WYNDHAM WORLDWIDE CORPORATION

elate to payroll costs that we pay on behalf of hotel owners, and for which we are entitled to be fully reimbursed by
the hotel owner. As the reimbursements are made based upon cost with no added margin, the recorded revenues are
offset by the associated expense and there is no resultant impact on EBITDA
Excluding the impact of the Tryp hotel brand acquisition, EBITDA further reflects an increase in expenses of
$10 million (2%) primarily driven by:
k $24 million of increased costs primarily associated with ancillary services provided to franchisees and to
enhance the international infrastructure to support our growth strategies;
k $6 million of costs incurred during 2010 relating to our strategic initiative to grow reservation
contribution;
k $5 million of higher employee compensation expenses compared to 2009;
k $3 million of higher information technology costs; and
k $2 million of higher bad debt expense primarily attributable to receivables relating to terminated
franchisees.
Such cost increases were partially offset by:
k a decrease of $13 million in marketing-related expenses primarily due to lower marketing overhead;
k $8 million of lower payroll costs paid on behalf of hotel owners, as discussed above;
k the absence of a $6 million non-cash charge in the fourth quarter of 2009 to impair the value of an
underperforming joint venture in our hotel management business; and
k the absence of $3 million of costs recorded during the first quarter of 2009 relating to organizational
realignment initiatives (see Restructuring Plan for more details).
As of December 31, 2010, we had approximately 7,210 properties and approximately 612,700 rooms in our
system. Additionally, our hotel development pipeline included over 900 hotels and approximately 102,700 rooms, of
which 51% were international and 55% were new construction as of December 31, 2010.
We expect net revenues of approximately $675 million to $725 million during 2011. In addition, as compared
to 2010, we expect our operating statistics during 2011 to perform as follows:
k RevPAR to be up 5-7%; and
k number of rooms (including Tryp) to increase 1-3%.
Vacation Exchange and Rentals
Net revenues and EBITDA increased $41 million (4%) and $6 million (2%), respectively, during 2010
compared with 2009. A stronger U.S. dollar compared to other foreign currencies unfavorably impacted net revenues
and EBITDA by $16 million and $7 million, respectively. Net revenues from rental transactions and related services
increased $35 million primarily related to incremental contributions from our acquisitions and ancillary revenues
increased $8 million, partially offset by a $2 million decline in exchange and related service revenues. EBITDA
further reflects the favorable impact from foreign exchange transactions and foreign exchange hedging contracts,
partially offset by incremental costs contributed from acquired businesses, an increase in costs related to organizational
realignment initiatives and increased operating expenses.
On November 30, 2010, we acquired James Villa Holidays, which resulted in the addition of approximately
2,300 villas and unique vacation rental properties in over 50 destinations primarily across Mediterranean locations.
In addition, we acquired ResortQuest during September 2010 and Hoseasons during March 2010 which resulted in
the addition of approximately 6,000 and over 15,000 vacation rental properties, respectively. Our vacation exchange
and rentals business now offers its leisure travelers access to approximately 97,000 vacation properties worldwide.
Such acquisitions contributed incremental net revenues of $43 million and an EBITDA loss of $3 million, which
includes $6 million of costs incurred in connection with these acquisitions. Such contributions include $6 million of
ancillary revenues generated from ResortQuest. ResortQuest and James Villa Holidays were purchased subsequent to
the third quarter vacation season, which, based on historical seasonality, is the quarter in which results derived from
these vacation rentals are most favorable.
Net revenues generated from rental transactions and related services increased $35 million (8%) during 2010
compared to 2009. Excluding the impact to net revenues from rental transactions from our acquisitions and the
unfavorable impact of foreign exchange movements of $22 million, such increase was $20 million (4%) during
2010, which was driven by a 4% increase in average net price per vacation rental. Such increase resulted from
(i) favorable pricing on bookings made close to arrival dates at our Landal GreenParks business, (ii) higher pricing
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