Travel + Leisure will be acquired by a timeshare company for $ 100 million. How exactly will that be?
Wyndham Destinations has just acquired the popular Travel + Leisure travel publication from Meredith Corporation. Wyndham Destinations is a timeshare company managed separately from Wyndham Hotels & Resorts.
With this $ 100 million acquisition, Meredith Company will receive $ 35 million at closing, with the remaining payments to be completed by June 2024. The acquisition is expected to be neutral in relation to earnings for the new Travel + Leisure Co. in first year, and increase in year two. This acquisition follows the Meredith Company having reported a loss of $ 289 million earlier this year, given the intensity with which advertising was hit by the pandemic.
Meredith Company will continue to operate and monetize Travel + Leisure under a 30-year, royalty-free renewable licensing relationship. The deal also includes a five-year marketing commitment across Meredith’s brand portfolio.
As described, this business combines “the travel company’s lifestyle travel portfolio, associations and lifestyle brands with the world’s most trusted travel lifestyle content curator.”
Wyndham Destinations says it accelerates its strategic plan to “build its leadership position as the largest vacation club and exchange company in the world and expand into new licensing and leisure travel markets.”
Michael Brown, CEO of Wyndham Destinations, describes this acquisition as follows:
“We acquired Travel + Leisure, including access to its global audience of 35 million loyal followers on various platforms and around 60,000 club members, because it matches our passion and purpose to put the world on vacation. In the past 18 months, we have laid the foundation for expanding our presence beyond our core vacation ownership business and today we have added one of the most trusted and influential travel brands through the acquisition of Travel + Leisure.
This iconic brand, along with its trusted content and wide audience, will help accelerate and amplify the growth of new business and light capital travel services, while taking the next step to expand our reach in the global leisure travel industry. “
Wyndham Destinations will be renamed Travel + Leisure Co.
It is not just that Wyndham Destinations is acquiring Travel + Leisure, but the timeshare company will change the brand to Travel + Leisure Co. and, from mid-February 2021, the shares of Travel + Leisure Co. will begin to be traded on the NYSE under the symbol TNL.
With this change, we should expect new branded products from Wyndham Destinations, with the goal of increasing the timeshare business, launching new branded travel services and expanding licensing agreements under the Travel + Leisure Group.
Help me understand this acquisition
The concept of companies that buy media businesses in their “space” is nothing new. Everyone has the right to monetize their business as they wish, great for Travel + Leisure and Wyndham Destinations, I suppose.
That said, I can’t help but find it all a little ironic. These companies are literally at the opposite ends of the travel spectrum – Travel + Leisure focuses primarily on luxury hotels and exotic destinations, and publishes “travel inspiration” like this:
Meanwhile, Wyndham Destinations has timeshare properties in Orlando that look like this:
Photo: Wyndham Destinations
Now, to be fair, I suppose Wyndham Destinations probably got a deal at Travel + Leisure, considering the environment. In addition, I imagine that the timeshare business has not been hit as hard as other businesses in the travel space, as customers are stuck for life.
Still, is this really a good fit in terms of cross-marketing opportunities? “Well, I was going to stay at the Four Seasons Bora Bora for a week, but am I going to buy a timeshare in Orlando instead for the rest of my life?”
Personally, I have very strong feelings about the timeshare business, but I recognize that others think differently, so I won’t even go into that. But I just don’t understand if Wyndham Destinations is in any way trying to go to the luxury market here, or if Wyndham Destinations wants the Travel + Leisure audience to go to the luxury market.
The best comparison I can make is that this would be like Applebee’s acquisition of Capital Grille and then renamed all restaurants as Capital Grille.
Result
Travel + Leisure is being purchased by a major timeshare company. The timeshare company will be renamed Travel + Leisure, and I think it hopes that the purchase of the media company will expand its potential consumer base.
I still cannot understand this, since the two companies do not seem to complement each other much.
What do you think of Wyndham Destinations’ acquisition of Travel + Leisure?