Another Reorg Rolls Through Cendant Hotel Division

PARSIPPANY, NJ— Less than a year into a major restructuring, Cendant’s hotel division finds itself playing musical chairs again, with significant staff cuts and shifts being made at numerous levels of the organization, from media relations personnel to brand presidents. On top of this, the company has said it intends to cull U.S. properties that are not meeting quality standards, expecting to purge at least 300— or 7%— of its franchise properties from the system by year’s end. It’s already given a first wave of 300 franchisees 10 days from initial notification to state their intentions to shape up, including working out fee-payment defaults, with an additional 90 days to complete the changes before they’d be forced to ship out. More are expected to follow, representing as many as 40,000 rooms— in addition to the average 20,000-30,000 rooms dropped annually— as part of an overall plan to ratchet upwards all nine Cendant lodging brands in terms of quality, value, profitability and distribution growth. As to the so-called shakeup, “it’s far more evolutionary than revolutionary,” hotel group chairman/CEO Steve Rudnitsky told HOTEL BUSINESS®, agreeing the current moves are closer to an iteration of the structure already in place. “It really is an iterative process as it relates to the reorganization… that’s a fair assessment.” The division eliminated 75 existing jobs and it will not fill 55 other positions that had been open. Rudnitsky said the reorganization that first surfaced last November and that has been playing out this year, including his own hire in March, has now been taken to the next step “and really made sure that roles and responsibilities were clearly defined. “For example, with our brand presidents absolutely 100% owning the franchisee versus our marketing department being very focused against the consumers. That’s where we made the iterative steps to sort through the structure and make sure the accountabilities and organizational resources were clearly in place for both the brand presidents and the marketing organizations,” he said. In a key leadership move, the division reached outside the industry to Kraft Foods— one of Rudnitsky’s former stomping grounds— to bring in marketing vp Jean Thomas to head up marketing for all nine brands as svp-brand strategy, with oversight of the hotel group’s research team and other marketing endeavors. “Marketing talent— fresh marketing talent— is really, really very important to any organization,” said Rudnitsky. “Jean’s got a very strong marketing background. She’s got a very strategic mind. I had the pleasure of working with her at Nabisco. She also came over and assisted me at Kraft for a period of time…she’s going to take that experience combined with just a terrific knowledge base that people like Peter Strebel [svp-marketing] have in the industry and we’re just going to run with it.” Another key move finds Bob Weller retaining the title he got in the last reorganization in fourth-quarter 2001, that of group president/CEO for the AmeriHost Inn, Knights Inn, Super 8, Wingate Inn and Villager brands; however, now he will manage a reconfigured set composed of Days Inn, Howard Johnson, Knights Inn, Super 8, Travelodge and Villager brands, overseeing the brand presidents, including his former fellow group president/CEO, Joe Kane. Kane, who received the same upgrading as Weller last November, with oversight of Days Inn, Howard Johnson, Ramada and Travelodge, is now back in the slot he occupied for six years prior to that promotion: president/CEO of Days Inn. Commenting on the moves, Rudnitsky told HOTEL BUSINESS®: “We really needed to relook at the organizational structure and make sure from the top down when we decided to reduce this work force that we were reducing it at all levels. We felt that there was a really a need for one group president— not two— at this time. Joe Kane is a world-class hotelier who probably knows the Days Inn business better than anybody els