Hospitality and holiday rentals giant Wyndham Worldwide is to spin off the company’s hotel business to create two separate, publicly traded companies.
Wyndham Hotel Group, headquartered in Parsippany, New Jersey, will become a new, publicly traded hotel company.
Wyndham Vacation Ownership, with headquarters in Orlando, Florida, will become the world’s largest publicly traded timeshare company.
It will be joined with Wyndham Destination Network, parent of RCI, the world’s largest timeshare exchange company.
The company announced it will also explore strategic alternatives for its European rental brands.
The two public companies will enter into long-term exclusive license agreements to retain their affiliation with loyalty program Wyndham Rewards as well as continued collaboration on key inventory sharing and customer cross-sell initiatives, Wyndham announced.
The corporate names of the post-spin public companies have not yet been decided.
Wyndham said the split will allow each separately traded entity to “maintain a sharper focus on its core business and growth opportunities, facilitate future capital raising, and make the changes necessary to respond to developments in its markets”.
Stephen P. Holmes, chairman and chief executive of Wyndham Worldwide, said: “After a comprehensive review process, the board of directors has determined that a spin-off of the hotel business and the combination of Wyndham Vacation Ownership with RCI is the best structure to unlock shareholder value and enable strong growth across the businesses.
“We will work with the leadership of our European rental organisations, which have outstanding brands in their regional markets, to explore options to fully realize their future growth potential.”
Holmes added: “Over the past decade, we have attracted incredible teams of dedicated professionals who have built these businesses and brands into industry leaders which are now connected by the industry’s top rated loyalty program.
“With this strong platform in place, our businesses are now able to move forward individually, each positioned for a very strong future, based on a shared history and culture and an ongoing affiliation with Wyndham Rewards.”
The transaction, which is expected to be tax-free to Wyndham Worldwide and its shareholders, will be effected through a pro rata distribution of the new hotel company’s stock to existing Wyndham Worldwide shareholders.
The transaction to be completed in the first half of 2018.
As two separate public companies, the vacation ownership company and the hotel company will have separate boards of directors. Holmes will serve as non-executive chairman of the board of directors for both companies.
Geoff Ballotti, current chief executive of Wyndham Hotel Group, will continue to lead the hotel company as president and chief executive.
Michael Brown, current chief executive of Wyndham Vacation Ownership, will continue to lead the timeshare company as President and chief executive.
Gail Mandel, chief executive of Wyndham Destination Network, will continue to lead that business through the transition, and Tom Conforti, chief finance officer of Wyndham Worldwide, will move into an advisory role.
Holmes said: “Tom has worked closely with the board and me to get to our announcement today.
“He has been a passionate leader for our business and a vocal champion of our culture and values.
His contributions to the company and for our shareholders are significant, and our gratitude to him runs deep.
“As we begin this next chapter, Tom and I agreed that now is a good time to make this change to support a seamless transition to the leadership of the new companies.”
Other management changes will see David Wyshner assume the role of Wyndham Worldwide chief financial officer and will become chief financial officer of the hotel company upon spin. Michael Hug will serve as chief financial officer of the timeshare company.
Wyndham owns a number of brands well-known to the UK trade including Hoseasons, James Villa Holidays and Novasol. This week it announced the acquisition of holiday home sharing website Love Home Swap.