WYNDHAM WORLDWIDE CORPORATION

incidental to the rental of the properties, such as fees for travel services, local transportation, on-site services and
insurance or similar types of products.
The global supply of vacation rental inventory is highly fragmented with much of it being made available by
individual property owners. We believe that as of December 31, 2010, there were approximately 1.3 million and
1.7 million vacation properties available for rental in the U.S. and Europe, respectively. In the U.S., the vacation
properties available for rental are primarily condominiums or stand-alone houses. In Europe, the vacation properties
available for rental include individual homes and apartments, campsites and vacation park bungalows. Individual
owners of vacation properties in the U.S. and Europe may own their properties as investments and may sometimes
use such properties for their own use for portions of the year. We believe that the overall supply of vacation rental
properties has grown primarily because of the increasing desire by existing owners of second homes to gain an
earnings stream evidenced by homes not previously offered for rent appearing on the market.
We believe that the overall demand for vacation rentals has been growing for the following reasons: (i) the
consumer value of renting a unit for an entire family; (ii) the increased use of the Internet as a tool for facilitating
vacation rental transactions; and (iii) increased consumer awareness of vacation rental options. The global demand
per year for vacation rentals is approximately 54 million vacation weeks, 34 million of which are rented by leisure
travelers from Europe. Demand for vacation rental properties is often regional since many leisure travelers rent
properties within driving distance of their home. Some leisure travelers, however, travel relatively long distances
from their homes to vacation properties in domestic or international destinations. Current economic conditions have
resulted in slower growth in the near term, but we believe that long-term trends will support a return to stronger
growth.
The destinations where leisure travelers from Europe, the U.S., South Africa and Australia generally rent
properties vary by country of origin of the leisure travelers. Leisure travelers from Europe generally rent properties
in European destinations, including the United Kingdom, Denmark, Ireland, Spain, France, the Netherlands,
Germany, Italy and Portugal. Demand from European leisure travelers has recently been shifting beyond traditional
Western Europe, based on political stability across Europe, increased accessibility of Eastern Europe and the
expansion of the European Union. Demand from U.S. leisure travelers is focused on rentals in seaside destinations,
such as Hawaii, Florida and the Carolinas, in ski destinations such as the Rocky Mountains, and in urban centers
such as Las Vegas, Nevada; and San Francisco, California. Demand is also growing for destinations in Mexico and
the Caribbean by leisure travelers from the U.S.
Wyndham Exchange & Rentals Overview
Wyndham Exchange & Rentals is largely a fee-for-service business that provides vacation exchange services
and products to developers, managers and owners of intervals of vacation ownership interests, and markets vacation
rental properties. Our vacation exchange and rentals business primarily derives its revenues from fees which generate
stable and predictable cash flows. Our vacation exchange business, RCI, derives a majority of its revenues from
annual membership dues and exchange fees for facilitating transactions. Our vacation exchange business also derives
revenues from ancillary services including additional services provided to transacting members, programs with
affiliated resorts, club servicing and loyalty programs. Our vacation rentals business primarily derives its revenues
from fees, which generally average between 15% and 45% of the gross booking fees for non-proprietary inventory,
except for where we receive 100% of the revenues for properties that we own or operate under long-term capital
leases. Our vacation rentals business also derives revenues from ancillary services delivered to property owners and
travelers. The revenues generated in our vacation exchange and rentals business are substantially derived from the
direct customer relationships we have with our 3.8 million vacation exchange members, the affiliated developers of
over 4,000 resorts, our over 51,000 independent property owners and our repeat vacation rentals customers. No one
external customer, developer or customer group accounts for more than 2% of our vacation exchange and rentals
revenues.
We are the world’s largest vacation exchange network based on the number of vacation exchange members and
the world’s largest global marketers of vacation rental properties based on the number of serviced vacation rental
properties marketed. Our vacation exchange and rentals business has access for specified periods, in a majority of
cases on an exclusive basis, to approximately 97,000 vacation properties, which are comprised of over 4,000
vacation ownership resorts around the world through our vacation exchange business, and approximately 93,000
vacation rental properties with approximately 87,000 properties located principally in Europe and approximately
6,000 located in the U.S. Each year, our vacation exchange and rentals business provides more than 4.9 million
leisure-bound families with vacation exchange and rentals services and products. The properties available to leisure
travelers through our vacation exchange and rentals business include vacation ownership condominiums, homes,
villas, cottages, bungalows, campgrounds, hotel rooms and suites, city apartments, fractional private residences,
luxury destination clubs and yachts. We offer leisure travelers flexibility (subject to availability) as to time of travel
and a choice of lodging options in regions to which such travelers may not typically have such ease of access, and
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