Wyndham Hotel Group’s plans for the brand include expanding it beyond the Midwest.
PARSIPPANY, New Jersey—Wyndham Hotel Group added 200 hotels to its midscale lineup with its plan to acquire the Minnesota-based AmericInn hotel brand from Northcott Hospitality for $170 million, the company announced Tuesday.
“From a quality standpoint, this is something we think is a great fit,” Wyndham Hotel Group President and CEO Geoff Ballotti told Hotel News Now. “This brand is a powerhouse that really stands for something. Families love it; it has incredibly strong leisure business and a strong blue-collar (demand) that is incredibly loyal.”
AmericInn’s portfolio of 200 hotels and 11,600 guestrooms is concentrated in 21 states, primarily in the Midwest. The deal includes 10 company-owned hotels, which the company will look to divest in alignment with its asset-light strategy. It also includes AmericInn’s management company, Three Rivers Hospitality, which manages 21 AmericInn properties.
Ballotti said Wyndham will keep the AmericInn brand, making it the 20th hotel brand in its portfolio. The company launched its Trademark upper-midscale soft brand in early June, and in December announced its acquisition of Argentina-based Fën Hotels.
The deal is expected to close by October, Ballotti said.
At press time, Wyndham Worldwide stock was trading at $103.25 per share, up 0.52% since the market opened.
“Whenever we acquire a brand, we try to build on it and enhance it,” Ballotti said. For AmericInn, that means likely expanding it beyond its traditional Midwestern core.
“We have heard interest from our developers about the brand, from the East Coast to the West Coast, and we think this is a brand that resonates even outside of the Midwest,” he said. “This brand appeals to a lot in so many ways.”
AmericInn’s current pipeline includes 23 hotels. The company, for most of its history, developed primarily new-construction hotels, but in recent years expanded that to include conversions. Ballotti said the brand’s growth will be in both new-construction and conversion opportunities.
He also pointed out AmericInn’s “balanced” mix of leisure and business transient business, and he said that positioning likely will remain the same.
Strong outlook for midscale
This isn’t the first time Wyndham made a play for AmericInn. In 2008, the company tested the acquisition waters, but Ballotti said it “wasn’t the right time.”
“As the years went on, we continued to stay in touch,” he said. (Northcott Hospitality President and CEO) Paul Kirwin is one of the classiest people I know in the industry, and I’ve always had a great affinity and friendship with him, and we were finally able to make this happen.”
Growing its midscale footprint is important for Wyndham, Ballotti said. “It’s a segment of the industry that’s so attractive to us right now; we have been and are looking to grow it.”
The AmericInn acquisition notwithstanding, midscale and upper-midscale hotels only account for approximately 1,500 of its more than 8,000 hotels.
“Midscale is where you see the demand and the growth, in leisure and in business transient,” he said.
The company’s current midscale and upper-midscale brands include Ramada, Ramada Plaza, Baymont Inn & Suites, Wingate by Wyndham and Hawthorn Suites by Wyndham.
Ballotti said he doesn’t anticipate any issues with adding an additional brand to that midscale mix, and said he hasn’t heard negative feedback from current franchisees about it.
“We are excited about this,” Ballotti said. “AmericInn has a strong franchise advisory council, and I told them that getting in front of them post-close to talk about where we could add the most value—based on our scale and size—could be significant, but we won’t do anything without asking them.
“When you plug in what we’re doing with distribution, technology, sales and marketing and Wyndham Rewards, it’s very compelling,” he said.
As the deal goes through customary closing and regulatory processes, Ballotti said it’s “business as usual” for both companies.
“Right now I’m meeting as many owners and franchisees as I can,” he said.