Making Sense of the Wyndham Destinations-Travel + Leisure Deal

Wyndham Destinations’ $100 million acquisition of the Travel + Leisure media brand may have been a head-scratcher for some in both the travel and media industries.

But the vacation rental and timeshare company’s chief executive says the move is all about broadening the scope of its evolving business.

“Our objective here is to create not nightly stays or whole [timeshare] ownership but [build on] that huge gap between where people want to travel with a name they trust,” said Wyndham Destinations CEO Michael Brown Wednesday in an interview with Skift hours after the deal was announced. “They trust Travel + Leisure, and we already have the mechanism in place.”

The Wyndham Destinations leadership team worked in recent years to change the perception of the company’s timeshare roots, a sector historically seen as attracting older clientele who have a set time of year to visit one vacation home or condo. Wyndham Destinations, which spun out from Wyndham Hotels & Resorts in 2018, pursued projects in urban markets like Atlanta and Nashville as well as ways to appeal to younger clients.

The Travel + Leisure acquisition will result in Wyndham Destinations becoming the Travel + Leisure Co. The name change is a further signal the company wants to tap into new market segments that may not have been possible under its current brand.

“Under the Wyndham name, there was a hurdle there that, by changing our umbrella name to the Travel + Leisure Co., we can now really talk more easily to any brand that’s out there that’s willing to engage,” Brown said.

The acquisition also helps fuel Wyndham Destinations’ ongoing evolution into a broader travel environment beyond its mix of timeshares and vacation rentals.

“We thought it was a natural fit for our first look in the broader leisure market outside timeshare,” Brown said. “The added benefit is they already had two membership travel clubs in existence with tens of thousands of members.”

While the Travel + Leisure magazine anchors the 50-year-old media brand, Wyndham Destinations appears more interested in metrics like members and followers over circulation. Travel + Leisure’s travel clubs have about 60,000 members who skew younger than Wyndham Destinations’ existing clientele.

“Although this is not a singular opportunity, I think it is an opportunity to start appealing to that younger, aspirational traveler,” Brown said.

The line of thinking shows this $100 million acquisition was about significantly more than a magazine.

“I get the question because most people that look for valuation look for ‘How would I value a magazine?’ This is about much more,” Brown said. “We think it’s a very smart tuck-in that has minimal cash outflow that opens doors in exactly the strategic direction we want to go. Valuation is in the eye of the beholder and what you can generate from it. I think we have the unique ability to generate the maximum amount of value with this transaction.”

But the magazine and its accompanying brand awareness is a key part of its attractiveness to Wyndham Destinations.

“All the hard work Travel + Leisure editors have been doing for 50 years led us to this point because Wyndham Destinations wants to create this whole new company centered around our brand and legacy and name, so I’m thrilled about that,” said Jacqueline Gifford, editor-in-chief of Travel + Leisure.

Talks between the two companies began early last year before the pandemic, Gifford added. But while Wyndham Destinations will own the combined brands, leaders of both sides of the deal stress the legacy Travel + Leisure media brand will remain editorially independent and under the Meredith Corp.’s purview thanks to a 30-year licensing agreement.

“As I sit here right now, we have complete editorial independence. We’re allowed to write about the world of travel. They have made it very clear that we are free as journalists to cover the world as we see fit, and it’s under my guidance and discretion,” Gifford said. “It’s what is of utmost importance to me as we look to the future.”

The acquisition comes at a catastrophic time for the greater travel industry, when hotel revenue and occupancy rates cratered due to the pandemic. The crisis wreaked similar havoc on the media industry.

But Wyndham Destinations managed to recover enough to post a third quarter profit, and its Travel + Leisure acquisition stands to bring new business to the magazine. While Gifford didn’t give revenue or readership forecasts, she is optimistic on what lies ahead.

“In the coming months and years, I’m excited about new revenue streams and the potential for new business opportunities. That’s what we’ve always done and what we’ll continue to do,” she said before later adding, “Really the biggest change we’ve had from an editorial perspective is the pandemic.”