Wyndham Worldwide, Cendant Corp.s former
hospitality division, was spun off as an independent company on
Aug. 1 and began trading on the New York Stock Exchange as WYN.
Stephen Holmes, Wyndham Worldwides CEO, spoke with Travel Weekly
Hotel Editor Michael Milligan about what the future holds for the
hotel company.
Q:
You have some well-known brand names (such as Howard Johnson and
Ramada) that have been around a long time. Will there be an effort
to refresh them?
A:
They still do very well in the market. We went through a process
last year called Project Restore, where we took a lot of
sub-performing properties out of our system and terminated about
50,000 to 60,000 rooms, which is the size of a large chain. That
was so we could clean up our system and position it for
growth.
We have big
opportunities with Baymont, which is new to us. We will merge the
Baymont and AmeriHost Inn brands to give Baymont a bigger presence.
We have big opportunities with Wyndham, which is also new to us. It
gives us an upscale presence, which we can drive very hard for
growth.
Q:
Are there any plans to create any new brands?
A:
There are no plans to spin anything off. When you talk about the
luxury sector -- W and the St. Regis -- we dont have a product
there right now. If one was available and attractive and properly
priced, we would consider buying it. But I dont think you are going
to see us launch a luxury brand in the very near future. Launching
a brand can be a very costly, slow venture.
But when you look
at the traveling public in the U.S. and around the world, it is
really the midscale and economy sectors [that they want]. It is
nice to have a sexy luxury brand, but at the end of the day, where
are the meat and potatoes? They are in the midscale and economy
markets.
Q:
Still, youll have franchisees saying that they need a new brand
because theyve already purchased all of your other brands. That
spurred Choice Hotels to create Cambria Suites. Youre not seeing
that situation with your franchisees?
A:
We saw it with the upscale brand. That was one of the reasons we
bought Wyndham. But we could use an extended-stay product. We will
consider either developing or buying something in that
sector.
Q:
Revenue per available room is up, demand for hotel rooms is up and
theres a significant amount of investment in the marketplace. But I
wonder if this wave has crested or if were going to see it crest
soon.
A:
I dont think the market is poised for a crash. We dont have
anything dynamic like a change in tax laws that might cause rapid
development of hotels to the point where supply will outpace demand
like weve seen in prior cycles. You are going to have a slowdown
because of general economic conditions.
But the good news
for us is that [we have several brands] in the economy and midscale
sectors. Generally, people trade down during difficult times. They
might go from an upscale to a midscale and a midscale to an
economy. So we are well positioned to grab that business as it
arrives.
Q:
Then you dont see a downturn in the hotel market, at least not in
the foreseeable future?
A:
We dont see it on the horizon. Obviously, at some point, the way
the cycles work, there will be a softening. But we dont see it
coming in the near term.
To contact
reporter Michael Milligan, send e-mail to [email protected].