Wyndham Hotels & Resorts’ chief strategy and development officer sat down for a video interview with HNN to talk about his company’s acquisition of La Quinta, sale of Knights Inn and further plans for mergers and acquisitions.
PHOENIX—Wyndham Hotels & Resorts has made some big moves this year, first purchasing the La Quinta hotel brand and then selling off the economy segment Knights Inn brand.
Wyndham had been looking at the La Quinta brand for a long time, Barber said. It’s a great fit for Wyndham’s portfolio and sits squarely in the upper-midscale space, he said. Wyndham considered pursuing La Quinta two or three times before, he said, and one of those times was before Blackstone acquired it in 2006.
Once La Quinta started looking at spinning off the real estate investment trust CorePoint Lodging from its branding and franchising operations, he said Wyndham knew it was the right time to move in. The company announced the acquisition in January, he said, which played well with the timing of the spinoff and closed on the deal in May.
“We had a unique opportunity to get under the covers before the closing of the deal,” he said. “We did a lot of planning upfront. That helped us hit the ground running.”
Three to four months into the integration of La Quinta, he said the company has achieved some good, quick wins, such as having a status match on the two loyalty programs, meeting with and gaining the support of the La Quinta brand council and having the brand adopt the “by Wyndham” tagline.
Wyndham has acquired 18 out of its 20 brands, Barber said, excluding Wingate and Trademark. The company looks to grow through acquisitions as “M&A is in our DNA,” he said. Although Wyndham executives look at every opportunity, officials take a disciplined approach to deals, he said. Scale is important in the industry, he said, and adding on brands means adding scale.
However, any new brand joining the Wyndham portfolio has to meet the company’s criteria, he said. The deals have to be value-accretive, as Wyndham must acquire the brand at a valuation lower than where the company is trading at in the market. The brand must meet all of the company’s quality objectives, he said, and there has to be tremendous growth opportunities as well.
Selling off the Knights Inn brand to RLH Corporation was a unique situation, Barber said, as Wyndham typically looks to grow through acquisition, not the opposite. At this point in time, he said, the company has no further plans for selling off brands.
Watch the video below to hear more of what Barber had to say during his interview with HNN.