Wyndham Hotel Group, the largest hotel company in the world by number of hotels, has been busy. Its loyalty program underwent a US$100 million revamp and simplification, and its 16 brands, mostly midscale and economy, have undergone refinement and redefinition. Chip Ohlsson, executive vice president and chief development officer, North America, is overseeing about half the pipeline of new hotels (Wyndham has more than 128,000 rooms in its global pipeline, 66% of that new construction; in the U.S., that’s 532 hotels/50,277 rooms).
HOTELS spoke with Ohlsson at Wyndham’s global conference recently in Las Vegas.
HOTELS: How has Marriott International’s acquisition of Starwood Hotels & Resorts affected plans at Wyndham?
Chip Ohlsson: We’re going to keep doing what we’ve always done. When you talk about the loyalty program, when you talk about what’s been happening (with the brands), that was well in effect prior to any announcement of any other company doing any mergers. We know what our business is, we stay in our lane and we do what we have to do to succeed.
H: What is your No. 1 priority?
CO: Quality growth. We’ve realigned our entire development team to make sure that they can go out and sell the right brands to the right people. So we have a new construction team, we have a team that handles only select-serve, we have a team that handles full-serve… We can walk into just about any property and we can find the right fit for them, whether it’s a lifestyle brand such as Tryp, a 4-star such as Wyndham Garden, or in the economy segments.
H: Do potential owners have too many choices?
CO: From our loyalty members’ standpoint, we don’t have too many brands. Loyalty members want to earn points and burn points wherever they can. When you talk to franchisees, it depends on the day of the week. If you’re in a market that has too many brands, a lot of Wyndham product, there may be a concern over that.
The marketing department is putting identification on each brand and putting it in its own category. That’s where the hotel industry needs to do a better job of the homogenization of brands versus looking at the brands for what they are and making sure they speak to what that is. (For Travelodge), the fact that 60% of our brand is near a national park, it starts to speak to what the brand is, and now all of a sudden you start marketing to that and people know, Travelodge, national park, I can go hiking, I can go rafting, I can do all these other activities. And whether it’s near a national park or not isn’t relevant to what I’m doing. The fact is it’s the lifestyle I want to live. And that’s the brand I’m going to choose. I think people were loyal to brands, then they became loyal to loyalty programs, and now they’re back to saying I want something that speaks to who I am. And that’s what you’re seeing a lot of what’s going on with Wyndham.
H: In terms of homogenization, it gets difficult to tell the difference among brands.
CO: The rule has always been that the hotel industry is not overbuilt, it’s under-destroyed. There’s a lot of recycling that goes on. New product comes into a market, and the other product gets pushed down. There is a need, when we look across our 16 brands, there’s a category and a group that travels in that. And trying to be everything to everyone doesn’t necessarily work, as opposed to saying, we’re going to speak to this group. Rather than try and get four different groups to stay at our hotel, let’s get one segment.
H: With Tryp, you’re aiming at the millennial, young-at-heart market. So are other companies.
CO: It goes back to the right growth. Where are we growing, how are we growing, what makes sense in the U.S. for those brands? Right now we have six deals under development in south Florida alone for Tryp. That’s a feeder market for us. You get Latin America, Spain, a lot of international travelers. That’s where we want to start building our base. We have a hotel in New York City. It’s urban and it’s an international destination. People know the Tryp name. We want to build from within. Start from a strong foundation with hotels in the right markets, and then hub and spoke it out from there.
H: How are you differentiating in those markets?
CO: When we go into a market like New York and sit down with someone, we have a portfolio of brands that we’ll look at and say, what makes sense for you. If I only represented one brand and I went into that market, and the client says, what should I do here? The answer can only be “this brand.” And then it becomes a pricing exercise.
H: With your focus on mid-market brands, are you circling around Cuba?
CO: We always look at every opportunity, and we think Cuba and the Caribbean in general are going to be big opportunities. I’m excited from a personal standpoint because 25 years ago I worked in the Caribbean doing yacht charters. And every year, it was a story of, “Cuba’s going to open up, and we can finally take sailboats to Cuba.” It looks like it’s finally broken down and is opening up, and the infrastructure is not there.
H: The company is touting the “democratization of travel” with its focus on midscale and economy brands.
CO: That’s where we see the next generation of traveler, in the middle class. So while other companies sit up here with high-end brands, that’s not accessible to everybody. We think we have a brand for everybody, because we go from the budget segment all the way up to the 4-, 5-star segment, depending on which brand and which region you’re in.
H: Where is the main focus for improvement at this point?
CO: We are going to consistently look at our quality issues and consistently push quality. That is the most important thing. If we continue to drive that, we’ll see RevPAR growth from that, we’ll see loyalty growth from that… You’re not just spending money. It’s an investment in your property and your future. We can always be improving.