Hospitality Management
PR Newswire | October 18, 2023
Choice Hotels International, Inc. announced a proposal to acquire all the outstanding shares of Wyndham Hotels & Resorts, Inc. at a price of $90.00 per share, payable in a mix of cash and stock.
Under Choice's proposal, the $90.00 per share to be received by Wyndham shareholders would consist of $49.50 in cash and 0.324 shares of Choice common stock for each Wyndham share they own. Choice's proposal represents a 26% premium to Wyndham's 30-day volume-weighted average closing price ending on October 16, 2023, an 11% premium to Wyndham's 52-week high, and a 30% premium to Wyndham's latest closing price. In addition, Choice's proposal includes a cash or stock election mechanism, which would provide Wyndham shareholders with the ability to choose either cash, stock, or a combination of cash and stock consideration, subject to a customary proration mechanism. The proposal implies a total equity value for Wyndham of approximately $7.8 billion on a fully diluted basis. With the assumption of Wyndham's net debt, the proposed transaction is valued at approximately $9.8 billion.
Choice is making its latest proposal public following Wyndham's decision to disengage from further discussions with Choice, following nearly six months of dialogue.
Patrick Pacious, President and Chief Executive Officer of Choice Hotels, said, "We have long respected Wyndham's business and are confident that this combination would significantly accelerate both Choice's and Wyndham's long-term organic growth strategy for the benefit of all stakeholders. For franchisees, the transaction would bring Choice's proven franchisee success system to a broader set of owners, enabling them to benefit from Choice's world-class reservation platform and proprietary technology to drive cost savings and greater investment returns. Additionally, the value-driven leisure and business traveler would benefit from the combined company's rewards program, which would be on par with the top two global hotel rewards programs, enabling them to receive greater value and access to a broader selection of options across stay occasions and price points."
"A few weeks ago, Choice and Wyndham were in a negotiable range on price and consideration, and both parties have a shared recognition of the value opportunity this potential transaction represents. We were therefore surprised and disappointed that Wyndham decided to disengage. While we would have preferred to continue discussions with Wyndham in private, following their unwillingness to proceed, we feel there is too much value for both companies' franchisees, shareholders, associates, and guests to not continue pursuing this transaction. Importantly, we remain convinced of both the many benefits of the combination and our ability to complete it," concluded Pacious.
STAKEHOLDER BENEFITS
The proposed transaction is expected to provide important benefits for both companies' stakeholders – franchisees, shareholders, associates, and guests – that will be particularly significant in the current uncertain economic climate:
Franchisees Win with Lower Total Cost of Ownership and Increased Hotel Profitability.
Capitalizes on Choice's proven franchisee success system, dedicated to driving incremental topline reservation delivery to hotel owners' properties, while lowering the total cost of hotel operations.
Nearly doubles the resources available to spend on marketing and driving direct bookings to franchisees' hotels, lowering the cost of customer acquisition.
Establishes an even larger rewards member base on par with the top two global programs in hospitality.
Drives more business to franchisees through lower cost direct booking channels, lower customer acquisition commissions and fees, and lower hotel operating costs and technology-driven labor efficiencies, while continuing to determine their own commercial and pricing strategy.
Improves the value of franchisees' real estate assets by enhancing applicable cap rates and cash flows resulting from affiliation with the proforma company.
Reduces friction by offering guests a broad portfolio of brands across segments, no matter their stay occasions, within a single system.
Promotes increased investment and innovation in proprietary technology systems, processes, and training at the hotel and corporate level, which drives returns for Choice franchisees.
Creates an opportunity to replicate the tremendous success of Choice's recent acquisition of Radisson Hotel Group Americas. During the integration of the nearly 600 Radisson Americas hotels into the Choice platform, Radisson's franchisees have already meaningfully benefited from increased guest traffic to direct and digital channels, improvement in conversion rates, and access to more corporate accounts, among other benefits.
Shareholders Win with Superior Value Creation.
Represents a 26% premium to Wyndham's 30-day volume-weighted average closing price ending on October 16, 2023, an 11% premium to the 52-week high, and a 30% premium to the latest closing price.
Anticipates meaningful annual run-rate synergies, estimated at approximately $150 million, through the rationalization of operational redundancies, duplicate public company costs, and topline growth potential.
Enables Wyndham shareholders to benefit from Choice's historically 3x higher EBITDA multiple on a go-forward basis and receive deferred tax treatment on their stock consideration.
Creates additional capacity to further support Choice's revenue intense strategy, ultimately helping drive growth across its organic revenue levers.
Generates predictable high free cash flow through an asset-light, fee-for-service model, providing resiliency through all economic cycles and enabling additional investments for future growth.
Offers Wyndham two seats on the combined company's board and Wyndham shareholders the opportunity to participate in the significant upside potential of the combined company.
Cash/stock consideration mechanism enables Wyndham shareholders to choose between immediate upfront proceeds or long-term value creation, subject to a customary proration mechanism.
Guests Win with More Lodging Options and Value.
Creates a combined rewards program on par with the top two global programs in hospitality and will offer best-in-class program benefits through partnerships and compelling hotel redemption options.
Builds a global network of brands and hotels that meets the needs of the value-driven traveler across geographies, stay occasions and price points, supported by a seamless reservation system that provides guests with a more effective and efficient booking and shopping experience.
Improves data analytics, enabling the combined company to personalize communications and tailor recommendations to best meet the needs of the up to 160 million combined rewards program members.
Associates Win with Expanded Opportunities and Increased Stability.
Offers the ability to retain and attract "best-in-class" talent to one of the world's premier hotel companies focused on employee well-being, bringing together a wide range of experience and deep industry expertise.
Provides more opportunities for advancement and career growth as part of a larger, more diversified organization.
Combines two performance-driven cultures with a continued emphasis on associate development and growth.
RECENT ENGAGEMENT OVERTURES
Choice has been engaging with Wyndham for nearly six months.
In April 2023, Choice sent its initial letter to Wyndham regarding a potential transaction, proposing to acquire Wyndham for $80.00 per share, comprising 40% cash and 60% Choice stock. The proposal represented a 20% premium to the closing price of Wyndham common stock on April 27, 2023, and a 19% premium over Wyndham's 30-day volume-weighted average share price as of such date. Wyndham rejected the proposal and refused to engage in further discussions.
In the days and weeks thereafter, Choice continued to attempt engagement with Wyndham, increasing its proposal to $85.00 per share, comprising 55% cash and 45% Choice stock, explaining that further discussions could clarify Wyndham's hesitation to proceed with negotiations. The companies' respective Board Chairs and CEOs then met in person, and following that meeting, Choice improved its proposal yet again. Choice made its best and final offer which represented an increase of the per-share consideration to $90.00, comprising 55% cash and 45% Choice stock.
In September 2023, the Choice and Wyndham Board Chairs continued engagement, along with each of their respective financial and legal advisors. Wyndham acknowledged the strategic rationale of the proposal and that terms were within a negotiable range but raised questions regarding the value of Choice stock and timing for obtaining regulatory approvals. In response, Choice proposed to enter into a one-way, short-term non-disclosure agreement to facilitate Choice providing information that would address Wyndham's concerns (a draft of which was subsequently sent to Wyndham) and made its external counsel available for several discussions. However, during a follow-up call between the Chair of each company's Board and their respective advisors, Wyndham made clear their unwillingness to proceed with further discussions.
FINANCING, CONDITIONS AND APPROVALS
Closing of the contemplated transaction would be subject to satisfaction of customary closing conditions, including receipt of required shareholder and regulatory approvals. Choice would not make this offer if it were not confident that its franchisees and guests would embrace the proposed combination and that the transaction would receive applicable regulatory approvals in due course.
The cash portion of the purchase price is expected to be funded with a combination of cash on hand, as well as proceeds from the issuance of debt securities. Choice is highly confident in its ability to obtain fully committed financing based on indications from two separate bulge bracket global banks for the entire cash portion of our proposal. Strong free cash flows will allow for continued investments in the proforma business and rapid deleveraging of the balance sheet.
About Choice Hotels
Choice Hotels International, Inc. is one of the leading lodging franchisors in the world. Choice® has nearly 7,500 hotels, representing almost 630,000 rooms, in 46 countries and territories. A diverse portfolio of 22 brands that range from full-service upper upscale properties to midscale, extended stay and economy enables Choice® to meet travelers' needs in more places and for more occasions while driving more value for franchise owners and shareholders. The award-winning Choice Privileges® loyalty program and co-brand credit card options provide members with a fast and easy way to earn reward nights and personalized perks.
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Hospitality Management
PR Newswire | October 20, 2023
Aimbridge Hospitality EMEA, a division of global management leader Aimbridge Hospitality, has been appointed by Santa Maria Group to manage its independent, 402-key Grand Luxor Hotel & Village resort on the Costa Blanca beginning October 1, 2023. The deal marks a major milestone for both companies, signaling their joint ambition to accelerate growth and provide exceptional experiences in the market.
A leading hospitality management company and the world's largest third-party hotel operator, Aimbridge EMEA is expected to bring its two decades of operational expertise and award-winning talent development to the four-star rated resort. The Grand Luxor Hotel & Village houses a 300-guest room hotel, including two Presidential Suites, five food and beverage outlets and 102 villas, boasting both communal and private swimming pools.
Located adjacent to the Terra Mitica theme park, and a 40-minute drive away from Alicante Airport, the resort also offers a spa, a gym, three outdoor pools, mini golf, a kids' club, and more than 1,500 sqm of meetings and events space. The hotel will benefit from the Terra Mitica Convention Centre and world class event spaces, totalling 12,000sqm, including an Iberian Village, and a 3,000 sqm Circus Maximus Auditorium.
Terra Mitica is under the same ownership group and the theme park is a key destination for family tourism in the area.
David Anderson, Divisional President at Aimbridge EMEA, said: "We are incredibly excited to partner with Santa Maria Group and announce our entry into the Spanish market. The Grand Luxor Hotel & Village, located on the Costa Blanca - one of Spain's most popular tourist destinations - is an impressive and sought-out resort, and we look forward to helping the owners meet their growth goals."
Formerly known as Interstate Hotels & Resorts, Aimbridge EMEA has seen development deals across Europe soar over the last six months, as travel returns to pre-pandemic levels and investors regain confidence in the hotel and tourism sectors.
"As a division of global powerhouse Aimbridge Hospitality, this deal also reflects our commitment to accelerate growth across the region. The Iberian Peninsula has been a major focus for our development plans over the last 12 months, and we have made sizable investments in the market, including several new hires in key locations, such as Madrid and Barcelona," Anderson continued.
"We see many opportunities to bring our management expertise to the Spanish region and beyond, utilising Aimbridge's industry-leading technologies, systems and talent to create great experiences for guests, and superior returns for investors and owners."
In addition to its entry into Spain, the company has also announced a number of new additions to its EMEA portfolio in recent months, including the Holiday Inn Eindhoven Airport, the Adagio Aparthotel Antwerp City Centre, and the Alliance Palace in Batumi, Georgia.
Last month, the business welcomed industry veteran, Niall Kelly, who has been appointed as Head of Development – EMEA, bringing more than 25 years of significant deal-making experience within international markets to his role.
Anderson added: "We're focused on attracting top talent with expertise in multiple languages and across all verticals, building on our relationships with both existing and new hotel owners to create returns and unlock more opportunities for their properties.
"The strong growth in project numbers that we're seeing across Europe is testament to this approach, and the many benefits Aimbridge's global scale and industry experience can offer owners within the hospitality space."
The Aimbridge Hospitality global portfolio, inclusive of managed and pipeline properties, includes approximately 1,500 hotels in 20 countries around the world.
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Commercial Travel
PR Newswire | October 26, 2023
Red Roof, an award-winning leader in the lodging industry, hosted over 200 attendees at its 2023 SHE Leads Forum in Dallas. From sound baths to sound advice and student scholarships, attendees – mostly women in the hospitality industry – left the Forum inspired and armed with insightful information and tools to support, help and elevate themselves for future success.
This year's SHE Leads Forum was based on SHE, inspired by Red Roof'sSM pillars of ownership, personal branding, and wellness brought to life, with support from HBO, through interviews, a stellar lineup of speakers and workshops, networking, and even a meditative sound bath. Program leader and founder, Red Roof Chief Marketing Officer (CMO) Marina MacDonald opened the Forum celebrating the growth of women in the hospitality industry and at Red Roof.
"In recent decades, there has been an evolution, a growing emphasis on women's professional development as part of broader efforts to close gender gaps in the workforce. And while hospitality is still a male-dominated industry, even that is evolving," said MacDonald. "Last year, we celebrated 31 percent of our Red Roof properties owned or partially owned by women, and this year, that number is over 35 percent, thanks in large part to participation in Red Roof women initiatives throughout the year."
The Forum also celebrated the future of the hospitality industry by presenting seven deserving students with 'SHE Leads Forum Student Scholarships,' sponsored by DISH Business. Each student was selected by their school, including Cornell University, Florida International University, Howard University and University of Nevada, Las Vegas, to attend the SHE Leads Forum free of charge.
Dr. Lalia Rach, Founder and Partner, Rach Enterprises and best-selling author of Managing the Book on You! Rewriting Your Leadership Story, moderated the two-day Forum. "Red Roof's 'SHE Leads Forum' is in a class all its own! It is jam-packed with interesting speakers, iconic women leaders sharing information, and a passionate leader, Red Roof CMO Marina MacDonald," said Rach. "The biggest difference is the engagement of the attendees, all successful professionals, who want to learn, be inspired, meet new people and connect with those they know. The energy, the desire to be more, is so inspiring."
Keynote speaker Dorothy Dowling, Founder of Introspect Strategic Advisor Services, helped motivate the crowd with her inspirational thoughts. "Women's leadership events such as 'SHE Leads' are like having a trusty guide on our journey, whether it's climbing the corporate ladder or venturing into the world of hotel ownership. They're not just about empowerment, they're about real-world guidance. These events let us tap into the experiences of women who've been there, done that. It's like getting insider tips for navigating our own unique paths," said Dowling.
Through a session on Red Roof's Strategic Initiatives, with Red Roof Director of Strategic Initiatives Lina Patel and Chief Development Officer Matthew Hostetler, attendees also learned about SHE, inspired by Red Roof's sister program, RIDE with Red RoofSM. While SHE is intended to motivate, RIDE is intended to activate — providing access to capital, educational resources and the connections needed to build a strong network of industry partners.
SHE Leads attendees also heard from experts offering business advice. Jyoti Sarolia, President and CEO at Ellis Hospitality gave an informational talk about how attendees can fine tune their lending skills and be ready to finance their next project. Christine Taylor, Claims Consultant & Strategic Insurance Partner at Lockton Companies, spoke about the state of the property and casualty insurance market, educating attendees on the importance of insuring their assets and understanding risk.
Listening to and interacting with so many enthusiastic and seasoned business owners left many inspired. AAHOA EVP of Communications and Chief Strategy Officer Heather Carnes, who also spoke at the Forum, was struck by the collective fearlessness in the room. "When I looked at the strength, intelligence and the daring nature of the women in attendance, I know that the future of the hospitality industry is in great hands. The can-do attitude and entrepreneurial spirit in the room was palpable and contagious. I left feeling like, in conjunction with this amazing group, I could change the world," said Carnes.
Forum speaker Marti Winer, Executive Leader and General Manager of Casa Bonita said, "Programs like SHE Leads are crucial to women in hospitality and beyond for three important reasons. The first is that they provide a forum for conversation. They are a safe space to meet, explore and create the critical relationships that advance careers. The second reason is education. These forums provide much needed and customized learning opportunities for women that are largely unavailable elsewhere. The final reason is innovation. Dedicated time away from the day-to-day allows for more focused thinking, processing and collaborating. As a result, great ideas are born and given space to germinate."
The annual SHE Leads Forum kicks off a year-long infusion of inspiration for women primarily in hospitality that facilitates sharing professional experiences and provides collaborative learning opportunities to continue to foster change in the industry. 'SHE' provides thought leadership, access to resources, and serves as a platform, sharing content and best practices through a dedicated website.
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