Editor’s note: This is the second part of a two-part interview with Wyndham’s president and CEO, Geoff Ballotti, conducted at the Wyndham Dubai Marina on 26 April. In the first part, published on 23 May, Ballotti discussed Wyndham’s overall strategy.
DUBAI—Wyndham Hotel Group president and CEO Geoff Ballotti knows franchising is where his company’s bread is buttered. But he also knows that finding new management agreements is its best bet to grow in the Middle East.
So that’s just what he plans to do.
“Our big focus here is our management presence,” he said during the recent Arabian Hotel Investment Conference. “In 2008, we had none in the region, but of the deals in the pipeline (in the region), 80% will be managed.”
Wyndham announced seven new managed deals during the conference. Only eight Wyndham brands are currently operating in the Middle East.
“The market potential for midscale and management contracts in this area is huge,” Ballotti said. “The region essentially does not have much midscale, rather it is a pyramid filled with luxury product, while Wyndham is a pyramid of budget and economy, so we see opportunity.”
The customer base for these new initiatives would be international, he said, but domestic travelers will become increasing important in filling midscale rooms.
Also benefitting this new trend is a new type of owner, said Daniel Ruff, Wyndham’s president and managing director, Europe, Middle East, Africa and Indian Ocean.
“We see an evolution in Dubai in owner type and sophistication,” Ruff said. “Initially, it was pure real-estate (people), but now we are seeing owners who have grown into hoteliers themselves. They’re great partners as they understand the business. Yes, there still are a lot of big players who dominate big swaths of the region, but there are upstarts, too.”
The newly opened Wyndham Dubai Marina is an example, GM Rogier M. Hurkmans said.
“It is a first for its developers, who came from residential,” Hurkmans said.
Ballotti said the scene in the region reminded him of when Gujarati Indians began owning and developing hotels in the United States.
“It’s an amazing phenomenon, then and now,” Ballotti said.
“We’re increasing the number of the selected management companies we partner with. We’re always looking for company deal flow, who we have a great relationship with, who operates to a very high standard, and that approach is a two-way street, as it will bring us as many deals as we could get on our own,” he said.
Ruff said there are various development opportunities around the Middle East.
“I really believe in Saudi Arabia for both business and religious customers. It is not easy, but the opportunity is there. Growth will happen, first in religious travel,” Ruff said.
“The region is spreading its wings. Doha (Qatar), for example, host to the (soccer) World Cup in 2022, is building stadiums that they claim are transportable. After the competition, they say they’ll be able to pick them up and sell them to other markets, if that is what they decide. That will be incredible if they can pull off,” Ruff added.
Luxury, brand growth
Ballotti wants to expand Wyndham into the luxury space.
He said he often things of that when people ask if Wyndham has too many brands.
“We can have more. We would love to have something in the luxury space at some time. Wyndham Grand is moving in that direction, especially in China. I recently visited the Wyndham Grand Xian South in China, and it is off the charts,” Ballotti said.
But Ballotti said the company isn’t solely focusing its growth efforts on luxury.
“We’d never rule out anything,” Ballotti said. “Something in the upper midscale space would be welcome. Opportunities come up all the time, and it is about fit, how it relates to what we have and how our franchisee advisory council thinks about it.”
That openness to opportunity also included a speculative meeting with luxury serviced-homes distributor Onefinestay, which was bought by French firm AccorHotels in April.
“Onefinestay’s Greg Marsh came to us. He was interested in business similarities and opportunities regarding our vacation rental business,” Ballotti said.
Ballotti the performance of Wyndham Hotel Group’s 16 brands is fueled largely by the popularity of the flagship Wyndham brand.
“That’s the development team’s challenge. Wyndham is growing great notoriety, and everything is folding together under our loyalty program,” Ballotti said.