Following Wyndham Worldwide’s announcement of changes to its hotel group’s operations, the company has now moved on to the implementation process, said Steve Holmes, chairman and CEO of Wyndham, during the company’s second quarter earnings call on Tuesday morning. The company has moved away from building in-house systems.
The company is tackling a third-party property-management system, central-reservations platform and an automated revenue-management tool. The plan is to migrate more than 4,500 of its North American franchises on to Sabre’s cloud-based property-management system.
“As part of the property management migration, our economy and midscale franchisees will also enjoy the benefits of an integrated revenue-management system developed and installed by industry leader Infor,” Holmes said. “It allows these owners to efficiently and effectively analyze booking information, trends and patterns specific to each hotel on a daily basis. The owner will receive recommendations that can be used to optimize rates based on demand. This level of insight and pricing capability will provide unprecedented value to our franchisees and boost their bottom line.
“We currently have 21 hotels piloting the property-management system, which is proceeding as planned. Later this year we will start adding roughly 100 hotels per month, accelerating to about 400 hotels per month until we reach our target. We expect full implementation by late 2016.”
On the conference call, Patrick Scholes, an analyst with SunTrust Robinson Humphrey, asked Holmes who pays for the PMS — is it mostly the franchisees or is corporate paying for some it.
Holmes said it is not significant because Wyndham actually negotiated a deal with Sabre and Infor where the franchisees are basically getting the system for the same thing they were paying before.
“So we are able to make it a net neutral to them, which is really terrific,” Holmes said. “They are getting a better system, they are getting a lot more capability and particularly this yield-management system for the economy hotels, they have never really utilized that before so we think that will have a great impact.
“That will be rolled out but in my opinion it will take a little longer to effectuate because these owners are not accustomed to working in that kind of an environment like a large full-service hotel would naturally do,” he continued. “So we think that this will have a big impact going forward but probably a little bit more of a delayed reaction than some of the other things that we are implementing in the hotel group.”