The Wyndham-Choice Merger Skeptics

Good morning from Skift. It’s Thursday, May 25. Here’s what you need to know about the business of travel today.

Listen Now

🎧 Subscribe

Apple Podcasts | Spotify | Overcast | Google Podcasts

Episode Notes

A recent report in the Wall Street Journal said Choice Hotels International is considering buying Wyndham Hotels & Resorts. However, hotel industry analysts are skeptical, reports Senior Hospitality Editor Sean O’Neill.

O’Neill writes a Choice Hotels-Wyndham merger could create the largest hotel franchisor in the U.S. But he cites two analysts who explained why it’s unlikely to happen in a Truist Securities research report. Choice Hotels would have to add more budget properties to its portfolio, which might undermine its strategy of boosting its collection of high-end properties. In addition, a merger might face pushback from antitrust authorities. The two companies combined already have a more than 50 percent share of the U.S. economy hotel market. 

Still, O’Neill adds that a merger might make sense in some ways. He notes that bigger is better is a general rule in hotel marketing, franchising and management. 

Next, Short-Term Rental Reporter Srividya Kalyanaraman profiles a&o hostels, a Berlin-based company that has reused dirty, run down buildings as part of its quest for net zero carbon emissions.  

A&o CEO Oliver Winter said the company, which aspires to be Europe’s “zero-emissions hostel chain” by 2025, scours cities for dirty, ugly buildings that can be repurposed into hostels. Kalyanaraman writes that’s a huge part of its net-zero goal since it allows the company to open a new property with a zero carbon footprint. Winter adds that a&o’s strategy is appealing to Gen Z consumers increasingly looking for greener travel. 

Winter also said that using refurbished buildings is substantially more economical for a&o considering the enormous costs it would face if it constructed new properties.

Finally, the percentage of U.S. adults planning Memorial Day travel is set to jump from last year despite widespread concerns about inflation, reports Associate Editor Rashaad Jorden.

A recent survey by travel news site The Vacationer found roughly 64 percent of American adults intend to travel during Memorial Day weekend, a nearly 5 percentage point jump from 2022. Eric Jones, co-founder of The Vacationer, said that increase indicates a strong summer for the travel industry. 

However, Jones acknowledged that inflation could make travel during the upcoming holiday weekend difficult for some people. About 66 percent of respondents in The Vacationer’s survey said inflation was affecting their Memorial Day travel plans. Jones added some people eager to travel will stay home because can’t they afford the surging prices.