Although the hospitality industry across the globe remains closed amid the ongoing crisis, various hotel companies have come to the fore expressing their preparedness not only to welcome back the patrons to their hotels but also to keep expanding into existing and new geographies. Nikhil Sharma, area director – Eurasia, Wyndham Hotels & Resorts while speaking to Akshay Nayak informed that converting independent hotels into Wyndham Hotels & Resorts brands has always been an important part of Wyndham’s consistent room growth, and as the industry recovers from Covid-19, the company believes, conversions will become an even more important growth vehicle for them
How has the pandemic and the lockdown impacted Wyndham’s business in the markets under your purview, especially in India?
Coronavirus and its subsequent lockdown has created unprecedented times, which in turn have strongly impacted the hospitality industry as a whole, Wyndham Hotels & Resorts included. Throughout the pandemic, our number one priority has been and will continue to be maintaining the health, safety and well-being of all our partners, team members, staff and guests. Here in India we have experienced closures and have taken all necessary measurements to ensure our partners are well-supported through the crisis and are best prepared for when travel resumes. The fundamentals of the industry will see a shift and we are working hard to provide our partners the best practices and tools that will help them succeed post lockdown and face any challenges head on.
What measures are you considering to further optimise the balance sheet for the current fiscal?
Throughout this crisis we have had to make a number of difficult and measured decisions to adjust our cost base to this new reality, which in turn will help to preserve liquidity and support our hotels. The actions we have taken since the early stages of the Covid-19 crisis have resulted in identification in cash savings that will help us mitigate revenue declines. In addition to workforce and salary reductions, we reduced advertising spend by over 50 per cent, cut our travel budgets by over half and eliminated 100 per cent of non-essential discretionary spend. We’ve also reduced our capital budget by nearly half, funding only the highest priority projects. We have suspended certain fees and we’ve provided payment relief by deferring receivables, as well as property improvement plans in certain non-essential brand standards, requiring cash outlays. We will continue to monitor the situation closely and make decisions that will ultimately support our partners, team members, and in turn our guests.
Which markets are showing a faster recovery? What contingent plans are you chalking out to ensure the utmost safety of guests and employees?
As each market is on a slightly different trajectory based on varying times that lockdown measures were initially implemented, it’s difficult to say. In China, we now have over 85 per cent of our system back open and we are seeing gradual signs of recovery with recent occupancy levels running in the low-30’s. We are keeping the safety of our guests and employees at the forefront of everything we do and in order to ensure this safety we are now mandating new health and safety operating standards. Part of these standards include providing new health and safety training to our frontline team members, as well as making health and safety training available at our hotels. We’re identifying offsets to the cost of these new standards to help our hotels drive profitability and we’re also updating additional existing brand standards to address social distancing and other protective measures. This builds on our already established processes and procedures to provide the cleanest and safest stay for our guests.
As the aviation industry is in turmoil and MICE business will take a major hit, which alternative revenue streams at Wyndham are you vouching on?
Focusing our efforts on domestic travel is going to be a key component to our rebound. Over the last few quarters we have put a strong focus on creating a National Sales team, which directly services our domestic hotels. This sales team came about from a latent demand we discovered for business and leisure hotels that offer accessibility to major cities.
Your views on the recovery of business from domestic tourism in India?
India has historically had a very strong domestic market and our base reflects this with about 80 per cent of our business in this region coming from domestic travellers. As part of our rebound plan we will be focusing our efforts on promoting and supporting domestic travel while also restoring our guest’s confidence and desire to travel. Ensuring the safety of our guests, partners and team members is our first priority and focusing on domestic travel first will help to build back the stability and confidence needed for more international tourism to resume.
The future roadmap of expansion for Wyndham in India and other Asian markets?
We currently have almost 50 hotels in this region with further development plans coming down the pipeline. Converting independent hotels into Wyndham Hotels & Resorts brands has always been an important part of Wyndham’s consistent room growth and as the industry recovers from Covid-19, we believe conversions will become an even more important growth vehicle for us. We have confidence in the iconic brands we currently have in this region including Ramada, Howard Johnson and Days Inn and in the strength of the partnership between our team and our property owners. While these are extraordinarily difficult times, we are certain that our asset-light business model is optimally positioned for continued long-term growth. Travel will inevitably rebound. And when it does, Wyndham will be there, ready to welcome the everyday traveller to our approximately 9,300 hotels around the world.