Wyndham Grand Chicago

[DRIless]

It doesn't really have anything to do with Royal Sonesta per se -

Nice info.


This sort of thing happens all the time in Royal Holiday Club. THey contract on an annual basis with many timeshares and apartment hotels beyond their Park Royal base. That's how they have London, Paris, Rome, NYC, San Francisco, etc. The locations in these cities changes sometimes when a contract ends for whatever reason, maybe because the location rises their price or doesn't want RHC there anymore?

 

[HitchHiker71]

Nice info.


This sort of thing happens all the time in Royal Holiday Club. THey contract on an annual basis with many timeshares and apartment hotels beyond their Park Royal base. That's how they have London, Paris, Rome, NYC, San Francisco, etc. The locations in these cities changes sometimes when a contract ends for whatever reason, maybe because the location rises their price or doesn't want RHC there anymore?

I'd surmise it's about the bottom line profits - whatever is going to net the REIT the best deal/dollar - that's what the REIT is going to look to do. If another bidder comes along, and the net cost of breaking even a long term lease, as was the case for the Wyndham Grand Chicago, is less than the potential profits for the new deal - the lease is going to be broken. It's also noteworthy to point out from this article that other REITs are also looking to break their leases with Wyndham:

Just a day earlier, RLJ Lodging Trust officials announced they are considering rebranding their portfolio of eight Wyndham properties, with RLJ President and CEO Leslie Hale saying changing flags for those properties will “unlock substantial value embedded in these hotels.”

 

[HitchHiker71]

I found the sites owned by HPT, here goes:

Fortunately HPT only owns a single Wyndham Grand hotel, the one in Chicago. The other hotels in this list will inevitably also be rebranded over time, but in so far as timesharing goes, it appears the Chicago Wyndham Grand will be the only property that will negatively impact Wyndham timeshare owners.

If you would like to peruse what HPT owns, click here: https://www.svcreit.com/portfolio/properties/default.aspx

You can click on the Brand option and easily view the properties they own by brand.

 

[GRapuser]

From Businesswire.com

• Wyndham Agreement: As of June 30, 2019, 22 of HPT’s hotels were operated under a management agreement with subsidiaries of Wyndham Hotels & Resorts, Inc. (NYSE: WH), or Wyndham, requiring annual minimum returns of $28.0 million as of June 30, 2019 (approximately $7.0 million per quarter). The guaranty provided by Wyndham with respect to the management agreement was limited to $35.7 million and has been depleted since 2017. HPT's agreement with the Wyndham subsidiary provides that if the hotels' cash flows available after payment of hotel operating expenses are less than the minimum returns due to HPT and if the guaranty is depleted, to avoid default Wyndham is required to pay HPT the greater of the available hotel cash flows after payment of hotel operating expenses and 85% of the contractual minimum amount due. During the three months ended June 30, 2019, HPT realized returns under its Wyndham agreement of $6.0 million, which represents 85% of the minimum returns due for the period.

HPT currently expects to exit its relationship with Wyndham and to rebrand or sell its 22 hotels currently managed by Wyndham.

HPT leases 48 vacation units in one of the hotels to a subsidiary of Wyndham Destinations, Inc. (NYSE: WYND), or Destinations, which requires annual minimum rent of $1.5 million (approximately $0.4 million per quarter). The guaranty provided by Destinations with respect to the lease is unlimited. The contractual rent due to HPT under the lease for Destinations' 48 vacation units during the three months ended June 30, 2019 was paid to HPT.

It sounds like the timeshare units are a separate lease, but based upon what we've seen, I am assuming this will be terminated as well. Wyndham is clearly under-performing in their hotel agreement.

 

[OutSkiing]

HitchHiker and GRapuser have found a lot of good information.

It's a shame as Wyndham Chicago was such a beautiful place in such a great location.

But you have to wonder if Royal Sonesta would be able to market those 48 larger 1 bedroom / 2 bedroom presidential type units (and studios). I'm keeping my fingers crossed that maybe they'll renew the lease with Wyndham Destinations.

Bob

 

[HDiaz1]

I reached out to Wyndham about this property and this is what they said:

Thank you for reaching out to Club Wyndham. We are aware that the Chicago property will no longer have a Wyndham flag, effective November 1. We are working closely with the property owner to evaluate options for a continued presence for Club Wyndham at the property. While we evaluate these options, all existing reservations will be honored, and we will continue to deliver great vacation experiences for our owners and guests.

We understand you want more definitive answers about the future of our relationship with the property, and we are working to gain that clarity. You will be updated as soon as we know more.

 

[HitchHiker71]

I reached out to Wyndham about this property and this is what they said:

Thank you for reaching out to Club Wyndham. We are aware that the Chicago property will no longer have a Wyndham flag, effective November 1. We are working closely with the property owner to evaluate options for a continued presence for Club Wyndham at the property. While we evaluate these options, all existing reservations will be honored, and we will continue to deliver great vacation experiences for our owners and guests.

We understand you want more definitive answers about the future of our relationship with the property, and we are working to gain that clarity. You will be updated as soon as we know more.

Typical elevator speech response. Since the lease is being terminated effective 10/31/2019, and the building itself is not in fact owned by Wyndham, stating that all existing reservations will be honored is quite a statement to make, as ultimately the building owner and Sonesta - who is taking over the building management, makes that decision, not Wyndham. It will be interesting to see if the elevator speech statement holds over time.

 

[55plus]

I'll miss it if the units go away. If you're flexible cancellation and half points reservations make for a cheap getaway. It's a nice place to go in the summer with Navy Pier, the museums, etc., all within walking distance.

 

[jebloomquist]

Other than the cost to park it's worth the points. If you have to drive to Chicago, to save money on parking, park in long term airport parking for about $10 and take the CTA into the city. Otherwise take the Amtrak or bus to Chicago, or fly. Flights to Chicago are cheap.

I usually stay at the Wyndham Grand Chicago a few times per year. I use Parkwhiz to book parking at 60 E Lake St at $26 per day. It is about 2 blocks from the Wyndham. I am disappointed to see that it might be going away.

 

[erniecrews]

I'll miss it if the units go away. If you're flexible cancellation and half points reservations make for a cheap getaway. It's a nice place to go in the summer with Navy Pier, the museums, etc., all within walking distance.

I will miss it also, I normally stay 3 to 4 times a year there for 3 days each trip