Wyndham Destinations CEO says he's targeting the millennial traveler and gaining 'instant credibility' with his $100 million purchase of Travel + Leisure
- Timeshare company Wyndham Destinations announced it is acquiring Travel + Leisure magazine in a $100 million deal.
- Wyndham Destinations CEO Michael Brown said the acquisition is primarily about reaching a wider audience and providing more value to its members.
- "Travel + Leisure's core effort has always been to inspire travel. And one of Wyndham Destinations' core competencies is to put those members on vacation," he said.
- Visit Business Insider's homepage for more stories.
Wyndham Destinations announced on Wednesday that it would be acquiring Travel + Leisure from Meredith Corporation.
The $100 million deal includes the acquisition of the Travel + Leisure's brand and travel clubs with their roughly 60,000 travel club members. Wyndham paid $35 million at the deal's closing and expects to wrap up its payments by June 2024.
Meredith will continue to operate and publish the magazine independently under a licensing agreement.
Wyndham Destinations will change its name to Travel + Leisure Co. and trade under the TNL ticker by mid-February, the company said.
In an interview with Insider on Thursday, Wyndham Destinations CEO Michael Brown said that the acquisition was fueled in part by a desire to offer members as much value as possible.
Wyndham Destinations spun off Wyndham Hotels & Resorts in 2018 and is now primarily a timeshare company. There are 230 resorts in its Wyndham Vacation Clubs portfolio, and it has four million members. It also has a membership travel business called Panorama, which brings together services enabling vacation exchange and home sharing.
"Travel + Leisure's core effort has always been to inspire travel," Brown said to Insider. "And one of Wyndham Destinations' core competencies is to put those members on vacation."
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By acquiring Travel + Leisure, Brown said, the company is hoping to "broaden" its reach.
When it comes to people buying Wyndham timeshares, he said, "new owners are about 50 years of age, with a $100,000 household income."
"With Travel + Leisure, I would expect it would provide a broader appeal to the millennial traveler as well as giving us the opportunity to provide bespoke travel membership clubs to individual segments of the market, whether it's by age, economic demographic, or even racial demographics. It really provides us some opportunities to be more customizable to the overall leisure market," he added.
Brown compared the company's ambitions to those of Inspire Brands, which owns a host of restaurant brands including Buffalo Wild Wings and Sonic, as well as Tapestry, which owns Kate Spade and Coach. These companies manage several trusted brands, with a lot of customer affinity, under a single entity.
And with a magazine like Travel + Leisure, a trusted name in travel for years, the company gets "instant credibility," Brown said. For example, he said a travel club member could read an article in Travel + Leisure about a destination they want to visit, then reach out to the club to build a vacation itinerary for them. Travel + Leisure currently has two travel clubs, one geared towards families and another towards luxury travel.
While traditional travel agencies have seen a decline in business, a Travelport study published in late 2019 found that 50% percent of millennials frequently turn to travel professionals, such as travel agents or tour operators, for recommendations.
"Ultimately there needs to be trust and value in any membership," he said. "As you grow your member base, you have more buying power and you can create that great value that you want to deliver to them."
Brown emphasized that the magazine will retain editorial independence under its new ownership.
2020 was a difficult year for the hospitality industry, with the American Hotel and Lodging Association CEO Chip Rogers saying it was the worst year on record for hotels.
Brown said that Wyndham Destinations has benefited from the trend of travelers prioritizing hotels in locations they could drive to during the pandemic. It reported a $40 million profit for the third quarter of 2020 following losses in the previous two quarters.
But Brown is optimistic that the environment will soon be better for travel.
"With vaccines being distributed, and with the belief that, at least as the health experts say, the summer is going to look very different from a COVID standpoint, the timing of this acquisition really gets us in a position that when the recovery begins, we all know that leisure travel will be at the front end of it," he said.
"This gives us just a little bit of time to get prepared for that."
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