Choice Hotels Reportedly Seeking To Buy Wyndham
Choice Hotels International is reportedly looking to buy Wyndham Hotels & Resorts, The Wall Street Journal reported, citing anonymous sources.
The hotel franchise giants are in the early stages of talks and it isn't clear that Wyndham would be on board, Reuters reported, also citing an anonymous source. But the source said that if Wyndham isn’t for the merger, Choice could take the option directly to Wyndham’s shareholders.
The move would bring two economy-focused hotel giants under one umbrella. Choice owns 22 brands and brand extensions that make up 7,467 properties, with flags like Quality Inn, MainStay, Comfort, Econo Lodge and Clarion. Wyndham owns 24 brands across approximately 9,100 properties including Super 8, La Quinta and Ramada, the Days Inn and Wyndham.
Choice Hotels didn't respond to a request for comment from Bisnow. Wyndham Senior Vice President for Global Communications Máire Griffin declined to comment on the reports.
“We don’t comment on rumors," Griffin said in an email to Bisnow. "We are focused on business as usual, driving value for our franchisees, team members, guests and stakeholders.”
The reported talks come at a moment when the hotel industry's economy sector — in which Wyndham has about 46% of its portfolio — is seeing rapid growth. The select-service and extended-stay hotel segments accounted for 51.1% of the total U.S. market’s investment volume last year, according to JLL, with liquidity approaching $20.5B, a 5.5% increase year-over-year.
First responders and blue-collar workers on the road during the height of the pandemic fueled demand in the sector. That demand is expected to keep its momentum, as U.S. companies look to reshore manufacturing, especially in the electric vehicle sector, and as projects funded by the Biden administration’s infrastructure law bring blue-collar workers on the road to temporary jobs.
Wyndham’s existing extended-stay brand is Hawthorn Suites Extended Stay, with 71 hotels internationally. In November, the hotel giant launched a new extended-stay brand, ECHO Suites Extended Stay. The brand has more than 200 properties in the pipeline, with the first expected to deliver by the end of the year and more coming in 2024.
Wyndham brought in $313M of revenue in the first quarter, with a net income of $67M, down from $106M in the first quarter last year. The company's stock price rose from about $64 per share to more than $70 per share Wednesday following the reports of the talks with Choice Hotels.