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ISM 158 Announcements

ISM 158 Announcements. Today: Wyndham Case Project Team and Topic Due Stay behind at end if still don’t have group I may ask groups to consider other companies if there are conflicts Quiz return. Case: Wyndham International Fostering High-Touch with High-Tech. Wyndham History.

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ISM 158 Announcements

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  1. ISM 158 Announcements • Today: Wyndham Case • Project Team and Topic Due • Stay behind at end if still don’t have group • I may ask groups to consider other companies if there are conflicts • Quiz return

  2. Case: Wyndham InternationalFostering High-Touch with High-Tech

  3. Wyndham History • High-end hotel company • Business travel • REIT = Real Estate Investment Trust • Changed to C-corporation (different tax structure) • Founded 1981 • First one opened 1982 in Texas under Tramel Crowe Corp • 1985 had 14 properties • IPO 1996 • Already substantial – total of 66 hotels • Acquired 1997 by Patriot American Hospitality • Real Estate Investment Trust

  4. Overview • Wyndham attempting to establish itself as recognized lodging brand • Restructured from real estate to hotel company • Core strategy of new guest program called Wyndham ByRequest

  5. ByRequest Program • Came about after govt scrutiny • Slowing company down • Needed to differentiate themselves to regain market • 80% drop in stock value 1999 • Market change happening • Customer access channels changing • Internet-based services used to book lodging • Many chains lumped into similar category • Commoditization of lodging • Rewards Program

  6. Program Details • Customization to very fine detail • Preferences • Loyalty Points? • Free amenities, snacks on arrival, local calls, internet access • Training staff to look for customers • Start with survey – customer particulars, preferences • Send preferences on to next hotel they stay • Store all information in shared computer network • First to allow cellphone reservations and internet access • Used frequent flier programs already existing • Other hotels: • Flier miles • Points based system

  7. Differences • Qualitative vs. Quantitative • W strategy hard to quantify • Soft experience advantage • Other programs = direct incentive scheme • Liability vs. expense • Financial difference in accounting • Hotel managers more flexibility to make customer happy • First to have many services – hair driers, internet, cellphone reservation, … • Challenge of managing rewards • Cash in free nights different location to earning • Management difficult to give right incentives between locations

  8. Wyndham ByRequest • Not points based • Customized guest profiles • Built on centralized IT infrastructure • Integrate data from different sources, and disseminate to geographically dispersed properties • Dedicated property-level personnel • Integrated organizational structure • Operate at majority of Wyndham properties

  9. Competitive Advantage • Positive and Negative Aspects of program

  10. Branding • What is the value of a brand in the lodging industry? • Associate hotel with experience at previous hotel of same chain • Cheaper hotel much more important for low-price customers • We don’t typically associate brand immediately • More interested in amenities etc. • Opportunity for brand to establish itself • Very difficult to sustain advantage

  11. Franchising • Different owners in different areas • Rapid expansion, more capital through franchising • Separate managers have different interests • Individual profit to company without direct service • Need system of standardization • Used IT for this system • Compatibility issues • Conformity issues • Each hotel built by different groups – perhaps different name or previous owner • IT infrastructure needs to be built together • Increased business, marketing benefits for individual hotel owners – reputation • No freeloaders in this system • Economy of scale • Loyalty to Brand name

  12. Sustainable Competitive Advantage • What barriers have been created? • What others could be?

  13. The Analysis of Sustainability:The Logic of Barriers to Erosion and Response Lag Drivers

  14. Group Exercise • Take the role of central management overviewing this program • What additions/adjustments would you recommend • What data would you like to see? • How will you maintain any advantage?

  15. Our recommendations • More amenities • Business relationships • Car rentals • Other hotels • Testing customer loyalty • Does it work? • Do customers come back? • Add recommendation abilities in addition to survey responses • Restaurants in area • Increase advertising in tourist areas • Tracking analysis • Over and above service • Increased flexibility for local managers • High quality employees – benefits, training

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