docWyndham Hotel Group - Corporate
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Wyndham Hotel Group - Corporate
Wyndham Hotel Group Steven A. Rudnitsky President & CEO For every kind of traveler. For every kind of trip. 2 Strategic Overview Wyndham Hotel Group has evolved from a U.S. economy-centric franchise business to an integrated, multi-segment, international franchise and management company. 2002 2003 2004 2005 2006 Project Restore Revamped QA/ Rate and Inventory Processes Introduced Field Support Organization Strategic Evolution Leading Economy segment player Maximize core brand operating performance International expansion Upscale management company capabilities For every kind of traveler. For every kind of trip. 3 Global Brand Portfolio North America Segments North America Brands International Segments Upper Upscale Wyndham Grand Collection Wyndham Hotels and Resorts Luxury Wyndham Grand Collection Upscale Wyndham Garden Inn First Class Wyndham Hotels and Resorts Mid-scale Wingate Inn Ramada Baymont/AmeriHost Inn Howard Johnson Mid-Market Ramada Howard Johnson Economy Days Inn Super 8 Travelodge Knights Inn Budget/Economy International Brands Days Inn Super 8 For every kind of traveler. For every kind of trip. 4 Customer Value Proposition Brand strength Three of 10 brands have consumer awareness over 90% Consumer database with over 70 million names Breadth of brands provides range of franchising options Worldwide distribution in all key regions Brand growth, domestically and internationally Super 8 and Days Inn: 35% of Economy segment; 100+ RevPAR index Ramada International: opened more than 7,000 rooms since December 2004 acquisition Ability to drive revenue TripRewards members generate 26% of all consumed nights Reservation contribution at approximately 30% Field staff providing operational and revenue management support Brand Web sites: projected 50 million visitors, 17% revenue growth year-over-year through web reservations Leverage scale and efficiencies Central reservations system Information Technology, franchise support infrastructure Marketing and worldwide sales RCI worldwide footprint For every kind of traveler. For every kind of trip. 5 Franchise Hotel Model Weighted Average Rooms X Average Daily Rate X Occupancy X Royalty Rate X 365 Days = Royalty Revenues X Marketing & Reservation Rate X 365 Days = Marketing & Reservation Revenues “RevPAR” Weighted Average Rooms X Royalty Revenues Average Daily Rate + X Occupancy Marketing & Reservation Revenues X 0% + Other Revenue Operating Expenses – = EBITDA •TripRewards •Management Fees •Reimbursable Costs •Initial Fees For every kind of traveler. For every kind of trip. 6 Performance +8.4% RevPAR CAGR over the past four years • +6.3% CAGR for the industry QA RevPAR $25.33 $35.00 Res. Revenue ($M) $366 $465 - $475 EBITDA ($M) $162 $200 - $210 Royalty/Mktg. and For every kind of traveler. For every kind of trip. Baymont Wyndham Hotels and Resorts International development Franchise sales 2006E Ongoing Operational Improvement Project Restore 2002 7 Performance Wyndham Hotel Group has exceeded Economy segment RevPAR performance since 2003 Economy Mid-scale w/F&B Mid-scale w/o F&B Wyndham Hotel Group 12% 10% 11.7% 9.6% 8.6% 7.6% 7.2% 5.9% 4.7% 2.3% 0.7% -0.4% -1.4% -5.5% -0.6% -3.7% -4.0% -1.6% -4% -6.8% -3.3% -2% -6.7% 0.6% 4.1% 3.0% 4% RevPAR 2% Growth 0% 4.7% 6% 6.1% 8% -6% -8% 2000 2001 2002 2003 2005(1) 2004 Sources: PricewaterhouseCoopers Hospitality Directions journals, September 2006 (December 2005 for 2000 data) (1) Excludes Ramada International For every kind of traveler. For every kind of trip. 8 Global Distribution Strong progress toward global diversification 2002 2006E 10.0% 1.2% 3.4% 0.5% 98.8% 90.0% 0.2% 0.8% 5.8% 0.5% North America Note: As measured by number of rooms For every kind of traveler. For every kind of trip. EMEA APAC LAM 9 North America Segment Distribution Expanding into the faster-growing Mid-scale w/o F&B and Upscale segments. 2006E 2002 11.6% 3.3% 6.8% 4.8% 30.5% 22.9% 65.5% 66.2% Economy/Mid-scale w/F&B Mid-scale w/F&B Mid-scale w/o F&B Upscale Note: As measured by number of rooms For every kind of traveler. For every kind of trip. 10 Competitive Comparison Wyndham Hotel Group is the largest hotel group in the world, measured by number of hotels. Top Ten Hotel Companies (2005) (Ranked by Total Global Hotels) Number of Hotels Number of Rooms Wyndham Worldwide 6,344 532,284 Choice Hotels International 5,897 481,131 Best Western International 4,195 315,875 Accor 4,065 475,433 InterContinental Hotels Group 3,606 537,533 Hilton Hotels Corp. 2,817 485,356 Marriott International 2,741 499,165 Carlson Hospitality Worldwide 922 147,129 Starwood Hotels and Resorts Worldwide 849 257,889 Global Hyatt Corp. 731 134,296 Sources: Hotels Magazine, July 2006 for competition For every kind of traveler. For every kind of trip. 11 Industry Overview: United States Industry RevPAR forecasted to grow +5.9% in 2007 RevPAR Growth by Segment in 2007 Economy Mid-scale w/ Food & Beverage Mid-scale w/o Food & Beverage Upscale Upper Upscale 5.9% 5.9% 7.9% 7.2% 6.3% Industry supply growing 1.6% in 2007 ADR increases driving growth across all segments Macroeconomic factors that may affect industry drivers Corporate profit growth is slowing RevPAR growth moderating Sources: PricewaterhouseCoopers September 2006, Merrill Lynch Lodging Supply Watch For every kind of traveler. For every kind of trip. 12 Industry Overview: International Internationally, the industry is also expected to grow. Total Hotel Revenue by Region 2005 Gross Revenue $U.S. Billion % Forecast Growth Rate 2006-08 U.S. 124.0 +8.2 Total Europe 133.2 +2.3 W. Europe 121.9 +1.2 E. Europe 11.3 +14.1 Asia Pacific 110.2 +4.3 China 15.6 +15.0 India 1.3 +35.7 Japan 80.0 -0.4 Latin America 23.8 +16.3 Mexico 6.9 +5.9 Sources: Euromonitor Integrated Market Database – Dec. 2005 for International data; PricewaterhouseCoopers – Sept. 2006 for U.S. data For every kind of traveler. For every kind of trip. 13 Industry Overview: International Large percentage of small chains/independent hotels offers significant conversion opportunities. U.S. 33% 67% Independent Total Europe 39% Branded Asia Pacific Latin America 48% 55% 61% 52% Small Chain/Independent 45% Large Chain Sources: Euromonitor Integrated Market Database – Dec. 2005 for International data; STR for U.S. data For every kind of traveler. For every kind of trip. 14 Industry Overview: International Fastest growing international segments are Mid-market and Budget/Economy. % Revenue U.S. Luxury Europe % Revenue RevPAR % change 2001-2005 7.5% $174.60 +4.0% Upper Upscale 30.8% $100.06 +3.0% Upscale 16.3% $72.16 +3.2% Mid-scale 33.3% $47.91 +3.7% Economy 12.0% $28.45 +1.7% RevPAR % change 2000-2005 Asia % Revenue RevPAR % change 2000-2005 Luxury 10.2% $244.12 -4.2% Luxury 20.8% $102.69 First Class 61.3% $101.28 -1.5% First Class 68.5% $81.99 -3.7% Mid-Market 24.4% $72.10 +3.7% Mid-Market 10.3% $62.96 +16.0% 4.1% $58.75 +13.6% 0.4% $59.99 +14.1% Budget/Economy Sources: International data: Deloitte & Touche same store analysis 2005 U.S. data: PricewaterhouseCoopers, September 2006 For every kind of traveler. For every kind of trip. Budget/Economy +6.1% 15 Growth Strategies Operating Growth Optimize performance of North American Economy/Mid-scale portfolio Position Wyndham flagship and Wingate brands as value-added alternatives to competitive brands Grow International core brands: Wyndham, Ramada, Days Inn, Super 8, Howard Johnson System Growth Revenue management program New property management system Increase sales/marketing efficiency Restructure worldwide sales Identify target markets to fill in distribution Enhance customer service culture Capitalize on Baymont brand value proposition Pursue portfolio conversions and tuck-in acquisitions Implement brand standards Integrate loyalty program Invest in sales/marketing Revenue management program Invest in high RevPAR strategic assets Execute timeshare/mixed-use opportunities Align Wingate Pursue tuck-in acquisitions and multi-unit development deals Drive mixed-use opportunities Leverage RCI developer network Refine global brand positioning Invest in sales/marketing to drive reservation contribution Implement essential operational and system efficiencies Utilize RCI global infrastructure For every kind of traveler. For every kind of trip. 16 Wyndham Master Brand Strategy Wyndham Vacation Ownership Wyndham Collection Historic Boutique Grand Bay International AAA 4+ diamond Major markets Original architecture Distinctive dining/ bar Strong local identification Wyndham Hotels and Resorts AAA 3, 4 diamond Major urban & resort destinations Restaurant/barcasual dining Meeting/event facilities Full fitness facilities For every kind of traveler. For every kind of trip. Wyndham Garden AAA 3 diamond Major/Secondary markets Casual/select- F&B service Limited meeting space Fitness center Wingate by Wyndham AAA, 2, 3 diamond Secondary markets 80+ rooms 24/7 F&B mart Fitness center 17 Wyndham Master Brand Strategy Position Wyndham flagship and Wingate brands as value-added alternatives to competitive brands. Initiatives Operating Growth System Growth Implement brand standards Integrate loyalty program Invest in sales/marketing Revenue management program Invest in high RevPAR strategic assets Execute time share/mixed-use opportunities Align Wingate Progress To Date Commissioned Michael Graves for new design Invested over $12 Million to fund marketing and product development efforts 100+ deals in progress Executed 15 hotel contracts YTD Opened five hotels YTD Re-branded 16 WVO properties Corinthia JV for 11 international properties For every kind of traveler. For every kind of trip. 18 Wyndham Master Brand Strategy Wyndham Hotel Wingate HI For every kind of traveler. For every kind of trip. Wyndham Vacation Ownership Pipeline 19 Wyndham Master Brand Strategy Wyndham brand has delivered strong performance in key markets RevPAR Index* Houston 119.6 Denver 113.9 Atlanta 112.4 Palm Springs 112.1 Miami 104.5 Chicago 101.3 San Diego 101.1 * RevPAR Index from STR, WYN hotels vs. market, market = 100 For every kind of traveler. For every kind of trip. 20 Wyndham Collection Historic Hotels: Galveston, Texas For every kind of traveler. For every kind of trip. 21 Wyndham Collection Historic Hotels: The St. Anthony, San Antonio, Texas For every kind of traveler. For every kind of trip. 22 Wyndham Resorts Grand Bay Isla Navidad, Mexico For every kind of traveler. For every kind of trip. 23 Wyndham Hotels Chicago For every kind of traveler. For every kind of trip. 24 Wyndham Hotels Cleveland Playhouse Square, left, Miami Airport & Executive Meeting Center For every kind of traveler. For every kind of trip. 25 Wyndham Resorts Sugar Bay, St. Thomas, Virgin Islands For every kind of traveler. For every kind of trip. 26 Wyndham Garden Overland Park, Kansas For every kind of traveler. For every kind of trip. 27 Wyndham development activity Jacksonville, Fla.: conversion For every kind of traveler. For every kind of trip. 28 International Strategy Grow International core brands: Wyndham, Ramada, Days Inn, Super 8, Howard Johnson Operating growth System Growth Initiatives Progress To Date Refine global brand positioning Invest in sales/marketing to drive reservation contribution Implement essential operational and system efficiencies Utilize RCI global infrastructure Developed regional marketing co-ops Launching multi-lingual Web sites Expanded in-country marketing structure Established and expanded General Sales Agent network Pursue tuck-in acquisitions and multi-unit development deals Drive mixed-use opportunities Leverage RCI developer network Approximately 25% of pipeline is international Signed multi-unit development deals in EMEA, APAC and LAM Completed JVs to develop and manage hotels in Europe and China For every kind of traveler. For every kind of trip. 29 International Performance Successfully expanded into EMEA, Asia Pacific and Latin America over past three years Latin America Asia Pacific EMEA Total EMEA 40,000 Total Asia Pacific China 25,000 32,000 32,550 35,000 4,000 4,500 4,228 18,250 18,750 20,000 Total Latin Am erica 5,000 4,000 30,000 25,083 25,000 22,849 13,000 13,500 15,000 3,087 3,000 11,344 20,000 10,000 15,000 8,322 2,000 7,836 5,244 10,000 1,000 5,000 5,000 0 0 2004 2005 0 2004 2006E 2005 2006E 2004 2005 2006E Source: Internal For every kind of traveler. For every kind of trip. 30 International Development Development Activity Malta U.K. Peru India Ireland Argentina Hungary China Australia Romania Mexico U.A.E. Italy France Czech Republic Belgium Tunisia Korea Saudi Arabia Honduras Germany Egypt Netherlands For every kind of traveler. For every kind of trip. 31 International: Corinthia St. Petersburg, left, and Prague For every kind of traveler. For every kind of trip. 32 International: Corinthia Budapest For every kind of traveler. For every kind of trip. 33 China joint venture First project: 140-room Ramada Encore in Wuxi, China For every kind of traveler. For every kind of trip. 34 Days openings Days Inn Shenzhen Days Hotel Dublin Airport Days Hotel Kilkenny Days Inn Joiest Beijing Days Inn Ferrybridge For every kind of traveler. For every kind of trip. 35 Super 8 openings Super 8 Beijing Dong Super 8 Shanghai Feng Ye Nanzhan Super 8 Shanghai He Jing Super 8 Tianjin Jian Gong Super 8 Shenzhen Peng Yue Mei Lin For every kind of traveler. For every kind of trip. 36 Ramada openings Ramada Plaza Cheongju Ramada Plaza Guangzhou Ramada Hotel Dresden For every kind of traveler. For every kind of trip. Ramada Osaka 37 Rooms, Rooms, Rooms Base Business Wyndham/Wingate Business 495 490 485 CAGR 75 CAGR 2% 70 11% 1.5% 65 8% 1.0% 60 480 475 6% 55 470 50 465 45 460 40 455 35 30 450 2006 2007 2008 Base-Medium 2009 Base-High 2006 2010 2007 Wyndham/Wingate-Medium Base-Low 2008 2009 Wyndham/Wingate-Low 2010 Wyndham/Wingate-High Combined Business International Business 230 CAGR 39% 785.0 CAGR 7% 735.0 180 33% 6% 685.0 26% 130 4% 635.0 80 585.0 535.0 30 2006 2007 International-Medium 2008 2009 International-High 2006 2010 International-Low Combined-High 2007 2008 Combined-Medium 2009 2010 Combined-Low Note: Rooms in thousands For every kind of traveler. For every kind of trip. 38 Summary Strategic transformation Diversification of portfolio International Upscale Management Company Strengthened base business value proposition Performance Consistent revenue and earnings growth Going forward Optimize performance of North American Economy/Mid-scale portfolio Position Wyndham flagship and Wingate brands as value-added alternatives to competitive brands Grow International core brands: Wyndham, Ramada, Days Inn, Super 8, Howard Johnson For every kind of traveler. For every kind of trip.
