Wyndham Hotel Group, spurred by rapid international growth and development in the midprice, upscale and luxury tiers, is positioning itself to become a bigger force in the corporate travel market and already is reporting increased travel buyer interest as a result.
Wyndham manages or franchises more hotels than any other hotel company, and ranks behind only InterContinental Hotels Group in total hotel rooms
(BTN, June 25). Because its portfolio skews heavily toward the economy and budget tiers, however, it traditionally has not received the same attention from corporate buyers as other multibrand hotel companies, and its own leaders refer to the company as a "quiet giant." A number of acquisitions and agreements in recent years, however, have begun to change that, Wyndham executives said.
"If you look at our request-for-proposal penetration year over year, it's changed dramatically," said Sean Worker, Wyndham managing director and senior vice president of international operations. "The trend line is widening because they recognize that we have great distribution. It's opened up a lot of programs for us."
Although its brands—including the flagship brand, the midprice Ramada and Wingate by Wyndham brands and a host of such economy and budget brands as Days Inn and Super 8—are well-established, Wyndham still is young as a stand-alone company. It's only been two years since Cendant Corp. acquired the flagship Wyndham brand from The Blackstone Group
(BTNonline, Sept. 14, 2005), and little more than one year since Cendant spun off the company. The name change signified the firm's new upscale focus.
"One of our core strategies is to really actively promote the position of the Wyndham brand in an upscale arena as a key competitor to the likes of Marriott, Hilton and Starwood's products, which we've been aggressively doing," Wyndham president and CEO Steven Rudnitsky said.
An even bigger factor in Wyndham's growth as a corporate travel player, however, was the acquisition of Ramada International from Marriott International
(BTNonline, Sept. 15, 2004). Combined with recent international growth of its other brands, Wyndham has become an option for buyers seeking global hotel programs, Rudnitsky said. Prior to the Ramada International acquisition, Wyndham had less than 2 percent of its rooms outside of North America. Now more than 15 percent of its rooms are, and Wyndham expects that figure to reach 25 percent in coming years, he said.
Outside of North America, consistent midprice brands are a key area of growth for corporate travel business, Worker said. In addition, many buyers want to add midprice properties to their hotel program.
"Because we have such a strong base in midscale, they know us for that," Worker said. "There's been a huge gap in the market for a traveler who is a medium manager having a place that's affordable to stay in and is branded."
Wyndham's progress also has caught the attention of analysts. Harry Curtis, an analyst with JPMorgan's hotel and gaming segment, said last week in a research note that Wyndham "is becoming a more geographically diverse company" and that it "continues to make progress on its long-term strategic initiatives."
The company's global sales infrastructure has grown significantly in the past few years, Rudnitsky said, to cover all major cities and markets. In particular, Ramada operators and developers said Wyndham's push for business is increasing their number of corporate agreements.
"We've had double-digit room night growth," said Andreas Wiebezieck, vice president of sales and marketing for German developer Hospitality Alliance. "Ramada is really considered a brand for business travelers, and we're having our success going to the companies."
Prior to becoming a part of Wyndham, Ramada often had been lost in the marketing shuffle, he said. "It was never a big focus for Marriott, but with Wyndham, the spotlight is on Ramada. We get more specific marketing, and we have a loyalty program now. We never participated with Marriott Rewards," Wiebezieck said.
One of Wyndham's more recent initiatives has involved streamlining its internal RFP-solicitation process, which owners and developers said has boosted corporate interest. "The RFP process has become much quicker and much more effective, so hopefully we'll reap the benefits of that next year," said Calum Ross, regional director of United Kingdom-based Ramada Jarvis Hotels.
At the same time, Wyndham has become a player in the deluxe market through the launch of the Wyndham Grand Collection, which sprung from a joint-venture agreement with Corinthia Hotels International to manage its properties across Europe, the Middle East and Africa
(BTNonline, Aug. 30, 2006). "The joint venture has enabled us to obtain a lot of management capability very quickly in a market where we really want to protect our upscale brands," said Olivier Dupont, Wyndham's senior vice president of development for EMEA and Asia/Pacific.
Through that agreement, Corinthia also has refurbished and repositioned a number of its properties to Wyndham brands, such as the Corinthia Aquincum Hotel in Budapest, Hungary, which this year was rebranded as a Ramada Plaza, Corinthia CEO Tony Potter said. Corinthia also is developing Ramada properties in Tunis, Prague and Dubai, and Corinthia now is beginning to negotiate development of Wyndham properties.
"We've done a reasonable job of getting hotels up and running," Potter said. "I think we just got on the horse, and we're just learning to work together."
In the meantime, Wyndham has not turned its back on its economy brands, Rudnitsky said. The Days Inn, Super 8 and Travelodge brands remain Wyndham's core value proposition in North America and are still key components to Wyndham's strategic platform, he said.
As 70 percent of economy properties are unbranded in some international markets, Dupont said, quick development of Wyndham's brands overseas is crucial. Already, about 50 Days Inn properties operate in the United Kingdom and Ireland.
"We are working actively in markets like France, Spain and Italy, and we have extensive partnerships in the Middle East," Dupont said. "We have the brands, so it's just a matter of time before you see some pretty major advancements."
For more Q&A with Wyndham president and CEO Steven Rudnitsky, click here.[email protected]