Dive Brief:
- Wyndham Hotels & Resorts reported $1.38 billion in fee-related and other revenues for full-year 2023 and $659 million in adjusted EBITDA for the same period, both up 6% year over year on a comparable basis, according to a company earnings report.
- In the fourth quarter, Wyndham saw a record 3.5% year-over-year system-wide organic rooms growth, the report detailed. The company’s development pipeline also grew in the quarter, up 10% year over year to a record 240,000 rooms.
- Wyndham President and CEO Geoff Ballotti said in the report that Wyndham’s Q4 growth comes “despite the distraction, uncertainty and misperceptions caused” by Choice Hotels International’s public bid to acquire the company. During a Thursday morning earnings call with analysts, Ballotti reiterated Wyndham’s rejection of the offer, calling it “inadequate, hostile and risk-laden.”
Dive Insight:
Wyndham’s fourth-quarter performance and portfolio growth follows Choice Hotels’ $7.8 billion public acquisition proposal made on Oct. 17 following months of private negotiations that Wyndham disengaged from in September.
Despite the offer, and the flurry of public back-and-forth communications between the companies in the months that followed, Wyndham saw the “best organic system growth [its] ever achieved,” Ballotti said in a statement.
Wyndham opened 66,000 organic rooms in 2023, Ballotti said during the earnings call. The company’s development pipeline also grew, with its Echo Suites extended stay pipeline particularly increasing nearly 60% year over year in 2023 with 98 new contract signings.
However, the proposed merger has caused challenges for Wyndham since rumors of the deal first circulated in May, Ballotti noted during the earnings call. He said the company has seen “both [franchise] deals and groundbreakings pause” because of uncertainty surrounding a possible Choice Hotels-Wyndham merger.
Despite this, Ballotti is “confident in the continued effectiveness of [Wyndham’s] growth strategy” and sees “exceptional value-creation opportunities in the years ahead,” he said in the report.
“Wyndham is positioned to generate shareholder value well in excess of Choice’s current offer,” he said during the earnings call. “Over the last three years, we've consistently grown our system, our market share and our earnings, while also expanding our pipeline to support future growth.”
In its public statements, Wyndham has repeatedly pleaded to shareholders to not tender their shares. Wyndham returned $515 million to its shareholders in 2023, the report detailed.
As the proposed merger stands, Choice continues its pursuit of Wyndham. On Wednesday, Choice filed a proxy statement with the SEC inviting its stockholders to “join a special meeting,” to be held at an undisclosed date, and vote to approve the issuance of (an undisclosed amount of) shares of Choice common stock in connection with a combination with Wyndham Hotels & Resorts. According to the filing, “stockholder approval of the share issuance is a condition to [Choice’s] completing an acquisition of Wyndham.”
Another proxy vote expected to happen in the next several months is for Wyndham board seats. In January, Choice nominated eight individuals to stand for election to become sitting directors on Wyndham’s board, a move that would skirt current Wyndham leadership. Wyndham later condemned the nominations.
