On Wednesday, Sen. Elizabeth Warren (D-Mass.) issued a public letter to Lina Khan, chair of the Federal Trade Commission, expressing “concerns” over Choice Hotels International’s attempts to acquire Wyndham Hotels & Resorts in what Warren described as a “hostile takeover.”
Citing a December report from the New York Times, Warren wrote that the takeover would “create the largest branded hotel chain in the United States” and reduce competition among hospitality companies. This reduction, she continued, would “harm entrepreneur franchisees and lead to higher hotel rates for customers across the country.”
The two companies each control close to 500,000 hotel rooms nationwide, the majority of which are in the economy and midscale markets. “The dominance of Choice and Wyndham in these markets is not obvious to consumers, who interface with the companies’ large respective portfolios of hotel brands,” the letter claimed. As such, travelers who are unfamiliar with the parent companies behind each brand may “believe they are making a meaningful choice between competing hotels, when they are in fact owned by the same company.”
Should the acquisition go through, Choice would have 46 hotel brands in its portfolio and control what Wyndham estimates to be 57 percent of the national market for economy hotel franchises, creating what Warren described as “a monopoly that can hide in plain sight.”
With that in mind, she urged the FTC to “closely scrutinize” the bid and oppose the deal if it violates antitrust law.
Follow the Choice/Wyndham news here.