Wyndham Worldwide Corp projects its hotel business will make up a third of earnings before interest, taxes, depreciation and amortization in five to 10 years, Chief Executive Stephen Holmes said at the Reuters Travel and Leisure Summit. Wyndham franchises about 7,000 hotels, including Days Inn and Super 8 brands. Holmes described it as a business with a "great margin.""We'd like to see that business grow," Holmes said. In 2009, lodging was 21 percent of Wyndham's EBITDA. Wyndham is the No. 2 hotel company in the world as measured by number of rooms, according to Smith Travel Research. The company also has a vacation exchange and rentals business as well as a timeshare business.
Wyndham said in 2008 that it would shrink its timeshare unit, cutting 4,000 jobs in the process. Revenue from this segment accounted for roughly half of its revenue in 2009, and this year timeshare will be a smaller piece, Holmes told Reuters.
Growth in the lodging segment could come through adding more hotels to its portfolio or through adding a new brand to its banner. Wyndham has said in recent quarterly calls it is actively looking for brands to add to its portfolio. Like many of its peers, Wyndham also sees demand for hotels in Europe and Asia growing in coming years.
The number of new hotels in the U.S. is expected to tick up this year, but that growth is expected to be muted compared to earlier years. However, there is a dearth of hotel rooms in areas that are starting to see bustling travel demand, notably China and India.