Wyndham May Buy Hotel Brands, Competitors’ Operations
Wyndham Worldwide Corp., the franchiser of Days Inn hotels and Super 8 motels, plans to buy more brands or acquire the operations of struggling competitors, Chairman and Chief Executive Officer Stephen Holmes said.
“There’s quite a bit of distressed real estate,” said Holmes, 52, in a Sept. 28 interview at Wyndham’s Parsippany, New Jersey, headquarters. “It’s an opportunity to add new brands or convert underperforming hotels” to a Wyndham brand.
The U.S. recession may cause as many as one in five hotel loans to default through 2010 as companies spend less on travel and perks, according to Kenneth Rosen, who heads the University of California’s Fisher Center for Real Estate and Urban Economics in Berkeley.
Wyndham rose 11 cents to $16.32 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have more than doubled this year, increasing the company’s market value to $2.9 billion. Marriott International Inc., the largest U.S. hotel chain, gained 43 percent in that period while Starwood Hotels & Resorts Worldwide Inc., the U.S. owner of luxury brands including St. Regis and W Hotels, rose 85 percent.
“They have stepped up the caliber of their management team recently,” said Patrick Scholes, senior equity research analyst at FBR Capital Markets & Co. “Financially, they are also in a better position than at the beginning of the year to accomplish some of these plans. There are a lot of independent hotels looking to become part of a larger reservation system.”
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Wyndham, which operates about 590,000 hotel rooms around the world, reported second-quarter earnings that beat analysts’ estimates after focusing on services for travelers taking shorter vacations.
