Leisure travel company Wyndham Destinations is spreading its wings with the $100 million acquisition of the Travel + Leisure brand and assets from Meredith Corporation. The strategic purchase will help advance Wyndham’s plans to launch new branded travel services, grow its membership travel club, expand branding licensing agreements, and exponentially grow its visibility through Travel + Leisure’s audiences. In mid-February, Wyndham Destinations (NYSE: WYND) will become the Travel + Leisure Co. and trade on the New York Stock Exchange under the ticker symbol TNL.
Strategic move for Wyndham & Meredith
“We acquired Travel + Leisure, including access to its global audience of 35 million loyal followers across multiple platforms and nearly 60,000 club members, because it matches our passion and purpose to put the world on vacation. Over the past 18 months, we have laid the foundation to expand our footprint beyond our core vacation ownership business, and today we add one of the most trusted and influential brands in travel through the acquisition of Travel + Leisure,” said Michael D. Brown, president and chief executive officer of Wyndham Destinations, in a joint news release.
“This iconic brand, along with its authoritative content and wide audience, will help accelerate and amplify the growth of new capital-light travel businesses and services, as we take the next step in expanding our reach within the global leisure travel industry,” Brown added.
Continued relationship with Meredith
As part of the deal, Meredith will operate and monetize Travel + Leisure’s media across multiple channels, including advertising and marketing, through a 30-year royalty-free, renewable licensing arrangement. Essentially, Wyndham Destinations is leasing Travel + Leisure back to Meredith who will continue to publish and sell the popular travel magazine. Travel + Leisure magazine will remain under the management of current editor-in-chief Jacqui Gifford and senior vice president/group publisher Giulio Capua. Travel + Leisure was as part of Meredith’s $2.8 billion acquisition of TIME Inc. which closed in January 2018.
“As new stewards of the Travel + Leisure brand, we are committed to ensuring that the integrity and independence of its trusted, authoritative journalism remains uncompromised. I’m very pleased that Meredith will continue producing the number one travel content brand and major monthly consumer magazine under the leadership of Editor-in-Chief Jacqui Gifford,” Brown said.
“For 50 years, Travel + Leisure has offered travel inspiration to tens of millions across the world through immersive, transportive experiences across many channels. Its dedicated readers rely on the brand as a window into the world’s best destinations, cultures, and experiences, and we look forward to supporting Meredith as it continues that mission,” added Brown.
Gifford also commented on the strategic alliance with Wyndham Destinations.
“I’m delighted that Wyndham Destinations has such a deep understanding of and excitement for Travel + Leisure, and in partnership with Meredith profoundly shares our mission to inspire and empower the world’s most curious and passionate travelers. I’ve spent time getting to know Michael Brown. I’m thrilled that he appreciates the legacy and integrity of this brand, and I look forward to working with him,” Gifford said.
“We will continue to produce and deliver independent, award-winning journalism and rich, immersive storytelling, transporting our passionate audience across numerous platforms to compelling destinations around the world. With Wyndham’s backing and support, T+L is poised to accelerate its growth and flourish beyond our content while continuing to benefit from Meredith’s successful track record in operating media brands,” added Gifford.
Details of the deal
The acquisition will be paid with $35 million in cash at closing. The remaining balance will be paid in trailing payments by June 2024. Wyndham Destinations has also agreed to a $30 million five-year marketing deal with Meredith across their portfolio of brands. Wyndham Destinations said the acquisition will not have an impact on earnings for Travel + Leisure in the first year and will make a gradual contribution toward earnings beginning in the second year.
The joint news releases said that, in the first quarter of 2021, Travel + Leisure Co. will become the world’s “leading membership and leisure travel company” with a portfolio of close to 20 resort, travel club and lifestyle travel brands. Wyndham Destinations alone has 230 vacation club resort locations around the world and the world’s largest vacation club and exchange company with more than 4 million members and owner families.
Wyndham Destinations preliminary Q4 2020 results
In related news, this week, Wyndham Destinations released preliminary data on operating results for the fourth quarter of 2020.
- Gross vacation ownership interest (VOI) sales of $281 million
- VOI sales were impacted by COVID restrictions, especially in California and Hawaii where resorts were closed in December.
- Q4 2020 gross VOI sales were down 51.8% year-over-year with tours down 63.8% year-over-year.
“We were pleased to finish the year strong while adhering to important and necessary safety guidelines for the benefit of our owners, members and associates. Restrictions in California and certain other markets curtailed the momentum we had coming out of the summer. However, the underlying strength at our resorts that remained fully open support our expectation of a strong return of leisure travel in 2021. Our bookings for the summer of 2021 and beyond continue to be strong,” said Brown.
This is an interesting alliance and one that makes a lot of sense for both companies. Wyndham Destinations gets access to a well-known travel brand with a huge following, while still retaining the magazine and brand expertise of Meredith. Meredith gets immediate cash, additional cash flow from the sale, and recurring revenue from the continued marketing relationship. Since Meredith acquired TIME Inc. in 2018, the company has made some strategic decisions that have included divesting themselves completely of assets (e.g., TIME), selling assets but continuing in some operational capacity (e.g., Sports Illustrated, Travel + Leisure), reimagining assets and, of course, finding synergies where possible. We are curious to see how the many pieces and parts will fit together and, more importantly, what Meredith will do next. If this is how 2021 is starting out for Meredith, it could be a very interesting year!