Hotel industry newcomer Anthony Berger last week became group president of the Cendant Hotel Group, a newly created position responsible for overseeing Cendant's Ramada and Howard Johnson brands. Berger joins the lodging industry from Kraft Foods, where he was general manager and vice president of sales. Earlier in his career, he held sales and marketing positions at Nabisco Food Service and Pepsi-Cola North America.
Berger is the latest in a series of high-profile hires by hotel companies from outside the travel industry. Larry Winston, for example, last month joined Carlson Hotels Worldwide as vice president of sales from International Paper Co.
(BTN, June 23). "Anybody who comes from outside the industry hopefully brings a combination of both new thinking and enhanced thinking to what's already in the marketplace," said Steve Rudnitsky, chairman and CEO of Cendant's hotel group, who joined the company himself last year, having previously worked at both Kraft and Pepsi-Cola.
In particular, Rudnitsky mentioned Berger's experience managing well-known brands. "Branding is absolutely crucial in today's market. We've got to have a brand proposition that includes a value proposition to our customers and franchisees," he said. "For each of our brands, this means constantly making sure we understand that brand's particular identity and the optimal way to market it to travel buyers, as well as others."
In another sense as well, Berger's prior history at Kraft and Nabisco should prove relevant: "Tony has thoughts on service, for example, which are valuable in light of his consumer packaged-goods experience," Rudnitsky said. "There's also commonality with the lodging industry, in working with large customers." In his new role, Berger reports directly to Rudnitsky.
Berger faces a challenge in the coming months since much of Ramada and Howard Johnson's inventory falls into the midprice with food and beverage category. "While midscale without F&B has been a strong segment of the business, midscale with F&B has been more challenged," Rudnitsky said. "The segment faces pressure from above with higher-end brands discounting and pressure from below with economy brands differentiating themselves with new amenities."
Berger also faces a challenge on the development front. "Industrywide, new construction definitely has slowed. Conversions have pretty much kept pace year over year, though last year was not a great year overall for the industry," Rudnitsky said. "Demand curves at this point simply haven't caught up with the supply curves. Until there's more demand out there for room nights, you're going to see a slower rate of conversion and particularly new construction."