Editor’s note: This is the first part of a two-part interview with Wyndham Hotel Group President and CEO Geoff Ballotti, which was conducted at the Wyndham Dubai Marina on 26 April in Dubai, United Arab Emirates.
DUBAI, United Arab Emirates—Wyndham Hotel Group is in the business of making things simple, both for its guests and franchisees.
President and CEO Geoff Ballotti said the Parsippany, New Jersey-based hotel firm’s strategy is about streamlining hotel operations and guest stays. Part of that process included adopting a third-party, cloud-based reservation management system instead of trying to create one from scratch.
“We saw there are people more adept at doing that than we would be,” Ballotti said.
Wyndham hotels have already seen market-share increases as a result of that agreement, he said, adding that all Wyndham hotels will use the new platform within 18 months.
Rooms and thrones
Making things simpler for guests meant a complete overhaul of Wyndham’s loyalty program. Jude Kadhim, Wyndham’s director of loyalty for Europe, Middle East and Africa, said a streamlined program is a better program.
“For our members, we are keeping it very simple,” Kadhim said. “We want every type of traveler to earn and redeem points as soon as possible. (It’s) not just for the savvy and well-traveled.”
According to Ballotti, Wyndham Rewards is the second-most successful loyalty program in the industry, behind only Marriott Rewards. But Ballotti said he is not content sitting in second place.
“We have reinvented our program,” he said. “No one has tried to come close to what we are doing. Before, because of the pyramid structure of hotel portfolios, a free roomnight used to require 60,000 to 90,000 points. Since last year, we made obtaining a room only 15,000 points, no blackouts.”
The new structure had translated to a spike in redemptions.
“Free-night take-up has increased by 80% since the program launched,” Ballotti said. “Franchisees are engaged. Loyalty has never mattered more to us.”
Getting ownership buy-in was an important component in the program’s success, he said.
“To persuade our Days Inn and Super 8 owners, as two examples, to advertise Wyndham Rewards at their front desks has been a revelation. That is not an easy thing to do,” Ballotti said.
The next phase of the loyalty plan will be to enhance guest status via tweaks to the program’s tiered levels.
“The value proposition is great for everyone,” Kadhim said. “Programs are not necessarily driven by points, rather it’s the experience that keeps guests engaged, and how well the program can accommodate their needs.”
“It will be centered on the ability to make our most inspirational assets available to all guests,” Ballotti said.
Ballotti said Wyndham’s previous goal was to recreate the simplicity seen in loyalty programs of companies like American Airlines. But he said that company’s program, along with many others in the travel industry, has been devalued in the eyes of consumers.
“I also disagree with the notion, which I read a lot about in consumer publications, that millennials do not care about loyalty,” Ballotti said. “Look at Starbucks. My daughter is always there, and we’ll also drive far out of our way to go to eat at (fast-food chicken sandwich chain) Chick-fil-A.”
Quality growth
Ballotti told HNN that he believed consolidation in the industry will continue and that scale matters. He said the U.S. airline industry is proof of that.
“Airlines have had three distribution plays, and the same will be true of hotel companies,” Ballotti said. “Every brand will want one day soon to be in one of the big distribution plays.”
To make Wyndham fitter and leaner for what might come next, Ballotti is concentrating on increasing the company’s footprint while improving overall quality. He said that tactic resonates with franchisees.
“In 2015, we grew by approximately 65,000 rooms, roughly two hotels per day, a gross room increase of 8% and net room growth of 3%,” he said. “This allowed us to terminate 44,000 rooms, and such termination is really important. We will do that again this year, and it is beginning to bear fruit in improved guest review scores and net-promoter scores.”
Ballotti said the company will work with owners and franchisees to improve standards before kicking properties out of the system, though.
“No one wants to be terminated,” he said.
Ballotti reserved a special affinity for Dolce Hotels & Resorts, its newest brands, which Wyndham acquired in February 2015.
“It is a brand we can grow,” Ballotti said. “Several new ones are in our pipeline, and more importantly, its owners, too, are seeing increased market share and margin growth. More is being driven to the top line through loyalty, global sales and Wyndham affiliation.
“Wyndham will continue to grow in the managed space and the group space, where we are under-represented.”