5 ‘transformational’ changes at Wyndham
01 APRIL 2015 8:44 AM
Geoff Ballotti announced five key initiatives during the company’s Global Conference in Las Vegas. The moves touch everything from technology to brand positioning to loyalty.
LAS VEGAS—When the lights dimmed and the spotlights fell on the main stage at Wyndham Hotel Group’s Global Conference, the 6,000 franchisees in attendance saw something different.
Absent were the theatrical flourishes and acrobatic performers that so often kick off such events in host city Las Vegas. In their stead was one man, President and CEO Geoff Ballotti, presenting a new-look Wyndham with a level of passion befitting the conference theme “Inspire.”
With almost a year to the day under his belt in the role, Ballotti introduced several key initiatives that will touch everything from technology and back-end systems to brand positioning to customer loyalty.
“We’re not trying to be showy,” he said Tuesday afternoon during a news conference. “It’s really about making this conference more meaningful for our franchises and making them believe more about where we’re headed.”
The stops along what he terms a “transformational” roadmap include:
New PMS, CRS and revenue management powered by third-party providers
Wyndham’s biggest opportunity? “Technology,” Ballotti said.
“We have just such an opportunity to provide best-in-class, cloud-based solutions that they don’t have to worry about in terms of hardware in their hotels,” he said.
The company is ditching its problematic Wynguest system in favor of Sabre Corporation’s SynXis property-management system and central reservations platform as well as an automated revenue management tool in Infor’s EzLITE.
The bundled package is a mandate for all 4,500 franchise hotels operating the Wynguest platform, said Keith Pierce, executive VP of global systems and operational support, during a news conference. He expects to migrate approximately 300 properties a month, meaning the entire process should take about a year and a half.
“They don’t have an option, but there really is no reason why they wouldn’t do this,” Pierce said. “It’s a relatively easy solution.”
(Wyndham franchisees using the Opera PMS tool, which is more common in the company’s larger, more complex hotels, will not be required to make the switch.)
Costs to owners are on par with those of Wynguest.
Cost savings to Wyndham Hotel Group could be substantial, Pierce said, although he declined to name a project dollar figure.
“There are significant benefits to not maintain the scale of the organization. Part of the benefit of going with an outside, best-in-class subscription-service-type model is that you don’t have to hold all of that infrastructure, all of that human capital,” he said. “The way in which we’re going to utilize that human capital and manage our relationship is going to be different.”
Building better brands
“Our second biggest opportunity is our commitment and focus on building our brand and brand equity and improving the quality and consistency of every one of our brands,” Ballotti said.
It’s also one of the company’s biggest challenges. Executives freely admitted that Wyndham’s slate of 15 brands lacks differentiation, particularly in the economy space in which a number of those flags sit.
Executives have engaged brand strategy firm Siegel & Gale to study those offerings and suggest a plan of action.
Consolidation is a possibility, said Josh Lesnick, chief marketing officer, “but I don’t know if we would do that.”
“As long as we can make each one have a unique proposition to the customer, I think there’s a compelling reason to do that,” he said during a news conference.
And new brands? “We also have the opportunity in other areas to develop brands,” Lesnick said, “but I want to wait until we get the feedback.”
The other side of the brand revitalization strategy is combing through each asset to weed out the poor performers.
“We have been so manically focused on making sure we have been taking out rooms that don’t meet our quality standards,” Ballotti said during his opening address on the main stage. Since Wyndham’s last Global Conference, the company has removed 300% more rooms than it did in the two years prior combined, he added.
Additionally, Wyndham has six new brand prototypes in the works for: Baymont Inn & Suites, Hawthorn Suites by Wyndham, Wingate by Wyndham, Microtel Inn & Suites by Wyndham, Super 8 and Days Inn.
Rewarding guests who’ve earned it
Noah Brodsky knows he has some ground to gain. “We don’t have the top loyalty program in the industry,” said Wyndham’s VP of worldwide loyalty and engagement during a news conference. It’s not even in the top half, he added.
The new Wyndham Rewards is designed to change that.
The program is built on simplicity and attainability to “give back to our most loyal guests what they’ve earned,” Brodsky said.
With 15,000 points, guests can earn a free night’s stay at any Wyndham hotel in the world, with no restrictions or blackouts. For guests looking to redeem more quickly, 3,000 points “and a little bit of cash” does the same thing.
How much is a “little bit of cash”? It ranges from $25 to $95 depending on the hotel, Brodsky said.
Guests earn 10 points for each dollar spent on a stay. For instance, a room rate of $100 would yield 1,000 points. The lone exception: Guests earn at least 1,000 points per stay even if the room rate is lower than $100.
Owners benefit as well, Brodsky said. Whereas most loyalty programs (including Wyndham’s in the past) charge a loyalty fee each time a hotel signed up a guest, Wyndham is now waiving that fee. Instead, owners will be charged a $250 “enrollment retraining fee” if they fail to sign up 10 new Rewards members in a given month.
“We had a program that created a disincentive to enroll,” Brodsky said. The new approach changes that.
When asked how the “enrollment retraining fee” has been received, Brodsky joked: “I haven’t been slapped yet.”
The cost of loyalty redemptions remains the same for owners. If occupancy is at 95% or above, they’ll receive the full rack rate. Below 95%, they get paid a flat rate redemption, he explained.
The new program is effective 11 May.
Getting the word out
Wyndham is marketing the new Wyndham Rewards through a $20-million ad campaign on TV and digital platforms.
The digital approach is a departure from the TV-only focus of 2014, Lesnick said. The company lost market share with that approach, something they’re attempting to rectify with the more balanced approach.
Once again executives are employing an umbrella brand campaign as opposed to messaging focused on any one particular brand. And they’re turning to a “third-party device” to do it.
In the vein of Progressive’s Flo or the GEICO gecko, Lesnick introduced the Wyndham Rewards Wyzard, played by Game of Thrones star Kristofer Hivju.
“He doesn’t play tricks, doesn’t do magic,” Lesnick said. “His only purpose, his only function is to make sure they get what they deserve.”
Putting on a prettier (digital) face
Wyndham’s digital content needs a face lift, Lesnick said. The proof is in the pictures.
More than 5,000 of the group’s hotels have either no photography at all or photos that have not been updated in eight years, he said.
“Nothing is more important than our digital content,” Lesnick said. The executive is putting the company’s money where his mouth is by funding 5,000 photo shoots and 30,000 hours of touch-up time for every hotel that pays into a brand marketing fund, he said.
“This drives conversion,” Lesnick said. “This drives revenue to you.”
Editor’s note: Wyndham Hotel Group provided hotel accommodations and meals during its Global Conference. Complete editorial control was at the discretion of the Hotel News Now editorial team; Wyndham had no influence on the coverage provided.