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Wyndham Hotels & Resorts, Inc. (NYSE: NS) announced today that it has entered into a definitive agreement with CorePoint Lodging (“CPLG”) to terminate all remaining Wyndham hotel management contracts (“HMAs”) following the completion of the merger announced by CPLG today.
The termination is linked to the completion of the CPLG sale, which is expected to take place in the first quarter of 2022. Upon termination of the HMAs, CPLG will pay Wyndham termination fees of approximately $ 84 million.
“The termination of these management contracts marks our exit from the resource-intensive select service management business with lower margins and gives us the opportunity to focus on growing our low-asset, highly profitable, cash-generative franchise business,” said Geoffrey A Ballotti, President and CEO.
Wyndham’s related franchise agreements are expected to remain in place at the current fee structure (5% license fees plus 4.5% for marketing and reservation services).
The company has published additional materials on its investor relations website, www.investor.wyndhamhotels.comto further disclose the potential financial implications of this arrangement.
