Wyndham Worldwide’s
timeshare company will spin off from the parent company, giving Orlando a new publicly-traded corporate headquarters.
Wyndham Worldwide’s timeshare company is set to spin off from the parent company, giving Orlando a new publicly-traded corporate headquarters.
Wyndham has always based its timeshare subsidiary, and that company’s CEO, in Orlando. With the new spinoff, the timeshare company will be listed separately on the stock exchange.
It will be the world’s largest publicly traded timeshare company and will be joined with Wyndham Destination Network, home to RCI, the world's largest timeshare exchange network. All of that has already been based in Orlando, but it will now be a separate company.
The Wyndham spinoff had been contemplated for years. The timeshare subsidiary is the world’s largest based on the number of resorts, units, owners and revenues, with 219 resorts and over 887,000 owners.
The remaining hotel business, currently called Wyndham Hotel Group, will keep its headquarters in Parsippany, N.J.
According to its most recent annual report, Wyndham’s timeshare and Destination Network subsidiaries had a combined annual revenue in 2016 of $4.365 billion. It’s not clear from Wyndham’s announcement on Wednesday evening how exactly those revenue streams would be divided in the new spinoffs. For comparison, Orlando-based Darden Restaurants’ annual revenue for its most recent fiscal year, ended in May, was $7.17 billion.
Wyndham’s split will not require a shareholder vote. Wyndham Worldwide (NYSE: WYN) expects to complete the separation in the first half of 2018, but the company said there’s no assurance regarding the timing or that the separation will ultimately occur.
The stock market at first reacted positively to Wyndham’s announcement and second-quarter earnings. Share price moved up in early trading Wednesday but closed the day down, at $102.30, down by 70 cents or .68 percent.
Wyndham Vacation Ownership held its owners meeting in Orlando on Tuesday, the same day it announced the split. The company has been dealing with complaints over its new website, which rolled out in May, sparking anger and confusion among owners. Wyndham warned users it was rolling out the new website. But even with that warning and instructions, thousands of messages have been posted online complaining.
The move to spin off the timeshare business follows similar moves by other hotel companies, including Marriott and Hilton. All the major timeshare companies are headquartered in Orlando. For example, the Marriott timeshare business is traded separately as Marriott Vacations Worldwide (NYSE: VAC).
In April, Wyndham’s timeshare subsidiary announced a new president and CEO, Michael D. Brown, who is based in Orlando. Brown had been chief operating officer of competitor Hilton Grand Vacations (NYSE: HGV).
Brown, current CEO of Wyndham Vacation Ownership, will continue to lead the timeshare company as President and CEO.
As two separate public companies, the vacation ownership company and the hotel company will have separate boards of directors. The transaction will include pro rata distribution of the new hotel company's stock to existing Wyndham Worldwide shareholders. Stephen P. Holmes, chairman and CEO of the parent company Wyndham Worldwide, will serve as non-executive chairman of the boards of both companies.
The hotel company is actually the smaller subsidiary, with 2016 revenues of $1.3 billion.
The timeshare subsidiary, Wyndham Vacation Ownership develops and operates a portfolio of over 220 resorts throughout the United States, Canada, Mexico, the Caribbean, South America and the South Pacific, managing vacation ownership sales, marketing, consumer financing operations and property management.
According to an announcement from Wyndham Worldwide, the two public companies intend to enter into long-term exclusive license agreements to retain their affiliation with its loyalty program, Wyndham Rewards, as well as continued collaboration on key inventory sharing and customer cross-sell initiatives. The corporate names of the post-spin public companies have not yet been decided.