Wanda checks in with Marriott model but will shareholders buy its asset-light approach?
Move to boost Hong Kong-listed Wanda Hotel Development’s flagging share price
But history suggests this yields mixed results.
In a meeting on December 8, shareholders of Wanda Hotel Development will vote on the proposed acquisition of the entire equity interest in Wanda Hotel Management, a company controlled by Wang Jianlin involved in hotel management, including hotel operations management, hotel franchising under the Wanda Hotels brand and consultancy services to other hotel owners, according to a Wanda Hotel Development circular to shareholders.
According to the circular, Wanda Hotel Management has more than 60 hotels in operation, including those in Beijing, Shanghai, Chengdu, Sanya and Nanjing. It has also been contracted to manage more than 15 additional hotels that are currently under construction and owned by independent third parties, as well as 20 hotels under sale to R&F Properties and Sunac Real Estate that are under construction.
In July, Wanda Group sold 77 hotels to developer R&F Properties for 19.9 billion yuan (US$3 billion), and 91 per cent equity in 13 cultural tourism projects to Sunac China for 43.84 billion yuan. Wanda Hotel Management will continue to manage 54 hotels owned by R&F for 19 years, after which it has the priority to renew management contracts for a further 19 years. It will continue to manage 25 hotels owned by Sunac for 20 years, after which it can renew contracts for another five years.