Dive Brief:
- Choice Hotels International reported its third-quarter 2023 earnings Tuesday, posting 3% year-over-year total revenue growth and 12% year-over-year adjusted EBITDA growth.
- The “record quarter of financial growth” was driven in part by Choice’s “successful integration of Radisson Americas,” Choice President and CEO Patrick Pacious said in the earnings report. Choice acquired Radisson Americas in August 2022.
- In a Tuesday earnings call with analysts and investors, Pacious said the Radisson deal indicates that a Choice-Wyndham merger could go smoothly and benefit both companies’ stakeholders. Though Wyndham has rejected the $7.8 billion proposal multiple times since it was made public about three weeks ago, that didn’t stop Pacious from calling Wyndham back to the negotiating table — again.
Dive Insight:
In the earnings call, Pacious called on Wyndham to return to the negotiating table, asserting the companies’ merger would benefit both parties’ stakeholders, including franchisees and shareholders. In mid-October, Choice offered $90 per share for all outstanding Wyndham shares, payable in a mix of cash and stock.
Pacious highlighted Choice’s acquisition and integration of Radisson, saying the deal “further validates our capabilities to replicate this great success with the Wyndham combination.”
Early in the third quarter, Choice announced the Radisson integration was ahead of schedule. By the end of Q3, Choice achieved $84 million of annual recurring synergies through the Radisson integration, exceeding its prior target by 5%, its earnings report detailed.
“The Radisson Americas acquisition has created a step function change in the size of our business, expanded our rewards program, extended our co-branded credit card opportunities, increased our geographic reach in the Americas region and opened up new incremental earning streams,” Pacious said, adding the deal benefited franchisees specifically by helping to reduce their reliance on third-party distribution channels and lower their overall operating costs.
Not all industry players agree that the Radisson merger had such great benefits, though.
Asian American Hotel Owners Association President and CEO Laura Lee Blake previously told Hotel Dive that the integration “was rough” for several of the association's members due to the rapid change of systems and culture, as well as implementation struggles. And Blake said AAHOA members fear similar outcomes with a Choice-Wyndham merger.
In Wyndham’s third-quarter earnings report released Oct. 25, President and CEO Geoff Ballotti reassured stakeholders, including shareholders and franchisees, that the company’s “standalone growth prospects offer superior, risk-adjusted returns” to them. He also reiterated Wyndham’s Board of Directors’ rejection of Choice’s public bid.
Despite Wyndham’s continued reluctance to return to negotiations, Pacious said he is “confident [Choice] will get the transaction completed.”
When asked by an analyst during the call if Choice would up its bid to attract Wyndham back to the negotiation table, Pacious declined to answer yes or no, but said “we're happy to have that conversation with the Wyndham board.”
