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Log In / Register | Dec 15, 2017

Wyndham to Split Into Hotel and Timeshare Firms but Publicly Neglects Hotel Owners

New Jersey-based hotel franchisor Wyndham Worldwide (WYN) announced this morning that it plans to split the company into two separate, publicly traded firms. Wyndham Hotel Group, with its headquarters in Parsippany, New Jersey, will be a pure-play hotel company with a portfolio of brands. Wyndham Vacation Ownership, headquartered in Orlando, Florida, will be joined with giant timeshare exchange broker RCI, currently part of Wyndham Worldwide.

The transaction is expected to be completed in the first half of 2018.

It is not particularly original or pioneering thinking. Wyndham’s spinoff comes after hotel franchisors Marriott, Hilton and Starwood have spun off their times share operations. However, the split of the giant company is expected to sharpen the focus on each company’s core business and growth opportunities, positioning each to be better able to make the changes necessary to respond to developments in its markets.

The change is overdue.

"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," said Stephen P. Holmes, chairman and CEO of Wyndham Worldwide.

Wyndham plans to explore strategic alternatives for its current European rental brands. ”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,” stated Holmes.

But where are the franchise owners?

What is surprising about Wyndham’s announcement is the absence of any mention about the franchisees that own and operate the hotels, which fly the Wyndham flag. An argument can surely be made how franchise owners will be better off. But there isn’t even a mention on what the split will do for Wyndham’s franchise owners.

“The very fact that this important corporate decision makes no mention of franchisees, is a clear indication of how little regard the Wyndham Hotel Group has for them,” says hotel consultant, author and award-winning hotel historian Stanley Turkel about the public announcement. “The Wyndham ‘hospitality powerhouse’ has more that 8,000 franchised hotels with over 697,000 rooms but doesn’t think them important enough to warrant inclusion in this important structural change.”

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Don Sniegowski is editor of Blue MauMau, the daily news journal for franchise & small business owners. Call him at +1 (270) 321-1268, tweet @bluemaumau or email don@bluemaumau.org.