Wyndham flexes its franchise muscle
Wyndham Hotels & Resorts continues to strengthen its hold on the Middle East and Africa region, with the announcement of two Omani properties.
Marking the introduction of the Wyndham Garden and Ramada Encore by Wyndham brands to Oman, Wyndham Garden Muscat Al Khuwair and Ramada Encore by Wyndham Muscat Al Ghubra are just a few properties to open under the Wyndham umbrella this year.
Wyndham Hotels & Resorts aims to add 23 new properties to its portfolio by 2023 and is focused on expanding the economy and mid-scale offering across the region. We spoke to Panos Loupasis, vice-president development, Middle East & Africa at Wyndham Hotels & Resorts for more insight into the brand’s plans in the region.
“Over the past year, we’ve seen tremendous growth and significant signings within the Middle East market. In this time, we’ve reached significant milestones and continued to expand our footprint – including important new openings and signings, a series of key brand launches and new market entries – and 2020 looks set to be another momentous year for us,” Loupasis tells TTN. “We will continue to deliver strong growth in key destinations, through an increased portfolio of managed hotels and strengthening our franchise business.”
Wyndham Hotels & Resorts is officially the world’s largest hotel franchising company with over 9,200 hotels across more than 80 countries. Amongst other upcoming openings in the region, the group is currently working on seven new hotels based on a franchised model, expected to open within the next year.
These franchised properties include the upcoming Ramada King Fahd Road (189 keys) in Riyadh, Ramada Encore Al Khobar King Salman Road (79 keys) in Al Khobar, Ramada by Wyndham Mekkah Al Rawda (426 keys) and Ramada by Wyndham Mekkah Al Tayseer (278 keys) in Makkah, Ramada Hotels & Suites Najaf (240 keys) and Ramada by Wyndham Erbil Gulan Street (133 keys) in Iraq, and Ramada Plaza Jumeirah Village Circle (502 keys) in Dubai.
Hotel franchising is part of the mix in the region, and it will continue to be so in the future, says Loupasis. “While our pipeline in the region today contains more rooms under management contracts, in the last year or two we have seen an increasing demand for franchised offerings. However, regardless of this trend, at Wyndham the reality we’re seeing is that the region is more inclined to management contracts and we feel that this preference will continue in the years to come.
The franchising model here in the Middle East is still in its relative infancy when compared to the US and Europe. Many hotels are still being managed directly by operators who are sceptical of some of the perceived drawbacks in adopting the franchise model.
“For instance, some operators are concerned by the loss of control over the overall delivery system and customer experience as these activities are inevitably delegated to franchisees. Where some franchisors seek to maintain control over all aspects of their service format, others welcome sharing this responsibility with a well-known brand to manage.
“However, franchising continues to be a popular model for regional expansion for many good reasons; a franchisor can expand its business quickly into a growing economy while mitigating some of the commercial risks and significant capital investment that are often involved with establishing a presence on the ground,” Loupasis says.
“As the world’s largest hotel franchisor, our commitment to making hotel travel possible for all starts with our franchisees. Our position allows us to offer our partners unmatched resources, distribution and purchasing power. Our size and scale also lead to stronger negotiating power with Online Travel Agencies (OTAs), resulting in lower fees than hoteliers can negotiate on their own.
“In addition, Revenue Management Service (RMS) help to take the load of managing rates and inventory off the shoulders of owners and hotel staff and this is often seen as a strong draw. Finally, with access to affiliate partners across the globe, our hotel owners benefit from significant cross-sell opportunities.
“Earlier this year at our global conference, we unveiled several initiatives designed to elevate our brands, deliver incremental resources to our owners, grow our presence and meet the needs of today’s travellers, with a focus on enhancing returns for our nearly 6,000 franchisees.
“These included leveraging new technology to expand our digital efforts to drive brand recognition and contribution and enhance the guest experience across our portfolio; prioritising new construction and design with the launch of both new and refreshed prototypes designed to lower development costs and capture greater efficiencies and driving global growth to capitalise on the rising demand for all travellers, in particular the growing global middle class.“Through this commitment to innovation in quality and design, operational efficiency, strategic growth and guest experience, our focus is on shaping not only the future of Wyndham but the legacy of our owners around the world.”