As the recovery in global travel starts to gain traction, more hotel owners are looking to scale their operations by partnering with industry-leading brands through franchise agreements. Indeed, the pandemic has accelerated a trend towards franchising in the hospitality sector that started more than a decade ago.
Led by global hospitality leaders such as Wyndham Hotels & Resorts, the proportion of branded hotels globally that were franchised operations rose from 70% in 2010 to around 80% in 2019, according to STR and JLL Research. In Wyndham’s case, the formula for success can be attributed to three factors.
Firstly, Wyndham adopts an “OwnerFirst” mindset where the company constantly collaborates with owners to achieve a win-win outcome. Secondly, Wyndham prides itself on having a brand for every occasion. This enables existing and potential business partners to identify a brand suitable for their market and target guest profile. Lastly, they have robust on-ground presence in Singapore, Jakarta, Seoul, Bangkok, Melbourne, Sydney, Shanghai, Beijing and seven other cities across China to help address owners’ queries and provide support. These three key factors provide existing and potential owners with a high level of confidence when they partner with Wyndham Hotels & Resorts.
Amid challenging economic conditions, the numerous benefits of the franchising model have become increasingly attractive. Franchisees are not only able to associate their hotel with a popular brand, but also take advantage of a franchisor’s global network and expertise, training programs, round-the-clock advisory and support services, as well as access to loyalty and marketing programs.
Meanwhile, as the world’s leading hotel franchisor, Wyndham offers strong opportunities for existing and potential hotel owners to tap into an enterprise system driven by a robust portfolio of iconic brands with strong value proposition.
“We know what it takes to run a successful and collaborative franchise business model with owners.”
While management agreements remain the dominant model in Asia Pacific, the appetite for franchising has been on a good trajectory in 2022, reveals Joon Aun Ooi, President, Asia Pacific, Wyndham Hotels & Resorts.
“Asian owners are more aware of the benefits of franchising today. It gives them branding, distribution and tools to help them reduce operating costs, and the flexibility to run their hotels as they see fit while conforming to franchise standards,” he says.
Owners in the region have become more comfortable with franchising as the talent pool to support this model expands. Asia’s hotel development boom in recent years has swelled the ranks of qualified general managers (GM) and other hotel professionals in the region.
“Asia has a lot of hospitality talent available now. This enables owners to hire their own GMs and other key team players to run the hotel themselves. Due to this factor, I am more enthusiastic about franchising today compared to five years ago,” explains Ooi.
Leading the Pack
Wyndham is widely recognized as one of the leaders of the franchising model in Asia Pacific. The group aims to grow its portfolio to 2,000 hotels in the region by 2025, from around 1,600 currently. Wyndham sees strong demand coming from Greater China, Southeast Asia and the Pacific Rim.
Globally, Wyndham is the world’s largest hotel franchising company, with approximately 9,000 hotels in 95 countries across six continents. “We’ve been franchising for decades,” says Ooi. “While other chains are franchising too, we have been very active in Asia Pacific. We know what it takes to run a successful and collaborative franchise business model with owners.” Reflecting the strength of Wyndham’s franchise and owner-first strategies, existing owners made up more than 20% of its signings in 2021, with one owner in Thailand opening four new hotels under the Wyndham portfolio of brands this year alone.
Leveraging a Global Footprint
The key advantage that Wyndham offers owners is its size and global footprint, including a diverse portfolio of 22 brands. The group has deployed 15 of these brands in Asia Pacific: Wyndham Grand, Wyndham, Wyndham Garden, Dolce Hotels and Resorts by Wyndham, Ramada by Wyndham, Ramada Encore by Wyndham, Microtel by Wyndham, La Quinta by Wyndham, Days Hotel by Wyndham, Howard Johnson by Wyndham, Trademark Collection by Wyndham, TRYP by Wyndham, Hawthorn by Wyndham, Super8 by Wyndham and Wingate by Wyndham. The group plans to introduce Wyndham Alltra, an all-inclusive resort brand, in Asia Pacific by 2023.
The versatility and diversity of the brand portfolio provide franchisees with a wide range of options to meet their unique needs and help them to capture profitable opportunities.
Wyndham partners also benefit from the group’s expansive network of relationships with major online travel agents (OTAs) and distribution partners. Due to Wyndham’s global reach and pool of more than 95 million Wyndham Rewards members, the group can negotiate favorable rates on their franchisees’ behalf. Owners can save on the costs of OTA bookings by taking advantage of these competitive rates, as well as brand marketing efforts that drive guests to direct channels.
Owners also enjoy the full backing of Wyndham’s highly experienced support team to assist them in their day-to-day operations. Franchisees have round-the-clock access to an online portal, including comprehensive best practices tools in operations and marketing, as well as a direct line to Wyndham support experts.
Meanwhile, Wyndham’s team of revenue management experts works to optimize property rates and inventory availability for franchisees with the goal of increasing property revenue and market share. Owners can also leverage Wyndham’s Architecture, Design and Construction team to guide them through each step of a new build or conversion process for projects of all sizes.
Winning with Wyndham Rewards
On the marketing front, owners can tap into the award-winning Wyndham Rewards platform. The program, along with Wyndham’s comprehensive and targeted cross-selling efforts, helps connect a franchised hotel with over 95 million loyalty members. Wyndham Rewards offers guests more than 50,000 redemption options around the world, helping ensure repeat business for franchisees. Most recently, Wyndham Rewards clinched Gold at the 2022 Loyalty & Engagement Awards organized by Marketing Interactive. This win is highly significant as it reflects the high level of acceptance and trust the program has among hotel guests and partners in Asia Pacific.
Looking ahead, Ooi says that he believes the recovery in Asia Pacific’s hospitality sector can only bode well for Wyndham’s franchise strategy in the coming years. “More than ever, the challenges of the pandemic have underscored the importance of hotels being affiliated with established, globally known brands. We know what it takes to run a successful and collaborative franchise model, and that’s driving increased interest in our offerings, a trend we expect to continue throughout 2022 as hotels look to further their recovery.”