| New Wyndham CEO Geoff Ballotti says his initial directive has been to continue building on the global growth started by his predecessor. (Screenshot: Hotel News Now) |
ATLANTA—There couldn’t have been a better period of time for Geoff Ballotti to step away from the hotel industry.
The executive left Starwood Hotels & Resorts Worldwide in 2007, just before things came crashing down, to lead Wyndham Worldwide’s vacation exchange arm, Wyndham Exchange & Rentals.
Fast forward six years and Ballotti is returning to the industry as Wyndham Hotel Group’s president and CEO having missed the economic downturn and subsequent hospitality downward spiral.
“It’s an exciting time,” Ballotti told Hotel News Now last week during an interview at the Hunter Hotel Investment Conference. “After six years in the timeshare industry, coming back to the hotel industry, it’s a lot different than it looked in late 2007.”
As Ballotti gets his legs underneath him and prepares to steer the direction of 7,490 worldwide hotels franchised under 17 brands from economy to upscale, he told HNN his initial priority is to stay the course.
Name of the game: Growth
“We’ve had a really great run the last few years for all of the brands—great growth on the revenue side and the property side,” Ballotti said. “My goal is to keep that growth going.”
Wyndham’s pipeline includes 114,000 rooms, 60% of which are expected to come online in regions outside the United States.
“Our development teams overseas are really motivated, really geared up, and all the brands right now are selling,” Ballotti said.
Growth opportunities for Wyndham are led by the fact that so few of the hotels in Europe, Africa and the Middle East are globally branded properties, he said. With so many independent hotels in those regions, Wyndham has an opportunity to provide global distribution and global brands.
“We’re hoping to capitalize on that, and that’s what our teams are focused on,” Ballotti said.
The backbone of Wyndham’s global platform was installed during the past six years by Eric Danziger, who left Wyndham last month to join Hampshire Hotels Management. Danziger spent much of his time abroad, developing franchise sales teams in areas where Wyndham had little or no footprint.
“I don’t know anyone who traveled more than Eric,” Ballotti said. “He built a great platform; he built a great team. He’s got great managing directors that are running our businesses in Europe, Africa and the Middle East, and we’ve got a great new team in China. China has been a great growth market for us.”
But Ballotti said he hopes the legwork Danziger has done overseas will allow him to focus more on the U.S.
“There’s a lot of work to do here in the U.S.,” he said. “I’m sure I’ll be traveling a lot but not sure I’ll be burning as many frequent-flyer miles as Eric did.”
Like many hotel companies, Wyndham sees opportunities in economies with higher growth rates than the U.S. “(China) was certainly not the downer everyone thought it was going to be a year ago,” Ballotti said, and “Europe has come back in a big, big way after several really difficult years.”
He said the “need and desire for branded product” in Europe, where Ballotti spent much of his time with Starwood Hotels, is driving Wyndham’s growth, particularly in the economy and midscale segments.
Fundamentals are right
As evidenced by data presented during the Hunter Hotel Investment Conference, those lower-end segments are leading the industry in terms of performance. Revenue per available room in the economy segment is expected to close 2014 in the 5% to 7% range, driven by supply in that chain scale, which is actually contracting.
“It’s great to see products at end of life going out of circulation … and new brands and new product most importantly coming in to replace it,” Ballotti said.
Sixty-eight percent of Wyndham’s pipeline is new construction, most of which is coming internationally. Unlike others, Ballotti said he is not concerned with oversupply on the horizon.
“There’s been a lot of concern—‘Is supply growing too fast?’—but there has been points made all week that in the economy segment you’re actually seeing contraction,” he said. “That’s very nice to hear and very nice to look at.”
4 new prototypes
Wyndham’s additions to that supply number will come by way of four economy and select-service brands: Wingate by Wyndham, Microtel by Wyndham, Hawthorn by Wyndham and Wyndham Garden. All four of those brands have recently introduced new prototype designs.
“We spent the last few days rolling out the new product for Wingate, which is really plug and play, the new prototype for Microtel, which we’re really excited about and has got great legs and is growing very well for us, along with Garden and Hawthorn,” Ballotti said. “Those are really the four new prototypes we’ve been talking about with developers this week.”