Businessmodel of Wyndham Worldwide

Customer Segments

Wyndham has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at all consumers who desire hospitality services.

Value Proposition

Wyndham offers four primary value propositions: innovation, cost reduction, risk reduction, and brand/status.

The company has embraced innovation in its operations. Its Vacation Ownership segment has implemented a green certification program that emphasizes the internal reduction of water, energy, and well as the practice of eco-friendly activities such as green cleaning. Nearly all of its 160 resorts have received the certification.  Wyndham also operates Ramada Vineland, one of the first brands in the Wyndham Hotel Group family to use solar panels to power its campus. Its solar farm generates 620,620 kilowatts of power per year, and prevents the annual emission of 863,220 pounds of carbon, 4,717 pounds of sulfur, and 1,552 pounds of nitrogen.

The company reduces costs through its pricing; its focus is on the economy and mid-budget range for its hotels. It also lowers costs through its loyalty program. Called Wyndham Rewards, it offers its members a generous points-earning structure and a flat, free night redemption rate, the first of its kind for a major rewards program. Points can be redeemed for airline travel, resort vacations, event tickets, gift certificates for top retailers, and restaurants. The program has more than 22 million members and is the largest lodging loyalty program in terms of number of participating hotels.

The company reduces risk through its “Best Rate Guarantee.” Through this feature, if customers find a lower rate for one of its properties on another website, it matches the rate and gives the customer 3,000 Wyndham Rewards bonus points.

The company has established a powerful brand due to its success. It is one of the world’s largest hospitality companies, providing over 120,000 places to stay in 100 countries across six continents. Highlights by segment are as follows:

• Wyndham Hotel Group is the largest hotel firm in the world based on number of properties, with 7,812 hotels and more than 678,000 hotel rooms worldwide
• Wyndham Destination Network is the largest provider of professionally-managed, unique vacation accommodations based on number of accommodations, with over 112,000 vacation accommodations
• Wyndham Vacation Ownership is the largest timeshare in the world based on number of resorts, units, owners, and revenues, with 213 resorts and 897,000 owners. Wyndham’s portfolio features many prominent brands, including Days Inn, Ramada, Howard Johnson, and Super 8. Lastly, it has won many honors, including recognition as one of the World’s Most Admired Companies by Fortune (2008 – 2010, 2012, 2013, 2016), one of the World’s Most Ethical Companies by Ethisphere (2010-2011, 2015-2016), and one of the top 100 greenest companies in the U.S. by *Newsweek *Magazine (2011-2012, 2014, 2016).

Channels

Wyndham’s main channels are its hotels, which customers most commonly book on a walk-in or direct-to-hotel basis due to their convenient locations. Other channels include its website, mobile apps, and call center facilities. The company promotes its offering through its social media pages, online advertising, traditional media buying (print/TV/radio), direct marketing, and sponsorships.

Customer Relationships

Wyndham’s customer relationship is primarily of a personal assistance nature. Company employees provide customers with services such as room bookings, room upkeep, and room service. That said, there is a self-service component. Customers can sign up to receive information on offers and discounts via e-mail, and there is a “News and Reports” section on its site with company updates.

Key Activities

Wyndham’s business model entails designing, developing, and delivering its services for customers.

Key Partners

Wyndham’s key partners are the suppliers that provide it with the equipment it needs to offer its services to customers. The company also maintains an affiliate program through which it invites third parties to promote its brand on their platforms (websites, mobile apps, etc.).

This typically involves placing a link (banner, text link, or button) in a strategic location. Every time a customer makes a reservation through the link, the third party receives a commission starting at 3%. Lastly, Wyndham provides its franchise partners with marketing, management, and reservation services.

Key Resources

Wyndham’s main resources are its physical resources, which include over 120,000 rooms representing over 890 properties.

It also depends significantly on its human resources in the form of its development team, professionals that focus on growing its franchise business, and its service staff, who provide customers with various kinds of assistance during their stays.

Lastly, it places a high priority on its intellectual property, with its trademarks being important to its business.

Cost Structure

Wyndham has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely cost of services, a variable expense. Other major drivers are in the areas of sales/marketing and customer support, both fixed costs.

Revenue Streams

Wyndham has three revenue streams:

• Its core fee-for-service business (accounted for 63% of revenues in 2015)
• Franchise fees paid by hotels for use of its brand names as well as marketing services
• Fees paid by hotels/vacation ownership resorts for property management services