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Chip Ohlsson on the Importance of Brands in Today’s Lodging Market

Chip Ohlsson on the Importance of Brands in Today’s Lodging Market

Wyndham’s chief development officer, Chip Ohlsson, has always been drawn to hospitality. “I like working with people and making sure everyone’s happy,” he says. “So hospitality was a natural fit.” Now, Ohlsson is 25 years into his career, giving him keen insight into the industry—especially when it comes to the crowded franchise space. LODGING spoke with Ohlsson about how to stand out in this market, and how Wyndham’s 19 brands inhabit their own unique segments.

How does Wyndham support its franchisees?

We occupy a very unique place in the hotel marketplace—possibly more so than just about any other hotel company. When we were Cendant, the company dominated the economy segment and mid-market. Then, with the purchase of Wyndham about 12 years ago, we got into the upscale space. Today, we have brands across every segment in the industry, which is attractive to developers.

With 19 brands in our portfolio, we also have scale and immense purchasing power—about $3 billion. This gives us an edge because we have the scale necessary to broker better deals on behalf of our franchisees. We understand that there’s a lot that independent owners can’t do, whether it’s getting a discounted rate from a vendor or securing extra group or SMERF business with our sales team. It is so costly to go out and get that business on your own, so we want to be there for our franchisees in this regard.

I’d also like to add that we know we’re making a good impression on our franchisees. Anecdotally, a really fun part of this job is that we have developers who started in this industry with a Howard Johnson or Days Inn and now have a portfolio of 20, 30, 50, and in some cases, more than 100 hotels. We love that those developers continue to grow with us.

Wyndham has a lot of legacy brands. How do you keep those fresh and exciting to better compete with new additions to the market?

Many of our brands have decades of history, and we’ve learned over time that if you treat a brand correctly—meaning you renovate it and give travelers a clean, comfortable room at an affordable rate—then you can extend the life cycle of that brand.

And I don’t want anyone to think I don’t like new brands. New brands are great, and there’s space out there for new brands, but sometimes they jump the gun to pursue the new hot demographic without doing their homework. So right now, a lot of hotel companies are targeting millennials, but what they don’t take into account is that the majority of millennials make less than $40,000 a year. So while millennials are looking to book travel experiences, they don’t necessarily want to spend a tremendous amount of money on their hotel. We’ve been focusing on updating our legacy brands to be more millennial-friendly and provide that travel experience at a price point they can afford. Also, I think millennials have learned and are teaching previous generations how to travel better, and how to look at things differently, understanding the value of branding without making it a commodity. Because a hotel room is not necessarily a commodity; a hotel room should be an experience, so providing those experiences has really allowed us to up our game. I love being part of this because I wake up every day to new and interesting challenges and opportunities.

Do you ever have to sway developers away from new brands toward your legacy offerings?

No, we don’t really have to sway anyone. That’s the good news about our brands. Our brands are very well established. They have a lane, and we keep them there. In fact, we’ll often meet owners that want to put one of our legacy brands in a certain location that we believe is not a good market, so we have to tell them no and suggest an alternative. We’re not sales people, we’re consultants and entrepreneurs, and we are primarily concerned with finding the right fit for our developers within our portfolio. An advantage of having 19 different brands is that one brand doesn’t have to be everything to everyone. No matter the situation, where the person is, or what type of experience she’s trying to give guests, we have a way to help her achieve that goal.

There’s a lot of transition going on in the hotel industry right now—including new brands, consolidation, etc. How has the current lodging environment impacted Wyndham’s development goals?

As people say, the only constant in the universe is change. When I look back to when I started in the business 25 years ago, what was important then isn’t necessarily important today. Organizations need to evolve to keep up with the times. Luckily, Wyndham Hotel Group is very nimble and flexible for a large organization. We pay attention to trends. We have the ability to talk to our owners, and we have 8,000 hotels that we can reach out to for information. We’re also constantly looking at each individual brand to predict marketplace changes before our competitors. And once we see an opportunity to evolve, we quickly shift towards whatever it is. For example, we saw that a lot of guests were complaining about internet speeds, so we increased the minimum bandwidth required by our properties long before any of the other major hotel brands. At first, our ownership was a bit resistant—it was a costly requirement—but now they look back and say, “Thank God we were ahead of the curve.” That’s just one example. We’re always trying to correct issues as they arise before they become bigger issues.

If you were an owner, what is the number one quality you’d look for in a brand?

I would want a brand that mirrors my own principles and business goals. There are people out there who build hotels for the sake of building hotels because it’s simply a business vehicle. I don’t think hospitality should be that. I think hospitality should fit the personality of the ownership group and should reflect who they truly are. I think you need to find that brand that fits your personality, so as an owner myself, I would look for the brand that has the same values and beliefs I have and try to grow that way.

What do you like most about being in the hotel industry?

It’s an exciting time to be in the hospitality industry, and the best part about that statement is that I’ve been saying it since my first day in the business. The guest is constantly evolving, and we need to be able to evolve with them. I think as long as we continue to evolve as an industry, it will always be one of the greatest industries to work in. Not many industries can say that. In a lot of industries, you get up every morning and do what you did the day before. In the hospitality industry, it’s never like that.

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