Wyndham International
Moves Into Manhattan

Wyndham International Inc. ended a dispute that has kept the company out of Manhattan -- one of the biggest hotel markets in the world -- for three decades by buying the ground lease to the Wyndham Hotel. The company will now look to lure existing hotels to its flag and will renovate the 1920s-era hotel.

Wyndham, which bought the lease from Suzanne Mados, who with her late husband John has run the hotel since buying the lease from the late hotelier Harry Helmsley in 1966, can now put its brand on hotels in Manhattan for the first time and market its other New York hotels without restrictions. Financial details weren't disclosed.

It also lands Wyndham its first Manhattan hotel, and it's a prime spot -- across 58th Street from the Plaza hotel. The Wyndham Hotel in Manhattan has 136 guestrooms, half of which are suites.

Ms. Mados wasn't available for comment.

The dispute started after Dallas-based Wyndham International was created in 1981 and tried to trademark the Wyndham name. The Wyndham Manhattan opened in 1929. When the company challenged the Madoses on the name in the early 1990s, the dispute ended up in court. The two sides settled in 1998, with Wyndham International barred from putting its brands in Manhattan. The settlement also placed heavy marketing restrictions on the company's properties in nine New York counties.

Those restrictions forced the company to list its New York hotels on their own Web site, instead of Wyndham.com, and all materials mentioning the hotels had to say "not affiliated with the Wyndham Manhattan" in a type size exactly half that of the largest logo.

Fred J. Kleisner, Wyndham's chairman and chief executive, says that by the time he arrived at the company five years ago, there was bitterness because of the lawsuit and settlement. "For those who preceded me, perhaps there was bad blood," he says. But Mr. Kleisner, a former managing director of the Waldorf-Astoria, knew Mr. Mados from his years as a New York hotelier. That eased the tension between the company and the Madoses.

Mr. Kleisner says Wyndham will aggressively seek to lure independent and branded hotels in Manhattan to its flag. "My interest is having a major hotel in Manhattan within the next six months," he says. The company will immediately begin updating the Wyndham Hotel in Manhattan.

Wyndham has been hobbled for years by large debt and has been selling off assets to reduce debt and reposition itself to grow by franchising, which is how most large hotel companies grow their brands.

Last week, it sold four hotels to Highland Hospitality Corp. for $227 million. Wyndham has 135 hotels with its Wyndham or Summerfield Suites brand names, and it owns 60 of those hotels. It also owns 14 hotels with other brand names. Mr. Kleisner says the company will sell 13 of the non-Wyndham hotels and 20 Wyndham-branded hotels in the next 18 months to reduce debt to a manageable level.

The move into Manhattan is essential for a hotel company with national growth ambitions. "Manhattan as a market has been especially strong this year," says Bill Crow, an analyst with Raymond James & Associates in St. Petersburg, Fla. "It's the hub of business travel. If you want to be at least a true U.S. brand, if not global brand, you would want to have a beachhead in New York."

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