Las Vegas –
Addressing the 6,000-plus attendees at the 2015 Wyndham Hotel Group Global
Conference here late last month, president and CEO Geoff Ballotti cited the company's
strong 2014 performance but stressed the importance of continued revenue growth,
along with the need for increased unit growth and improved brand
differentiation.
High on the list of revenue streams Ballotti is counting on
for growth is the managed travel sector, which works with global accounts on
chainwide discounts, as well as property-specific negotiated rates based on
volume projections.
With more than 7,600 mostly franchised hotels across 15
brands in 70 countries, Parsippany, N.J.-based Wyndham already is a major
player on the global hospitality stage. Unlike such multibrand competitors as Marriott
International and Hilton Worldwide, however, Wyndham's portfolio is heavily
concentrated in the economy and midscale tiers. Marriott and Hilton have Fairfield
and Hampton, respectively, but they also have Ritz-Carlton and Waldorf Astoria.
Granted, Wyndham also has upscale Wyndham Hotels & Resorts (and its upper
upscale Wyndham Grand line extension), but they represent a small percentage of
the whole.
Better known in its portfolio are legacy brands with
significant distribution like Ramada, Days Inn and Super 8. They're stalwarts,
along with such newer economy/midscale entrants as Wingate, Microtel, Hawthorn
Suites and Tryp, all of which carry the "by Wyndham" sub-brand to tie
them to the better-known Wyndham name. The most recent addition came in
February when Dolce Hotels & Resorts joined Wyndham.
"We know we have work to do when it comes to brand
differentiation. Too many travelers, both leisure and business, aren't clear
how many of the brands differ from one another," Ballotti said at a press
event at the conference.
With the overall lodging industry in the midst of a strong
rebound, corporate travel managers faced significant rate increases as they put
together their 2015 preferred hotel programs. As a result, the Wyndham Hotel
Group captured more business from existing and new accounts as travel managers
started "trading down" in search of better deals, according to executive
vice president of global sales Ross Hosking.
"In addition, travel managers are more likely to be
looking at the total cost of a stay today, rather than simply the [average
daily rate]. That also plays to our advantage because so many of our brands'
brand standards include value-adds like complimentary breakfast and
complimentary Wi-Fi," Hosking told BTN.
He doesn't like to think in terms of a seller's or buyer's
market. "We always try to strike a balance between what's good for the
corporate account and what's fair for the hotel. Travel managers are hardly
giving in to the suppliers. In our experience, they're working as hard as they
ever have, aggressively pursuing cost savings," he said.
But the numbers speak for themselves. For 2015, most of
Wyndham Hotel Group's corporate accounts saw rates rise on average north of 3
percent. Owing partly to downtrading, business travel revenue through the group's
managed accounts in 2014 increased 16 percent to 18 percent year over year.
The availability of chainwide discounts is one reason for
the spike in revenue. "In destinations where it doesn't make sense for
travel managers to issue an RFP because they don't have enough room nights in
that market to warrant it, there's the option of the chainwide discount,"
Hosking said.
Last-room availability still is of interest to many travel
managers, but the concept is less relevant at the economy and midscale industry
tiers, Hosking pointed out, where there typically is just one room type.
Accordingly, travelers can book run-of-the-house without an LRA provision.
Contractual compliance also is less of an issue with
chainwide deals because there are no volume commitments. "We understand
that it's harder for travel managers to come up with accurate numbers," Hosking
said. "In fact, the reports we generate are helpful when it comes to
forecasting because they give travel managers a picture of where their people
are staying. So we don't get into those types of conversations. Instead, we're
more likely to focus on the account's general travel trends."
Compliance overall is less contentious than it was in years
past. "We're doing a better job of tracking room night production, thanks
to the more sophisticated technology at our command," he said. "But
we still see it as a joint responsibility between us and the customer."
Travel managers today actually tend to be laser-focused on not overpromising, Hosking continued. "Of course, there are some who just want to get the coverage they need. But they're in the minority. At the end of the day, it's both of our jobs to stay on top of any negative numbers.