Born last year out of the breakup of the multifaceted Cendant group, Wyndham Worldwide relies on the prestige of its leading brand Wyndham and the dynamism of its brands Ramada, Days Inn, Howard Johnson and Super 8 to accelerate its international growth. A specialist in franchising, Wyndham is diversifying its development methods by adopting management contracts.
{{HTR Magazine: What is the perimeter of the hotel group Wyndham Worldwide, which was spawned by the breakup of the conglomerate Cendant?O.D. :}} Our expertise in industrializing construction allows us to enter with elaborated products that are pleasant and extremely competitive in terms of cost.Olivier Dupont : }} Prior to 2006, Cendant operated in four areas, each of which gave rise to a different entity individually listed on the SSP500 at the NY stock exchange. We were present in automobile rental with Avis and Budget; in tourism distribution with GDSs such as Galileo, portals such as eBookers or Octopus, travel agencies… now part of Travelport; in real estate with networks such as Century 21, service companies and financing, which are now integrated into Realogy; and finally the tourism-accommodations pole with hotel brands, timeshare and vacation exchanges. On August 1, 2006, we became a “pure hospitality player”. Wyndham Worldwide is a smaller, but now more coherent, entity built around an accommodations business in its broader sense.{{HTR : Wyndham Worldwide itself is a diversified company…O.D. : }} It is, in fact, made up of three divisions: Wyndham Hotel Group, Group RCI and Wyndham Vacation Ownership. The first includes all the hotel brands, the second is the first worldwide vacation apartment exchange, and the third is the leading timeshare operator worldwide. If we count the number of hotels under franchise and management contracts, Wyndham Hotel Group is N°1 worldwide with its ten brands and more than 6 500 hotels.{{HTR : What you gained in coherence, didn't you lose in synergy by being structurally cut off from the distribution pole?O.D. : }} There is necessarily a historic relationship with the new Travelport and we have maintained a privileged collaboration. Travelport constitutes one of the primary night-producing partners in the same way as Travel Management Companies such as Amex, Carlson Wagonlit, BCD Travel....{{HTR : How have you benefited from this new business coherence?O.D. : }} Wyndham Worldwide is still a very young entity that is just over a year old, but today it is much easier to explain our business to our interlocutors and to express our desire for international expansion. Wyndham is now a hotelier known and recognized by investors. The best proof remains that we have been able to grow from fewer than 200 hotels outside the United States in 2005 to 430 today. The choice of Wyndham as the name is not by chance either. When Cendant bought the company, it found a prestigious brand with a very good image on the North American continent in the package. It was also a way to show that the group had reached a new dimension by going beyond its traditional franchise activity to offer a range of multiple services, including management contracts. Our visibility worldwide has improved considerably.{{HTR : Has the franchise culture inherited from Cendant changed?O.D. :}} The acquisition of Wyndham has allowed us to integrate a new specialty in hotel management, which we emphasize. In order to be more competitive internationally, we must open our economic model with management contracts, share acquisitions and why not existing hotel networks acquisitions.{{HTR : Which brands will benefit the most from this expansion of development methods?O.D. :}} We have reserved management contracts for upscale brands, Wyndham and its offshoots, and Ramada Plaza. This is how we invested in the Rio Mar de Puerto Rico in March 2007, which became a 600-room Wyndham Grand Resort. We took over the management of the ex-Conrad in London last June, renaming it the Wyndham Grand Chelsea Harbour, the first Wyndham in Europe. If we take the example of partnerships, we signed with the Gammon Group in India to develop and manage 38 Super 8 and Days Inn economy hotels. We entered another partnership to develop 40 Days Inns in the United Kingdom, which will double the inventory. Days Inn fully meets expectations on the European market in the 2-3 star concept. We are reinforcing the unfurling of the Super 8 network in Asia. It already includes 49 units that are operating and 67 that are under construction in China with another partner. Ramada has also undertaken development worldwide and Howard Johnson is taking a more opportunistic strategy in China as well as in South America. We are not adverse to management contracts for these brands, but it will only be in response to demand with no initiative on our behalf.{{HTR : Are you able to rival with the other hotel groups that are already present in the world?O.D. :}} Cendant’s decision to expand internationally dates from 2004 with the buyout of Marriott’s shares in Ramada. Our development depends on two regions where we have teams of developers and support with almost 40 persons: EMEA in London with Brice Marguet as the manager for Southern Europe and Asia-Pacific in Hong Kong with offices in India. It is our goal to accelerate a movement that has already begun, particularly with regional partnership like the one we created with the Maltese group Corinthia. These 15 hotels are being “rebranded” as Ramada Plaza or Wyndham, and we rely on Corinthia’s management skills to offer it to investors. Cendant signed a master franchise contract with a koweiti partner for the development of the Ramada brand in Morocco and five other countries in the Mediterranean. This is possible in other parts of the world. Although we are a “young” company, our international presence is far from being marginal thanks to the RCI Group, which manages the exchanges of 60,000 properties in 22 countries and is in permanent contact with major investors.{{HTR : What are Cendant’s goals?O.D. : }} We would like to develop a worldwide network rapidly for each brand in order to meet the needs of our clients who travel frequently and to meet the demand of countries that are experiencing strong growth in local demand but do not have a hotel network in line with international standards. This is the case for emerging countries, but there are also opportunities on more mature markets. For example in France 20% of the market is already franchised with two major actors in France, paradoxically what would appear to be an obstacle becomes an opportunity for us. Some regions have an appetite for new brands and new distribution networks. In the countries in Southern Europe, where a certain type of hotel is aging, we are able to participate in the valorization of heritage by contributing our savoir-faire prior to investing. Our two brands Days Inn and Ramada are already present in Europe with more than 160 hotels in the United Kingdom and Germany, the top two supply markets for France. They offer hoteliers an opportunity to open on European markets. To this may be added the notoriety of our brands on the two supply markets where we have the strongest presence: the USA with more than 6,000 hotels, and now China with 100.{{HTR : Will you accelerate on this continent in order to be present at the Olympic games in Beijing of the Shanghai Exposition?O.D. : }} Across all brands, since the end of December 2006 Wyndham Hotel Group has been the number one international hotel group in China with a hundred or so units operating under the Super 8, Days Inn, Howard Johnson and Ramada brands. The first Wyndham will open in 2008 in Xiamen.{{HTR : At a time when everyone is presenting new concepts to seduce investors and adapt to behavioral changes, how do you position yourselves?O.D. : }} We do not go and try to duplicate concepts made to fit American market standards in Europe, or anywhere else. The new Ramada Encore concept was launched in the United Kingdom and Switzerland four years ago, and we are unfurling it around the world right now. It is flourishing in the United Kingdom with 20 properties scheduled to open in the next 3 years and 25 others under construction in Central Europe. China will also welcome the product wide-scale. It is an excellent concept in the Limited service category at a reasonable price for the investor and it gives the client the impression he is in a hotel that belongs to a higher category because of the quality of its equipment. The bathroom in particular is a prefabricated concept made of glass including doors and walls with its floor integrated into the floor of the bathroom, which speeds up construction. In extreme cases, we have delivered Ramada Encore in less than a year. We were discreet until now with regard to communications since the network was not sufficiently developed, but with all the projects in the pipeline in France and Europe, this could change. As for super-economy hotels, we are currently completing the adaptation of the Super 8 concept to the more demanding European market. This new product will be along very soon.{{HTR : The hard budget segment is very competitive…O.D. :}} Our expertise in industrializing construction allows us to enter with elaborated products that are pleasant and extremely competitive in terms of cost.
United-States
