Choice Hotels officially goes hostile in Wyndham takeover attempt
The budget hotel brouhaha boiled over Tuesday morning as Choice Hotels launched a hostile bid for Wyndham Hotels & Resorts.
Choice, the owner of brands like Comfort Inn and Radisson’s Americas operation, launched a $7.8 billion offer for Wyndham earlier this year. But Wyndham repeatedly rebuffed Choice’s advances. Wyndham owns a variety of budget brands like Days Inn and Super 8 but also higher-end options like the Registry Collection, Wyndham Grand and the Alltra all-inclusive resort brand.
It appears Choice is done playing nice and is now going the hostile route, planning on appealing directly to Wyndham shareholders.
“While we would have preferred to come to a negotiated agreement, the Wyndham Board's refusal to explore a transaction has left us with no choice but to take our proposal directly to Wyndham's shareholders,” Choice CEO Patrick Pacious said in a statement. “Wyndham chose to publicly reject our last proposal without any engagement even after we addressed their concerns, including adding significant regulatory protections for their shareholders."
Wyndham leadership has portrayed any Choice takeover as too drawn out, peppered with risk and too much of a lowball offer. That sentiment continued later Tuesday.
Wyndham noted it would “carefully review and evaluate the offer to determine the course of action that it believes is in the best interests of Wyndham and its shareholders” but that “the offer looks to be unchanged from Choice's previous highly conditional offer the Board reviewed and rejected, which failed to address the serious concerns repeatedly expressed by Wyndham.”
Why is everyone so hot for Wyndham?
Choice Hotels leadership previously indicated talks with Wyndham took place over six months earlier in the year before breaking down. Depending on who you talk to, there could be other suitors out there, like financial firm Blackstone.
The budget hotel segment is widely seen as the future of the industry, both in terms of where a bulk of development and guest demand will come from. Hilton’s new premium economy Spark brand is slated to grow on the premise of owners of existing hotels converting to that brand. The first Spark hotel was previously associated with a Wyndham brand, and it’s highly likely the brand will continue to feed off existing Wyndham and Choice hotels.
Marriott entered the space with its acquisition of Mexico-based City Express and the launch of Four Points Express by Sheraton overseas. Hyatt is similarly entering a more affordable segment of the market with its Hyatt Studios extended-stay brand.
There was chatter in the hotel industry that IHG Hotels & Resorts might also be interested in Wyndham, but that would go against IHG's recent focus on the luxury and lifestyle segment of the market with its expansion of brands like Regent and Six Senses. IHG has previously been mentioned in rumored mergers with Accor and was reported as the original buyer for Starwood before Marriott swooped in at the end of 2015.
Today, Holiday Inn Express is seen as IHG’s affordable brand cash cow, so it’s unlikely a company like that would want to saddle its portfolio with more budget brands.
Why you should care
Owning a budget brand, if not several, is a must these days to cater to travelers for a variety of reasons. At a time when the cost of living is high, it makes sense to have lower-cost options so as to not drive any business away.
Further, it’s a smart way to bring younger travelers into a loyalty program ecosystem. Have them when they can afford a Spark or a Four Points Express, and you’ll keep them all the way to when they’re able to pay for Waldorf Astoria or St. Regis.
A Choice-Wyndham marriage makes sense as far as offering a compelling low-cost juggernaut against Marriott, Hilton and IHG. At the end of the day, there is a sizable segment of the traveling public that just wants an affordable place to stay and doesn’t care about the bells and whistles of a loyalty program.
It’s now just a matter of whether the hostility abates and Wyndham eventually walks down the aisle — or if it becomes a runaway bride.
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- A comparison of luxury hotel programs from credit card issuers
- Which credit cards offer the most lucrative rewards for hotel stays?
- The best hotel rewards programs in the world
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- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
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| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
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You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
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Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.