Ballotti: No brand M&A imminent for Wyndham
 
Ballotti: No brand M&A imminent for Wyndham
26 SEPTEMBER 2019 8:34 AM

Wyndham Hotels & Resorts has grown its portfolio through brand acquisitions in the past two years, but President and CEO Geoff Ballotti said the company is focusing on developing its current brands for the time being.

LAS VEGAS—You can almost set your watch to Wyndham Hotels & Resorts’ brand acquisitions, but President and CEO Geoff Ballotti said at the company’s annual conference there are no deals currently in progress.

During a media Q&A session, Ballotti said Wyndham averages a brand acquisition every 18 months. The company announced the acquisition of La Quinta Holdings’ management and franchise businesses in January 2018 and closed the deal in May 2018, and in July 2017 announced its acquisition of the AmercInn brand, which it completed in October 2017.

“Every 18 months (on average) we acquire a brand, and it’s been about 18 months since we acquired the last one, but we have nothing to announce today,” Ballotti said.*

Asked if Wyndham was shopping for a specific brand to pad its portfolio, Ballotti said any brand in any segment could be a target under the right conditions.

“We’re very dominant, powerful and strong in economy, and with the last two acquisitions they were more in the midscale and upper-midscale space, but we’d never preclude any segment out there as an acquisition (target). But to the extent that midscale and above fits better in our system and brand lineup, that would be more likely where you’d see us acquire.”

Finding the right brand to acquire gets more difficult in higher chain scales, especially in luxury, Ballotti said.

“We’re not dying to go buy a luxury brand, but if one presented itself that made sense and was asset-light and ticked all the boxes—it’s infrequent that type of asset-light luxury brand presents itself,” he said. “Really with all of the upper-upscale brands we already have—Dolce, Wyndham Grand—those brands are really positioned in international markets against luxury competitors.”

Brian Mulroney (right), Canada’s prime minister from 1984 to 1993, laughs with his son, Canadian TV host Ben Mulroney, during the keynote address at Wyndham Hotels & Resorts’ brand conference. (Photo: Dan Kubacki)

EVP and CFO David Wyshner said he anticipates more brand growth when the next recession hits, as tougher economic environments have typically increased conversion rates at Wyndham brands.

“We have a number of brands that are geared more toward conversion than new construction, and there are thousands of independent hotels out there,” Wyshner said. “We’ve seen in the past that there’s way more conversions in a tougher environment, and we expect that to happen in the near future as well. Our brands and distribution and the services we provide to franchisees, they become more valuable in a more challenging environment, and we’ve seen in past downturns more conversions as a result.”

During the first day of the conference, Ballotti and other Wyndham executives shared several new brand initiatives, including the launch of the “Dawn” Days Inn guestroom prototype as the brand turns 50 in 2020, a dual-brand Hawthorn Suites and La Quinta prototype, a repositioning of Wyndham Garden and an interior and exterior refresh of AmericInn.

Growth in China
Overall, Wyndham’s pipeline is up 16%, Ballotti said, and across the globe, the development pace in China really stands out. The company intends to open approximately 500 hotels in China by 2022, which would increase its footprint to more than 2,000 properties in the country.

Leo Liu, Wyndham’s president and managing director of Greater China, cited the spending power of China’s growing middle class, which is estimated to reach 500 million people by 2022.

“Chinese travelers are keen to explore new travel experiences, and with the increase of domestic travel in China, it’s our mission to open up the road to them and offer the best service and experiences,” Liu said.

Tech investment and marketing
Wyndham announced plans to roll out Wyndham Wi-Fi, a new wireless internet bundle available to franchisees intended to instantly improve on-property connectivity and raise online review scores. The company also intends to launch a new mobile app in spring 2020 that features fewer clicks needed to book. EVP and Chief Marketing Officer Lisa Checchio said the app should be a huge driver of guest engagement.

“We know that our guests are on the go,” she said. “The world is at our guests’ fingertips, so let’s meet them where they are.”

EVP and Chief Marketing Officer Lisa Checchio speaks during Wyndham Hotels & Resorts’ brand conference about the company’s new app coming in 2020. (Photo: Dan Kubacki)

A year ago, Wyndham introduced its “By Wyndham” campaign to add the phrase to each of its 20 brands. In a year’s time, the campaign has unified the Wyndham brand family by increasing impressions, awareness, search volume and converted bookings, Checchio said.

“This gives guests peace of mind in the booking decision, and this momentum and visibility make a huge difference for all of us,” she said.

*Clarification, 26 September 2019: This story was updated to clarify the context of a quote.

Editor’s note: Wyndham Hotels & Resorts paid for meals, registration fees and accommodations at Mandalay Bay Resort and Casino to attend its brand conference. Complete editorial control was at the discretion of the Hotel News Now editorial team; Wyndham had no influence on the coverage provided.

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