Choice Just Won't Stop + Early Dubai Highlights
Good morning, readers. Labor has been having a bit of a moment in the U.S. of late. The airline industry may be next. We take a look specifically at how cabin crews are making noise of late. We also have the latest on the Choice-Wyndham dance and what happened the first half of the day at Skift Global Forum East. On the itinerary:
Flight attendants want more and may strike to get it
Choice Hotels goes straight to Wyndham shareholders
Leaders from Dubai and beyond share insights
Early Highlights From Dubai
Earlier today, the Skift team kicked off its second Skift Global Forum East in Dubai. While the event is well into its post-lunch agenda, we have some early coverage for you to read from morning sessions.
Jumeirah Chief Commercial Officer Alex Lee (pictured above) told Skift's Sarah Kopit that the luxury hotel brand has set a target to double the number of properties in its portfolio by 2030. To do this, the brand will be looking outside of its traditional markets. "Americas are absolutely on the horizon, but the focus for now is Europe," Lee said.
Both Emaar Hospitality Group and Atlantis Resorts are two regional powerhouses closely linked to the glamorous transformation of Dubai. In conversation with Skift's Josh Corder today, Emaar Hospitality head Mark Kirby and Atlantis’ global president Timothy Kelly spoke about the “Dubai miracle” and why now is the time to expand outside the city.
Before the first coffee break, investor Michael Zeisser (who's worked with Formula One, Live Nation Ticketmaster, and Alibaba Group) discussed with Skift's Brian Quinn how travel businesses must see technology as a means to enhance the human side of what they do in creating more meaningful and personalized experiences, and not just solve technical issues.
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Choice Courts Wyndham Shareholders
Having been rejected by Wyndham management at every turn thus far, Choice Hotels brought its bid for the rival hotel operator directly to shareholders on Tuesday with an exchange offer for their shares.
Choice is offering the same $49.50 in cash and 0.324 shares of Choice common stock per Wyndham share that it proposed to Wyndham management back in October. Wyndham shareholders can elect to receive the consideration in all cash, all shares or a combination of cash and shares.
The hotelier also said it had bought more than $110 million of Wyndham stock, or nearly 1.7% of shares outstanding.
"While we would have preferred to come to a negotiated agreement, the Wyndham Board's refusal to explore a transaction has left us with no choice but to take our proposal directly to Wyndham's shareholders,” Choice ceo Patrick Pacious said in a statement. “Wyndham chose to publicly reject our last proposal without any engagement even after we addressed their concerns, including adding significant regulatory protections for their shareholders."
Choice Hotels wants to move quickly. Its exchange offer is scheduled to expire on March 8, though it could extend the offer.
Wyndham said its board is reviewing the offer and will give a recommendation to its shareholders within 10 days. It said Choice’s offer looks to be unchanged from one it previously rejected, citing issues of antitrust approval and undervaluation of Wyndham.
Cabin Crews Are Getting Antsy
Flight attendants at Southwest Airlines overwhelmingly rejected a new contract over the weekend. It was the latest move in what has been mounting tensions between cabin crews and U.S. carriers, and it could lead to the industry’s first labor action in more than a decade.
The agreement that Southwest’s nearly 19,000 flight attendants rejected included pay increases of 36% over five years and other quality of life improvements. The offer clearly was not enough: 64% of those who voted rejected the agreement.
Cabin crew unions at Alaska Airlines, American Airlines, Spirit Airlines, and United Airlines are all in active contract negotiations. American flight attendants have gone as far as to authorize a potential strike.
Labor is having a moment in the U.S. Strikes have been successful in a number of high profile industries from the big auto manufacturers to actors and screenwriters in Hollywood. And the threat of strikes helped freight railroad employees reach long-sought deals. Organizing campaigns have succeeded at historically non-union companies like Starbucks.
“People, they’re furious,” said Sara Nelson, president of the largest flight attendants union, the Association of Flight Attendants. “They’re furious that they haven’t been recognized, and their demands are very high.”
For Southwest crews, one area of disagreement concerns boarding pay. Almost all U.S. flight attendants are paid only when an aircraft door is closed, rather than during the boarding and deplaning process. Delta Air Lines is the sole U.S. carrier that pays cabin crew for boarding, a policy it added last year amid a drive to unionize (the airline’s cabin crew is currently not unionized).
In addition to the ground pay issue, another issue concerns the work rules that govern when flights are delayed and canceled, said Embry-Riddle Professor Blaise Waguespack. This was top of mind for many Southwest crews following the airline’s meltdown last December when it “lost” many of its pilots and flight attendants.
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Skift Travel 200: Top Movers
Wyndham shares were lower on the day, sliding 1.3% after Choice took its takeover offer directly to shareholders.
Source: The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. Go to the Skift Travel 200. Stock data as of market close.