Oakwood postpones sale of agency business to Dwellworks

George Sell George Sell Uploaded 26 March 2020

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US/Singapore: Oakwood has postponed the sale of its global solutions business to Dwellworks and is suspending new bookings through its agency arm.

The sale of the agency business has been in the pipeline but has been put on hold due to current market conditions. Oakwood continues to operate more than 80 properties worldwide, and is committed to growing its management portfolio.

In an open letter to partners, CEO Dean Schreiber said: "The impact on the global travel and hospitality industries caused by COVID-19 is unprecedented and devastating. It’s forcing business leaders to make difficult decisions to protect their employees’ health and safety, as well as their companies’ financial position. In turn, the threat to businesses is straining the global financial markets. Unfortunately, our business is not immune to these challenges. The situation is fluid and likely to get worse. So, we are moving quickly and taking significant measures in response to substantial declines in demand."

He continued: "Let me begin with an update on the previously announced sale of our global solutions business that you may have heard about. For the past several weeks, we’ve been in talks with Dwellworks and working out the details of an acquisition of our global solutions business. Dwellworks and Oakwood signed a letter of intent; however, due to these unprecedented circumstances, the two companies have agreed to pause talks to reach a final agreement. It’s a disappointing decision for both companies, as we are still aligned in our values and a shared vision for the future. But we are in agreement that we cannot move forward at this time due to current market conditions."

Oakwood has also decided to suspend operations of its global solutions business. "This means, until further notice, we will no longer offer a ‘total solutions’, end-to-end housing option to our clients. Our epic platform, and the ability to source housing options from our supply chain, will be taken offline and we will no longer administer housing programs through our technology platform," said Schreiber.

After Friday March 27 the company will no longer accept new sourcing requests for bookings into its global supply chain channel. All sourcing requests for the global supply chain currently in-process will continue to be sourced, and reservations confirmed through March 31, 2020. Lease extensions after March 31, 2020 will be subject to availability, and all existing reservations and in-house guests will continue to be serviced by Oakwood for the duration of their reservation.

"Given the uncertain effect and duration of the suspension, we may also provide written notice to some customers to terminate our Global Housing Services Agreements over the coming week," said Schreiber. "Throughout this transition, it is our goal to do everything we can to minimise the disruption to our clients and guests. Oakwood will honour and continue to manage all booked and in-house reservations. We are also taking actions to assist with the transition of this business to another provider. Our Oakwood and ExecuStay franchisees are available to service your business."

"Taking action now will ensure that we are in a better position to take care of our clients, guests and employees in the future," he concluded.

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