PARSIPPANY, NJ—Determined to continue the growth momentum gained by Wyndham Hotel Group (WHG) over the last handful of years, President and CEO Geoff Ballotti has identified three specific areas of focus: marketing, technology, and the continued design evolution of its 15 brands.
Ballotti—who took over the reins of the company in April following the resignation of former President and CEO Eric Danziger—pointed out the publicly traded company, Wyndham Worldwide, just reported record earnings in Q2 and WHG recently surpassed the 650,000-room milestone.
In terms of marketing, WHG in May launched a national advertising campaign aimed at building consumer awareness of all of its brands as well as its Wyndham Rewards loyalty program. The campaign, which airs on prime time network and cable television, was developed by MMGY and is narrated by actor John Goodman.
Ballotti touted the impact of the campaign, which runs until Sept. 21. “We’ve had a big focus on marketing and most importantly growing out our Wyndham Rewards base. We’ve had our first umbrella advertising campaign. We convinced all of our franchisees to allow us to use those marketing funds to market on an umbrella basis, which has just been huge for us from a reach standpoint,” he said, adding, “the importance of marketing and a strong loyalty program just can’t be underestimated.”
The executive further discussed how the program is benefitting the company’s loyalty program. “What it’s done is it’s driven more consumers to wyndhamrewards.com than ever. Growth in our loyalty program is up over 20% and our enrollments to date are up over 50%. We’ve enrolled millions of new members,” he said.
Ballotti also stressed that WHG continues to put lots of resources into the latest technology solutions. “Our biggest priority right now is investing in our property management systems and our central reservation systems from every angle and every aspect,” he said.
In other technology developments, the company recently announced that it will streamline distribution of property photos for its global portfolio of hotels to more than 6,000 global distribution channels and a number of affiliated travel web sites. Working with ICEPortal, creators of the Visual-ICE content management system, the photo distribution effort plays a key role in WHG’s content management strategy, which was designed with the goal of ensuring greater content consistency and quality across all partner channels, according to the company.
According to Ballotti, the third priority is “making sure we have the very best prototypes and the very best design support we possibly can for their [owners]new builds. We need to make sure each of these brands continue to evolve,” he said. Ballotti added that the company is “spending millions right now” to develop new prototypes for all of its core brands and is utilizing outside designers and consultants.
Meanwhile, in its recent earnings report for the period ended June 30, 2014, WHG reported revenues increase 7% compared with the second quarter of 2013 and the company’s adjusted diluted earnings per share (EPS) was $1.17, an increase of 19% from adjusted diluted EPS of $0.98 in the second quarter of 2013.
The company also reported domestic RevPAR increases of 8.8%, partially offset by a 1.8% decline in international RevPAR, resulting in a 5.6% increase in total systemwide RevPAR compared with the second quarter of 2013. WHG attributed the international RevPAR decline to an unfavorable currency movements and growth in lower-RevPAR countries such as China.
As of June 30, the company’s system consisted of roughly 7,540 properties and more than 650,000 rooms, a 2.4% increase compared with the second quarter of 2013. The development pipeline included over 970 hotels and approximately 117,000 rooms, of which 57% were international and 67% were new construction. “Our pipeline is nearly 70% new construction and for us that is so exciting to see the demand from the people we sell to day in and day out,” he said.
Ballotti added that the increase in supply would have been greater were it not for a number of sub-par properties leaving the system. “We’ve been really focused on managing the increased terminations of hotels that are not meeting our brand quality. I’m a big believer you’re only as strong as your weakest link. Our franchisees have asked us to be tougher on quality and we’ll continue to do that from a QA standpoint and still deliver the room growth goals we set out to with our guidance,” he said.