by Mia Taylor
Last updated: 4:18 PM ET, Mon March 19, 2018
Wyndham Worldwide is spinning off its hotel business into a new publicly traded company.
The Wyndham Hotel Group is to become a hotel franchising and hotel management company and will be known as Wyndham Hotels & Resorts, Inc., the company said in a statement.
Wyndham also plans to consolidate its timeshare business, with Wyndham Vacation Ownership joining with RCI to create the world's largest vacation ownership and exchange company, which will be known as Wyndham Destinations, Inc.
The hotel giant has just completed and filed the necessary paperwork for its planned spin-off with the Securities and Exchange Commission.
"Today's filing marks an important next step toward the successful completion of the planned spin-off of Wyndham Worldwide's hotel business," Stephen P. Holmes, chairman and CEO, Wyndham Worldwide, said in a statement. "Both our hotel business and our vacation ownership and exchange business are well-positioned for long-term success, and we believe that this separation will result in continued growth and enhanced shareholder value. Each company will have significant scale and a leadership position within its industry, strong cash flows, and a rich portfolio of trusted brands."
The spin-off of the hotel business is still subject to final approvals and reviews from Wyndham Worldwide's board of directors. There will also need to be an execution of intercompany agreements, arrangement of financing facilities and more.
The company has already received favorable rulings from the Internal Revenue Service regarding U.S. federal income tax consequences of the transaction.
News of the spinoff comes on the heels of various other strategic transactions by Wyndham including its planned sale of its European vacation rentals business and the acquisition of La Quinta Holdings Inc.'s hotel franchising and hotel management business.
As TravelPulse's Donald Wood reported in February, Wyndham Worldwide Corporation entered into a definitive agreement for the sale of its European vacation rental business to Platinum Equity for approximately $1.3 billion.
The La Quinta acquisition will be part of Wyndham Hotels following its separation from Wyndham Worldwide.
Wyndham is not the only hotel industry giant to pursue spinoff opportunities. In January, Hilton Worldwide Holdings spun off its real estate into Park Hotels & Resorts Inc. Its timeshare business became Hilton Grand Vacations, Fortune reported.
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