Wyndham Worldwide is still on track to spin off Wyndham Hotel Group into a separate publicly traded company, Wyndham Hotels & Resorts, by the end of the second quarter, according to chairman and CEO Stephen Holmes.
Holmes said agreements for licensing, cross-marketing and transition services are in place and separate public company infrastructures, organizational designs and corporate identities have been established. He said the spin-off process is expected to begin in "a couple of weeks."
Wyndham's acquisition of La Quinta is also expected to close during the second quarter, Holmes said; financing is in place to fund the acquisition. The company last month agreed to sell economy brand Knights Inn to RLH Corp. Holmes said Knights Inn had the lowest domestic revenue per available room in Wyndham's system.
Asked if the future Wyndham Hotels & Resorts plans to continue to acquire brands, Wyndham Hotel Group CEO Geoff Ballotti, who also will helm the standalone company, said the plan is to focus on organic room growth, particularly internationally. "We've been adding 60,000 rooms consistently for the last three years, and that's all been organic, backing out M&A," he said. The company also removed 80,000 underperforming domestic rooms from its system during the past three years. However, Ballotti didn't rule out acquisitions, pointing to the success of AmericInn, the midscale brand it acquired in October, and to the expected benefits from the La Quinta acquisition.
Q1 Earnings Results
Wyndham Hotel Group' systemwide average daily rate grew 5.4 percent year over year to $66.94, and occupancy rose 1.2 percentage points to 50.7 percent. Its portfolio as of March 31 was 722,990 rooms across 8,336 properties. Including both organic growth and added rooms from the AmericInn acquisition, Wyndham's room count grew 3.3 percent year over year. Its pipeline is comprised of 147,700 rooms, of which 58 percent are in international markets and 67 percent are new construction. Wyndham Hotel Group's total revenue increased 4 percent year over year to $302 million.
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