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Wyndham (WYN) Enters into Strategic Partnership with Veeve

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Shares of hotel company Wyndham Worldwide Corporation had been underperforming the Zacks categorized Hotels & Motels industry by recording a decline of 12.8% from the beginning of year to Oct 26, while the industry grew 4.7%.

However, Wyndham’s better-than-expected third-quarter results, declared on Oct 26, changed the scenario. After the earnings release, shares of the company outperformed the industry by recording growth of 16.8% till today, compared with the industry’s growth of 14.7%.

On Dec 1, Wyndham’s Hotel Group announced the acquisition of Latin America's leading Fen Hotels. With the purchase, Wyndham is poised to leverage Latin America’s upsurge in accommodation demand as the acquired company has 22 existing hotels in six countries and a strong developmental pipeline throughout the region.

Recently, Wyndham announced another move that has the potential to impact its performance further – Wyndham Vacation Rentals’ strategic partnership with Unique Ventures (Veeve).

Per the terms of the partnership, Wyndham Vacation Rentals UK will aid the expansion of Veeve's portfolio in London as well as globally. The financial details of the deal, however, have been kept under wraps.

The market leader in upscale rentals designed for short stays, Veeve owns a portfolio of above 1,000 homes across London. The company assists home owners in marketing, reservations, property management, and housekeeping, and connects these houses to the prospective guests.

Wyndham Vacation Rentals – part of Wyndham Destination Network and one of Wyndham Worldwide’s three business segments – encompasses a portfolio of 40,000 units to rent across the U.K. and Europe. This is included in its 108,000 vacation rental properties portfolio spanning across 600 destinations worldwide.

However, economic/political conditions in Europe are expected to be further challenging after U.K.’s exit from the 28-member economic bloc. Business in Europe is clouded by the economic uncertainties in the northern region and deflation in the Eurozone which is hurting other hoteliers like Marriott International, Inc. (MAR - Free Report) , Hyatt Hotels Corporation (H - Free Report) and Hilton Worldwide Holdings, Inc. (HLT - Free Report) .

Thus, it remains to be seen how this expansion impacts Wyndham in the near future as the company plans on generating more bookings and expand beyond this region.

Wyndham Worldwide currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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