Wyndham is Latest Hotel Brand to Spin Off Its Timeshare Business
Wyndham Worldwide is splitting its hotel business into two separate, publicly-traded companies: the first being Wyndham Hotel Group, a pure-play hotel company, and the second being Wyndham Vacation Ownership
In fact, at the company's first quarter 2017 earnings call in April, Wyndham CEO Stephen P. Holmes spoke to the importance of a loyalty program across the Wyndham brand.
"The customer staying in our hotels is a timeshare customer," said Holmes. "It's the average consumer that's out there that buys timeshare. And we think with a stronger loyalty connection to the brand that driving those consumers to learn more about our timeshare product is going to be a natural progression as we build out the interconnection between the two business."
After the announcement of this news, company officials emphasized an ongoing commitment to Wyndham Rewards, while also stressing that this transaction is expected to provide a host of other benefits for Wyndham as well.
"After a comprehensive review process, the Board of Directors has determined that a spin-off of the hotel business and the combination of Wyndham Vacation Ownership with RCI is the best structure to unlock shareholder value and enable strong growth across the businesses," Homles said in a statement. "We will work with the leadership of our European rental organizations, which have outstanding brands in their regional markets, to explore options to fully realize their future growth potential."
"Over the past decade, we have attracted incredible teams of dedicated professionals who have built these businesses and brands into industry leaders which are now connected by the industry's top rated loyalty program. With this strong platform in place, our businesses are now able to move forward individually, each positioned for a very strong future, based on a shared history and culture and an ongoing affiliation with Wyndham Rewards."
Company officials said that the transaction, which is expected to be tax-free to Wyndham Worldwide and its shareholders, is expected to be completed in the first half of 2018. The leadership structure for the two separate public companies will involve separate boards of directors, with Holmes serving as non-executive chairman of the board of directors for both. Geoff Ballotti, current CEO of Wyndham Hotel Group, will lead the hotel company as president and CEO, while Michael Brown, current CEO of Wyndham Vacation Ownership, will continue to lead the timeshare company as president and CEO there.
This news comes in the same week that Wyndham announced that it was acquiring Love Home Swap, a London-based startup that, like Airbnb, allows travelers to book stays in other people's homes while at the same time letting them list their own properties to be booked by others.
Wyndham Hotel Group is one of the world's largest and most diverse hotel businesses, with a global portfolio of 18 brands spread throughout 8,100 hotels, giving it approximately 705,700 rooms in more than 80 countries, with a 2016 revenues of $1.3 billion. With more than $2 billion in gross timeshare sales in 2016, Wyndham Vacation Ownership is the world's largest developer and marketer of vacation ownership products, operating a portfolio of more than 220 resorts throughout the United States, Canada, Mexico, the Caribbean, South America and the South Pacific.
Wyndham Hotel Group has the following projects currently underway:
The Wyndham Cardiff hotel will consist out of 32-storeys, and with its 127-meter-high structure it will be the tallest hotel in Wales.
Barrasford and Bird Worldwide has selected Wyndham Worldwide as franchise partner for its first mixed-use development in Europe.
The project includes a hotel and a registry tower that are connected by a lower level common area, forming an overall U shaped structure.
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