Wyndham Worldwide, one of the world’s largest hotel groups and owner of the Travelodge, Ramada and Days Inn brands, is spinning off its hotel business and combining its timeshare businesses to create two separate publicly traded companies.
Wyndham said on Wednesday that it plans to spin off Wyndham Hotel Group into a hotel company with its headquarters in New Jersey and led by its current chief executive Geoff Ballotti.
Meanwhile, Wyndham Vacation Ownership will be a publicly traded timeshare company, headquartered in Florida and headed by its chief executive Michael Brown. The company, which sells hotel rooms to which multiple parties hold the rights, will include Wyndham Destination Network, which includes RCI, the world’s largest vacation exchange network.
“After a comprehensive review process, the Board of Directors has determined that a spin-off of the hotel business and the combination of Wyndham Vacation Ownership with RCI is the best structure to unlock shareholder value and enable strong growth across the businesses,” said Wyndham Worldwide’s CEO Stephen Holmes.
The names of the two companies have not been finalised as yet and Wyndham also said that it would explore options for its European rental brands. The plan is subject to board approval but does not require a shareholder vote.
The move comes after Hilton spun off its timeshare business, Hilton Grand Vacations, and carved out its 70 properties into a real estate investment trust last year. Starwood announced a similar move in 2015 while Marriott spun off its timeshare business in 2011.
The news accompanied upbeat second quarter results, with revenues rising 5.4 per cent to $1.48bn, topping estimates for $1.47bn.
Net income halved to $78m, from $156m in the year ago quarter, which translated to earnings per share of 75 cents, down from $1.39 a share in the year ago period. Adjusting for one-time items, earnings of $1.53 a share also beat expectations.
Wyndam shares, which are up more than 35 per cent so far this year, rose as much by as much as 7.9 per cent in extended trade.
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