WYNDHAM WORLDWIDE CORPORATION

Competition
Competition is robust among the lodging brand franchisors to grow their franchise systems and retain their
existing franchisees. We believe existing and potential franchisees make decisions based principally upon the
perceived value and quality of the brand and the services offered to franchisees. We further believe that the
perceived value of a brand name is, to some extent, a function of the success of the existing hotels franchised under
the brands. We believe that existing and prospective franchisees value a franchise based upon their views of the
relationship between the costs, including costs of conversion and affiliation, to the benefits, including potential for
increased revenues and profitability, and upon the reputation of the franchisor.
The ability of an individual franchisee to compete may be affected by the location and quality of its property,
the number of competing properties in the vicinity, community reputation and other factors. A franchisee’s success
may also be affected by general, regional and local economic conditions. The potential negative effect of these
conditions on our results of operations is substantially reduced by virtue of the diverse geographical locations of our
franchised hotels and by the scale of our franchisee base. Our franchise system is dispersed among almost 5,600
franchisees, which reduces our exposure to any one franchisee. No one franchisee accounts for more than 3% of our
franchised hotels or total segment revenues.
WYNDHAM EXCHANGE & RENTALS
Vacation Exchange and Rentals Industry
The over $60 billion global vacation exchange and rentals industry is largely a fee-for-service business and has
been a growing segment of the hospitality industry. The industry offers services and products to both leisure
travelers and vacation property owners. For leisure travelers, the industry offers access to a range of fully-furnished
vacation properties, which include privately-owned vacation homes, villas, cottages, apartments and condominiums,
vacation ownership resorts, inventory at hotels and resorts, boats and yachts. The industry offers leisure travelers
flexibility (subject to availability) in time of travel and choice of lodging options in regions where travelers may not
typically have access to such choices. For vacation property owners, affiliations with vacation exchange companies
allow owners of vacation intervals to exchange their interests in vacation properties for vacation time at other
properties or for other various services and products. Additionally, affiliation with vacation rental companies
provides property owners the ability to have their properties marketed and rented and, in some instances, to transfer
the responsibility of managing such properties.
To participate in a vacation exchange, an owner generally contributes their interval to an exchange company’s
network and then indicates the particular resort or geographic area where the owner would like to travel, the size of
the unit desired and the period during which the owner would like to vacation. The exchange company then rates the
owner’s contributed intervals based upon a number of factors, including the location and size of the unit or units, the
quality of the resort or resorts and the time period or periods during which the intervals entitle the owner to
vacation. An exchange may then be completed based on these conditions. Exchange companies generally derive
revenues from owners of intervals by charging exchange fees for facilitating exchanges and through annual
membership dues. In 2009, 72% of owners of intervals were members of vacation exchange companies, and 54% of
such owners exchanged their intervals through such exchange companies.
The long-term trend in the vacation exchange industry has been growth in the number of members of vacation
exchange companies. Current economic conditions have resulted in slower growth, but we believe that an economic
recovery will support a return to stronger growth. In 2009, there were approximately 6.1 million members industrywide
who completed approximately 3.3 million exchanges. Within the broader long-term growth trend of the
vacation exchange industry, there is also a trend where timeshare developers are enrolling members in private label
clubs, where members have the option to exchange within the club or through external exchange channels. The club
trend has a positive impact on the average number of members, but a negative effect on the number of exchange
transactions per average member and revenue per member.
The vacation rental industry offers vacation property owners the opportunity to rent their properties to leisure
travelers for periods of time. The vacation rental industry is not as organized as the lodging industry in that the
vacation rental industry does not have global reservation systems or brands. The industry is divided broadly into two
segments. The first is the serviced rental segment, where the homeowner provides their property to an agent to rent,
in a majority of cases, on an exclusive basis and the agent receives a commission for marketing the property,
managing bookings and providing quality assurance to the renter. The other segment of the industry is the listing
business, where there is no exclusive relationship and the property owner pays a fixed fee for an online listing or a
directory listing with minimal additional services, typically with no direct booking ability or quality assurance
services. Typically, serviced vacation rental companies collect rent in advance and, after deducting the applicable
commissions, remit the net amounts due to the property owners and/or property managers. In addition to
commissions, serviced vacation rental companies may earn revenues from rental customers through fees that are
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