– Sean O’Neill
Choice Hotels International has signed an offer to buy Wyndham Hotels & Resorts, the Wall Street Journal reported Tuesday.
A spokesperson for Choice Hotels told Skift: “We have not commented on market rumors and speculation.”
A spokesman for Wyndham said: “We are not talking about rumours. “We are focused on business as usual.”
The magazine said the companies are not in serious discussions. However, the report will cause group speculation as a possible merger between the companies could create the largest luxury hotels in North America.
If Wyndham management rejects the deal, Choice Hotels would have the option of offering the purchase directly to Wyndham shareholders, the report said.
“This is a very interesting situation because the money would be large, maybe enough to eliminate the interest rate that would be needed to get rid of this,” said Alan Woinski, editor of Skift’s Daily Lodging Report.
“But is this the right time to try to do dirty things because of big financial concerns?” Woinski asked. “Would the government allow even one company to dominate the financial sector like a conglomerate would?”
Choice Hotels is a Rockville, Maryland-based operator of approximately 7,500 hotels with 22 brands, including its flagship Comfort brand and the mid-range Quality Inn brand. Choice has repeatedly stated that its strategy is to build its portfolio with hotels that offer the most value per unit, meaning the highest quality properties.
Wyndham, which operates hotels in Parsippany, New Jersey with approximately 9,100 hotels and 842,500 rooms, is best known for its budget brands, such as Super 8 and Ramada. But its 24 brands also include luxury brands, such as Dolce, Wyndham, and Wyndham Grand. (See Skift’s “Every One of Wyndham’s 24 Hotel Brands, Explained.”)
The tendency to merge between hotel groups is understandable. Having a higher rate of return helps the success of loyalty programs and brand marketing, which can help hotel companies drive more customers to direct bookings. Booking direct avoids the 10 to 30 percent commissions that online travel agencies charge.
The article has been updated and will be updated advance.
Image Credit: Wyndham is the brand name of Wyndham Hotels and Resorts. The upscale model has rooms, meetings, public spaces designed for today’s mixed travel. Source: Wyndham.