ATLANTA — The world’s largest hotel company, Wyndham Hotel Group, made a splash in January when parent company Wyndham Worldwide Corp. purchased La Quinta’s franchise and management business for nearly $2 billion.
Speaking at the 30th annual Hunter Hotel Conference in Atlanta Wednesday, Geoff Ballotti, president and CEO of Wyndham Hotel Group, spoke about how the acquisition has helped expand the company’s platform.
“It is our 21st brand. We’re the company that operates more hotels than any other company today at 9,100 hotels,” says Ballotti at the three-day conference, which is drawing 1,700 attendees. “La Quinta is a brand that franchises well — 85 percent of La Quinta’s franchisees score four stars or above on TripAdvisor. It’s a great value for our shareholders.”
The past few years have seen mega transactions like this, none bigger than Marriott International’s $13 billion acquisition of Starwood Hotels & Resorts in 2016.
Joining Ballotti on the stage during the President’s Panel, held at the Atlanta Marriott Marquis in downtown Atlanta, was Patrick Pacious, president and CEO of Choice Hotels International Inc. The Rockville, Maryland-based company is the second-largest hotel group by property count at 6,800 hotels in 40 countries.
Similar to Wyndham, Choice Hotels is growing outward via acquisitions as the company closed on its purchase of the Woodspring Suites brand last month. Pacious says the company was drawn to Woodspring’s performance and growth trajectory.
“If you look at the hotel industry, the segment that had the highest RevPAR growth last year was the economy and extended-stay segment, and the fastest-growing brand in that segment was Woodspring Suites,” says Pacious. “Over the last three years, [Woodspring] has grown 25 percent in units and 21 percent in RevPAR. It’s currently at 240 hotels, but putting it on the Choice platform we feel like we can grow it significantly. We look for brands that can scale, and we look for brands that owners want to build.”
The three-day event drew roughly 1,700 attendees.
In addition to Ballotti and Pacious, the President’s Panel featured Elie Maalouf, CEO of the Americas at InterContinental Hotels Group (IHG), and David Marvin, founder and president of Atlanta-based Legacy Ventures. Jeff Higley, vice president and editorial director of Hotel News Now/STR Global, moderated the panel. Founded by Atlanta-based Hunter Hotel Advisors and Georgia State University’s J. Mack Robinson College of Business, the annual Hunter conference will conclude on Friday.
Launch Party
Hotel companies aren’t just growing via acquisitions, top firms are also launching new brands. In September 2017, Atlanta-based IHG announced avid hotels, a midscale hotel brand. IHG broke ground in November on the first avid property in Oklahoma City. Dubbed avid hotel Oklahoma City-Quail Springs, the four-story, 87-room hotel is set to open in the third quarter.
IHG opened 4,000 new hotel rooms in the United States alone in 2017. Maalouf says the company is looking for opportunities to grow its hotel count, while also being flexible.
“We don’t have 21 brands yet, but we’re on our way,” says Maalouf. “IHG has 12 brands in over 100 countries. We want scale where it matters because we really want muscle in our portfolio.”
Other recently launched hotel brands include Best Western’s BW Signature Collection, Hilton Worldwide’s Tapestry and Curio concepts, the Hyatt Centric brand and Marriott’s Moxy.
Choice Hotels is aggressively growing its footprint through a brand that it launched a decade ago, Ascend Collection.
“There’s now 200 that are open, we opened 50 last year and we’ll do another 50 more this year,” says Pacious.
The lone owner on the panel, Marvin spoke briefly about how the hotel industry may be getting overextended with the amount of hotels coming on line and the number of brands getting launched.
“I consider hotels to be the most under-demolished real estate classes out there,” says Marvin. “There is a lot of obsolescence, both physical and concept-wise.”
Muhtar Kent, chairman of the board of directors at The Coca-Cola Co., spoke at the Hunter Hotel Conference on Wednesday, March 21 at the Atlanta Marriott Marquis.
Innovation, Brand Investment
Opening yesterday’s general sessions was Muhtar Kent, chairman of the board of directors at The Coca-Cola Co. He previously served as the company’s chairman and CEO from 2009 to 2017.
Kent spoke to the crowd of hoteliers about the importance of customer engagement and marketing for brands.
“Businesses and brands must be responsive and must be authentic,” says Kent.
Pacious says that in addition to growing Choice’s footprint, the company is also improving its efficiency with new technology.
“We’re the first brand to put its central reservation system in the cloud, we just finished last week migrating all our hotels to the cloud,” says Pacious, who also says that Choice has a history of innovation with being the first hotel company to launch an app, the first to accept online bookings and the first to feature member rates.
IHG’s Maalouf says that it’s important to be adaptive and detail-oriented in today’s hyper-competitive environment because the winners and losers are often decided in the margins.
“It’s now a game of inches,” says Maalouf.
Even for a global powerhouse like Coca-Cola, companies can always be doing more, according to Kent. During his presentation, Kent described how the average household worldwide has 26 drinks per day inclusive of all beverages — water, alcohol, juice, coffee, etc. Of those, on average only two are Coca-Cola products.
“The room for growth is immense,” says Kent.
— John Nelson