Marc Stanley
This year's hotel rate negotiation season promises to be an inimitable, wearisome one, according to Marc Stanley, Wyndham Hotel Group vice president of global sales in Europe, the Middle East and Africa. Speaking here with The Transnationallast month during the National Business Travel Association convention, Stanley said negotiations this fall will present corporate travel managers with various challenges specific to the down market and discussed tactics his team has used to secure and retain corporate accounts. A portion of the conversation follows.
What are the current trends leading into the 2010 hotel rate negotiation season?
Everyone is looking to consolidate in two ways: the number of preferred hotels in any given location and the number of hotel brands they want to work with. Wyndham Hotel Group, being an umbrella company, represents 11 brands so [corporate travel managers] see one person and do one RFP for 7,000 hotels. Yes, there is a juggle going on with regard to the business for individual hotels, but we are finding--certainly in Europe, the Middle East and Africa regions--growth in the number of solicitations and acceptances. We have an inside sales team, and they are telephone account managing, but field-based accounts are out there delivering a number of appointments and a number of RFPs, pre-solicitations, acceptances and increased revenue. We are the largest hotel group that no one has ever heard of. Under our new leadership with [president and CEO] Eric Danziger, our business model is changing to become more of a pure hotel company and moving more into management. In 2005, there was one global sales person outside of America and now I have 14 in the EMEA region. We have five in Asia-Pacific. As we grow in those international markets, we will be able to grow the teams that support the North American market. With the growth in my team, we are able to talk to more customers. Therefore, there will be more solicitations and more global-based accounts in EMEA that will be buying into North America or buying into the Asia-Pacific region.
What are you telling clients who are seeking to extend their 2009 contracts into 2010?
It will be case by case. We have gone to a lot of our accounts that want to extend contracts to see what new opportunities we can add. There is give and take. If we can extend the contract for some hotels and look at what other opportunities for other hotels we can bring into the program ... Everyone is working hard for their part of the pie. We want our part of the pie, and our customers know we want it, but it's consultative selling: It's a different game from selling freezers.
Have you had to alter current contracts because corporate clients are unable to fulfill their commitments?
We have had certain conversations like that, particularly where a rate has been quoted based on a significant number of room nights. If it was a rate quoted on 250 or 300 room nights, not so much, but where a customer has really pushed us for a rate, we have gone back and done a couple of renegotiations with the hotel itself. We rely on our hotels to sometimes tell us what room nights were delivered so we can have those meaningful conversations; otherwise you go in without the data, and you can't push. When a rate is offered to a company, it used to be "how many room nights have you got?" The rate would be based on that, and no one would necessarily monitor it if they were meeting their expected number of room nights in the first quarter. (We quoted a rate based on 1,000 room nights and in the first quarter 25 were delivered.) What is happening now is that hotels have the opportunity to extend the rate through 2010 or increase it by 1 percent or 2 percent, or decrease it by 1 percent or 2 percent, but if you do not come up to the expected room nights after the first quarter, we will have a review and we will start to pull the rate. We reserve the right to review the rate based on the room nights, and that's where the global sales relationship with the customer comes in because, ultimately, it's the hotels that set the rates, not necessarily the global sales director. We will go back and negotiate with the customer to say, "Look, you promised 1,000 and the first quarter you are up to 25. We have to move that rate." It is a relationship game and a partnership game through the good times and the bad times. The fact that they haven't come up to numbers, it's not just a matter of "Well, we are going to pull your rates up," but "Why haven't you come up to numbers? Has something changed in your own business? Or were you just spreading your preferred hotels too thinly?" It is more of a conversation, not necessarily that we are going to add $10 to a rate. Renegotiations take place, and review meetings take place. Hopefully, we all work well together so at the end of the recession we can come out with a better relationship.
How is the Middle East holding up for Wyndham?
The Middle East was the last market to falter over the past couple of months, but I was out in Dubai recently and the city was as busy as it always is and the market is holding up. (Dubai was the last to start to go, and it will probably be the first to come back.) We have two hotels open and operating in Dubai with a third on the way, and a very large 850-bedroom Ramada in Doha, Qatar, with other hotels on the way. Our expansion with 10 hotels in Saudi Arabia is quite solid, and we will continue to look at other investments and work with management companies and franchisees that can build our portfolio.
J.D. Power and Associates recently saidthat business travelers are not prone to being members of the Wyndham loyalty program, as they are for some of your competitors. Why do you think that is the case?
There are only 100 Wyndham hotels and 165 Wingate properties, so a fair amount of our products are geared more toward our leisure travelers. Ultimately, once [leisure travelers] have their [loyalty program] card in their pocket, they will be tempted to start using that for their business travel as well. It will hopefully guide them to the portfolio of products that we have. There is a big push internationally at the moment in regard to certain United Kingdom, German and Chinese markets as we bring in new partners. In Germany, the program has 40 million members--nearly half the population. There are a lot of U.S. retailers that have equivalent brands in the U.K. market, and it is a very fast-growing program in the EMEA region. We have added Asian airlines as well, because outbound travel for the U.S. and abroad is so much stronger now.