i)
Reflects cash received from CorePoint. In connection with La Quinta's spin-off of CorePoint, CorePoint will make a payment of approximately $985 million, subject to certain adjustments, in

66


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

    order to reimburse La Quinta for the balance of La Quinta's long-term debt. The receipt of such cash payment by La Quinta is a closing condition of the acquisition.

(ii)
Reflects the portion of the purchase price that Wyndham Worldwide will use to repay the La Quinta assumed long-term debt and the estimated tax liability, incurred in connection with La Quinta Holdings Inc.'s taxable spin-off of its owned real estate assets into a separate entity.

(iii)
The fair values of total current assets and total current liabilities are estimated to approximate their current carrying values.

(iv)
The identifiable intangible asset fair value estimates are based on a preliminary valuation and may change. The identifiable intangible assets associated with the La Quinta acquisition consist of trademarks, franchise agreements and management agreements with a fair value of $810 million. The final valuation may be materially different and may result in the identification of additional intangible assets as more detailed information will become available after the consummation of the La Quinta acquisition.

(v)
This balance includes the deferred tax liability resulting from the fair value adjustments for the identifiable intangible assets. This estimate of deferred tax liabilities was determined based on the book and tax basis differences attributable to the identifiable intangible assets acquired at a combined federal and state statutory tax rate of 26.1%. This rate reflects the impact of the United States' enactment of the Tax Cuts and Jobs Act. The goodwill recognized in the La Quinta acquisition is not expected to be deductible for income tax purposes. The final deferred tax liability may be materially different as more detailed information will become available after the consummation of the La Quinta acquisition.
    (b)
    Reclassifications

    Certain reclassifications have been made relative to the historical financial statements of La Quinta to conform to the financial statement presentation of Wyndham Hotels.

    The reclassification adjustments related to the balance sheet of the New La Quinta as of December 31, 2017 include the following:

    (i)
    Reclassification of $171 million of intangible assets, net to trademarks, net of $169 million and franchise agreements and other intangibles, net of $2 million.

    (ii)
    Reclassification of $52 million of accrued payroll and employee benefits to accrued expenses and other current liabilities.

    The reclassification adjustment related to the statement of income of the New La Quinta for the year ended December 31, 2017 pertains to the following:

    (i)
    Reclassifications of $148 million of general and administrative to marketing, reservation and loyalty.

    (c)
    Reflects the capital lease associated with Wyndham Worldwide's headquarters, which we expect to occupy upon the consummation of the spin-off, and leasehold assets used in the operation of our business, inclusive of deferred tax impact, which we expect to be transferred from Wyndham Worldwide upon spin-off when they become assignable.

    (d)
    Reflects (i) the elimination of Wyndham Worldwide's and La Quinta's Parent's net investment of $1.6 billion and (ii) the capitalization of $184 million of intercompany debt due to parent to additional paid-in-capital.

    (e)
    Reflects the issuance of one share of our common stock, par value $0.01 per share and the pro forma recapitalization of our equity.

    (f)
    Reflects the adjustment to give net effect to the financing transactions described in Note 4 that we anticipate will be completed on or prior to the completion of the spin-off.

    (g)
    Reflects (i) the step-up of La Quinta's royalty fees, (ii) the step-up of La Quinta's management fees, (iii) the incremental revenue La Quinta will receive from CorePoint related to IT services and a front desk call center program and (iv) incremental depreciation and amortization resulting from the adjustment of our assets to fair value in connection with purchase accounting. The

67


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

      estimated amortization expense was computed using the straight-line method and an estimated useful life of 20 years.

    (h)
    Reflects (i) the change in fee revenue related to the license, development and noncompetition agreement (described in Note 3) and (ii) a revenue share agreement on the co-branded credit card, both of which we will enter into with Wyndham Worldwide upon completion of the spin-off.

    (i)
    Reflects the removal of one-time transaction costs related to (i) the acquisition of New La Quinta of $2 million, (ii) the spin-off of Wyndham Hotels into a separate public company of $3 million and (iii) New La Quinta's separation from CorePoint of $12 million.

    (j)
    Reflects depreciation and amortization expense associated with the capital lease and leasehold assets described in Note (c) above.

    (k)
    Reflects (i) the adjustment to interest expense to give net effect to the financing transactions described in Note 4, (ii) the removal of $6 million of interest historically allocated by Wyndham Worldwide and (iii) $3 million interest expense associated with the capital lease described in Note (c) above.

    As described in Note 4, in connection with the spin-off and the La Quinta acquisition, Wyndham Worldwide has obtained financing commitments of $2.0 billion in the form of a 364-day senior unsecured bridge term loan facility to fund the La Quinta acquisition. The commitments will be used to fund the cash portion of the acquisition and fees and expenses in connection with the transactions contemplated by the purchase agreement. Wyndham Worldwide anticipates replacing some or all of the bridge facility prior to closing of the acquisition with long-term financing (comprised of a term loan credit facility and senior unsecured notes).

    Based on the terms of the $2.0 billion bridge facility with an assumed average variable interest rate of 3.60% which rate is based upon LIBOR plus 200 basis points, the pro forma interest expense would be $72 million for the year ended December 31, 2017. Each 0.125% change in assumed interest rate would result in an approximately $2 million change in annual interest expense on indebtedness.

    As noted above, Wyndham Worldwide anticipates replacing the bridge facility with $2.1 billion of long-term financing. The long-term financing will have terms ranging from seven to eight years, with an assumed weighted average interest rate of 4.66% which will give effect to pro forma interest expense of $98 million for the year ended December 31, 2017. The final terms of the term loan credit facility and senior unsecured notes will be subject to market conditions and may be materially different.

    (l)
    Reflects the income tax impact of the pro forma adjustments, using a combined federal and state statutory tax rate of approximately 39.2%. This does not represent Wyndham Hotels & Resorts, Inc.'s effective tax rate, which will include other tax charges and benefits, and does not take into account any historical or possible future tax events that may impact Wyndham Hotels & Resorts, Inc. The final income tax impact may be materially different as more detailed information will become available after the consummation of the spin-off and related transactions.

    (m)
    The number of shares of our common stock used to compute basic and diluted earnings per share for the year ended December 31, 2017 is based on the number of shares of Wyndham Worldwide common stock outstanding on December 31, 2017, assuming a distribution ratio of one share of our common stock for each share of Wyndham Worldwide common stock outstanding. The number of shares of Wyndham Worldwide common stock used to determine the assumed distribution reflects the shares of Wyndham Worldwide common stock outstanding as of the balance sheet date, which is the most current information as of the date of that financial statement.

68


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

THE HOTEL INDUSTRY

        Companies in the hotel industry typically operate through a combination of one or more of the following business models.

        Franchise – Under the franchise model, a company typically grants the use of a brand name to a hotel owner in exchange for royalty fees, which are typically a percentage of gross room revenues and provides marketing and reservation services for a fee, which is calculated similarly. Since the royalty fees are a recurring revenue stream and the related cost structure is relatively low, the franchise model often yields attractive margins and steady, predictable cash flows. Franchisors generally do not directly participate in the daily management or operation of franchised hotels.

        Management – Under the management model, a company provides professional oversight and comprehensive operations support to hotel owners in exchange for base management fees, which are typically a percentage of total hotel revenue. A company can also earn incentive management fees which are tied to the financial performance of the hotel. In addition to management and incentive fees, typical management agreements include a provision that hotel owners will pay ongoing marketing and reservation fees, which are based on a percentage of gross room sales.

        Ownership – Under the ownership model, a company owns a hotel and bears all financial risks and rewards relating to the hotel, including appreciation and depreciation in the value of the property. Ownership requires a substantial capital commitment and typically has a high fixed-cost structure.

        The hotel industry is cyclical in nature. Companies operating under the franchise model are largely insulated from this risk when compared with the other two business models since they do not own the hotels and have limited operating costs. Therefore, a company's strategic positioning and presence within these business models can influence overall profitability, particularly in a volatile economy.

        According to STR, as of December 31, 2017, the global hotel market consisted of approximately 184,000 hotels with combined annual revenues of $507 billion. This represents over 16.9 million rooms, of which 54% are affiliated with a brand. The industry is geographically concentrated in the top 20 countries accounting for over 80% of total rooms. The United States has the largest presence in the global hotel industry with 5.1 million rooms, representing approximately 30% of the global market. China is the next largest concentration with 2.3 million rooms, representing approximately 14% of the global market. The geographical distribution as of December 31, 2017 was as follows:

Region
  Hotels   Room Supply
(millions)
  Revenues
(billions)
  Brand
Affiliation

United States/Canada

  60,990   5.6   $169   70%

Europe

    68,329     4.7   156   40%

Asia Pacific

  35,551   4.6   120   53%

Latin America/Middle East

    18,741     2.1   62   43%

69


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

        Segmentation within the hotel industry is primarily measured through RevPAR. RevPAR growth is tracked and reported by STR on a geographical basis. Within the United States, hotels are classified into "chain scales" by STR as follows:

Chain Scale   ADR Range   % of
U.S. Market
  Typical Amenities
Economy   Less than $65   15%   Basic amenities
Midscale   $65 to $90   10%   Limited breakfast, selected business services
Upper Midscale   $90 to $110   18%   Restaurants, vending, selected business services and some recreational facilities
Upscale   $110 to $145   15%   Full range of on-property amenities and services, including restaurants, recreational facilities and business centers
Upper Upscale   $145 to $210   12%   Full range of on-property amenities and services
Luxury   $210 and above   2%   Luxury accommodations and extensive range of on-property amenities and services
Brand Affiliated     72%  
Independents       28%    
Total     100%  

70


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83


OUR BUSINESS

        Wyndham Hotels is the world's largest hotel franchisor, with more than 8,400 affiliated hotels located in over 80 countries. We license our 20 renowned hotel brands to franchisees, who pay us royalty and other fees to use our brands and services. We are the leader in the economy segment and have a substantial and growing presence in the midscale and upscale segments of the global hotel industry. We have grown our franchised hotel portfolio over time both organically and through acquisitions, and we have a robust pipeline of hotel owners and developers looking to affiliate with our brands. In 2017, Wyndham Hotels generated revenues of $1,347 million, net income of $243 million and Adjusted EBITDA of $395 million.

        We enable our franchisees, who range from sole proprietors to public real estate investment trusts, to optimize their return on investment. We drive guest reservations to our franchisees' properties through strong brand awareness among consumers and businesses, our global reservation system, our award-winning Wyndham Rewards loyalty program and our national, local and global marketing campaigns. We establish brand standards, provide our franchisees with property-based operational training and turn-key technology solutions, and help reduce their costs by leveraging our scale. These capabilities enhance returns for our franchisees and therefore help us to attract and retain franchisees. With over 5,700 franchisees, we have built the largest network of franchised hotels of any global hotel company.

        Our portfolio of brands enables us to franchise hotels in virtually any market at a range of price points, catering to both our guests' and franchisees' preferences. We welcome nearly 140 million guests annually worldwide. We primarily target economy and midscale guests, as they represent the largest demographic in the United States and around the world. We have the leading position in the economy segment, where our hotel brands represent approximately two of every five branded rooms in the United States. Approximately 68% of the hotels affiliated with our brands are located in the United States and approximately 32% are located internationally. The following table summarizes our brand portfolio as of December 31, 2017:

GRAPHIC

71


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

        Our business model is asset-light, as we generally receive a percentage of each franchised hotel's room revenues but do not own the underlying properties. Our business is easily adaptable to changing economic environments due to a low operating cost structure, which, together with our recurring fee streams and limited capital expenditures, yields attractive margins and predictable cash flows. Our franchise agreements are typically 10 to 20 years in length, providing significant visibility into future cash flows. Under these agreements, our franchisees pay us royalty fees and marketing and reservation fees, which are based on a percentage of their gross room revenues. We are required to spend marketing and reservation fees on marketing and reservation activities, enabling us to predictably match these expenses with an offsetting revenue stream on an annual basis. We also license the "Wyndham" trademark and certain other trademarks and intellectual property to Wyndham Worldwide through existing license agreements under which we receive royalty fees, and will continue to earn royalty fees following the spin-off under a long-term licensing agreement. In addition to hotel franchising, we provide hotel management services on a select basis. Our portfolio of managed hotels includes 116 third-party-owned properties and two owned properties. Approximately 99% of the hotels in our system are franchised to third parties, and substantially all of our Adjusted EBITDA is generated by our Hotel Franchising segment.

        We pursue multiple avenues of growth to generate returns for our stockholders. We use our scale, brands, guest loyalty and franchisee network to add new hotels to our system. Our long-established franchising experience and ability to innovate, together with favorable macroeconomic and lodging industry fundamentals, continue to support our organic growth around the world. Additionally, we intend to use our cash flow to continue to return capital to stockholders and to invest in the business and pursue external growth opportunities.

Our Competitive Strengths

        We believe our success has been and will be driven by significant competitive strengths that we have developed over time:

Industry-leading footprint in the hotel industry

        Wyndham Hotels is the world's largest hotel franchisor, with more than 8,400 affiliated hotels in over 80 countries. Our brands have substantial presence, welcoming nearly 140 million guests annually worldwide. The following chart presents the number of branded hotels associated with each of the six largest hotel companies:


Global Hotel Companies by Number of Branded Hotels as of December 31, 2017

GRAPHIC

*
As of June 30, 2017.

Source: Companies' public disclosures.

72


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

        Our scale enhances brand awareness among consumers and businesses and provides numerous benefits to franchisees. Our global reservation system, extensive distribution network and our award-winning Wyndham Rewards program drive over 60 million guest reservations annually to our franchisees. We also help our franchisees reduce overall costs through our marketing campaigns, our technology solutions and our purchasing programs with third-party suppliers. Our ability to provide these benefits helps us to attract and retain franchisees.

Strong portfolio of well-known brands

        We have assembled a portfolio of 20 well-known hotel brands, from leading economy brands such as Super 8 and Days Inn to upscale brands such as Wyndham and Dolce. Our Super 8 brand, with over 2,800 affiliated hotels, has more hotel properties than any other hotel brand in the world. Our brands are located in primary, secondary and tertiary cities and are among the most recognized in the industry. Over 80% of the U.S. population lives within ten miles of one or more of our affiliated hotels.

        Our brands offer a breadth of options for franchisees and a wide range of price points and experiences for our guests, including members of our award-winning Wyndham Rewards loyalty program. Our brands have also won numerous industry awards, both for guest satisfaction and as franchise opportunities for entrepreneurs. With many of our affiliated hotels located along major highways, our brands not only drive online and telephone reservations to hotels, they also help attract guests on a "walk-in" or direct-to-hotel basis.

Global leader in the economy segment

        We have built a leading position in the economy segment of the hotel industry, with our brands representing approximately 30% of the branded global economy hotel inventory. Our central reservation channels generate nearly half of our franchisees' occupied room-nights annually and approximately 60% of guests at our franchised hotels in the United States. In addition, we have substantial experience in property design, establishing brand standards, advertising, structuring promotional offerings and online marketing for economy brands. Four of our hotel brands have been consistently ranked in the top five in J.D. Power's North American Hotel Guest Satisfaction Index Study for the economy segment.

        Our strength in the economy segment is attractive to potential franchisees and positions us well to benefit from favorable demographic and consumer demand trends. According to the Brookings Institution, the global middle class is expected to more than double from 2.0 billion to 4.9 billion people by 2030. As this population increasingly participates in the global travel and leisure industry, we expect the economy segment will be a natural entry point.

Award-winning loyalty program

        Wyndham Rewards, our award-winning loyalty program, is a key component of our ongoing efforts to build consumer and franchisee engagement while driving more guest reservations directly to our affiliated hotels. Nearly 55 million people have enrolled in Wyndham Rewards since its inception, and substantially all 8,422 hotels affiliated with our hotel brands participate in the program. In addition, over 20,000 Wyndham Worldwide vacation ownership and rental properties participate in the program. Wyndham Rewards generates significant repeat business by rewarding frequent stays with points. Since being redesigned in 2015, Wyndham Rewards has been recognized as one of the simplest, most rewarding loyalty programs in the hotel industry, providing more value to members than any other program. It has won more than 50 awards, including "Best Hotel Loyalty Program" from US News & World Report and "Most Rewarding Hotel Loyalty Program" from IdeaWorks.

        Wyndham Rewards loyalty program members now account for approximately one-third of occupancy at our affiliated hotels. Total membership has been growing by approximately 10% annually. Our franchisees benefit from the program through increased guest loyalty and the more than one million

73


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

room-nights for which award points were redeemed for each of the past two years. These members are an important driver of our growth, as they stay nearly twice as often and spend 95% more than other guests, on average.

Proven ability to create value through acquisitions

        We have built our portfolio of renowned hotel brands primarily through acquisitions, beginning with the Howard Johnson brand and the U.S. franchise rights for the Ramada brand in 1990. Since then, we have acquired 17 economy, midscale, upscale and extended-stay brands, enabling us to meet travelers' leisure and business travel needs across a wide range of price points, experiences and geographies. We have established an extensive track record of successfully integrating franchise systems and enhancing the performance of brands post-acquisition by leveraging our operating best practices, significant economies of scale, award-winning Wyndham Rewards loyalty program and access to global distribution networks, while producing significant cost synergies for us and our franchisees. We intend to build upon our past success as we continue to opportunistically acquire and integrate brands into our franchising platform.

        In addition, we have grown many of the franchise systems we have acquired to be significantly larger than at acquisition. For example, after acquiring the economy-focused Baymont Inn portfolio in 2006, we re-positioned the brand within the midscale segment as Baymont Inn & Suites and have more than tripled its size from 115 hotels to 483 hotels in North and Latin America. Similarly, we have nearly doubled the size of our flagship Wyndham brand since we acquired it in 2005. We believe these capabilities, combined with our scale, enable us to be highly competitive for acquisition opportunities.

Strong and experienced management team

        Our executive management team is focused on building upon Wyndham Hotel Group's past success and track record of growth through its deep industry experience and leadership continuity. We benefit significantly from the experience of our executive officers who have an average of 18 years of experience in the travel and hospitality industries. Our chief executive officer, Geoffrey Ballotti, spent 20 years with Starwood Hotels & Resorts before joining Wyndham Worldwide in 2008 and has been instrumental in transforming our business over the past several years through acquisitions and technology-related initiatives. Our non-executive chairman, Stephen Holmes, has 27 years of experience in the hospitality industry and has served as Wyndham Worldwide's chief executive officer since 2006. Our chief financial officer, David Wyshner, has 18 years of experience in the travel industry and previously served as president and chief financial officer of Avis Budget Group. As a group, our executive officers have extensive experience with leading global hospitality and consumer-brand companies.


Our Strategy

        Our objective is to continue to strengthen our position as the world's leading hotel franchisor and help our franchisees drive profitability through the brands, technology and reservation services we provide. We expect to achieve our goals by focusing on the following core strategic initiatives:

Attract, retain and develop franchisees

        We intend to attract and retain franchisees and to grow our system size by maintaining and increasing the value we provide to franchisees. With more than 5,700 franchisees, we have built the largest network of franchised hotels of any global hotel company. These hotel owners and developers provide the engine and platform for future growth. In order to attract, retain and serve franchisees, we plan to:

    continually enhance the competitive position and awareness of our brands;

    provide best-in-class, cost-effective technology solutions; and

    drive reservations to our franchisees through our proprietary booking and third-party distribution channels.

74


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

        We are focused on building brand awareness, brand preference and reservations by presenting the value propositions of each of our hotel brands in all relevant channels to consumers who are likely to have the greatest propensity to stay with us. We also provide our franchisees with fully integrated, turn-key property management, reservations and revenue management systems that have capabilities that were not previously affordable to hotels in the economy and midscale sectors. We continuously innovate in our e-commerce channels, including websites and mobile applications for our brands, to enhance the consumer experience and drive reservations to our franchisees. We also operate telephone reservation and customer service centers around the world, and provide easy access to third-party distribution channels for our franchisees. Finally, we develop strong, consultative relationships with our franchisees, beginning with the sales process, where we work with hotel owners to determine how our brands will optimize their investment. We nurture this relationship throughout the life of the contract, continually assessing our franchisees' needs, providing solutions to meet those needs and partnering with them to grow their business. These efforts help us to retain approximately 95% of our total properties each year and to welcome an average of two new hotels into our system every day.

"Elevate the economy experience"

        We believe every type of traveler should have a great travel experience, regardless of price point. We are building on our leading position in the economy hotel segment to reshape and elevate the economy hotel experience. This process starts with our iconic economy brands—Days Inn, Super 8, Howard Johnson and Travelodge—which we have redefined to create new brand standards and new guest experiences. For instance, we have developed innovative new-construction prototypes and have introduced new design concepts and plans for conversion properties and renovations, such as the Super 8 Innovate room package. These changes enable our franchisees to create an upscale guest experience at an economy price point.

        Our economy brands are among the most respected in the industry and have won numerous awards for the quality and consistency of service they provide. We intend to continue to drive favorable consumer perception of our brands through our brand standards, quality assurance, marketing and franchisee relations. As a result, we believe our reshaped and elevated economy brands will be a natural entry point for millennials and other price-conscious travelers, who are looking for quality branded experiences at an economy price point.

Expand our presence in the midscale space and beyond

        Our leading position in the economy segment provides a strong platform for our accelerated growth in the midscale sector, where our share of branded rooms is approximately 15%. We are able to effectively and easily leverage our industry-leading technology, marketing platform and infrastructure to serve midscale and upscale hotels. This capability provides an opportunity for our existing franchisees to "trade up" as their businesses grow and for us to attract hotel owners and developers focused on these segments.

        In addition to expanding our revenue opportunities, growing our presence outside the economy segment offers many advantages, including strengthening brand equity and building brand loyalty among higher-paying guests. Growth in the midscale and upscale segments, all within the Wyndham Rewards loyalty program, will provide our loyalty members with increased flexibility to redeem points at a Wyndham Hotels brand that fits a member's specific preferences, further increasing brand loyalty.

Grow our footprint in new and existing international markets

        With a diverse, global network of brands already represented in more than 80 countries, we intend to expand in new and existing international markets. Over the past five years, our international portfolio has grown at a compound annual rate of 12%, nearly 2,700 hotels, and now represents approximately 32% of the hotels in our system.

75


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

        We have built a strong, flexible international franchise sales platform, with more than 100 sales professionals in key locations around the world, including in Europe, Latin America, India, China, Singapore and Australia. We typically focus on rapidly developing countries that are under-served by the hotel industry. We also look for flagship opportunities in higher-traffic markets throughout the world to aid international brand awareness and loyalty. We believe our flexibility as a sales organization and our diverse portfolio of brands enable us to effectively adapt our sales strategies in response to franchisees' and hotel developers' needs, and to changes in global supply and demand.

        Currently, our pipeline of franchise contracts and applications consists of approximately 1,200 hotels with 148,000 rooms, of which more than half are international. As we grow internationally, we are particularly focused on brand quality and property design, with approximately 90% of our existing international pipeline being new-construction projects.

Use cash flow to create value for stockholders

        We intend to use the cash flow generated by our operations to create value for stockholders. Our asset-light business model, with low fixed costs and stable, recurring franchise fee revenue, generates attractive margins and cash flow. In addition to investments in the business, including acquisitions of brands and businesses that would expand our presence and capabilities in the lodging industry, we expect to return capital to our stockholders through dividends and/or share repurchases. We expect to pay a regular dividend and use excess cash to repurchase shares.

Recent Developments

        In January 2018, Wyndham Worldwide Corporation entered into an agreement with La Quinta Holdings Inc. to acquire its hotel franchising and management businesses for $1.95 billion in cash. Under the terms of the agreement, stockholders of La Quinta Holdings Inc. will receive $8.40 per share or $16.80 per share (if a reverse stock split has been effected) in cash (approximately $1.0 billion in aggregate), and Wyndham Worldwide will repay approximately $715 million of La Quinta Holdings Inc. debt and set aside a reserve of $240 million for estimated taxes expected to be incurred in connection with the taxable spin-off of La Quinta Holdings Inc.'s owned real estate assets into CorePoint. Consummation of the La Quinta acquisition is subject to certain customary conditions, including the receipt of approval from the La Quinta Holdings Inc. stockholders and government agencies. FTC approval for the La Quinta acquisition was received on March 2, 2018. The La Quinta acquisition is expected to close in the second quarter of 2018, prior to the consummation of our spin-off from Wyndham Worldwide. The La Quinta brand is one of the largest midscale/upper midscale brands in the hotel industry, with 902 hotels (585 third-party franchised and 317 managed) in 48 states in the United States, Mexico, Canada, Honduras and Colombia as of December 31, 2017.

        With the acquisition of La Quinta's asset-light, fee-based hotel management and franchising businesses, Wyndham Hotels will span 21 brands and over 9,000 hotels across more than 80 countries. In addition to adding over 900 hotels to the world's largest hotel network, the acquisition of La Quinta will strengthen our position in the midscale and upper midscale segments of the hotel industry, which has been and continues to be one of our strategic priorities. Following the La Quinta acquisition, Wyndham Hotels will have the largest number of midscale and economy hotels in the industry. We expect to leverage our development capabilities to further grow the La Quinta brand in the United States and across Latin America where we already have 198 properties. The transaction will also expand our managed hotel network by more than 250%, from 116 hotels today to more than 430 properties, making us the sixth-largest hotel manager in the United States. Hotel management represents an attractive expansion opportunity to grow our asset-light business and further penetrate the midscale and higher segments.

        The La Quinta Returns loyalty program, with over 15 million enrolled members, will be combined with the award-winning Wyndham Rewards loyalty program, with nearly 55 million enrolled members.

76


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

        LQ Management L.L.C., an indirect wholly-owned subsidiary of La Quinta that will become an indirect wholly-owned subsidiary of Wyndham Hotels & Resorts, Inc. after the completion of the acquisition, will enter into 20-year management agreements with subsidiaries of CorePoint, with each hotel to be a party to a separate management agreement, whereby the management fees paid by CorePoint on the La Quinta properties owned by CorePoint will increase from 2.5% to 5.0% of gross revenue. The management agreements will allow for two additional five-year renewal periods at LQ Management L.L.C.'s option. CorePoint may also pay certain service fees and generally will pay or reimburse LQ Management L.L.C.'s for any hotel operating expenses incurred by it in the course of managing the hotel, including salaries and wages of hotel employees. Services provided under these agreements will include, but will not be limited to, certain human resources, risk management, revenue management, payroll, accounting and information technology services. Subject to certain qualifications, notice requirements, applicable cure periods and, in certain instances, termination fees, the applicable management agreement for each of the CorePoint hotels generally will be terminable by either party upon material casualty or condemnation of the hotel, or the occurrence of certain customary events of default and will be terminable by CorePoint upon a sale of the hotel. CorePoint will also have the right to terminate the management agreements if certain performance metrics are not satisfied, subject to customary notice and cure provisions on LQ Management L.L.C.'s behalf.

        La Quinta Franchising LLC, an indirect wholly-owned subsidiary of La Quinta that will become an indirect wholly-owned subsidiary of Wyndham Hotels & Resorts, Inc. after the completion of the acquisition, will also enter into franchise agreements related to the CorePoint hotels, with each hotel to be a party to a separate franchise agreement. Pursuant to the franchise agreements, CorePoint will be granted a limited, non-exclusive license to use the La Quinta name, marks and system in the operation of these hotels. La Quinta Franchising LLC will provide CorePoint hotels with a variety of services and benefits. The franchise agreements and associated brand standards will specify operational, record-keeping, accounting, reporting and marketing standards and procedures with which CorePoint must comply. The franchise agreements will require that CorePoint pay a royalty fee of 5.0% of gross room revenues, along with customary fees, including a marketing fee of 2.5% of gross room revenue and a reservation services fee of 2.0% of gross room revenue. The franchise agreements will have an initial term of 20 years, with an opportunity for a renewal term of 10 years at CorePoint's option. Each franchise agreement will contain a mutual right to terminate without cause effective on the fifteenth anniversary of the franchise agreement. La Quinta Franchising LLC will also be able to terminate the agreements upon the occurrence of certain events, including the failure to maintain brand standards and the failure to pay royalties and fees as and when due.

        We expect to generate substantial synergies when integrating La Quinta into our existing business by eliminating redundant public company expenses and reducing operating costs associated with technology, distribution and marketing as we leverage our scale and existing infrastructure. Additional revenue benefits are expected to come from incremental domestic and international expansion as well as RevPAR growth from a broader distribution platform.

77


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83


History

        Our business was initially incorporated as Hospitality Franchise Systems, Inc. in 1990 to acquire the Howard Johnson brand and the franchise rights to the Ramada brand in the United States. It has been a part of Wyndham Worldwide and its predecessor since 1997 and has grown substantially over time through acquisitions and organic expansion.

GRAPHIC


Our System

        With 8,422 affiliated hotels in our brand portfolio, our global footprint is substantially greater than that of any other hotel company in the world. Our brands can be found in over 80 countries, with the heaviest geographic concentration in the United States and China:

 
  # of
Properties
  % of
System
 

United States

  5,726   68%  

Asia Pacific

    1,556     19%  

Canada

  509   6%  

Europe/Middle East/Africa

    433     5%  

Latin America

  198   2%  

Global

    8,422     100%  

78


Confidential Treatment Requested by Wyndham Hotels & Resorts, Inc.

Pursuant to 17 C.F.R. Section 200.83

        We welcome nearly 140 million guests annually worldwide. While our portfolio spans a wide array of hotel brand offerings, we are the leader in the economy segment and have been rapidly increasing our significant presence in the midscale segment.

 
  # of
Properties
  % of
System
 

Economy

  6,131   73%  

Midscale

    1,804     21%  

Lifestyle

  205   3%  

Upscale

    172     2%  

Extended Stay

  110   1%  

    8,422     100%  

        Our portfolio of brands appeals to a broad range of consumers. With diverse offerings across chain scales, geographies and price points, and a particular focus on economy and midscale hotels we seek to address the travel needs of the over two billion people in the expanding global middle class. Our brands combine innovative design, quality and affordability that attracts today's value-conscious consumer. While our typical guest is a leisure traveler, our industry-leading scale and presence in major, secondary and tertiary cities also attract business travelers. Over 1,300 hotels affiliated with our brands are located on interstate and highway roadsides, catering to value-oriented guests seeking quality accommodations in convenient locations. We also seek to appeal to the growing millennial generation through our investment in consumer-facing technology, online and social media marketing, innovative new-construction prototypes and redesigned lobbies.

        The following table presents the changes in our portfolio for the last three years:

 
  As of December 31,  
 
  2017   2016   2015  
 
  Properties   Rooms   Properties   Rooms   Properties   Rooms  

Beginning balance

  8,035   697,607