In an era where constant evolution is the key towards growth, some traditional elements are required to run a business. In a detailed interview, Deepika Arora, Regional Vice President, Eurasia, Wyndham Hotel Group sheds her expertise on the same.
Please share your entrepreneurial journey? Please give a brief about your brand’s USP?
I am an hotelier by passion with a degree in landscape architect from the foremost architectural school in India – the School of Planning and Architecture (SPA). I embarked on my professional journey with JLL, an international property consultant where I engaged with clients to establish strong business cases for large real estate investments in various asset classes. That’s where my tryst with hospitality began. My first project with specific focus on hospitality was at Hilton Worldwide where I championed development of new hotels in India. Thereafter I joined the Wyndham Hotel Group (WHG) in 2010 to fuel their growth in Eurasia, including India. There has been no looking back with Wyndham Hotel Group having grown to 34 properties in the last six years.
The WHG is the world’s largest hotel company based on number of hotels. In India, we have 26 properties with 2,625 keys (as of date); 21 Ramada properties, 4 Days Hotels and 1 Howard Johnson. Our recently updated loyalty program - Wyndham Rewards - is an award-winning guest loyalty program that makes earning and redeeming generous rewards for travel both simple and attainable. Members can earn and redeem points at any of the nearly 8,000 Wyndham Rewards hotels across the globe. With over 45 million members worldwide, Wyndham Rewards continues tobe our ace card and is expected to be one of the biggest contributors in the next five years.
What is the basic criterion of evaluating franchisees and getting them on board?
We maintain very strict quality standards at WHG and expect our franchisees to uphold the mantle on behalf of the brand that they are associated with. For us quality audits are not the destination but a journey. While as a process they are formally conducted once a year by a third party audit firm, as a culture they are enforced by our corporate teams through the year. Each region’s Director – Franchise Operations is the custodian of this process; who along with his team reviews our franchised properties regularly to make sure they conform to Wyndham Hotel Group’s standards at all times.
What according to you has been a breakthrough for your brand?
The WHG recently unveiled its vision for a strategic transformation of its 16 iconic brands worldwide, aimed at elevating the overall travel experience for the customer, particularly the millennial and the diverse middle class. This global transformation is a major breakthrough for the Group to reposition and revitalize all its brands across segments, unlocking boundless opportunity to delight the everyday traveller, regardless of his budget or travelling style. Globally, travel and tourism are among the fastest-growing industries with their contribution to the global GDP expected to rise from $7.2 trillion to $11 trillion over the next decade as the global middle class more than doubles from 2 billion to 4.9 billion. With a powerhouse portfolio of nearly 8,000 hotels worldwide across economy, midscale and upscale segments, the Wyndham Hotel Group is well-poised to meet these demographic tailwinds and lead the hospitality industry in empowering guests to have great experiences at great value.
How do you evaluate the Indian market and the day to day evolving Indian consumer?
The modern day consumer is spoilt for choice -choice of destination, choice of brands choice of rates and choice of time. The advent of technology and the abundance of consumer-direct travel services have played a pivotal role in aiding these choices.
Gone are the days when annual holiday planning was an event in itself. Today a traveller plans a holiday on instinct. Earlier there were just two-three types of holidays – beach holiday, vacation in the hills or a pilgrimage. The horizon has expanded far and beyond with people travelling for adventure sports, putting up in luxury tents, or even taking social responsibility tours. A decade ago family holidays or romantic getaways were the buzzwords, today its ‘single women travellers’ and ‘leisure’ trips.
The new age consumer is also impatient and doesn’t want to wait or stop. This puts tremendous pressure on the industry to be on their toes and even build in a predictive style of operations.
These trends have transformed the Indian hospitality industry. We at the Wyndham Hotel Group are well equipped to handle these winds of change given a strong technology orientation and an inimitable loyalty program.
Getting a hotel franchise is not a small venture, what more than capital is required to become your franchisee?
The relationship between a hotel owner and the brand is a very committed one. It cannot be only measured in commercial terms. There has to be a willingness to understand each other, harness mutually exclusive advantages and systematically wean off the weaknesses. You would be surprised to know that almost 50 percent of our franchisees are multiple-project owners. We expect our owners to be conscious of the WHG quality promise and uphold our operating standards that have made us the preferred brand for the customer.
What kind of training and support is provided to your franchisees?
As I mentioned, WHG is a very technologically sound company with strong systems and processes. Our biggest support is our internal hotel resource platform called ‘MyPortal’ that is the invisible genie to all questions, problems and issues at a hotel level. This has been developed and evolved following years of experiencing and anticipating problems related to operations, sales, PR and finance. Besides this, we conduct regular ‘webinars’ on various aspects such as productivity through various online channels, how to fill your RFP, how to prepare for a quality audit, how to enrol members in our loyalty program, etc. Our Operations team conducts monthly review calls with the hotels to understand their issues and also apprise them about the latest tools and initiatives that they can apply at their properties.
Our product offerings are very flexible, fitting into the owner’s budget and meeting consumer requirements. We also conduct annual audits that guarantee fair practices and quality performance.
Do you operate your franchised hotels through ‘Hotel Management agreement’? Please elaborate thoroughly.
A Hotel Management Agreement would typically be used for a hotel which we are directly operating and not franchising. Franchised hotels are inducted through an International License and Training Agreement along with an International Services and Marketing Agreement. Herein, a franchisee invests to construct a hotel as per our product standards, which on completion operates as per our brand standards. We typically help the franchise owner identify the right General Manager to undertake day to day operations at the hotel.WHG also provides virtual and hands-on support including hotel management tools, revenue management, service culture training, access to global sales offices and accounts, strategic sourcing opportunities, on-going operational support and marketing services. We also ensure that proper training is imparted to the staff to equip them with the right skills.
What are the teething issues that you face with a franchised hotel?
Generally, franchisee hotels are not as rigidly standardised as their managed counterparts, enabling them to adapt more easily to the market. With every new hotel owner that we engage with or every new hotel we lend our brand to, the sensitisation to this philosophy is slowly and steadily built. Given this, in the formative years of the said hotel there could be hiccups due to non-adherence or lack of understanding of our standards, To prevent this, WHG insists on two annual audits at all hotels of which one is by an external auditor. If a hotel fails the external audit for three consecutive years, its contract may be terminated. It is particularly important to handhold our franchisees during the run up to these external audits.
Please share your expansion plans?
With our recent announcement on WHG’s brand transformation, we are well poised to claim our spot not just as the largest but also the best in the world! Within a span of six years, the Group has established a strong foothold in India with the successful launch of brands such as Ramada Plaza, Ramada Encore, Howard Johnson and Days. There are plans to augment this growth with the introduction of namesake brands in the next one-two years, including ‘Wyndham Garden’. Soon our presence will also get accentuated across countries such as Pakistan, Maldives, Sri Lanka and Bangladesh.
Additionally, our award-winning loyalty program Wyndham Rewards, with over 45 million members worldwide, is expected to become one of the biggest contributors to this growth in the next five years.With so much action and novelty of initiatives, our biggest priority continues to be supporting our franchisees and providing them with tools to attract and retain customers in their respective markets.
Can you please share the things that a franchisee should keep in mind while getting a franchise of a hotel?
Every brand has a specific business model and it is extremely important to educate owners on the basic functioning of that model. We insist that our franchise partners understand and appreciate our brand standards and adhere to them in the best interest of the customer and thereby the overall business.
We go out of our way to stay as flexible as possible while keeping with our standards. In return, we expect the franchisees and owners to cooperate with us in upholding the minimum standards of the brand. For example, I can give some leeway in the colour scheme of the interior design of a hotel but I will certainly not compromise on the safety of my guests by overlooking fire and life safety standards applicable to my hotels.
Please give a detailed overview of your franchising plan?
Currently, WHG stands at 34 hotels in the Eurasia Region, of which 26 are in India alone. Going forward, we will not only increase in numbers but also spread to newer territories. We have already made foray into countries such as Bangladesh, Maldives, Mauritius and Nepal, and are looking to further expand our presence.
We have been working relentlessly to expand our brand footprint by establishing dominance over the franchise-based model in the region. By the end of 2016, the overall region including Pakistan, Maldives, Sri Lanka and Bangladesh will see more action and innovation with new launches.
In India, we have successfully launched upper midscale brands such as Howard Johnson, Ramada Encore and midscale brand - Days’ Inn. Riding on the positive response to these properties, we hope to expand our reach and visibility to enhance customer experience.
Currently WHGhas a robust pipeline of 41 hotels which also includes our new brands i.e. Wyndham Garden and Wyndham and Hawthorn Suites by Wyndham. So you will surely see a lot of the mother brand – ‘Wyndham’ coming into the market soon.
Getting a franchise of a hotel is a big investment, is there any fixed R.O.I promised to the franchisee?
Given that both the day to day operations as well as responsibility to construct the hotel within set budgets lies with the owner, it may be difficult for us to offer a promise of budgeted ROI. However, what we can do is set the correct business expectations for the owner by advising him on indicative investments as per the relevant brand. With regards business projections, we usually advise owners to have them validated by hospitality consultants. Regardless of all this, we do know that typically hotels are a long gestation asset class and payback ranges from 6-10 years depending on location and nature of investment.
|Total Investment||Depends on the brand Midscale – 25-30 lakhs/room (e.g. Day’s Inn) Upper midscale – 45 – 60 lakhs/room (e.g. Ramada, Wyndham Garden) |
Upscale – 60 – 90 lakhs/key (e.g. Ramada Plaza/Wyndham)
|Required area for opening brand’s franchise||Varies from Brand to Brand – Minimum 45,000 sqft for a 100 room midscale hotel|
|Target cities for expansion||Darjeeling, Bangalore, Lucknow, Jammu, Kumbhalgarh, Trivandrum, Dhaka (Bangladesh)|
|Preferred location for opening your brand’s franchise outlet||Open to metros, Tier 1 and 2 cities, business, leisure and pilgrimage destinations.|
|Brand’s vision & mission for 2016||Having established a strong foothold in India, there are plans to expand our business in the Eurasia region with the introduction of one of the Group’s youngest and fastest growing brands, ‘Wyndham Garden’, which offers a refreshingly laid back customer experience.|