The group’s President for Asia Pacific explains why he’s optimistic about the future of the regional hospitality and travel industry.
It’s been nearly six months since the global shutdown of international travel. What is the current outlook for the hospitality sector in the Asia-Pacific region?
The hospitality industry, despite being profoundly impacted by the Covid-19 pandemic, is on the road to recovery. Domestic travel in drive-to leisure and resort destinations will be leading the recovery in the immediate to medium term, and already, many countries in the region are showing positive signs, which is very encouraging.
A majority of our hotels in the region have already reopened and are welcoming back guests. In fact, we are seeing very robust demand for travel with people looking for getaways near home. This demand will be sustained as more regional travel bubbles are created, which will further stimulate the hospitality industry.
Generally, hotels with diverse segmentation have seen more positive results than those focused on one particular segment. China, which was one of the first countries to resume domestic travel, appears to have achieved some levels of normalcy—in destinations like Sanya, our hotels recorded over 90 percent occupancy over the recent Dragon Boat Festival. We’re also seeing RevPAR [Revenue Per Available Room] trends steadily improving, driven by strong domestic demand across the upcoming week-long Mid-Autumn Festival holiday.
Beyond the Chinese market, we’re experiencing a pick-up in domestic travel in key markets like New Zealand, Australia, Malaysia and South Korea. Overall, we are very encouraged by this positive momentum. The industry has also been quick to demonstrate how it has been able to create safe and clean environments, whether it is within the hotel and on domestic flights, and this goes a long way in re-instilling confidence in travel.
What changes to the business has Wyndham Hotels and Resorts had to implement to help it weather this crisis?
Despite how challenging and difficult these last few months have been for everyone, we have every reason to be confident in the long-term viability of our business.
To that end, we have made several changes and adjustments to the business. A key measure we undertook was the consolidation of the Greater China region with the South East Asia and Pacific Rim region to form a new operating region: Asia Pacific (APAC), which covers a portfolio of over 1,500 hotels across 16 countries and territories. This will enable us to leverage a broader pool of resources, allowing us to strengthen our strategic positioning to support existing operations, drive further expansion, and create additional opportunities for cross-border collaborations.
Our business model is low risk with an asset-light strategy that is supported by our strong presence in the midscale sector—and this crisis has reinforced the importance of this segment to owners and operators. Midscale hotels offer hotel owners greater control over operational costs to maximize their profitability, both in good times and in downturns. In terms of occupancy rates, we are seeing our midscale hotels performing ten percentage points higher than the industry average in destinations like Australia.
We’ve built a strong foundation and a robust business model that will enable us to sustain our position in the months ahead. Most recently, we’ve announced our global second quarter results, achieving positive adjusted EBITDA [Earnings before interest, taxes, depreciation and amortization]. Altogether, Wyndham Hotels & Resorts is well-positioned to take on the challenges presented by the pandemic and will continue to have an optimistic outlook into the nearby future when travel starts to return.
How is Wyndham supporting its employees through this difficult time?
Our team is, without a doubt, the most important asset for the company, and especially in the hospitality industry, they are the driving force behind our business. We understood the severity and implications of the pandemic at a very early stage, and the first thing we implemented was telecommuting for the regional teams. Most of our offices are still working from home.
To ensure our communication lines remain open and our team members are continuously engaged, we’ve been conducting biweekly townhalls since the start of the pandemic. These town halls are conducted by myself and alongside my leadership team. This is in addition to weekly, and even daily conversations that our line managers are having with their respective team members.
It is important for us to recognize that this is an incredibly stressful and challenging period for our team members. That is why we’ve taken an additional step to help sustain a healthy work-life balance. For instance, we have implemented a monthly appreciation day where we’ve closed our office one day a month so our team members can rest, recharge, and spend valuable time with their family and loved ones.
Can you tell us a little bit about the global health and safety initiative “Count on Us”?
Since the pandemic unfolded, we have been, and still are, working very closely with the guidelines recommended by the World Health Organization and local health authorities across the world. We’ve been taking all the necessary steps and precautions to ensure a clean and comfortable stay for our guests—health and safety will continue to be the top priority for us.
Count on Us is a long-term, multi-faceted initiative which seeks to build confidence among guests and to support the region’s hotels as they make preparations to welcome back travelers in the wake of Covid-19. There are three critical components of the program:
Delivering on the Promise of a Safe Stay – We’ve developed a series of industry best practices and guidelines that are focused on enhanced hotel cleaning practices, social interactions, and workplace protocols to meet the new health and safety challenges presented by Covid-19. We have also implemented a series of mandatory live and recorded webinars for all hotels together with resources like housekeeping checklists, best practices, and guidelines, which hotels can use with team members to ensure consistency and accountability in execution.
Enhanced Cleaning and Disinfection of Guestrooms and Public Spaces – All Wyndham properties are using EPA-approved disinfectants that are designed to disinfect emerging pathogens. This move builds on the already high operational standards at our hotels and will deliver an elevated and more consistent cleaning experience across the region.
A Visible Commitment to Guests – Wyndham has taken steps to ensure guests and hotel team members can physically see the above efforts and trust in their impact. On property, guests have access to hand sanitizers, notice social distancing measures in public spaces, and observe increased frequency of cleaning and disinfecting of high-touch areas. At the same time, hotel team members will make use of personal protective equipment as needed.
Wyndham signed 59 new hotels across the Asia-Pacific region within the first six months of 2020. What gives the company such long-term confidence in Asia?
This confidence we have stems directly from our hotel owners and partners. Hotels are a long-term investment, and as a franchise or hotel management partner, we offer our hotel owners a strong global partnership. The association with the world’s largest hotel franchise system, driven by a strong brand and strong value proposition, will continue to be essential in a highly competitive environment.
We’ve clinched 59 hotel signings across APAC in the first six months of the year, more than the same period in 2019—a testament that our owners and operators are seeing the value and power of a trusted and global brand to help them navigate these unprecedented times that we are in.
We know that the demand for travel will return and our expansion across Japan, China, Thailand, New Zealand, and Australia is part of our long-term development strategy to introduce new brands into the region and provide a range of hotel development options for owners and developers. When guests are ready to travel again, we will be ready to welcome them back with a range of new hotel experiences and destinations.
What significant Wyndham hotel openings are coming up in Q4 this year and early 2021?
We have had multiple exciting launches and signings this year. We’ve strengthened our leadership position in South Korea with two new hotel openings including the Ramada Plaza by Wyndham Dolsan Yeosu—the first hotel to launch a zipline attraction on its rooftop in Asia—and Ramada by Wyndham Gumi. Two new brands were also introduced in Japan’s emerging destinations: Wyndham Grand Awashima and Wyndham Garden Nagaizumi. We’ve also celebrated the opening of the very first Dolce by Wyndham in Asia—Dolce by Wyndham Hanoi Golden Lake. It bears a striking gold-plated facade and is complemented with a classic and luxuriously styled interior.
Across the next few months, we’ll continue to have a strong pipeline of new hotel openings, which includes several stunning upscale resort properties. Wyndham Grand Flamingo Dai Lai Resort is located on a sprawling 123-hectare plot of land, offering exquisite sky villas, unique culinary experiences with no less than 10 F&B establishments, delightful entertainment, and professional MICE facilities.
Wyndham Grand Nai Harn Beach Phuket will be launched in Q4 with 353 guest rooms. It is a stunning destination with fantastic accommodation offering either pool access to a large, swimmable lagoon covering the entire ground floor or a private balcony.
As part of our strategy to expand the presence our midscale brands into international markets, we will also be introducing the La Quinta by Wyndham brand in New Zealand. LQ by Wyndham Remarkables Park is an 87-key property located next to the scenic Kawarau River, perfect for visitors who want to immerse themselves in nature.
In your opinion, which countries in the Asia-Pacific region have the greatest potential for growth following the pandemic?
Countries that have a strong domestic base that they can tap on will most likely present the best initial potential for recovery, and we have already witnessed it. Markets like South Korea, China, and Australia, where Wyndham has a considerable footprint, have been doing well in replacing inbound travel with options like staycations and domestic corporate business.
We expect this trend to continue and with added availability through “green lanes,” we foresee hotels in key business hubs like Bangkok, Singapore, Manila, and Kuala Lumpur will be off to a quick surge off the back of international visitors. A key segment that we look forward to seeing again is meetings and events. It is still heavily regulated by government-imposed restrictions and social distancing measures, but as these regulations are relaxed, we are confident and excited to welcome back this important segment.
From a development perspective, Vietnam is one market that is likely to continue its rapid growth. Since 2016, its inbound visitor numbers have seen double-digit growth, and its two largest source markets are China and South Korea. These two countries have managed to cope exceptionally well in managing the crisis, and it is highly conceivable that Vietnam would open up “green lanes” that can spur further growth in the country’s real estate and hospitality investments.
How is Wyndham shifting its focus to domestic markets while we await the arrival of Covid-19 vaccines? And what is your long-term recovery strategy?
Throughout this entire period, our focus has been and will continue to be on our customers. In this time of uncertainty, it is important to focus on how we are providing flexibility for guests, how can we continue to recognize and drive loyalty, and most importantly, what we can do to re-instill confidence in travel.
To drive our response to these key areas, we developed a three-phased approach that will continue to give guests the confidence that Wyndham is ready to welcome them back. From health and safety to booking flexibility and loyalty programs, our teams around the world are working hard to implement new processes, continually review existing policies, and launch consumer campaigns.
The first phase was to establish the building blocks of our recovery plan. In April, we launched #EverydayHeroes, which honors essential frontline workers, alongside initiatives to reinforce our flexible booking policies, loyalty member enhancements, and loyalty partnership benefits to drive direct bookings.
The second phase, which kicked off in early June, highlighted our focus on cleanliness and enhanced safety policies. Through “Count on Us”, we rolled out new brand standards and playbooks, which is essential in rebuilding confidence for travel and the industry.
We are now in our third or “Welcome Back” phase, and are looking to reinforce our direct booking benefits across our omnichannel platforms. We have also rolled out new campaigns like “Stay Two Nights And Get One Free” to “Save Now, Travel Later”, and “Stay Close To Home”—to spark conversations about traveling while offering flexibility to consumers when booking.
What valuable lessons for the hospitality industry can we draw from this global health crisis?
2020, undoubtedly, has presented one of the most challenging crises most of us have lived through. However, I’m confident that the actions that Wyndham has taken will allow us to emerge as a stronger company, financially and operationally.
This pandemic has reinforced a core in Wyndham’s DNA—how vital the element of humanity and empathy is. People have always been our priority, and it’s not just the guests that chose Wyndham, but also our team members, owners, and partners who take care of our business. They are the ones that are instrumental in making every single guest experience unique and unforgettable. Guests who choose to stay in hotels more often than not are looking for such experiences and personalization when they stay with us. Even as the pandemic has forced us to change how we operate, we are unwavering in making people our priority.
On the business end of things, the past six months have showcased how important being flexible and having the agility to adapt to an ever-changing situation is. Every day poses a different challenge, and being able to toss aside the tried and proven playbooks and think out of the box is the difference between swimming and sinking.