Hotel Owners Push Back on Merger of National Brands
Summary
When Patrick Pacious, the chief executive of a large portfolio of hotel brands, promoted a blockbuster attempt to acquire a competitor in October, he said the proposed merger would lower costs and attract more customers for the families and small businesses that own most of the company’s locations. He said Choice had been taking a larger cut, via charges like an $18 monthly fee for reporting his property’s energy use, discounts for rooms booked with rewards programs and penalties when guests file complaints. “And maybe If I want to go to Wyndham, they have nearly 20 brands, and I lose that opportunity, because it will be the same thing.” Choice argues that as its rivals have expanded and merged, it also needs to grow to offer hotel owners bigger savings on supplies like signage and bedsheets. “Combining with Wyndham would enable us to continue to deliver enhanced profitability for franchisees — by helping to lower their costs and grow their direct revenue while providing our best-in-class technology platform,” Choice said in a statement. It could also sway federal regulators, who have started to take into account the effect of corporate mergers not just on their consumers but also on suppliers like book authors, chicken farmers and Amazon sellers.