ChoiceHam: balancing scale 

Representation is a difficult thing in the world in which we live. In an environment where everyone can go online and broadcast an opinion, we’ve got used to being our own representation.

And it’s nice to have a voice. We’re having one right now. But a society in which every voice is equal sounds wonderful, but does nothing for cohesion. It doesn’t help when, say, the politicians who represent you seem to share none of your hopes, dreams and basic humanity, but you need a collective to get things done. 

But while we consider each being king for a day, it’s time to look again at what’s up with ChoiceHam. Anyone who has followed the past two paragraphs might be able to guess that all is not well with cohesion in the various camps.

The latest manoeuvre from Choice has been to propose “eight independent, highly-qualified individuals to stand for election at the 2024 Annual Shareholder Meeting of Wyndham Hotels & Resorts”.

While the rest of you look around for the definition of “independent” and come up confused, Choice added that its nominees “understand the nuances of the franchising model and the increasing pressure franchisees face from rising operating costs, larger hotel chains and dominant online travel agencies – pressures that will only mount as the lodging sector becomes even more competitive with new brand entrants”.

Pat Pacious, president & CEO, Choice, said: “The current Wyndham board continues to refuse to engage in meaningful negotiations regarding a combination with Choice that would create extraordinary value. By supporting these nominees and participating in our exchange offer, Wyndham shareholders can send a clear message to the Wyndham board.”

So the best road for ChoiceHam to go down in terms of value would be to compete with those larger hotel chains by becoming a larger hotel chain, which would help deal with those under-pressure franchisees?

Enter the under-pressure franchisees, who, to be fair, have not been missing out on some debating action themselves during this affair.

AAHOA president & CEO Laura Lee Blake. “AAHOA remains highly concerned about the significant impact this proposed merger will have on the industry, and we strive to always represent the best interests of our members.

“In response to a recent survey, our AAHOA members have raised the alarms that a hostile takeover by Choice Hotels will limit competitiveness, dilute the merged brands in this segment, and decrease the value offered to guests. AAHOA remains resolute in highlighting these grave concerns of its hotelier Franchisee Members, since they are the stakeholders who have the most at stake if a merger were to occur.”

And to underscore this, AAHOA did indeed do a survey, which found that nearly 80% of owner respondents with either a Choice Hotels or Wyndham property stated that a merger would have a negative impact on their businesses, while nearly 70% of owner respondents with either a Choice Hotels or Wyndham property stated that it was unlikely, or very unlikely, they would consider being a licensee if the Choice Hotels takeover occurred.

So, for anyone who has wisely left Twitter/X and misses such fun, Choice can take those franchisees out of their mouths.

And it’s a fair few mouths. AAHOA member-owners represent roughly two-thirds of all Wyndham and Choice franchise hotels, with brands that are largely in the economy and mid-scale segments of the hotel industry.

Now that everyone is trying to get into luxury, who cares? But if you’re going for volume, which has been the ChoiceHam model, the answer is everyone.

So that’s where we are in ChoiceHam. As in politics, so in M&A: everything can usually be resolved with a suitcase of cash. Should Choice up its bid, it’s likely the mob would be quieted.

But for the sector, if owners start deciding that they don’t like scale, the debate changes completely. 

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