$100 million to No. 1: At Wyndham Worldwide’s owner conference this week in Las Vegas, lots of numbers were thrown around, but those two might be the ones that matter the most to the company.
The company spent US$100 million revamping its Wyndham Rewards program over the past year and a half, simplifying what was considered an overly complicated system. No. 1 is an early payoff on the investment, in the form of a recent ranking by US News & World Report that puts the loyalty program tops in the world, catapulting Wyndham from seventh place.
It’s part of the company’s “democratization of travel” approach that has them considering what luxury brands are bringing to their customers and applying more experiential, less cookie-cutter approaches to midscale customers.
“We sat back at the Wyndham Hotel Group 18 months ago and said, we believe that travelers, no matter what rate they’re paying, deserve equally great experiences. Luxury hotel companies, luxury brands, have created that brand definition and that delivery of initiative in service and programming very well,” President and CEO Geoff Ballotti said. “It had never been tried in the economy and midscale place at the size or the scope or the scale that we’re trying it now.”
Ballotti pointed to Super 8, which has 98% “unaided awareness” as a brand, as matching its unique, high-energy positioning with initiatives that appeal to millennial travelers for whom experience is critical.
That’s a lot for executives to crow about, along with adding 7 million members since the loyalty program was revamped. But with 40% of revenue generated by 4% of members, the celebration is followed by calls to keep high-level loyalty ranks growing and spending. The company, largest in the world by number of hotels, is including employees in those ranks with its titanium status, available exclusively to owners, who get diamond-level status and other perks. “Nobody in the economy space is doing this,” said Noah Brodsky, senior vice president, worldwide loyalty and engagement.
Response has been enthusiastic, said Ballotti, who added that he was asked by several conference attendees – owners – how to get additional cards. “Open more hotels,” he told them. (Associates are able to earn gold-level rewards status as well, all in a push to give employees the same incentive to commit to the company as customers.)
The emphasis on the loyalty program prompted a rethink of how points are distributed, as well. “A few years ago, 40% (of redemption) was for hotels, and the rest was for gift cards,” Executive Vice President and CMO Josh Lesnick said, for items like gasoline. “That’s taking owner money and sending it to Exxon-Mobil.”
The program focused on redeeming “tens of millions of dollars” back into hotels, he said. But it also includes “experience-enhanced” rewards; some of the most popular include indoor skydiving in Florida, an architecture boat tour along Chicago’s river and dumpling-making classes in China.
The customer-facing technology investment is matched on the back end. The company has introduced a cloud-based PMS and is migrating its nearly 8,000 hotels to Sabre’s SynXis CRS. Four brands have moved to that system and the rest are expected to move by late next year. When all owners need is “a laptop or tablet or iPhone to maintain their rates, their inventory, their availability, that’s going to be transformational,” Ballotti said.
Brand refresh
With 16 brands, primarily in the midscale and economy space, owners who want to earn another titanium card have a lot to choose from. The “too many brands?” question is answered by a marketing overhaul that aims to differentiate offerings to specific, defined markets, even as it touts loyalty program members so devoted that they will stay anywhere they can get points.
Howard Johnson, for instance, will still offer its ice cream and clams, but at some properties it is offering “picture points” where customers can snap giant Adirondack chairs or life-size beach balls. It takes five minutes, said Lisa Checchio, vice president of branding, but offers an Instagram-able, memorable moment.
As well, Microtel, which touts itself as “Brilliantly Efficient,” is becoming the first major economy brand to incorporate texting to communicate with its customers. It’s also giving the lobby a millennial makeover to be more socially inviting and adaptable. Its purpose-built prototype will become available early next year. And its Ramada brand is focusing more on F&B, with a prepared Bento Box option for grab-and-go food that will launch later this year. It will showcase its global footprint with lobby posters of its locations around the world.
The company is tweaking some of its offerings. Tryp, its upper-midscale, select-service brand focused on urban markets, had been promoting its fitness room. But in the brand’s breakout session, it was suggested that only one room on property offer the service as a marketing tool. Perhaps having an exercise bike in a guest’s hotel room served the same purpose as it often does at home (clothes hanger, dust-gatherer).
The Dolce brand, with 22 upper-upscale offerings – a third in Europe – continues to see success in its long-standing group and meeting business. Its southern Germany hotel has the most meeting space of any hotel in that region. Expect announcements within the next couple of months on future locations; areas being considered include Dubai, whose airport has overtaken London’s Heathrow as busiest, and the United Kingdom.
And then there’s China
For a company whose bread and butter is midscale hotels, China is the whole loaf. “To say that we now have 1,200 hotels in China appealing to that incredible burgeoning class – when you look at the growth, that the middle class globally, travelers of 2 billion will in the next 10 years burgeon to 5 billion, where is that growth happening? It’s happening in China. And we’re very focused on China,” Gallotti said.
It’s also happening in India, where he called the company’s development pipeline “massive.”
Despite economic shifts and a slowdown in luxury development, “we’re growing more quickly in China than we’ve ever grown, and we continue to see growth there,” said Bob Loewen, executive vice president and chief operating officer. “There are so many cities, still, with over a million people that don’t have any branded hotels, there is so much opportunity. The whole country is growing at 6%. It’s still three times the growth we may be getting here.”
Eighty conference attendees are from China, Gallotti added, with that number only limited by the number of visas that could be obtained in a limited time frame. “Are things going to slow there?” he asked. “It’s anyone’s guess. But we don’t see it.”
Dubai is another focus, with the Middle East market “oversaturated” with luxury. “We are talking to them about the Days inn for the first time. We’re talking to them about Super 8 for the first time,” Gallotti said, with announcements coming soon in the region.
And Cuba? “We are working on opportunities there,” Loewen said. “Our teams have been there. We have partners that we’re talking to. We’re looking to bring some more brands there. We’ve talked both to people who want the upscale side and some who really see the need for good solid economy hotels.” The biggest challenge, of course, is utilities and other infrastructure. “The government’s got a lot of work to do down there, I think. But it will be a great location,” he added.