Wyndham International Hotels: Fostering High-Touch With High TechEssay Preview: Wyndham International Hotels: Fostering High-Touch With High TechReport this essayWyndham International Hotels: Fostering High-Touch with High TechWhat is WyndamÐŽ¦s GoalÐŽÐÐŽ§To become the lodging brand of choice for business and leisure travelers in the upscale and high-upscale segments of the market?ÐŽÐ pg. 1Who Is WyndamÐŽ¦s Competition?Six ContinentsHoliday Inn (especially Crowne Plaza)Hilton HotelsMarriottStarwood HotelsSheratonWestinFour PointsIn summary, Wyndham is much small (in terms of numbers of hotels and numbers of rooms) than their competition in this market segment. They have a problem overcoming this disadvantage.
Huge numbers are not that surprising; the average number of people attending a particular event (especially a sporting event such as football or football games) is a big deal in many parts of the US, many many places. Yet, despite their high number of hotels, there’s a lot more competition – and many more people staying at a specific hotel. In any case, the competition at WyndamÐŽ¦s New York hotel has not lost much ground, as many others – the Marriott Group, Hilton, One World House and others – have managed to increase their number and the number of hotels (in the last 10 years) going back to the previous numbers. Why are these two groups so competitive? Here’s why: WyndamÐŽ¦s competitors in this market have a lot of weaknesses, including their high costs, high-staffed staff – they are very secretive and they often do not have a list of available rooms – low-volume and low-key and usually small, so they are easily intimidated and often lose to other new competitors that they don’t want to compete with. In addition, their high turnover rates are often the result of poor planning, where for a group of 15 people every 12 hours, you can expect turnover numbers (and turnover rates) more than 500% every 24 hours – they could have been better able to cope with a lot more competition, and it might have reduced the cost of living in one of their neighboring cities, but WyndamÐŽ¦s cost structure isn’t perfect. (I want to say, however, that many of our critics may be right: The reason we’re complaining about low turnover rates is that the same costs that often go into booking stays at a hotel can be spent on booking additional rooms because they all run the same cost and are less likely to change.) WyndamÐŽ¦s expense structures also work to the advantage of small and mid-sized cities where they can generate a lot of revenue. But WyndamÐŽ¦s lack of a pool of room booking locations isn’t so surprising either. As to not being able to make this small and mid-sized group of 20 waiters – the majority of the hotel’s room capacity in those cities is at the lowest level – cost the majority of their customers to find their lodging, it makes little sense for them to spend any of this time getting a place (especially when you are actually in some cities that are quite expensive and close to very high rents). Most of the
Huge numbers are not that surprising; the average number of people attending a particular event (especially a sporting event such as football or football games) is a big deal in many parts of the US, many many places. Yet, despite their high number of hotels, there’s a lot more competition – and many more people staying at a specific hotel. In any case, the competition at WyndamÐŽ¦s New York hotel has not lost much ground, as many others – the Marriott Group, Hilton, One World House and others – have managed to increase their number and the number of hotels (in the last 10 years) going back to the previous numbers. Why are these two groups so competitive? Here’s why: WyndamÐŽ¦s competitors in this market have a lot of weaknesses, including their high costs, high-staffed staff – they are very secretive and they often do not have a list of available rooms – low-volume and low-key and usually small, so they are easily intimidated and often lose to other new competitors that they don’t want to compete with. In addition, their high turnover rates are often the result of poor planning, where for a group of 15 people every 12 hours, you can expect turnover numbers (and turnover rates) more than 500% every 24 hours – they could have been better able to cope with a lot more competition, and it might have reduced the cost of living in one of their neighboring cities, but WyndamÐŽ¦s cost structure isn’t perfect. (I want to say, however, that many of our critics may be right: The reason we’re complaining about low turnover rates is that the same costs that often go into booking stays at a hotel can be spent on booking additional rooms because they all run the same cost and are less likely to change.) WyndamÐŽ¦s expense structures also work to the advantage of small and mid-sized cities where they can generate a lot of revenue. But WyndamÐŽ¦s lack of a pool of room booking locations isn’t so surprising either. As to not being able to make this small and mid-sized group of 20 waiters – the majority of the hotel’s room capacity in those cities is at the lowest level – cost the majority of their customers to find their lodging, it makes little sense for them to spend any of this time getting a place (especially when you are actually in some cities that are quite expensive and close to very high rents). Most of the
What is the Basis of Competition in the Hotel Industry?Start to generate general list and then focus on WyndhamÐŽ¦s segment (what is this and how might it differ from other segments?) See pg. 7Wyndham targeted the upscale and luxury travelerÐŽXfrequent business traveler12-14 trips per year (pg 13)See Exhibit 6 (pg. 27 & pg 26))Critical Factors for this market segmentClean roomsServiceLocationPrevious experienceValue for priceReputation of chainRoom price lowerHow does Wyndham intend to compete?What are WyndhamÐŽ¦s major problems?Low brand recognition among business and leisure travelers (pg 7)WyndhamÐŽ¦s name did not appear in the list of the top 20 most recognizable brands to business travelers.Issue of hotel rooms as a commodityOffer a similar product making their value propositions indistinguishable and leading to within-segment competition increasingly based on PRICETo be successful a firm must develop inimitable and sustainable differentiators and know their customers intimatelyThus, Wyndham must:ÐŽ§Build a RECOGNIZED BRAND, CHANGE THE RULES OF ENGAGEMENT, AND CARVE A PROFITABLE NICHE THAT WE CAN DEFEND?What are rules of engagement?What is the solution?Guest recognition or guest loyalty programsWhat is the difference?See Exhibit 7 pg. 30Part of WyndhamÐŽ¦s answerÐŽXThe BY REQUEST program.ÐŽXA Strategic InitiativeWhat is this?Introduced in 1999 to shareholdersÐŽXProvides popular perks for members:Registration free check-inRoom upgradesLate checkoutFree telecom servicesComplimentary productsAll to the guestÐŽ¦s preferencesSupported by Kleisner and Teng (CEO and CFO)Focused on customization, not points as would be a rewards programGathered data from registration to add desired features such as reading materials,