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Wyndham growing in peer-to-peer-plus space

Wyndham Worldwide was in the shared economy space way before it became cool. In fact, Wyndham Destination Network (WDN), led by CEO Gail Mandel, started adding properties back in 2001, and she manages inventory, the U.K.’s Hoseasons, for example, that go back 70 years, while its Novasol properties in Denmark go back more than 50 years.

“The sharing economy is not new to us,” says Mandel, whose properties range from houseboats and treehouses to villas and even timeshare resorts that are a part of the WDN rental pool. “We really believe that because of our decades of experience we’re able to bring something very different.”

Gail Mandel
Gail Mandel

Now, WDN is becoming an even bigger player in the shared economy with its recent acquisition by its Danish arm, Novasol, of Germany’s Wimdu, which offers 350,000 short-term rental properties in 100 countries. WDN also has made an undisclosed investment to support the global growth of U.K. upmarket brand Veeve, which manages more than 1,000 homes across the London area. Earlier last year,

Wyndham also acquired Spain’s Friendly Rentals, while back in the U.K. it added Blue Chip Holidays.

In a conference call in which the company reported Q4 2016 earnings, Wyndham took questions about potentially splitting its business up, since most other public hotel companies have separated out their vacation ownership businesses in recent years, according to analyst Patrick Scholes of SunTrust Robinson Humphreys. The company’s current multiple, of less than 9x, “makes it difficult to make accretive purchases in lodging,” Scholes wrote in a note.

What sets Wyndham apart is its peer-to-peer-plus shared economy operating model, which calls for boots on the ground to support these brands; more than an introduction service for owners and renters, it offers hospitality services such as housekeeping and billing, for example, backed by a global giant like Wyndham.

“We are continually looking at what our customers want, and we see them combining urban stays while they’re going to our resort locations,” Mandel explains. “We want to be able to provide them that entire experience. So, for us, the acquisition of Wimdu is another tool in our toolkit, enhancing our distribution and allowing us to add that urban stay into that resort vacation.”

While Wimdu provides distribution for individual homeowners, much more akin to a listings company, Wyndham’s vision is to use that model to expand distribution for its own brands. “We’re not going change that model, but we will try to leverage it for our portfolio of existing brands,” Mandel says, adding that Wyndham will

continue to bring in partners or investments to make sure it is augmenting the experience for its customers.

When asked about the growth potential of the two latest acquisitions, Mandel says both are there to augment what Wyndham already does in the space. “The Wyndham Destination Network saw 8% organic EBITDA growth in the third quarter of 2016, so we are continuing to grow at a strong pace for brands that have been around for decades. The goal is to continue to keep that strong growth off the strong momentum that we have going,” she says.

Mandel also credits implementation of a dynamic pricing model and strong focus on adding owners in markets like Croatia via its organic recruiting process.

Looking farther afield, Mandel thinks there’s an opportunity to grow the peer-to-peer-plus model in the U.S., which she calls an embryotic market. “Latin America would be the next area that I see opportunity, and Asia is alos going to become an opportunity,” she adds. “We’ll be opportunistic. If something does come up and is at the right price at the right time, we’ll take advantage of that.”

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