Wyndham Takes $160 Million Hit After European Franchisee Files for Insolvency
Summary
Wyndham took a $160 million hit due to the collapse of its largest European franchisee, Revo Hospitality Group. This highlights the risks of the asset-light hotel business model. Revo's rapid expansion led to financial struggles, impacting Wyndham despite not owning the hotels directly. This underscores the need for hosts to understand business model risks.
Key Insights
- •Wyndham incurred a $160 million charge due to the insolvency of its largest European franchisee.
- •Revo Hospitality Group managed roughly 22,000 rooms under Wyndham and other brands.
Action Items
- ✓Hosts with multiple properties or considering expansion should carefully analyze the financial stability of any management companies they partner with.Effort: mediumImpact: medium
Common Mistakes
- ⚠A common mistake is assuming a brand affiliation guarantees financial stability in the face of economic downturns; hosts should do their own due diligence.
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