It's been a busy time for Wyndham Hotels & Resorts. In the past 18 months, the company acquired AmericInn and La Quinta, sold its Knights Inn brand to Red Lion Hotels Corporation, announced the spin-off of its hotel business into two separate and publicly traded entities and added the “by Wyndham” tag to its 20 brands. And Geoff Ballotti, the company's president and CEO, isn't slowing down either.
At the upcoming Mediterranean Resort & Hotel Real Estate Forum, Oct. 17-19 in Athens, Ballotti will discuss his company’s growing resort strategy in the Mediterranean in a special one-on-one session.
Ahead of the conference, Ballotti shared his insights on emerging Mediterranean markets, major trends in hotel investment and development in the region and finding the right partners for growth.
1. Wyndham Hotels & Resorts recently completed its spin-off from Wyndham Worldwide Corporation and is now the world’s largest hotel company by number of hotels. As an independent public company what is Wyndham Hotels’ development strategy? What should the market (and owners and developers) expect from here on?
On June 1, Wyndham Hotels & Resorts marked its spot as the world’s largest hotel franchisor and a leading managed-hotel-services provider. As a pure-play hotel company with the leading position in the economy and midscale space, we are even more focused on growing our brands and helping our owners make travel possible for all guests.
We continue to open two new hotels every day of the week, and last year we introduced nine brands to 21 new markets around the world. In 2017, in the EMEA region we launched The Trademark Collection by Wyndham, a soft brand aimed at midscale and above hoteliers, with the opening of more than 50 hotels in Germany, Austria and Switzerland. In the GCC market, last year we opened the world’s largest TRYP by Wyndham in Dubai and Wyndham Grand in Bahrain.
The markets and owners can expect to see more growth from Wyndham. Whether it’s through strategic acquisitions or organic growth, we have a long track record of spotting opportunities in the market. Our development pipeline increased to nearly 1,400 hotels and more than 171,000 rooms, a 13 percent year-over-year room increase. Approximately 51 percent of our pipeline is international and 70 percent is new construction. In EMEA our pipeline is equally strong with 104 hotels and 14,634 rooms.
Our key openings in the region so far this year include Dolce Attica Riviera and Wyndham Athens Residence in Greece, [and] new hotels in various Turkish destinations, such as Rize, Izmir, Hendek and Isparta. In addition, our Days Inn by Wyndham brand has expanded to new European markets with openings in Nice and Rotterdam. Israel is another important destination. Our presence includes two beach resorts in Hadera and Netanya, just outside Tel Aviv, in addition to other hotels in Jerusalem and Nazareth.
We are experiencing strong growth in the CIS region, where we have 15 operational hotels across Azerbaijan, Georgia, Kazakhstan, Russia, Ukraine and Uzbekistan. In particular we are seeing positive momentum in Georgia, where we expanded our presence with the opening of Ramada Encore Tbilisi in March this year, and have plans to open three more hotels in the next two years.
2. What do you see as the major trends in hotel investment and development in the Mediterranean region?
European travelers are shifting from longer-haul trips to destinations closer to home, especially to Southern European markets. Europe is a year-round destination, with plenty of travel options, from Central Europe--particularly popular for weekend breaks--to the Mediterranean area, a top summer destination that continues to provide a number of attractive development opportunities. In addition to these positive trends, low-cost airlines also have changed and expanded the landscape to include a number of secondary cities that have become more popular. This is creating great development opportunities in the segment, which we are looking forward to capitalizing on.
3. How do Wyndham’s brands fit the unique conditions of the Mediterranean markets?
Our strong and diverse brand portfolio means that we can suit the needs of any type of guest, whenever and however they want to travel. The diversity of our brand lends itself to the traveling middle class that is increasingly discovering important destinations like Turkey and Greece, to name a few. The recent addition of the word ‘Resorts’ to our company name Wyndham Hotels & Resorts says a lot about how important this segment is and the development opportunities it brings.
4. Which emerging Mediterranean markets are you keeping an eye on, and why?
Turkey is a key market for us. Not only is it the sixth largest market for Wyndham Hotels & Resorts globally, but we also are proud to be the largest international hotel group in Turkey. As of July 2018, we have 67 hotels all across this market. We are committed to maintaining our leading position through sustained expansion in this dynamic market.
Greece is another important Mediterranean market for us. In just over 18 months we have opened seven hotels in the country, accounting for almost 1,300 rooms. We entered Greece in December 2016 with the opening of Wyndham Grand Athens. The co-located Ramada and Wyndham resorts in Loutraki opened about a year ago and we have continued to establish a larger presence in the Athens area with three additional hotels.
Cyprus is another high-potential market. In 2017 the country had its most successful year based on arrivals and it’s building on great infrastructure, which has the potential to make Cyprus a year-round destination and an important development market.
In Italy, which is a fragmented market, local businesses are gradually starting to realize the incremental value a brand can bring, and we believe this is something we will be able to capitalize on in the long term.
5. Tell us a bit more about the partnership with Zeus in Greece: benefits, challenges, what difference does it make to customers? How important is finding the right partners to run resorts?
We entered Greece in December 2016 through our partnership with Zeus International, and the opening of Wyndham Grand Athens. We have found a like-minded partner who continues to help us grow our footprint. In just over 18 months we have opened seven hotels in Greece, six of them with our partners at Zeus. In 2017, we announced an extended partnership with Zeus international to develop 20 hotels in Greece, Cyprus, Bulgaria and Romania over the next 10 years.
Overall, finding the right partner is crucial for a number of reasons. From identifying the right locations when entering a new market, to operating successfully, and very importantly ensuring guests have a great brand experience, with the right service and attention they deserve. Ultimately, successful partnerships of this nature not only benefit the businesses involved, but the local economy and the country as a whole. Greece is a great example.
6. How are travel trends such as the rise of serviced apartments, extended stay or the shared economy affecting the resort market (particularly with the recent opening of the Wyndham Athens Residence).
Wyndham Athens Residence is our first mixed-use hospitality development in Greece and a very exciting proposition. The philosophy behind Wyndham Athens Residence is to offer comfortable long-term accommodation in the city center, but at affordable prices—ideal for families and younger travelers. It is a solid addition that complements our other hotels in Greece.