WYNDHAM WORLDWIDE CORPORATION

Our field services team, strategically dispersed worldwide, integrates new properties into our system and helps
existing properties improve RevPAR performance and guest satisfaction. Our training teams provide robust
educational opportunities to our hotel owners through instructor led, web-based and electronic learning vehicles for a
number of relevant topics. Our strategic sourcing department helps franchisees control costs by leveraging the
buying power of the entire Wyndham Worldwide organization to produce discounted prices on numerous items
necessary for the successful operation of a hotel, such as linens and coffee. Our development planning and
construction team provides architectural and interior design guidance to hotel owners to ensure compliance with
brand standards, including construction site visits and the creation of interior design schemes.
We also provide hotel owners with property management system software that synchronizes each hotel’s
inventory with our central reservations platform. These systems help hotel owners manage their rooms inventory
(room nights), rates (ADR) and reservations, which leads to greater profits at the property level and better enables
us to deliver reservations at the right price to our hotel owners.
Additionally, MyPortal, which is a property-focused intranet website, is the key communication vehicle and a
single access point to all the information and tools available to help our hotel owners manage their day-to-day
activities.
New Development
Our development team consists of 100 professionals dispersed throughout the world, including in the U.S.,
China, U.K. and Mexico. Our development efforts typically target existing franchisees as well as hotel developers,
owners of independent hotels and owners of hotels leaving competitor brands. Approximately 30% of the new rooms
added in 2010 were with franchisees or managed hotel owners already doing business with us.
Our hotel management business gives us access to development opportunities beyond pure play franchising
transactions. When a hotel owner is seeking both a brand and a manager for a full-service hotel, we are able to
couple these services in one offering which we believe gives us a competitive advantage.
During 2010, our development team generated 732 applications for new franchise and/or management
agreements, of which 590, or 81%, resulted in new franchise and/or management agreements. The difference is
attributable to various factors such as financing and agreement on contractual terms. Once executed, about 70% of
hotels open within the following six months, while 10% open between six and 12 months and another 10% open
generally within 24 months. The remaining may never open due to various factors such as financing.
As of December 31, 2010, we had approximately 102,700 rooms pending opening in our development pipeline,
of which 51% were international and 55% were new construction.
In North America, we generally employ a direct franchise model whereby we contract with and provide various
services and reservations assistance directly to independent owner-operators of hotels. Under our direct franchise
model, we principally market our lodging brands to hotel developers, owners of independent hotels and hotel owners
who have the right to terminate their franchise affiliations with other lodging brands. We also market franchises to
existing franchisees because many own, or may own in the future, other hotels that can be converted to one of our
brands. Our standard franchise agreement grants a franchisee the right to non-exclusive use of the applicable
franchise system in the operation of a single hotel at a specified location, typically for a period of 15 to 20 years,
and gives the franchisor and franchisee certain rights to terminate the franchise agreement before its conclusion
under certain circumstances, such as upon the lapse of a certain number of years after commencement of the
agreement. Early termination options in franchise agreements give us flexibility to terminate franchised hotels if
business circumstances warrant. We also have the right to terminate a franchise agreement for failure by a franchisee
to bring its property into compliance with contractual or quality standards within specified periods of time, pay
required franchise fees or comply with other requirements of the franchise agreement.
Although we generally employ a direct franchise model in North America, we expect to open and operate our
first company-owned hotel, The Wyndham Lake Buena Vista Hotel and Spa at Bonnet Creek Resort, in late 2011.
This hotel will be situated in our Bonnet Creek vacation ownership resort near the Walt Disney World» resort in
Florida and will enable us to leverage the synergies of our company’s hotel and vacation ownership components.
In other parts of the world, we employ a direct franchise model or, where we are not yet ready to support the
required infrastructure for that region, we may employ a master franchise model. Franchise agreements in regions
outside of North America may carry a lower fee structure based upon the breadth of services we are prepared to
provide in that particular region. Under our master franchise model, we principally market our lodging brands to
third parties that assume the principal role of franchisor, which entails selling individual franchise agreements and
providing quality assurance, marketing and reservations support to franchisees. Since we provide only limited
services to master franchisors, the fees we receive in connection with master franchise agreements are typically
lower than the fees we receive under a direct franchising model. Master franchise agreements, which are individually
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