Choice Hotel franchise owners are resisting a potential merger with Wyndham, fearing it could harm their businesses. They believe the proposed deal would reduce competition, leaving them with fewer options and less negotiating power. The resistance from franchisees and industry experts poses a challenge to the merger's approval by the Federal Trade Commission. This opposition reflects a wider trend of growing resistance to industry consolidation.
The attempt by Choice Hotels to take over Wyndham Hotels has encountered resistance from the franchises of both brands. Despite Choice's CEO's initial optimism about the benefits of the merger, feelings have soured, with an association representing the majority of hoteliers opposing the deal. Franchisees are concerned that the merger would reduce competition and in previous similar cases, did not necessarily lead to cost reductions for franchisees. There are also fears that the merger could give the combined entity too much power and control in the budget hotel sector. The move has sparked a wave of opposition from franchise owners, who worry that their profits could be squeezed if the deal goes through. This concern is emerging as a potential hurdle for Choice as it seeks approval from the Federal Trade Commission for the merger. Hotel owners' dissatisfaction could harm Choice's ability to acquire Wyndham, especially if more franchisees switch to other brands. This is a situation that has led some on Wall Street to reconsider support for the deal and has implications for federal regulators, who are increasingly considering the impact of mergers on suppliers as well as consumers. Choice, however, remains optimistic that its proposed deal will be approved and anticipates finalizing the transaction within a year.
The attempt by Choice Hotels to take over Wyndham Hotels has encountered resistance from the franchises of both brands. Despite Choice's CEO's initial optimism about the benefits of the merger, feelings have soured, with an association representing the majority of hoteliers opposing the deal. Franchisees are concerned that the merger would reduce competition and in previous similar cases, did not necessarily lead to cost reductions for franchisees. There are also fears that the merger could give the combined entity too much power and control in the budget hotel sector. The move has sparked a wave of opposition from franchise owners, who worry that their profits could be squeezed if the deal goes through. This concern is emerging as a potential hurdle for Choice as it seeks approval from the Federal Trade Commission for the merger. Hotel owners' dissatisfaction could harm Choice's ability to acquire Wyndham, especially if more franchisees switch to other brands. This is a situation that has led some on Wall Street to reconsider support for the deal and has implications for federal regulators, who are increasingly considering the impact of mergers on suppliers as well as consumers. Choice, however, remains optimistic that its proposed deal will be approved and anticipates finalizing the transaction within a year.