Skift Travel News Blog

Buying a share in a company typically involves hoping the stock price rises over time and maybe means sharing in dividends. But Selina, an upstart hospitality brand, said on Wednesday it has a new enticement for people to buy its stock — discounts and freebies at its properties.

“Today, investing extends beyond the balance sheet,” said co-founder and CEO Rafael Museri.

Selina shareholders will be able to enjoy upgrades at the company’s hostel-style lodging, discounts or free breakfasts at its restaurants, lake checkouts, access to co-working spaces, and “exclusive event invitations,” depending on a variety of factors via the Selina Shareholders Program.

Selina isn’t the only travel company to try this. Carnival Cruise Lines, Norwegian Cruise Lines, and Royal Caribbean Cruise Lines have long offered onboard credit per stateroom on select sailings to confirmed shareholders. Intercontinental Hotels Group (IHG) has for years let shareholders enjoy discounts at their hotels if they book through a private website available by emailing the company’s registrar with proof a person holds shares in certified form.

But Selina has innovated, making the process to verify that someone holds shares fully digital. The process appears to be more seamless than what other travel companies have offered.

On Selina’s investor page, shareholders can link their online, U.S.-based brokerage account for verification. Other eligibility requirements can be satisfied online, and bigger investors can enjoy bigger benefits. After vetting, the company aims to send shareholders access to benefits within five business days.

“We extend a special thank you to retail-focused investor relations agency, Equity Animal, along with our technology partner, Stakeholder Labs, for their collaboration in creating the Selina Members Club,” said Sam Khazary, executive vice president and global head of corporate development.

”The Selina Members Club is not only a strategic move to strengthen relationships with customers who are also shareholders,” Khazary said. “It also serves as an expression of gratitude for their steadfast support.”

Skift editors were struck by this chart of Wyndham’s stock price as of Friday. Investors continue to behave as if it would be a good thing for the world’s largest hotel franchisor to merge with another player. Sustained investor pressure on that score might prompt Wyndham’s management to change strategy at some point.

Shares spiked on Wednesday after the Wall Street Journal floated a rumor that Choice Hotels wanted to buy Wyndham. Analysts quickly cast doubts that any deal would materialize.

Yet Wyndham’s shares remained elevated even when analysts like those at Baird poured cold water on this rumor. Many investors seem to dare to hope that a merger or takeover by some player will happen.

So why would investors cheer an offer for Wyndham?

Baird Equity Research held meetings with Wyndham’s management team after the announcement.

“The company continues to believe the stock is trading at a ‘significant and unwarranted discount,'” wrote the Baird analysts, who agree with management’s view.

To be clear, Baird analysts like Wyndham’s management and neither call for nor predict a merger. But in a flash report, Baird analysts suggested some reasons about why Wyndham’s stock had “underperformed” before the merger rumors.

“The list of potential reasons (among others) includes: growing competition in the lower-end chain scales; recent banking/financing uncertainties that might disproportionately impact Wyndham’s development pipeline; and Wyndham’s typical customer, which has an average household income of $91K, potentially being more impacted from a disposable income perspective due to continued inflationary pressures.”

—Michael Bellisario and Jo Choy of Baird.

Wyndham’s management had retorts to every concern. They said they saw no signs of fundamental slowing in leisure travel demand or in hotel development deal flow, signings, and ability to meet announced targets. Only about two dozen deals in its pipeline appear to face any risk of headwinds because of trouble getting financing because of recent banking and interest rate turmoil.

And yet, the market continues to value Wyndham more when they believe it’s in play. That partly reflect’s an investor mentality. Analyst David Katz at Jeffries estimated this week that any takeover bid might come with a price premium of as much as 30 percent of Wyndham’s stock prices. Some investors, possibly naive, are looking for a quick gain.

Yet Wyndham has weaker earnings growth forecasts for 2024 when compared with Choice Hotels, its competitor with the most overlap in hotel profile.

To paraphrase Baird’s Michael Bellisario and Jo Choy, risks to Wyndham include:

• the sustainability of brand equity and customer loyalty when facing the larger loyalty and co-branded credit card machines of players like Marriott International
• the endurance of its popularity among developers especially as larger groups like Hilton and Hyatt increasingly develop brands in the premium economy sector that Wyndham has heavy exposure to
• exposure to a more price-conscious traveler during macroeconomic headwinds in the context of rivalry from other hotel brand companies

Wyndham’s management capably managed its way through the pandemic and have consistently met their announced targets while avoiding unpleasant surprises. Yet Wyndham’s trades at a noticeable discount to the sum of its parts, according to a few investment banks that cover the stock.

It appears that some investors believe Wyndham would be stronger as part of a larger group that could have more scale efficiencies, such as in a larger loyalty program, an ability to negotiate deeper discounts on things like furniture supplies and commissions for distribution, and back-office synergies.

If investors continue to signal with their pricing behavior frustration with Wyndham for a year or longer, pressure will only grow on Wyndham’s management to adjust their business strategy in response or possibly entertain merger talks.

SoftBank Group has reportedly cut the valuation of Indian hotel-booking platform Oyo by more than 20 percent, Bloomberg reported on Thursday quoting people familiar with the matter.

According to the report, the Japanese investor, who owns 45 percent of Oyo, cut its estimated value for initial public offering-bound Oyo to $2.7 billion in the June quarter from an earlier $3.4 billion. In 2019, Oyo had been valued at $10 billion.

The $2.7 billion valuation is lower than the $3.23 billion that Oyo has been able to raise through primary and secondary equity and debt funding rounds from investors. 

Calling the valuation markdown a speculation and “patently incorrect,” Oyo said that having clocked $1 million in earnings before interest, taxes, depreciation, and amortization in its fiscal 2023 first quarter, there is no rational basis for a markdown.

“A 41 percent gross profit margin and a 45 percent increase in gross booking value per hotel per month compared to the last financial year are dramatically improved results and the strong performance trajectory is expected to continue,” Oyo said in a statement.

Earlier this week, Oyo updated its initial public offerings application to the Indian regulatory body — Securities and Exchange Board of India (SEBI). The company originally planned to raise around $1.16 billion through the initial public offering, seeking a valuation of around $12 billion.

Oyo said that SEBI has given the company permission to file updated financials till the September 2022 quarter and Oyo would initiate the approval process post the filing of its audited numbers. “We have not decided the exact timing for the IPO and the IPO valuation is also highly speculative,” Oyo added.

Have you ever claimed your value added tax back for things you bought during a trip to Europe? Then you probably used a Global Blue Tax Free Shopping service. Global Blue, a payments specialist for 300,000 partner stores primarily in the European Union, is now on the rebound.

It has agreed to receive $225 million in investment, subject to shareholder approval, from CK Opportunities, an investment fund co-managed by Certares, a global travel, tourism and hospitality investment firm, and Knighthead, a credit investment management firm.

The news comes shortly after Global Blue reported its first notional profit since the pandemic began, as measured by positive adjusted earnings, before interest, taxes, depreciation, and amortization.

Certares was founded as a private equity firm in 2012 in New York and has gone on to invest heavily in travel companies — most prominently American Express Global Business Travel, Hertz Corp., airline group Latam, and Liberty Tripadvisor Holdings.

One of the broad themes of Certares’ recent travel investments is that luxury or premium travel will prove to have long-term resilience despite other headwinds that might buffet the travel sector. Global Blue processes payments and has made particularly inroads on facilitating purchases made by international travelers on luxury good purchases at airports. In a non-pandemic year, Global Blue manages 35 million transactions. (See Skift’s coverage of Certares, here.) 

Recovery led by US travelers in Europe is especially strong. Spending by U.S. travelers of which Global Blue is managing the VAT refund was up 166 percent in April compared to pre-Covid levels.

Global Blue is a Silver Lake portfolio company that went public in 2020.