Wyndham Hotel Group, an operational arm of
Wyndham Worldwide Corporation (
recently entered into an agreement with
Hospitality Properties Trust (
for branding of 20 hotels under the Wyndham Hotels and Resorts and
Hawthorn Suites by Wyndham brands.
Hospitality Properties is a real estate investment trust (REIT)
primarily engaged in buying, owning, and leasing hotels designed
for business, governmental, and family travelers. It currently owns
290 hotels and 185 travel centers located throughout the United
States and in Puerto Rico and Ontario, Canada.
As per the agreement signed between the two parties, 4 hotels
will be branded under the brand name Wyndham Hotels and Resorts and
the other 16 under the brand name Hawthorn Suites by Wyndham. Under
a 25-year management contract, all properties will be managed by
Wyndham Hotel Group management company. Moreover, Wyndham Hotel
Group can exercise two consecutive 15-year renewal options for all
The rebranding and reconstruction of the hotels will cost around
$75 million for Hospitality Properties. In addition, around 5% of
the hotels' gross revenues for an FF&E Reserve will be kept
aside for periodic renovation of the hotels going forward. Wyndham
Worldwide's payment of the management fee is subject to maximum cap
of $20 million for the first 7 years and an annual cap of $10
Wyndham Hotel Group remains optimistic regarding the agreement
and expects to extend this alliance with Hospitality Properties in
Of late, Wyndham Hotel Group also signed an agreement with
Hoteles Costa del Sol hotel group to franchise three new hotels
under the Ramada Worldwide brand in Peru, South America. The
agreement marked the extension of Wyndham Hotel group's alliance
with Costa del Sol hotel group.
Headquartered in Parsippany, New Jersey, Wyndham Worldwide,
having more than 55 brands, provides various hospitality products
and services to individual and business customers in the United
States and internationally. The company operates three business
units namely Wyndham Hotel Group, Wyndham Exchange & Rentals
and Wyndham Vacation ownership.
Wyndham Worldwide, which competes with
Marriott International Inc. (
, currently retains a Zacks #2 Rank, which translates into a
short-term Buy rating. We are maintaining our long-term Neutral
recommendation on the stock.
HOSPITALITY PRP (HPT): Free Stock Analysis
MARRIOTT INTL-A (MAR): Free Stock Analysis
WYNDHAM WORLDWD (WYN): Free Stock Analysis
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