What does takeover rumor mean for Wyndham timeshare owners?
How would a potential acquisition of Wyndham Hotels and Resorts by Choice Hotels affect Wyndham timeshare owners?
Wyndham Hotels & Resorts
Wyndham Hotels & Resorts (WHR) is the world’s largest hotel franchisor by the number of properties, with approximately 9,100 hotels across over 95 countries. The power of this brand is leveraged by Wyndham Destinations, the world's largest timeshare brand.
The success of Wyndham's timeshare division lies in no small part with the credibility of their brand. Their timeshare owners bought into Wyndham itself at least as much as they did the physical properties.
Choice Hotels is another of the world's largest hotel chains. Choice own multiple hotel brands with a wide portfolio encompassing budget to luxury brands.
Currently Choice manages more than 7,100 hotels in more than 40 countries and territories worldwide. This presents a total of nearly 600,000 rooms. There are also a further 1,035 hotels under construction which will bring more than 85,000 extra rooms to the brand.
Recently the Wall Street Journal reported that Choice Hotels International were looking to acquire Wyndham Hotels & Resorts. This prompted frenzied trading during which WHR shares had climbed 7.2% by the end of the day, adding nearly half a billion dollars to the group's market cap.
The reported merger, if it were to materialize, would create one of the largest hotel owners in the world. Combined, the two entities would own nearly 17,000 hotels globally.
A merger could produce significant benefits for both brands. Choice would gain from Wyndham's massive global presence, and both companies combined would have amassed enough market share to effectively influence the market itself. This could be likened to Marriott's acquisition of Starwood in 2015.
So what would it mean for timeshare owners?
The first and most obvious effect would be that the Wyndham brand could cease to exist, in the same way that Diamond Resorts did when taken over by the Hilton Group.
Wyndham timeshare owners could wake up to find that they no longer owned a membership with the powerhouse Wyndham name. It could now be Choice, or even a newly minted brand.
"This is not what their owners signed up for," comments American Consumer Claims spokesperson Suzanne Stojanovic. "Wyndham timeshare owners paid a premium for the security and bargaining power of that brand. If there is a takeover members will need to hope that whatever comes next is equally robust. Wyndham themselves took over Club La Costa last year and completely rebranded the site. If this takeover happened it could be the second rebrand in two years for the original Club La Costa complex."
Stojanovic also notes that availability could be affected. "It is difficult to imagine that Choice Hotels would not want access to Wyndham inventory for their own guests," she says. "If so, then Wyndham members would be facing a tougher challenge to obtain their preferred time slots and destinations. Sure, Choice could give access to some of their other hotels, but with so many budget brands in their portfolio, the worry would be that the overall quality available to Wyndham owners would be reduced."
Another effect could be increased sales activity in both former Wyndham resorts as well as existing CH hotels. "Both of these groups would benefit commercially from taking advantage of the sales opportunities presented by the extra flow of guests," says Stojanovic. "One of the biggest challenges any timeshare operation faces is to find enough prospects to feed their sales team.
"This acquisition, if it goes ahead, would mean that millions of guests per year would be passing through the doors of the newly enlarged Choice Hotels. Choice guests may also be staying in former Wyndham resorts.
"Experience suggests that these people would be targeted with phone calls in their rooms or staff knocking on their room doors to offer enticements (free meals or other hotel related benefits) in exchange for the guests agreeing to a sales presentation.
"These staff are called 'timeshare concierges' or Hotel Program Representatives (HPRs). They are generally motivated by a wage that is largely commission and have been known to get pretty insistent with guests in their efforts to convince prospects to agree to a sales presentation.
What now for concerned members?
Wyndham, or any other timeshare owners, with concerns about their membership can get in touch with our team at ACC.
Our consultations are free, confidential and without obligation of any kind.
We will let you know your options.