Choice Hotels Seeks to Buy Wyndham Hotels

Choice Hotels International is seeking to acquire Wyndham Hotels & Resorts, the Wall Street Journal reported on Tuesday.

Choice Hotels’s stock dropped more than 3% in midday trading Tuesday, while Wyndham shares were halted. A deal between the two hospitality companies would create one of the biggest budget hotel owners.

The companies, however, “aren’t in serious talks and it isn’t clear whether Wyndham wants to do a deal,” the Journal reported. If Wyndham executives resist a deal, Choice Hotels would have the option to pitch the acquisition directly to Wyndham’s shareholders, the report noted.

“We don’t comment on rumors. We are focused on business as usual, driving value for our franchisees, team members, guests and stakeholders,” Wyndham said in an emailed statement.

Choice Hotels operates nearly 7,500 hotels spanning 22 brands, including its flagship upper-midscale brand Comfort and roadside midscale brand Quality Inn. Choice has repeatedly said its strategy consists of expanding its portfolio with hotels that generate higher royalties per unit, meaning higher-end properties.

Wyndham has approximately 9,100 hotels and 842,500 rooms, and is best known for its budget brands, such as Super 8 and Ramada. But the company also has higher-end properties, such as Dolce, Wyndham, and Wyndham Grand.