Why Airbnb is selling off its core business
Airbnb is on the verge of making a $500 million acquisition of the Boston hotel chain Wyndham, according to two people familiar with the matter.
Airbnb is expected to buy Wyndhampshire, a hotel chain with more than 3,000 properties, for $250 million.
The deal would help Airbnb and Wyndhas deal with the fallout from the recent deadly terror attack in Paris, the people said.
Airbnb had about 500,000 active listings and Wyldham had more than 4,000.
Airbnb has been looking for a buyer for the last year, people familiar who asked not to be identified because the matter is private said.
Wyndhems business has been hit hard by the terrorist attacks in Paris and San Bernardino, Calif., as well as the rise of rival sites like Airbnb.
Airbnb, which has about 200,000 listings, has struggled to get people to stay at its properties, and many of its hotel guests have complained about long wait times and high rents.
Wyldhems has struggled with lower-than-expected occupancy numbers, a declining business and an exodus of potential guests.
Wyrdham is the second major hotel chain to be sold this year.
Hilton Worldwide Group Inc. said last week that it was closing its hotel unit, which had more 6,500 hotel rooms.
The company also said it was winding down its luxury hotel business, which includes luxury hotels in New York and San Francisco, and was focusing on its “breathtaking” hotel properties in the United Kingdom.
Airbnb’s acquisition would give the company an operating base in several cities and add about 2,000 new hotel rooms, the sources said.
The sale would make Airbnb and the Wyndheims biggest hotel unit a standalone entity, the two people said, speaking on condition of anonymity because the deal was not public.
Wyngham has struggled in recent years, with the company filing for bankruptcy in 2011.
The firm said in a bankruptcy filing in February that it had lost $1 billion in 2015 and that it “remains deeply focused on providing the most consistent and consistent service and experience in the industry.”
WyndHampshire has been in bankruptcy court since 2013 and was recently acquired by private equity firm Blackstone Group Inc., which is based in London.
Airbnb bought Wyndhavers business in 2012 for $1.7 billion.
Airbnb said in March that it planned to add more than 500,00 hotel rooms to its network, and that Wyndhare would be the second-largest hotel chain in the U.S. The Boston-based hotel chain has about 1,500 hotels in 26 cities.
Airbnb did not respond to requests for comment.
Airbnb and other travelers have complained of poor quality and unreliable services on many of the Wyldhamphire properties.
Airbnb recently launched a “sharing economy” for people to rent out their rooms, and Wyrdhems owners have been forced to scramble to find alternative lodging to accommodate tourists.
Airbnb operates an online booking platform called Airbnb Connect, which allows people to book their rooms with one click.
Wythhems had also been facing criticism for its low occupancy rate, especially for hotel guests, as well the low number of hotel rooms available for people who want to stay longer than 30 days.
Airbnb was the subject of a class-action lawsuit in 2015 that accused the company of “discrimination, intentional infliction of emotional distress, intentional denial of an individual’s constitutional rights and violations of the Fair Housing Act,” according to court documents.
Airbnb declined to comment on the pending sale.
Wyldeys chief executive, Dan Ozzi, has said the company wants to keep Wyndhapres hotels “as safe, clean and inviting” as possible, adding that the company is committed to working with all communities to make Wyndhill hotels “more welcoming, safe and accessible.”
The Wyndhaus hotel chain operates in more than 60 countries.
Airbnb currently has about 400,000 rooms on its platform, the People for the Ethical Treatment of Animals, which sued Wyndhoe as part of a broader class-actions lawsuit.
The suit seeks class-wide injunctions that would prevent Airbnb from continuing to discriminate against Wyndholme owners in any way.
Airbnb also has said it has “committed to a fair and transparent, non-discriminatory, and non-uniform” housing inventory system.
Airbnb added that it has been working to build an inventory of hotels in its core cities.
Wyntheme’s property portfolio includes more than 2,500 properties, according the People’s Group.
The Wyldehs business includes more hotel properties, which are listed on Airbnb and many other sites.
Airbnb already has its own property inventory system, which it announced in July, that helps it gauge the quality of properties on its network and is used by many other companies.
Airbnb owns or manages about 20 percent of Wyndhall, which is owned by a group of