Wyndham Hotel Group has acquired Latin American hotel management group Fën Hotels, adding 26 management contracts.
The company said that it was committed to growing its global management operations and distribution system and was looking for further brands to buy.
The news came shortly after Marriott International signed four hotels in Mexico, with the company describing an “aggressive expansion strategy” in the area. The company operates more than 200 hotels in the Caribbean and Latin American region, spanning 20 brands in 33 countries and territories.
Seventeen hotels have been signed into the Marriott’s Caribbean and Latin America development pipeline so far in 2016. By 2022 the company is planning to open 38 additional properties, reinforcing Mexico’s status as Marriott’s top market within the region.
The Fën Hotels deal will add hotels across Argentina, Peru, Costa Rica, Uruguay, Paraguay, Bolivia, and the US including two new Fën-built Wyndham Grand hotels opening in Montevideo, Uruguay, and Asunción, Paraguay
The addition of Fën Hotels’ Esplendor Boutique Hotels and Dazzler Hotels takes Wyndham Hotel Group’s portfolio to 18, all of which will be bookable through the company’s loyalty programme, Wyndham Rewards, by the end of 2017.
Fën’s current headquarters becomes Wyndham Hotel Group’s new Latin America HQ for management operations. Current Fën CEO, Patricio Fuks, will remain as chairman of Fën, helping lead Fën’s growth across the region.
Paulo Pena, president & managing director for Wyndham Hotel Group in Latin America and the Caribbean, said: “From design-led boutique hotels to an exceptional focus on service and comfort, Fën Hotels delight guests visit after visit making for a great addition to our portfolio as we continue delivering elevated experiences for our guests.”
Patricio Fuks, Fën Hotels CEO & co-founder, added: “Wyndham Hotel Group’s strength and significant scale as the company with more hotels globally than any other hotel company – dramatically increases our distribution, immediately enabling us to grow faster not only in Argentina, but also throughout the region.”
Additionally, Fën Hotels’ partner, Emprenurban, led by CEO Ivan Kozicki, will become a Wyndham strategic partner across Latin America, launching the first two Wyndham Grand Hotels in Latin America later this year and next. “Coupling our proven development model and capabilities across Latin America with Wyndham’s global brands and resources will ensure an accelerated and robust joint growth pipeline for Fën and Wyndham,” said Kozicki.
Fernanda L’Hopital, Associate Director, Sao Paulo office, HVS, told us: “South America has proven to be a rapidly evolving economy. External and domestic demand, flexible fiscal policies, healthy fundamentals, higher commodity prices, favourable terms of trade, capital inflows, and national and foreign investment contributed to the region’s high economic growth in the period 2003/4-2012/2013.
“The development of the hotel industry had a strong correlation with the economic and tourism growth of the region. A new middle class emerged and economic recovery brought new business developments in the countries and the activity acquired renovated dynamism. Demand experienced a remarkable growth in most of the countries since 2004-2006 boosting hotel occupancy and rates.
As a result of the growing demand, the hotel supply in South America grew both in quantity and quality. This turned the market into a more competitive one, bringing about better service and internationalisation of standards. However, despite the fact that a considerable number of hotel brands and chains entered the market, most of the properties in the region are still owned/managed by individuals or small/independent local chains. The international hotel chains with larger presence in the region are IHG, Marriott, Starwood Hilton, Accor, and Wyndham.
“During the last three years, moderate economic growth and increase in supply (mainly in Colombia and Santiago) have impacted on occupancy levels. These factors and the local currencies devaluation have pressed on the rates in US dollars. Current trends in rates suggest that many of the markets in the region are still in a period of readjustment of their supply. Small independent hotels face greater challenges in relation to large scale hotels and international branded properties. There could be buying opportunities in markets with modest performance and important conversion opportunities.”
She added that, the countries which presented a more varied and sophisticated supply in terms of brands (and also experienced the highest increase in supply during the last decade) were Colombia, Peru, Chile and Argentina (in the case of the latter the pipeline was quite stable as a result of the economic situation but it is expected to reactivate in the near future).
L’Hopital said: “ However, all of them present opportunities in different segments and markets. For instance, many of the core brands of the main hotel chains are absent in primary markets of some of those countries, also many secondary and tertiary cities in the region lack of a quality supply in the economy and midscale segments.
“All of the main countries in the region are receptive to domestic and international brands. Most of the international brands are working aggressively to expand their footprints in the markets that don’t have presence or to introduce new brands in those they have.”
The deal was the latest in a series for Wyndham, with Wyndham Vacation Rentals acquiring the apartment rental company Friendly Rentals, based in Barcelona, for an undisclosed fee in September. Wyndham said that the deal would allow it to move into the city rental market, a move which will bring it into competition with Airbnb.
At the company’s most-recent results presentation, Stephen Holmes, the group’s chairman & CEO, told analysts that the company was “solidifying” its position as “one of the largest and most formidable players in the hotel space through a combination of our growing loyalty programme” and “reinvigorated focus on our hotel brands”.
That focus now includes two more.
HA Perspective [by Katherine Doggrell]: As the scent of mulled wine and spiced biscuits fills the air, Wyndham gets on with its Christmas shopping but, unlike most attendees of festive markets, the company does not appear to be making drunk buys.
Wyndham was eager to point out that the hotels would be bookable through its loyalty programme. In the current rush to scale, Wyndham has been one of the most enthusiastic of the global operators to push its scheme, despite a small hiccup in October when a promotion designed to attract Starwood Hotels & Resorts loyalty members into its fold after it was abused.
Wyndham Rewards was named as offering the best payback among hotel loyalty programmes, returning an average of 13.6% from room night spending as reward stay value, according to the second annual Switchfly Hotel Reward Payback Survey. This latest brand addition sees it add global scope, rather than previous moves which have seen it broaden its range of products. Indeed, at the time of going to press Wyndham’s Vacation Rental division has agreed a strategic partnership with London home rental business Veeve. The move will boost Veeve’s short term luxury home business, enabling faster expansion.
The group has made no secret of its desire for a large brand stable and its opportunistic approach, coupled with asset-light tastes, make it likely that it will be a nimble frequent shopper in the new year.