Wyndham Hotel Group has announced a plan for what it calls "the democratization of travel." Following an 18-month study focused on 50 hotel brands (along with the primary decision-drivers of business and leisure travelers around the world), the new developments are set to "reposition and revitalize" the company's 16 brands.
Democratization of Travel
Travel and tourism is one of the fastest-growing industries globally, with its contributions to the global gross domestic product expected to rise from $7.2 trillion to $11 trillion over the next decade as the middle class more than doubles from 2 billion to 4.9 billion people worldwide.
Wyndham's portfolio includes nearly 8,000 hotels worldwide in the economy, midscale and upscale segments.
“We’re transforming at a time when the $7.2-trillion global travel and tourism industry is growing faster than the global economy, fueled largely by millennials and an increasingly travel-curious middle class,” WHG CEO Geoff Ballotti said in a statement.
WHG partnered with Siegel+Gale, a brand-strategy and experience firm, to understand guests’ preferences and priorities and design brand experiences tailored to elevate midscale and economy hotel stays. The research yielded key insights into traveler expectations that informed the changes.
A key focus of the new developments includes what the company is describing as a more nuanced “one size does not fit all” approach to economy hospitality and an emphasis on a great experience over status.
Sixteen Brands
Building on the momentum of its revamped Wyndham Rewards loyalty program, WHG created new identities and taglines for its brands, calling them "brand promises." For example, Super 8's new brand promise is "An American Road Original," while Travelodge's is "Your Basecamp for Adventure." Renovations to the hotels and to the brand websites will reflect these new identities.
“Not all economy and midscale hotels are alike, just like no two travelers are alike,” said Josh Lesnick, WHG’s chief marketing officer. “We’ve taken our 16 brands and redefined them to stand for something that matters to the kinds of guests we welcome so there’s something for every kind of traveler, regardless of their budget.”
More Investments
WHG is also investing in new back-end technology, with a secure, cloud-based property-management system with automated revenue-management capabilities available to the majority of its portfolio. More than 300 hotels are converting to this system each month; hotels that have adopted it have reportedly seen an increase in revenue per available room.
The company is also cutting "subpar" hotels from its its portfolio, and has added more than 650 new-construction hotels to its pipeline over the past two years, including hotels under its LEED-certifiable Days Inn and Super 8 prototypes.
As reported last month, Wyndham has been simplifying its loyalty program for more than a year, streamlining points accumulation and adding perks for frequent guests. At the time, Noah Brodsky, Wyndham's SVP of worldwide loyalty and engagement, explained that the new developments came from consumer insights. “When we told people how they can redeem their points, they said they like to earn points on business trips and redeem them on leisure,” he said.
Brand Challenges
These initiatives are launching just as the hotel industry is approaching a tipping point. Experts say that after years of explosive hotel construction to meet consumer demand, supply is set to outstrip need in the next couple of years. CBRE Hotels projects that after five years of growth, hotel occupancy will be flat this year at 65 percent. It expects revenue per room to increase 4.2 percent to $82, the smallest jump in five years.
Beyond the increased number of hotels, there has been a proliferation of brands that are often indistinguishable from one another.
“Sometimes it is hard for consumers to tell them all apart,” said Sean Hennessey, a hotel consultant who is also an assistant professor at New York University’s Tisch Center for Hospitality & Tourism. He added that many of Wyndham’s brands, such as Super 8 and Howard Johnson, are older, so “it will be a challenge to introduce them to a whole new generation of consumers.”
Source: Wall Street Journal