Wyndham Acquires La Quinta, Will Have 9,000+ Hotels

Filed Under: Hotels, Wyndham

We’ve seen quite a bit of consolidation in the hotel industry the past few years. Marriott has taken over Starwood, IHG has taken over Kimpton, and Accor has taken over Fairmont, Raffles, And Swissôtel.

The consolidation continues, as it has been announced today that Wyndham will be acquiring La Quinta for 1.95 billion USD. The acquisition is expected to close in the second quarter of 2018. Here’s how the takeover will be structured:

Under the terms of the agreement, stockholders of La Quinta will receive $8.40 per share in cash (approximately $1.0 billion in aggregate), and Wyndham Worldwide will repay approximately $715 million of La Quinta debt net of cash and set aside a reserve of $240 million for estimated taxes expected to be incurred in connection with the taxable spin-off of La Quinta’s owned real estate assets into CorePoint Lodging Inc.  Immediately prior to the sale of La Quinta to Wyndham Worldwide, La Quinta will spin off its owned real estate assets into a publicly-traded real estate investment trust, CorePoint Lodging.

Wyndham is the world’s largest hotel group in terms of the number of properties. La Quinta has nearly 900 managed and franchised hotels (almost none of which they own). So after the acquisition, Wyndham will have a total of over 9,000 hotels, spanning 21 brands, in more than 75 countries. While Wyndham is the world’s largest hotel group in terms of the number of properties, they aren’t the largest in terms of the number of rooms — that title goes to Marriott.

Here’s how Wyndham views La Quinta in the context of their portfolio:

The addition of La Quinta, one of the largest midscale brands in the industry, will build upon Wyndham Hotel Group’s strong midscale presence, expand its reach further into the fast-growing upper-midscale segment, and position Wyndham Hotel Group to be the preferred partner and accommodations provider of developers and guests.  The La Quinta Returns® loyalty program, with its 13 million enrolled members, will be combined with the award-winning Wyndham Rewards® program, with its 53 million enrolled members.

Here’s what executives from Wyndham and La Quinta had to say about the takeover:

“La Quinta will immediately become one of our flagship brands,” said Geoff Ballotti, President and Chief Executive Officer of Wyndham Hotel Group. “It is an exceptionally strong brand that is led by service-minded associates who deliver some of the highest customer engagement levels in our industry.  We expect that La Quinta guests and franchisees will benefit from our intense focus on product quality and our best-in-class technology, digital, loyalty and distribution platforms.  This acquisition also significantly expands our hotel management business and provides us with substantial new opportunities to drive increased growth in our business.”

Keith Cline, President and Chief Executive Officer of La Quinta, added, “As we anticipated, the separation of our businesses is enabling greater strategic clarity and allowing our company to take advantage of growth opportunities that naturally flow from each business model.  To that end, we are excited to announce the addition of the La Quinta franchise and management businesses to Wyndham Hotel Group’s portfolio.  We believe that, under the management of Wyndham’s seasoned team of executives, the La Quinta portfolio will grow and thrive, yielding long-term benefits to the stakeholders of both companies.”

Bottom line

Wyndham’s takeover of La Quinta increases their portfolio by over 10%. Wyndham has a lot of budget hotel brands (Days Inn, Knights Inn, etc.), so La Quinta will be one of their higher end brands. Presumably La Quinta Returns will eventually be folded into Wyndham Rewards, which is a mixed bag. On the plus side, Wyndham Rewards has improved nicely the past couple of years, and they’ve had frequent promotions, potentially lucrative redemption opportunities, and they’re working on adding elite benefits as well (though they still have a long way to go there).

This is a mixed bag, though generally I’m opposed to consolidation. The good news is that hotel consolidation isn’t quite as bad as airline consolidation, since individual hotels are still competing with one another, even if they belong to the same brand.

What do you make of Wyndham’s takeover of La Quinta?

  1. I like how they state that LaQuinta will become one of the flagship brands…why? because Knights Inn or Super 8 aren’t 🙂

  2. @Lucky thanks for the clarification between Wyndham and Marriott in terms of the largest hotel operator title.

  3. I like LQ and I hope this doesn’t go thru. These corporations just keep getting bigger and bigger.

    Anyhow the nect up should be Hyatt and Best Western.

  4. Don’t know if the dog friendly policy of LQ will change. I used to stay in LQ a lot when I have dogs. Will convenient feature for dog owners but probably not anyone else.

  5. I agree with Lu. I stayed almost exclusively at LQs when I drove cross country twice with my dog. Very convenient and the properties were usually quite adequate.

  6. If you are elite level with La quinta, would they status match you after the acquisition is completed?

  7. I always thought LaQuinta was very nice for the price. Usually on the level of Hampton Inn quality wise but about 20% cheaper.

    Certainly WAY better than Four Points by Sheraton.

  8. Haven’t stayed at a LQ for over a decade. Wyndham doesn’t need LQ. Hilton, Marriott or IHG needs LQ more. Wyndham needs a Doubletree or Courtyard by Marriott or similar.

    Wyndham lacks locations that I want. I like Choice Privileges among the budget brands (Comfort Inn, Quality Inn, Rodeway, etc.)

  9. How awesome
    I love La Quinta and wouldn’t stay in a Hilton Hyatt or Marriott Starwood hotel
    From their fine dining imacculate clean rooms and state of the art fitness
    All my business will go to La Quintal
    900 choices where do I begin?

  10. Oh I hope they keep the features of LaQuinta and not become the dives that most of the Wyndham properties tend to become. We love LaQuinta and their clean, quiet and pet friendly accomodations.

  11. The free dog everywhere thingy of La Quinta is the elephant in the room. Only they and Motel6 have this policy and who wants to be limited to Motel6.

  12. I hope Wyndham pays attention to the service & policies at what made LQ lucrative. Every person that travels with their pets or participates in AKC shows/events across the country stay at LQ, Red Roof and Motel 6, as no fee for dogs. That’s a lot of customers I hope they don’t abandon! #worried

  13. I do hope they keep their pet policy. I wish other Wyndham resorts would allow pets. It would open up wider options for travelers and a wider market for them.

  14. We are so disappointed that the pet policy at La Quintas is no longer. We were told that this is a Wyndham decision. They now charge for pets. We had to pay $20. So disappointing since we have been long time LQ rewards member and used LQ’s exclusively when traveling with or without our dog.

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