What has Wyndham done right in China to sign five hotels every two weeks?

There is an international hotel brand that, after entering China: Under its franchise model, signed nearly 600 hotels in just five years—equivalent to an average of five hotels every two weeks. Recently, Wyndham Hotels & Resorts announced a major milestone in the Chinese market: it has successfully secured nearly 600 direct franchise projects within five years. This marks a breakthrough in its direct franchise operations in China since 2019. Although the long-term positive trend of China’s hotel industry remains unchanged, the hospitality and travel market has grown increasingly complex and volatile. More and more hotel investors now require a systematic, professional, and battle-tested management and operational approach to quickly adapt to market shifts. Company-owned operations, managed operations, and franchising are the three most common global hotel expansion models. In recent years, franchising—often described as “achieving big results with small investments”—has been frequently discussed and is gradually becoming the preferred expansion method for international hotel groups in China. Notably, Wyndham Hotels & Resorts, which respects local differences while adhering to international standards, will soon showcase its franchise model’s strong market adaptability and growth potential at the 2024 Hotel Investment & Hotel Industry Series Exhibition in Shanghai. 01 Who Is Doubling Down on Franchising? As China’s hospitality and travel market continues its gradual recovery, international hotel groups—including Wyndham, Marriott, Hilton, and IHG—are aggressively expanding their footprints in hopes of capturing greater market share. Franchising is viewed as a key tool for rapid expansion under lower cost constraints—making it ideal for such aggressive market capture. Today, franchising is receiving heightened attention; in fact, for some hotel groups, the number of franchised hotels has already surpassed that of managed hotels. For example, Marriott currently offers franchising across 12 of its brands in China—accounting for 50% of its total operating brands there. Among its new openings in 2024, over 60% are franchised hotels—the first time franchised properties have outnumbered managed ones. It is clear that, as China’s hotel market matures and stabilizes, international hotel groups’ franchising strategies in China are shifting from sporadic experiments to large-scale deployment—and are even being regarded as the future direction. Franchising—a model proven successful in mature markets like Europe and the U.S.—has long operated in reverse in China (i.e., lagged behind other models). This gap is precisely what has driven international hotel groups’ recent large-scale adoption of franchising in China. Moreover, as growth opportunities and traffic dividends in Tier-1 and Tier-2 cities hit bottlenecks, franchising’s controllable operating costs make it a “must-have” option for international hotel groups seeking rapid expansion and deeper penetration into lower-tier markets. According to Lei Wang, Chief Development Officer for Greater China at Wyndham Hotels & Resorts, lower-tier markets represent an opportunity—and a blue ocean—for future hotel development. Franchising may well become a new trend in China’s hotel industry. Currently, Wyndham operates nearly 1,600 hotels across Greater China, with only 20% located in Tier-1 cities and the remaining 80% in Tier-2 and other cities. For international hotel brands, researching and promoting a franchising model tailored to the Chinese market is imperative. Notably, since 2014, Sino-foreign “hybrid” franchised brands—such as Accor’s partnership with Huazhu and Hilton’s collaboration with Jinjiang—have steadily grown in strength. Meanwhile, IHG’s “franchise-plus” model—offering hands-on support (“helping onto the horse and seeing off on the journey”)—also exemplifies evolving approaches.

Stock splits do indeed boost stock prices—but not for the reason you think.

The stock price increase following a split reflects correlation—not causation. Stock splits are experiencing a resurgence, and markets are swiftly rewarding companies that announce them. Alphabet (Google’s parent company), Amazon, Tesla, and GameStop are among the latest batch of firms seeking shareholder approval for stock splits—each enjoying a post-announcement stock price rise. Beyond increasing the number of shares outstanding, a stock split changes nothing fundamental—making the subsequent price surge puzzling, especially for those who subscribe to the efficient-market hypothesis. Ultimately, market enthusiasm stems less from the split itself and more from the signal it sends: that the company is likely to succeed. Companies tend to pursue splits when their stock prices have recently surged significantly—and stocks exhibiting positive momentum typically continue rising. “Stock splits themselves neither create nor destroy any value,” says Christopher Harvey, Head of Equity Strategy at Wells Fargo Securities. “Stocks undergoing splits usually exhibit positive price momentum, reflect strong overall company health, and show improving fundamentals. That’s what the market truly focuses on—and splits tend to occur precisely under such conditions.” In other words, the relationship between stock splits and price increases reflects correlation—not causation. But the numbers speak volumes: According to Bank of America Securities researchers, since 1980, stocks in the S&P 500 that announced splits have, on average, outperformed the index by 16 percentage points over the following 12 months. In recent years, major tech firms—including Apple, Nvidia (NVDA), and Tesla—have all announced splits. While these companies boast high share prices, lesser-known names—including Sherwin-Williams (SHW), Amphenol (APH), and McCormick (MKC)—have also joined the list. Dow Jones Market Data shows that, on average, roughly 20 U.S. publicly traded companies execute stock splits annually over the past decade. The true golden age of stock splits was the late 1990s tech bubble. From 1997 to 2000, an average of 65 U.S. companies executed splits each year as the stock market peaked. Split activity rebounded again in the years leading up to the global financial crisis—and once more toward the end of another bull market. Today, the median share price of S&P 500 constituents stands at approximately $118. Yet several companies trade far above this level—and may thus be candidates for splits. The most expensive U.S. stock is Berkshire Hathaway’s Class A shares (BRK.A), which have never been split and recently traded at $517,000 per share—with only a few thousand shares changing hands daily. Warren Buffett may never split these shares—but investors have another option: Berkshire’s Class B shares, equivalent to 1/1,500th of a Class A share—or roughly $350 recently.

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