Steven A. Rudnitsky is president and CEO of Wyndham Hotel Group. As head of the company's global operations, he is tasked with overseeing its China growth and ensuring the company has steady local partners.
How is Wyndham localizing its processes and focus for the China hotel market?
We established our Days Inn, Howard Johnson and Super 8 brands in China through master franchise relationships with mainland-based companies. Those companies are responsible for building their respective brands by franchising hotels with independent owner-operators and providing those franchisees with central reservations, sales, marketing and quality assurance support.
We franchise the Ramada brand directly, identifying developers, signing new franchise agreements and providing support services. We also offer management services to owners of Ramada Plaza hotels – the top tier in this brand – some of whom prefer to outsource operation of their hotels. We signed our first Ramada Encore project last year under a joint-venture agreement.
We are introducing the Wyndham brand to China using a management services model, extending our brand name to independently owned properties and providing turnkey management services.
Our presence in China has grown significantly during the last two years. We now have an office in Shanghai, and we continue to hire personnel as we build our business.
Your hotel brands like Super 8 and Days Inn are signing up franchisees in China very quickly. What are the attractions of hotel ownership and partnership with Wyndham's properties?
By affiliating with our brands, independent owner-operators retain all the advantages of entrepreneurism while gaining the benefits of international brand affiliation, global sales and marketing support, proven systems and consistent quality and service standards.
China has a challenging business environment. What sort of opportunities do you see in the China market over the coming 5-10 years?
As China's economic status continues to improve, the expanding middle and mercantile classes will use their increasing disposable income to travel throughout the country, creating an expanding need for hotel rooms in all price and service sectors. Travel and tourism will be accelerated by the rapid expansion of the nation's highways, which will increase the population's mobility by orders of magnitude, just as the same phenomenon transformed the United States during the 1950s and 60s.
When looking at your brand equity, how to you plan to expand that in China?
We have established a foundation for future growth with clear segmentation and business models that respond to market needs under the following brand structure: Wyndham, to debut in 2008, five stars; Howard Johnson, introduced in 1999, four stars; Ramada, 2004, three and four stars; Ramada Encore, 2008, three stars; Ramada Plaza, 2004, four to five stars; Days Inn, 2004, three stars; Super 8, 2004, economy.
The introduction of our frequent traveler program to China last year weaves a thread between those brands by encouraging travelers to stay with us no matter where they travel or what they spend.
In a few months, more Chinese travelers will be able to gain their U.S. visas through an agreement signed between China and the U.S. last December. What are you doing around the world to plan for more outbound Chinese travelers?
One of the corollary benefits of establishing our brands in China was to build brand recognition among domestic travelers. When those travelers venture overseas, they will see our brands wherever they go and, we hope, choose us for their accommodations.
Commanding a company with so many rooms among so many brands around the world is an awesome task. What sort of attributes do you value in the colleagues you work with and how does that filter down throughout your hotel chains?
On the corporate side, we focus on our strategic business plan and meeting our goals. Each of our brands begin the year with specific plans of their own, which are shared with our franchisees at regional meetings and through various communications vehicles on an ongoing basis.
We have an internal training mantra, "Hospitality Starts With Me." We value dedication, determination, creativity and hard work. To the degree that the corporate staff sets a strong example and demonstrates a willingness to do whatever it takes on behalf of our franchisees and management clients, we can expect that commitment to filter down to individual hotels and the people who work the front desk.
You have chosen Xiamen to base your first Wyndham-branded hotel in China. Why are you planning to fully manage this brand in the Middle Kingdom rather than find franchise partners?
Whereas our economy and mid-priced hotels tend to be owned by individuals or two- or three-person partnerships who are more than willing to operate their own properties, the ownership structure of upscale properties tends to be more complex, given the size and commensurate cost, involving multiple entities that regard their stake as an investment, not an entrepreneurial venture. Those owners tend to seek outside experts to manage those properties.
Both before you worked at Wyndham and during your tenure at this company you have visited China many times. What are some of the changes you have personally witnessed in the country's development?
I can sum the change up in two words: Growth and prosperity. The China I first visited two decades ago as a PepsiCo executive has evolved at almost "warp speed," and the changes that I see on my two-to-three annual visits further reinforce the pace of business opportunities throughout the country. While I admire the country's economic progress and incredible pace of development, I am very pleased to observe that it has not diminished the humility and kindness of the people.