Spirit Rejects Frontier and Continues JetBlue Talks

Good morning from Skift. It’s Thursday, July 28 in New York City. Here’s what you need to know about the business of travel today.

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Episode Notes

Spirit Airlines announced on Wednesday that the company’s shareholders voted to end its planned merger with Frontier Airlines. That stunning move paves the way for Spirit to accept JetBlue Airways’ offer for the Florida-based airline, reports Editorial Assistant Rashaad Jorden.

Spirit and Frontier agreed this February to merge in a deal valued at the time at $6.6 billion, including debt and liabilities, that would have created the fifth largest airline in the U.S. However, JetBlue put forth an unsolicited offer in April to buy Spirit, with JetBlue CEO Robin Hayes arguing that a JetBlue-Spirit combination was necessary to create a competitor to the four largest U.S. airlines. A JetBlue-Spirit deal would also create the U.S.’ fifth-largest airline. JetBlue has since sweetened its bid for Spirit three times, with its latest all-cash offer being valued at close to $3.8 billion.

Spirit CEO Ted Christie expressed disappointment about Spirit terminating its merger agreement with Frontier, a deal he had repeatedly backed. But he said his company’s board of directors would continue negotiating with JetBlue.

We head to Colombia next. The country’s booming tourism industry is set for a major transformation under its incoming government — the most diverse in Colombia’s history, reports Editor-at-Large Lebawit Lily Girma.

Girma writes Colombia’s tourism industry could become the model for inclusivity, equity and sustainability in Latin America. Incoming President Gustavo Petro, who assumes office on August 7, and the rest of the country’s new government — which features members of the Afro-Colombian and Indigenous communities in prominent roles — aim to use tourism as a vehicle for peace and economic equality. Colombian travel executives are hopeful the incoming government will help local communities reap the benefits of tourism. Rodrigo Atuesta, the CEO of Colombian-based tour company Impulse Travel, said he’s never seen so much optimism before about the country’s tourism industry.

Finally, hotel companies have historically focused on filling as many rooms as possible, but Wyndham Hotels & Resorts has instead opted to charge the highest rates possible. That strategy is paying off significantly for the company, reports Senior Hospitality Editor Sean O’Neill.

Wyndham reported, in its second-quarter earnings call on Wednesday, that the company’s U.S. revenue per available room — a key hotel industry metric — surpassed pre-Covid levels by 9 percent. That’s a pandemic-era first for the company. O’Neill writes that Wyndham’s decision to increase room rates drove its successful quarter. The company’s second-quarter average daily rate was 17 percent higher than pre-pandemic levels.

Wyndham generated $92 million of net profit during the second quarter.