WYNDHAM WORLDWIDE MAY have decided to spin off Wyndham Hotel Group on its own, but it is not entirely letting go.
Stephen Holmes, chairman and CEO of Wyndham Worldwide, which includes the hotel group, a vacation destination network and a timeshare business, said during a second-quarter-earnings call on Aug. 3 the corporation’s “blue thread” will continue to connect the three entities.
In conjunction with the Wyndham Hotel Group split, the corporation will combine Wyndham Vacation Ownership, its timeshare company, and Wyndham Destination Network’s RCI, its timeshare exchange company.
The main attribute the trio currently shares is Wyndham Rewards, the hotel loyal program that Wyndham Hotel Group rebuilt over the past two years and now allows members to redeem points across Wyndham Worldwide’s entire platform of accommodations. Rewards membership totals 52 million, an increase of more than 10 percent since last year, said the company.
Included in the split will be a Wyndham Rewards licensing agreement between the two new companies, which will continue to collaborate on sharing inventory and cross selling.
In the earnings call with market analysts, Holmes said, keeping that “blue thread” is key to the companies’ sustainability and growth.
“Our focus on new [timeshare] owners will be supported by activation of the blue threads between our hotel and timeshare businesses, where there’s a huge opportunity to tap an existing customer base,” he said.
“Our average hotel customer is 54 years old, married with $70,000 household income. This aligns well with our typical timeshare owner; it’s a natural fit.
“Through enhanced call transfer, special member promotions and more hotel loyalty guests at timeshare resorts through reward redemptions. We expect the hotel ecosystem to contribute significantly to our new owner tour growth this year and will be more significant in years to come, resulting in high-quality efficient sales.”
During the Aug. 3 earnings call, Holmes said the Wyndham Hotel Group spinoff is expected to take place in the first half of next year. Wyndham Worldwide expects to file a Form 10 with the SEC by the end of this year. It will provide details on the proposed separation, including financials and the names of the two new companies. Wyndham Hotel Group also needs to form a board of directors.
Geoff Ballotti, president and CEO of Wyndham Hotel Group since April 2014, will remain in his role. The corporation said, “Ballotti is well positioned to continue advancing Wyndham’s leadership in the economy and midscale hotel segments, while growing the company’s upscale portfolio and management business.”
In a statement, Ballotti said, “We are excited about moving forward as one of the largest pure-play hotel portfolios anchored by iconic hotel brands in the economy and midscale segments. With a proven asset-light, fee-for-service model and attractive opportunities to grow and further diversify our brand portfolio, we are well positioned to drive value for our shareholders.”
Last month, Ballotti announced the planned acquisition of AmericInn, a midscale brand prominent in the Midwest. It has 200 hotels and 11,600 rooms. That deal is expected to close in October.
In June, Wyndham Hotel Group launched Trademark Hotel Collection, a new soft brand concept for owners of 3- and 4-star independent hotels. Since the announcement, 15 hotels joined the system.
Wyndham Hotel Group has a global portfolio of 18 brands (AmericInn will be the 19th brand) and more than 8,100 hotels, with approximately 705,700 rooms in more than 80 countries and a pipeline of 150,800 rooms.
Its 2016 revenue totaled $1.3 billion. In the second quarter of this year, Wyndham Hotel Group amassed $177 million in franchise fees, up from $172 million in the same quarter 2016.