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This pandemic world has really changed everything: The new year brings the unlikeliest of travel marriages between a timeshare company and one of the industry’s leading media brands.
Wyndham Destinations, the vacation rental and timeshare company spun off parent Wyndham Hotels in 2018, is acquiring Travel + Leisure for $100 million in cash, the company announced Wednesday morning. The timeshare and travel club company will change its name to Travel + Leisure Co. sometime in the first quarter of this year. Meredith Corp. — the media brand’s parent company — will continue to operate the media side of the company under a 30-year licensing agreement.
The acquisition is the latest in Wyndham Destinations’ ongoing push to expand the reach of its timeshare and vacation clubs into new markets and appeal to younger travelers.
“Over the past 18 months, we have laid the foundation to expand our footprint beyond our core vacation ownership business and, today, we add one of the most trusted and influential brands in travel through the acquisition of Travel + Leisure,” Wyndham Destinations CEO Michael Brown said in a statement.
The $100 million price tag shows a significant financial gain for the Travel + Leisure brand, which American Express Publishing sold in 2013 to Time Inc. in a bundle with other lifestyle publications like Food & Wine. But the sale price was so low that Time Inc. actually made a $20 million gain on its acquisition after settling a management agreement with American Express.
Meredith Corp. acquired Time in early 2018 in a $2.8 billion deal.
Wyndham Destinations paid $35 million in cash at closing with trailing payments expected to wrap no later than June 2024.
While the hotel industry faced its worst year on record in 2020 due to the coronavirus pandemic, industry analysts were optimistic on the timeshare sector due to its ability to offer owners and members more control over their space. Wyndham Destinations even managed to post a $40 million profit by the third quarter of last year.
Meredith Corp. reported a $289 million loss for the same quarter.
The Wyndham Destinations acquisition of Travel + Leisure appears to maintain distinct identities for both companies’ existing brands.
All Wyndham Destinations brands, including Margaritaville Vacation Club and Club Wyndham, are expected to remain through the acquisition and continue to be a part of the Wyndham Rewards loyalty program. Wyndham Destinations will become the new umbrella brand for the broader company’s vacation club resorts.
Travel + Leisure will maintain its current slate of brands and products — including the namesake magazine and “A-List” travel advisor network. The new Travel + Leisure Co. will license out the brand name to Meredith Corp. to operate the media channels.
Travel + Leisure’s Editor-in-Chief Jacqui Gifford and Giulio Capua, the brand’s publisher, will maintain their roles with the company.
Wyndham Destinations also agreed to a five-year marketing commitment across Meredith Corp.’s portfolio of media brands beyond Travel + Leisure.
“This strategic alliance brings a new, innovative approach to media brand development, and we’re excited to leverage Wyndham Destinations’ and Meredith’s respective strengths to enhance and realize Travel + Leisure’s full potential,” said Meredith Corp. CEO Tom Harty in a statement.
The deal is not expected to impact employee counts at either company. The new Travel + Leisure Co. will end up with nearly 20 brands and 230 vacation club resorts around the world. Travel + Leisure’s travel clubs, with a combined 60,000 members, are also included in the acquisition.
“The Wyndham Destinations alliance is a win-win strategy, and indicative of our interest in collaborating with industry leaders to optimize the potential of our many other powerful Meredith media brands,” John Zieser, Meredith Corp.’s chief development officer, said in a statement.
Hospitality companies leveraging a media brand to drive business is a union not entirely new to the hospitality industry. Playboy magazine’s parent company, Playboy Enterprises, operated branded nightclubs and resorts in the past.
There is even precedent within Wyndham Destinations for some degree of media marriage. Its RCI brand’s magazine, previously known as Endless Vacation magazine, had one of the travel sector’s largest circulations thanks to its distribution to two million members, according to journalism platform Muck Rack.
But the Travel + Leisure acquisition is the latest in a Wyndham Destinations development streak aimed at evolving the reputation of timeshares and vacation clubs. Brown hinted in an interview with Skift last July the pandemic would lead to growth opportunities for the company.
The company increasingly develops vacation clubs aimed at shorter stays in urban markets like Atlanta and Nashville as a way to appeal to potential younger members. Millennials in 2019 accounted for 20 percent of sales at Wyndham Destinations, the company’s fastest-growing sales demographic.
“There is still a broad misperception out there that timeshare is same unit, same week, same location, same time of the year,” Brown told Skift last year. “That’s the perception, and — broadly — timeshare now is all about flexibility. The urban city center downtown destination is the prime leading indicator that trend has changed.”
While millennials weren’t specifically mentioned as a motive to acquire the media brand, Brown did highlight Travel + Leisure’s 20 million “loyal followers” across social media platforms.
“This iconic brand, along with their authoritative content and wide audience, will help accelerate and amplify the growth of new capital-light travel businesses and services, as we take the next step in expanding our reach within the global leisure travel industry,” he said Wednesday.