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Wyndham betting on refreshed prototypes
April 24 2014

Wyndham Hotel Group hopes its new prototypes will be a vehicle to drive growth in the coming months.

Highlights
  • Wyndham’s total system-wide RevPAR was up 4% in the first quarter.
  • The company recently refreshed three brand prototypes: Hawthorn Suites, Microtel and Wingate.
  • Wyndham is launching its first-ever umbrella marketing campaign in May.
 

PARSIPPANY, New Jersey—Wyndham Hotel Group is banking on strong growth from the company’s brands that have recently introduced new prototypes, including Hawthorn Suites by Wyndham, Microtel Inn & Suites by Wyndham and Wingate by Wyndham, said Stephen Holmes, chairman and CEO of Wyndham Worldwide, during the company’s first-quarter earnings call.
 
“While we’re best known for our powerhouse economy brands, there are other brands in our portfolio that have huge potential,” Holmes said of the refreshed brands, adding that by re-engineering the brand’s outdated prototypes investors have showed great interest because of reduced development costs.
 
“Frankly, we should have done this a couple years ago,” Holmes said. “But new construction wasn’t as warm as it is now.”
 
Holmes also mentioned that Wyndham’s flagship brand, Wyndham Hotels and Resorts, is showing significant growth. The company plans to expand the brand in city centers, including New York City, Holmes said.
 
As of 31 March, Wyndham Hotel Group’s hotel system consisted of approximately 7,500 properties and 646,900 rooms, a 2.4% increase compared with the first quarter 2013. The development pipeline included more than 955 hotels comprising 117,000 rooms, of which 60% were international and 69% were new construction, according to a news release
 
Holmes said not much has changed in terms of acquiring additional properties or portfolios over the last couple of years.
 
“The pipeline out there is what it’s been for the last couple of years,” Holmes said. “There’s opportunities, but there’s high price expectations.”
 
Portfolio performance
Total system-wide revenue-per-available-room increased 4% compared with the first quarter of 2013. The increase reflects a 7.6% domestic increase, partially offset by a 4.3% decrease in international RevPAR, primarily reflecting unfavorable currency movements, said Tom Conforti, Wyndham Worldwide’s CFO.
 
Even though many hotel companies have been affected by unfavorable weather conditions, including Wyndham Worldwide, Holmes said the company’s properties were able to withstand the challenges.
 
Holmes pointed out a number of factors that could have helped the company’s RevPAR click in the first quarter:
 
  • stalled supply growth in the economy and midscale sector;
  • strength in Central America, where the company has a lot of midscale and economy product; and
  • weather conditions.
 
“We’re encouraged by what we’re seeing,” Holmes said. “We think it’s going to be a good summer for all sectors.”
 
Marketing initiatives
Holmes also discussed Wyndham Hotel Group’s upcoming marketing campaigns. The company is on target to go live in May with its first ever umbrella marketing program for the brands.
 
The campaign will run from 12 May until 21 September and will include prime-time spots on television and sporting events, Holmes said.
 
In addition to the umbrella marketing campaign, Wyndham Hotel Group hopes to grow its reward program, and Holmes said that incentives put in place for franchisees should help.
 
“We’re excited to see the results,” he added.
 
There was no mention on the call of the hotel group’s new president and CEO, Geoff Ballotti, who replaced Eric Danziger in March. 
 
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