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HB ON THE SCENE: Conference Report: WHG plans to democratize travel

LAS VEGAS—Wyndham Hotel Group (WHG) is banking on the democratization of travel—the idea that everyone is entitled to travel how they want to, when they want to, and be assured of a good experience, regardless of price point. That much was apparent at the company’s global conference, held here at the Mandalay Bay Resort and Casino last month.

Geoff Ballotti laid out the company’s strategy to democratize travel for the middle class.

“Wyndham is a big company that appeals to a burgeoning middle class,” said Geoff Ballotti, president/CEO, WHG. “We believe travelers, no matter what rate they’re paying, deserve equally great experiences. Luxury brands have created that brand definition and delivery of service and programming very well. It’s never been tried in the economy and midscale space at the scale we’re trying it now.”

Josh Lesnick, EVP and CMO, WHG, noted the company needs to connect to guests on a deeper, more emotional level. “Our target audience and what they want has changed. In the next five years, millennials will be the single largest buyers of travel. They prefer experiences to material possessions, but unless they live and work near a major city, they don’t have money. The second major shift is the emergence of a massive, global middle class. Experts project this global middle class will grow from two to five billion people in the next 10 years. Like millennials, they’ll be well-educated, tech savvy and want to travel, but they, too, will have limited disposable income. The convergence of these two market segments create what we like to call, the ‘everyday traveler,’ and that is our target audience. The everyday traveler is looking for a great price but, more importantly, they want an amazing experience.”

A large component of this push involves the repositioning of the company’s 16 brands, a move that Ballotti laid out in an exclusive interview with Hotel Business in our Sept. 7 issue. At the conference, the company unveiled nearly 30 new initiatives to nearly 6,000 franchisees that support the distinctions between the brand personalities, including changes in marketing, guest services, technology and design.

For instance, a new marketing initiative for Days Inn—which plans to leverage its iconic sun logo—offers the tagline “Bask In The Sun,” while Dolce Hotels and Resorts’ new ad campaign offers a kaleidoscope twist. The brand’s new identity is Inspire Discovery, and the ad campaign features images of the hotel that has been morphed the way images are in a kaleidoscope. In addition to ads, these images will be incorporated into hotel collateral like notepads and coasters.

Changes in guest services range from piloting bike programs to reserved parking for veterans, but many focus on F&B. Baymont Inn & Suites—described by WHG as “The Hotel Next Door”—will now offer the Hometown Host, a new role designed to make the free breakfast in each hotel run smoothly. Hawthorn Suites by Wyndham is partnering with regional chefs to create easy-to-follow recipes for its extended-stay guests, while Travelodge—50% of which can be found within 25 miles of a National Park—has created a grab-and-go breakfast offering for its adventure-seeking guests. Meanwhile, Wyndham Grand is rolling out its Brew Parlor to all hotels, an afternoon happy hour serving cold-brewed, coffee-based drinks and cocktails.

Lesnick noted, “When you’ve seen these initiatives, they’ve been executed in higher-end or boutique brands. We’re trying to bring them into economy brands. What we know about the everyday traveler is not only do they want a great price, but they want a great, memorable experience, as well.”

Lisa Checchio, VP, brand marketing and insights, WHG, added, “Everyone deserves to have a special moment, regardless of your price point. Because 90% of our rooms fit into economy/midscale, no other hotel company can match what we’re trying to do, bringing these special, thoughtful moments, by brand, to them.”

With regard to technology initiatives, Microtel Inn & Suites by Wyndham is launching a Text Request program at select hotels. Ramada, with a brand identity of “Sample the World,” will pilot a digital lobby board that highlights fun global facts and Ramada locations while connecting guests socially; and Wingate by Wyndham will offer extra WiFi at no additional cost as well as pilot SoniCast for in-room casting technology.

Lisa Checchio explained several of the new brand initiatives to attendees.

Checchio acknowledged that while the initiatives help differentiate the brands, many of the technology initiatives could be seen across multiple brands in the future. “When you think about what brand we’ve chosen for texting, for example, Microtel is brilliantly efficient. You expect this kind of texting in an upscale hotel, but it’s not happening in economy… With this first round of initiatives, we’re trying to establish and drive home what these brands are; we have a number of initiatives where we’re looking at the portfolio level, and a lot of them have to do with technology.”

WHG also stressed technology on the back-end as well. All of the company’s nearly 8,000 hotels are migrating to Sabre’s SynXis CRS, connecting owners to more than 400 distribution partners. In addition, more than 2,000 have transitioned already to the Sabre SynXis PMS with Infor EzLITE functionality; this is expected to rise to 3,000 by year-end and both migrations are expected to complete in 2017.

Bob Loewen, EVP and COO, WHG, said, “We are two or maybe more years ahead of all of our competitors. I think you’re going to see them all go to a similar model, but it will take a lot of time. We get all of our hotels on the Sabre systems; it’s going to make it so much easier to distribute our rooms, bring on new hotels, market to customers and drive things like automated revenue management. It will really transform our business.”

Ballotti agreed. “If you talk to any of the big brands, what’s most important to all of us is having the best sales, marketing and loyalty programs. “Trying to fit and think your core competency is trying to upgrade legacy technology when best-in-class technology providers do that as their strategic imperative, to be able to partner with those providers as opposed to trying to build it yourself…other companies are starting to talk about it. We began this journey three years ago and it’s coming together. We’ve moved five of our brands onto the cloud-based CRS and we’re about to move the next 11 in the next two years.”

There will be design changes as well. In addition to new artwork and FF&E options across several brands, WHG unveiled several prototypes. Chip Ohlsson, EVP and chief development officer, North America, WHG, said, “Microtel Inn & Suites delivers a midscale experience, but operates in the economy segment. The entire lobby has been redesigned for a social experience with communal tables, workstations and pods, eliminating the need for the traditional front desk, making not only check-in but also the entire experience truly efficient. It is the only new-construction prototype hotel where 82% of square footage is designed to be revenue generating.

“We are also excited to relaunch Wingate by Wyndham,” he said. “This new design reduces the existing footprint by over 15%, presenting an opportunity for greater ROI for our owners. Hawthorn Suites’ new design prototype is a category killer. With demand for these brands through the roof, we created an unprecedented prototype to combine Wingate and Hawthorn into one. Finally, Wyndham Garden’s completely reimagined design brings in the serenity of the garden right into our lobbies.”

And these new prototypes will be important, according to the executives. “For 2015, 92% of the 48,000 rooms that exited the system were substandard,” said Ballotti, noting that in 2015, WHG exited approximately three times what it had in the previous period. And, he said, supply growth isn’t a huge factor in the economy segment. “Supply is beginning to tick up, but it’s still way below historic norms. Especially in the economy and midscale space, supply growth has been much lower than in the upper-mid, upscale and upper-upscale space,” he told Hotel Business at the media event. “A lot of these properties are at end-of-life and the best and most encouraging thing for us is that 70% of our pipeline is new construction. A lot of that is coming into markets where owners are buying properties that are at their end-of-life and building new prototypes. We’re seeing tremendous demand in new construction for all of our brands and we’re going to continue to focus heavily as we take our capital expenses and resources into the prototype development.”

Stephen Holmes, chairman and CEO, Wyndham Worldwide, reflected during the general session, “As I look at the travel industry as a whole, there’s a lot going on: this growing global middle class that is having a massive impact; the millennials will be the buying power of the future; you’ve got the disrupters changing the way booking is done. I’m incredibly excited about the travel industry. We’re positioning ourselves phenomenally well; we will be ahead of the competition. The things we’re doing are game changers for our industry. We’re in a fantastic position.” HB

 

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