WYNDHAM WORLDWIDE

Wyndham Worldwide

Wyndham Worldwide

Introduction

Based in New York, Wyndham is one of the largest franchised hotel operators in the US and is a global operator. It was also involved in the timeshare and vacation rentals areas in its hospitality division. In 2006, Cendant split its operations into discrete companies operating in specific industries. Its hotel operation was renamed Wyndham Worldwide.

Wyndham has about 7,210 properties with a total of 612,700 rooms. As of 2011, Wyndham had about 900 hotels and 102,700 rooms pending opening in their development pipeline, of which 51.0% were international and 55.0% were new construction. Wyndham derived 74.0% of its revenue in the U.S. and 26.0% internationally. Its brands include Amerihost Inn, Days Inn, Knights Inn, Ramada, RCI, Fairfield Communities, Super 8 Motels, Travelodge, Villager, Howard Johnson and Wingate Inns. The two largest brands are Super 8 and Days Inn, which have about 2,000 locations each. Wyndham's brands mainly cover the economy and mid-scale markets and it is involved in timeshare (via RCI and Fairfield Communities).

Over the five years to 2012, company revenue is expected to grow at an average annual rate of 0.5% to $4.5 billion. In 2011, revenue is estimated to have grown 10.4% to $4.3 billion, with revenue forecast to grow an additional 5.2% to $4.5 billion. In 2010, company revenue grew 2.7% to $3.9 billion due to increased occupancy rates. In 2009, as the recession spread, revenue fell 12.4% to $3.8 billion, due to adverse currency fluctuations and reduced demand for hotel rooms. For the lodging segment, revenue was down due to lower global revenue per available room (RevPAR), while the vacation exchange and rentals segment reported a decline in revenue due to the impact of the stronger US dollar. The deepening global economic recession heavily impacted travel, including vacation rental exchange activity. The company's performance is generally linked to changes in domestic and international travel demand, as well as acquisitions and restructuring of operations. For fiscal 2008, global revenue fell slightly. Better performance resulted from its international segment, as the US economic recession arrived early.

Discussion

Wyndham Worldwide is headquartered in New Jersey and was spun-off from Cendant Corporation in July 2006. Cendant Corporation was a global operator based in New York and was one of the largest franchised hotel operators in the United States. It was also involved in the timeshare and vacation rentals areas through its hospitality segment (Bryant & Coe, 2009). The company's brands include Days Inn, Knights Inn, Ramada, RCI, Fairfield Communities, Super 8 Motels, Travelodge, Villager, Howard Johnson, Wingate Inns and Amerihost Inn. The two largest brands are Super 8 Motels and Days Inn, which had 2,174 and 1,877 locations, respectively, in 2010. In 2010, Wyndham Worldwide operated 7,210 properties with over 612,700 rooms. It had an occupancy rate of 48% and RevPAR of $31.10. Company revenue increase steadily due to increased prices and higher occupancy rates. The United States accounted for almost 82% of the company's hotels and 75% of rooms. However, US occupancy rates were lower than the company average, ...