Wyndham Hotels & Resorts has bolted on a small European brand with Thursday’s announced US$44 million acquisition of the Vienna House brand from Berlin-based HR Group.
With 40 hotels (28 in Germany) and 6,000 rooms currently in the Vienna House system, HR Group will continue to own or lease and operate existing Vienna House hotels under long-term franchise agreements with Wyndham. HR Group is an existing Wyndham franchisee, owning and operating six properties in Germany and the Netherlands.
This marks the 23rd brand for Wyndham, which plans to develop the Vienna House by Wyndham brand via franchising. There are currently two brands in the system, upscale Vienna House and midmarket Vienna House Easy hotels, located in markets ranging from Berlin, Munich and Prague to Krakow, Bucharest and more.
With this deal, Wyndham has 120 franchised hotels and more than 19,000 rooms in Germany. It increases Wyndham’s global and international footprints by 0.7% and 1.8%, respectively (rooms).
“This acquisition further bolsters our presence in the region by plugging the attractive midscale and upscale Vienna House brands into our existing strong infrastructure in Germany and increasing our scale in Poland and Switzerland with the expectation of immediate NRG and earnings accretion,” Dimitris Manikis, president EMEA for Wyndham Hotels & Resorts, told HOTELS on Thursday.“ Longer term, Germany (Wyndham’s fourth largest market after the US, Canada and China) is a strong market to expand in as positive GDP growth and low unemployment levels are expected to remain for years to come.”
Wyndham did not answer questions about the current Vienna House pipeline, but the brand’s website suggests that single properties are under development in Germany and Poland. Other reports suggested Wyndham could double the brand’s footprint over the next several years.
“The size of the Vienna House deal is bite-sized and does not compromise Wyndham’s strong balance sheet or the clean story/narrative that has emerged recently (we like those attributes),” wrote R.W. Baird analyst Michael Bellisario. “Also, the European focus is not unexpected for Wyndham’s first post-pandemic acquisition (and first deal since the La Quinta transaction was completed in mid-2018), in our opinion. International is where the white space exists for Wyndham as well as other global hotel brands in our coverage.”