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‘Indian market is ready to welcome more of our iconic brands’

Tuesday, July 11, 2017, 12:33 Hrs  [IST]

After establishing a fair footprint for their widely recognised Ramada brand in India market, Wyndham Hotel Group will now be focusing on growing mid-scale brand ‘Days’ and upper mid-scale brand ‘Howard Johnson’ here. The company also feels that it’s time that it augmented its portfolio by bringing more iconic brands like ‘Wyndham Garden’ and ‘Hawthorn Suites by Wyndham’ to India market. Deepika Arora, Regional Vice President – Eurasia, Wyndham Hotel Group shares the regional and India market specific strategies with Hospitality Biz.

Q In the global portfolio of Wyndham Hotel Group, how significant is the Eurasia region in terms of its portfolio strength, and where does India figure within the region?
With a global portfolio of more than 8,000 hotels and over 699,700 rooms in 79 countries across 18 brands, Wyndham Hotel Group is the world’s largest hotel company based on the number of hotels. Eurasia is an integral part of Wyndham Hotel Group’s global expansion plan. Currently, there are 36 operational hotels in Eurasia with 3,798 keys under the Wyndham, Ramada, Ramada Encore, Days and Howard Johnson brands. We have been growing at a robust pace across Eurasia and over the past five years nearly doubled the number of hotels we have in the region while also growing our pipeline by more than 200%.

India is a key market in Eurasia as there is a great potential for growth. Currently Wyndham Hotel Group’s India portfolio consists of 28 operational hotels with 2,672 keys. Our presence spans across the length and breadth of the country including the metro cities of Delhi NCR, Mumbai and Chennai; tier II and III cities like Ahmedabad, Amritsar, Jalandhar, Jamshedpur and Panipat, and key leisure destinations such as Agra, Jaipur, Udaipur, Kochi and Varanasi. In addition, we plan to further expand our footprint by exploring opportunities in other high potential countries in the region including Bangladesh, Uzbekistan, Kazakhstan, Sri Lanka, Maldives and Nepal. We aim to have 50 operational hotels in the region by 2019.

Ramada, Navi Mumbai

Q How do you rate the growth momentum of Wyndham Hotels in India over the last couple of years? What does the future pipeline look like for Wyndham in India?
Within a short timeframe, we grew in India from eight hotels in 2010 to 28 operational hotels to date in 2017. Over recent years, we have successfully launched brands such as Ramada, Ramada Encore, Howard Johnson and Days in India and we are seeking opportunities to further expand our footprint.

We are concentrating on the mid-market segment in the country as we see an opportunity for immense growth in this segment. There has been a shift with an increasing number of corporate travellers opting for midmarket hotels along with India’s growing middle class with disposable income who are eager to travel and explore.

At Wyndham Hotel Group, we have a diverse portfolio of brands that have a strong offering for the economy and midscale segments. Our range of brand offerings is varied and flexible to meet the expectations of today’s dynamic traveller.

As part of our development strategy, we look to provide global connectivity and brand recognition with further expansion into secondary and tertiary cities. We will soon be opening hotels in tier-II cities such as Thiruvananthapuram, Jammu, Dehradun, Ghaziabad, etc., and leisure destinations such as Darjeeling, Lonavala and Kasauli.

Howard Johnson, Bengaluru

Q Among international hotel companies in India, Wyndham is the only group which is into total franchising of brands. What are the advantages or disadvantages associated with franchising in a market like India? What has been your experience?
Wyndham Hotel Group has two global business models; we are both a franchisor of hotel brands but in many markets, we also have a large hotel management business. However, in India, we have largely grown through the franchise model. We are happy to work with partners on a franchised or managed basis, depending on their individual needs, market of operation and what makes sense for the partnerships.

In the franchise model, we define the basic brand standards for franchisees so that the general look and feel of the brand is maintained. However, in some cases where the situation so demands, we do allow for certain customisation to cater to the local requirements or market dynamics.

To cite an example, with the launch of the Days Inn brand in India, we replaced the word ‘Inn’ with ‘Hotel’. This was done keeping in mind customer expectations and local relevance. As per our market analysis during the launch phase, we gathered that the word ‘Inn’ did not resonate well with customers since limited service as a concept is still not very acceptable in the Indian market. Therefore, all the Days hotels in the region are full service products as against their global counterparts. Another prime example is that of Howard Johnson, which is an economy brand in the US, but when introduced in Europe and the Indian sub-continent, it transforms into a midscale and upper midscale brand respectively. With these small market driven customisations, we have been able to successfully meet customer expectations through our portfolio offerings.

Q There were reports in the past that Wyndham is keen for strategic takeovers of mid-market hotel companies in India to strengthen your hold in the Indian hotel space, your comments?
Our global brand portfolio has grown largely through acquisitions, and we are open to evaluating new brands when their value proposition could enhance our existing portfolio. However, as a public company we will not comment on rumours or speculations regarding any potential acquisitions of a specific brand.

Q Although you have brought in few brands from your portfolio from time to time, Ramada continues to hold the forte for Wyndham in India. Why other brands failed to see the same traction in the Indian hospitality market as Ramada?
Globally, Wyndham Hotel Group has 18 brands, of which four are currently present in India: Ramada, Ramada Encore, Howard Johnson and Days. As we are all aware, India is a perception driven market. Currently approximately 75% of our portfolio in India is Ramada, which simply makes it the most visible of our brands. In fact, Ramada is one of the most recognised hotel brands in the world, with more than 850 hotels in 64 countries. In 2016, Ramada was named the ‘Fastest Growing Hotel Brand’ in Europe by PKF hotel experts, an internationally recognised leader in the field of hotel, tourism and leisure consulting.

Having said that, the Indian market is also extremely cost sensitive with great affinity for mid-market brands. Therefore, we see a lot of scope for the growth of our Days brand in the mid-scale segment and Howard Johnson brand in the upper mid-scale segment in the coming years. Also, we feel that the Indian market is ready to welcome more of our iconic brands. Over the next few years we hope to augment our growth in the region with the introduction of ‘Wyndham Garden’ and ‘Hawthorn Suites by Wyndham’.

Ramada, Powai

Q What are your strategies to strengthen your sales and marketing bandwidth considering the mid-market hotel space is getting more and more competitive with the strong expansion of new brands and business models?
We have partnered with Siegel+Gale, a highly recognised brand strategy and experience firm, to understand traveller’s preferences and priorities and design brand experiences accordingly.

We offer the simplest rewards programme - Wyndham Rewards - offering members a simple-to-use, generous points earning structure along with a flat, free night redemption rate. The recent multi-layered integration allows over 50 million Wyndham Rewards members an opportunity to redeem points for stays at more than 17,000 vacation condos and homes worldwide in addition to the over 8,000 hotels that were already a part of the offering.

In addition, Wyndham Hotel Group has a strong sales network comprising of 125 GSO sellers spread across five continents who contribute inbound business to our hotels across regions. We also have a robust referral programme that encourages cross selling of hotels. With a strong online presence and distribution capabilities, the Group runs several business promotions throughout the year with the objective of driving incremental business to the properties.

Q What is your understanding of the business scenario unfolding in India for hospitality players in coming times, especially in the light of various restrictions and regulations being imposed by executive and judiciary?
The tourism and hospitality industry in India has emerged as one of the key drivers of growth among the services sector. According to World Travel and Tourism Council (WTTC), in 2016 the industry contributed 9.6% to the country’s GDP with revenue of INR 14.1 trillion. The industry also holds great potential not just as a large employment generator but also as a significant source of foreign exchange. In 2016, the tourism and hospitality sector created 40.3 million jobs accounting for 9.3% of the country’s total jobs. The tourism and hospitality sector is among the top 10 sectors in India to attract the highest Foreign Direct Investment (FDI).

Although recent regulations introduced by the government and judiciary are reformative in nature; these need to be understood and implemented with the right perspective so that the growth of the industry is not restricted.

The long-term outlook for the Indian hospitality business continues to be positive, both for the business and leisure segments which have the potential for economic growth, as well as due to the increase in disposable incomes and the burgeoning middle class. As the hotel sector enters the next up-cycle, stakeholders need to remain prudent and measured, yet assertive in decision making.

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