Wyndham International Business Case Study
Challenges facing Wyndham International
There are a number of challenges facing Wyndham International in 2001 as they move forward to capture market share of a distinct upscale segment of the business and leisure travelers. In 2001, Wyndham was not a well-known name in the industry. The company had been suffering financially and had sold considerable assets in an effort to promote the Wyndham brand. The challenge of building branch recognition in a market dominated by a few key players such as Marriott, Hilton and Hyatt compounded by the fact that the travel and tourism market was already suffering from the backlash of the September 11, 2001 tragedy make Wyndham's challenge somewhat overwhelming.
In addition to less than desirable branch recognition, Wyndham was just entering year three of a significant debt restructuring plan composed of a $1 billion equity investment, as well as a $2.45 billion restructuring of debt. Under such tight "purse strings" it is unlikely there will be any surplus funds available for any capital investment, excepting that which is deemed mandatory. Currently there is $30 million allocated for the ByRequest advertising campaign, however if this is consumed, where will additional funding be generated from? Current financials (Exhibit 1 of the case) are display a net loss to the business in 2001 of almost $139 million.
The leisure travel business is also changing evidenced by the following comment, "hotel products competing in the same segment are becoming indistinguishable in the customers' eyes" (Wyndham International: Fostering High Touch with High Tech, p. 7). There has been a tendency towards increasing competitiveness in the industry focu...
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..., 27 management contracts and the worldwide rights the brand for hotel and timeshare from Blackstone for $101 million. This collaboration left behind owned real estate assets only. A couple of comments from a May 2006 article in Lodging Hospitality talk to the difficulty that Wyndham has had. "Steven Rudnitsky, chairman and CEO of Cendant expects to terminate some Wyndhams to bring brand standards up and the make the brand more consistent." As well, "when Peter Strebel, president of Wyndham Hotels and Resorts, began talking to owners in the winter of 2005, he discovered some frustration with the branch because its main focus was on owned assets rather than its franchises. During the past few years, Wyndham was in more of a sell mode, so refocusing, let alone refreshing, the brand was not on the front burner" (Lodging Hospitality Cendant's Upscale Gambit, 2006).
For the Balanced Scorecard section I have set up a table, which includes a strategic plan and management system to align our business activities to the mission and vision of the Hilton Worldwide brands, developed strategies to improve the internal and external communications for our location, and ways to monitor the performance over the next year. The chart will be organized into a strategy map to allow its users visual ideas of where the perspective plans connect. Subsequently, as you will see with the attached document for the 2013 Operating Budget, the hotel has revenues totally over $105,000,000 and a net operating profit of about $45,500,000 as of this year. Along with the P&L Statement, other revenue generating departments will be discussed thoroughly with estimated expenses and revenues displayed, and finished with an assessment of local comp...
In 1919, Company founder, Conrad Hilton, purchased his first hotel in Cisco, Texas. Since that time, Hilton Worldwide has become a worldwide operator, franchisor, and licensor of hotels and timeshare properties in more than 91 countries. In nearly 100 years of existence, the Company now finds itself as one of the largest and fastest growing hospitality companies with over 4,115 properties and 678,630 rooms. With a commitment to high quality and customer satisfaction, the company has established a portfolio of 10 world-class brands including the most recognizable hotel brand in the world, the company’s flagship full-service Hilton Hotels & Resorts brand. Its premier brand portfolio includes the luxury hotel brands, Waldorf Astoria Hotels & Resorts and Conrad Hotels & Resorts, full-service hotel brands, DoubleTree by Hilton and Embassy Suites Hotels, focus-based hotel brands, Hilton Garden Inn, Hampton Inn, Homewood Suites by Hilton and Home2 Suites by Hilton, and the company’s timeshare brand, Hilton Grand Vacations. Hilton operated properties are staffed with more the 314,000 team members focused on providing a complete experience at each location. The company’s award-wining customer program, Hilton Honors, defined rewards programs in the industry and now has over 40 million members (Hilton Worldwide).
Under what conditions might the parties to the alliance discussed in this case dissolve or end the relationship?
Founded in 1919, Hilton Worldwide has remained a beacon of innovation, quality, and success. What Hilton Worldwide calls their mission statement imposes its worldwide high status: “We will be the preeminent global hospitality company - the first choice of guests, team members and owners alike.” Fierce competition, however, does currently exist among hotel corporations within the market. Marriott International, Hilton’s main competitor, currently stands as the third-ranked world leader within the industry (according to hospitalitynet.org), coming in after Hilton. Other competition faced by Hilton comes from Wyndham Worldwide, Starwood Hotels and Resorts, and Best Western, to name a few. Affiliated with ten different hotel brands, Hilton Worldwide provides its guests with the advantage of choosing from any one of their 4,000 operating hotels located throughout 90 different countries. This has evidently contributed to Hilton Worldwide becoming one of the top leaders (ranked second to be exact) in the hospitality industry, despite their competition. The vision of Hilton Worldwide is “to fill the earth with the light and warmth of hospitality.” As the modern luxury hotel, Hilton has created a prestigious heritage with a modern attitude. The values of Hilton Hotels are stated uniquely, giving one value to each letter that constitutes the word for the hotel brand. “H” stands for Hospitality– “We are passionate about delivering exceptional guest experiences”; “I” stands for Integrity– “We do the right thing, all the time”; “L” stands for Leadership– “We are leaders in our industry and in our communities”; “T” stands for Teamwork– “We are team players in everything we do”; “O” stands for Ownership– “We are the owners of our actions and dec...
For the introduction, brief information regarding my purchase and the travel and tourism industry is presented. It was then followed by the explanation of the 2 chosen theories from two different chapters.
The Ritz-Carlton Hotel Company, L.L.C. originates with the 1983 purchase of The Ritz-Carlton, Boston by William B. Johnson, and the purchase of rights to The Ritz-Carlton name. The standards of service, dining and facilities of this Boston landmark serve as a benchmark for all Ritz-Carlton hotels and resorts worldwide.
The Wyndham Hotel Corporation was founded in 1981 by Trammell Crow in Dallas, Tx. Its first hotel was opened in 1982 and by 1985 they had successfully held 14 upscale properties in their portfolio. Wyndham continued to grow throughout the years until in 1997 they agreed to be acquired by Patriot American Hospitality Inc., under a Real Estate Investment Trust or REIT. After the acquisition, they began an aggressive campaign to purchase several smaller companies to increase their holdings. Some of those companies included Williams Hospitality, Carefree Hospitality, and Summerfield Suites. Due to these major acquisitions, Wyndham experience an eruption in growth and profit, but that would become short lived. The REIT structure was going under increased pressure federal regulators as well as several of Wyndham’s competitors. They claimed that under the REIT structure, companies were receiving an unfair advantage over premiums for both lodging properties and real estate. In light of this information, their stock value began to decrease significantly and had lost over 80% of its value. For several years Wyndham struggled to pay down its debt and was forced to lose it REIT status and turn into a C-Corporation under the new title Wyndham International Corporation. The next several years involved major changes and IT incorporation in a process to restructure the company.
The external environment of the hotel industry in is very competitive and already well established. Trends in the market include promotional campaigns to customers using the "more bang for your buck," method. There are several different segments of the hotel industry including: luxury, upscale, mid-market with food and beverage, mid-market without food and beverage, economy, and budget. Each different segment offers certain amenities to appeal to consumers depending on what they are looking for in an over night stay away from home. As McDonald's looks at entering the hotel industry they have looked at several important issues dealing with an entry into this market. McDonald's would like to enter the market in the state of Illinois where the company's headquarters is. Illinois leads all other states in money spent on tourism totaling $61.1 million in the year 2000. Illinois also ranked fourth in the nation for leisure person trips in 2000. Hotel industry has several important barriers to entry including cost of entry, ability to differentiate from other hotels, and competition in every hotel segment.
Thanks to these factors, pricing becomes one of the primary uses with which hotels attract customers. However, due to customers’ independent nature, there influence over industry players is limited. In the high-end segment of hotels, price influence becomes even less as hotels find it easier to differentiate themselves from the competition and customers become less price sensitive coming to expect higher prices as a symbolism of superior quality and services. Lastly, corporate business and tour operators can exert more influence due to their large purchases but this affect is of a limited nature and does not extend across the whole
In recent years, business tourism has become increasingly prevalent and prevailing in the tourism industry. There are large quantities of significant changes which have far-reaching implications for all consumers and suppliers of business travel such as consumption patterns, great developments in transport and communications technology, and the world´s political and economic changes related to tourism industry. All these developments have brought large effects on business travel as well as the main challenges to this sector for the coming years. Every day, tens of thousands of people are beginning or ending their business trips all around the world, while numerous conferences or exhibitions are being held globally, so business tourism is a
The Wyndham has executed a compliance program to strengthen ethics throughout the company. They have drafted a thorough Code of Business Conduct that has received top scores from the Ethisphere Institute for its comprehensiveness and availability to stakeholders. Another way the Wyndham contributes to customer is creating a customer relationships. When consumers think about and associate the Wyndham hotel company the first thought that should come to hand is an upscale hotel chains that targets high end consumers. However, the Wyndham targets travelers from across the world and social status. For example, they have different hotels that expend the reach of consumers some of them include Wyndham Hotels and Resorts, Wyndham Garden, and Wyndham Grand Collection, Days Inn, Super 8, Travel Lodge, and others. This strategy allows Wyndham to avoid brand confusion but also set apart with having a wide variety of consumers. Ending with Availability of products and customer care services: The products of the Wyndham are always available in markets and keeps on changing customer requirements. Their customer care service is also effective that help customers in making right and quick
History of Hilton hotel has been very interesting as it started as Mobley Hotel in year 1919 a small building. Because, when the company started it had no plans or ideas of expanding, the sole purpose was to serve as a place for the travelers to stay where they can comfortably enjoy a night or few and carry on towards their journey. After twenty-seven years of business and hard work, this small hotel went nationally in eleven states within United States, known as Hilton. Currently they have four thousand worldwide properties, either directly owned or franchised (including third party), in seventy-eight countries. Hilton even though allows franchises but there policies remain the same and direct Hilton officials do all the upper level management. The company name Hilton understands for Hosp...
-“Emphasis on individual property brands was not working from a number of fronts. Guests are seeking a unique Rosewood property experience and are not making the connection between Rosewood properties and are increasingly indentifying with other strong hotel brands.” –Scott and Boulogne
The Marriott Corporation (MC), had seen a long, successful reign in the hospitality industry until the late 1980s. An economic downturn and the 1990 real estate crash resulted in MC owning newly developed hotel properties with no potential buyers in sight and a mound of debt. During the late 1980s, MC had promised in their annual reports to sell off some of their hotel properties and reduce their burden of debt. However, the company made little progress toward fulfilling that promise. During 1992, MC realized that financial results were only slightly up from the previous year and their ability to raise funds in the capital market was severely limited. MC was left with little choice, as they had to consider some major changes within the company if they wished to remain a successful business. Thus, J.W. Marriott, Jr., Chairman of the board and president of MC, turned to Stephen Bollenbach, the new chief financial officer, for ideas and guidance.
1.2 Problem Formulation In the problem formulation part of my report I would describe the overall situation of the U.K Tourism industry. The service concept of “Simply Travel” will give us information about the services provided by the company. I will find out about the customers, competitors of the company. I will find out what political, economical, social and technological factors affecting the company and its demand situation.