A veteran of the lodging industry with more than 23 years of experience, Jim Alderman joined Wyndham Hotel Group in February 2009. He is responsible for the global growth of the Wyndham Hotels and Resorts brand as well as the growth of the company’s brands outside North America.
HTR Magazine: What is the impact of the worldwide economic downturn on your results?J.A.: We have assembled a new team throughout the entire organization from Eric Danziger, as a CEO, to executives formerly of Starwood Hotels, Marriott International or myself coming from Starwood Capital and Starwood Hotels. What we have done is to put a team together who can do both managed and franchised projects worldwide.Jim Alderman: Obviously the crisis is global and impacts all hotel companies significantly. But I would say that companies that do not have a very heavy luxury offering in their portfolio are less impacted. And we are one of these companies. As the largest franchise hotel company in the world and with an offering of 11 brands from budget and economy to upper upscale segments, we are a little more resilient than the overall market.HTR: Do you fear that some of your owners could encounter financial difficulties because of the crisis?J.A.: We are seeing more difficulties now than we have seen in the past. Every hotel company, every business that relies heavily upon real estate ownership is experiencing more stress. But with lower interest rates, the debt service is not what it was. Fortunately in this downturn, owners are able to withstand a little more than they would if interest rates were higher. The slump in activity does cause stress, but it is not magnified by the significant level of debt across the board. We are working with owners who may be in a stressful situation with their banks or trying to get refinanced. But it also creates enormous opportunity for us. Indeed, some owners with properties in the 4 and 5-star segment may be in an unfortunate situation and have to give up their current affiliation, some others are in the process of giving back their properties to their creditors and these institutions may be looking for branding solutions.HTR: Could your group benefit from this crisis, in the end?J.A.: What this downturn really portrays is that overtime Wyndham Worldwide has built up a solid portfolio of brands. So we have a roof for everybody, we have a room in every segment. We have “new construction only” brands, but nine of our brands are dedicated to converted hotels. We have the right brands for the right owners, the right properties and the right locations.HTR: Regarding this portfolio, this year your group bought Microtel Inns and Hawthorn Suites from Global Hyatt. How do you justify this external growth?J.A.: There was an exceptional opportunity to acquire two really pure brands to complement our portfolio. In order to have the right brands for any potential property across the world, we really needed an extended stay product. And now we have it with Hawthorn Suites. Microtel is an offering that is economical to build almost anywhere. Microtel is a 100% new construction brand that has been ranked “highest in guest satisfaction among economy/budget hotel chains” by JD Power & Associates for seven years in a row.HTR: Could Microtel be in competition with some of your other economy brands? Are you satisfied with the positioning and segmentation of your 11 brands?J.A.: Our brands are well segmented. Of course, with any broad offering such as ours, there is potential cross over. But Microtel is still in a high growth phase of his life whereas some of our other brands competing for the same RevPAR are more in an optimization phase. Super 8 and Days Inn are gigantic, global brands. They will continue to add the right properties in a meaningful way and rationalize their portfolio, removing properties that are no longer the right products in the right locations. Super 8, Days Inn and Microtel don’t compete for the same consumer. Microtel is a really special brand. It is consumer focused, innovative. It is not really an urban brand at this point in time. Because it is a 100% new build brand, it is still generally more in suburban markets. We believe Microtel can go everywhere but it will remain a 100% new build brand.HTR: What are the priorities for your different brands?J. A.: Super 8, Days Inns and Knights Inn are dominant players in their own space. We want to make sure that they continue to grow and we continually assess the portfolio to make sure that we always present the best properties for our guests and the best opportunities for our owners. Obviously it would be very difficult to quadruple the size of Days Inn or Super 8, but we see the opportunity to double, triple or even quadruple the size of our Wyndham, Wingate, Baymont and Hawthorn brands. There are over a thousand locations where we can put Wyndham Hotels and Wyndham Grand around the globe and we fully intend to pursue our strategy to get as many locations as possible. Wingate continues to be a new growth brand and we can add lot of hotels domestically, in Latin America and potentially throughout the world as well. For Baymont, originally a new built, but largely a conversion brand right now, there are many opportunities as well. And then we have some world class core iconic brands that need to be reinvigorated. We are getting back to the core value offerings of Ramada, Howard Johnson and Travelodge and rationalize the portfolio of these brands. Do you remember how iconic Howard Johnson used to be in the US? They were everywhere, easily signified by their orange roof, their restaurants. We have gone away from that in the last ten or fifteen years. We feel it is time to really reinvigorate Howard Johnson and Ramada to take them back to the solid 3-star brand offering that they are and still need to be.HTR : Wyndham Hotel Group expressed the strong desire to become more and more international. What are the brands that you would like to develop on a worldwide basis?J.A.: Wyndham Worldwide is a global company. We have very professional development teams with offices across the globe, throughout Europe, the Middle East and in Asia Pacific. Wyndham, Ramada, Super 8, Days Inn, Howard Johnson, Hawthorn Suites and Microtel are really the brands that we are growing internationally. We just opened ten Microtels in the Philippines. We have several other hotels in Latin America. We are definitely looking at growing Microtel everywhere. China and India will both be focus markets for this brand. {{HTR: Do you also see opportunities in a more mature market like Western Europe where the competition is quite strong?J.A.: You are right, the competition is quite strong in Europe. But we do see an opportunity to grow Microtel and Hawthorn Suites in those markets. We see opportunities for Super 8 as well, because the brand is not as big in those markets. The issue right now in Western Europe will be financing for new constructions. Europe will probably see many more conversions than new build developments.HTR: Ramada’s portfolio is already important in Europe with more than 160 hotels. Do you plan to go forward with this brand in this region?J.A.: We continue to have big plans for Ramada. We are short of where I want to be in France and Spain, two of the largest markets in Europe, and we have asked our development staff to concentrate on those markets. We have one hotel in Paris that is doing extremely well with a lot of business that we address from our reservation system. In the UK and in Germany, results are also very good. We want to sell that story to other property owners throughout Southern Europe in particular and Europe overall.HTR: You are the largest hotel franchisor in the world. Why do you maintain a strategy of management contracts for Wyndham Hotels?J.A.: We really concentrate on expanding the Wyndham portfolio in management contracts throughout EMEA and Asia. And in the United States, Latin America and Caribbean, Wyndham-managed hotels are as much as a priority as continuing to grow our franchised brands. Wyndham was originally strictly a management company and we want to continue this strategy to be able to offer a broad range of solutions. There are plenty of private, institutional and even public owners that want to maintain just one relationship and don’t want to have two different partnerships with a franchise company and a third party management company. Moreover we want to let people know that we are a hotel company, not just a franchisor. We are not just somebody selling a franchise system. We are also hotel operators. We know exactly what the owners are experiencing in a market because we are operating in this market as well. {{ HTR: Your group is not very present on the upper upscale segment. Would you like to further develop the Wyndham Grand Collection?J.A.: It is an interesting question. I followed the Wyndham Grand London Chelsea Harbour, which was formerly a Conrad Hotel, closely. This hotel is performing magnificently, better than it was before. It is currently undergoing refurbishment to position it as one of the finest hotels in London. That’s an example of where we want to go. We are going to stay away from the luxury segment as defined by exorbitant costs and exorbitant operational infrastructures. But the upper upscale segment is something where Wyndham is going to be positioned. In Europe we would like to continue to grow the relationship with Corinthia. And we are willing to invest in certain situations. We are not going to be in the real estate ownership business, but we are willing to “put some skin in the game” in order to grow the portfolio worldwide and domestically.HTR: With a new CEO and a new board of directors, is your organization better prepared for the future challenges?