Wyndham International Fostering High Touch with High Tech Challenges facing Wyndham International There are a number

of challenges facing Wyndham International in 2001 as they move forward to capture market share of a distinct upscale segment of the business and leisure travelers. In 2001, Wyndham was not a well-known name in the industry. The company had been suffering financially and had sold considerable assets in an effort to promote the Wyndham brand. The challenge of building branch recognition in a market dominated by a few key players such as Marriott, Hilton and Hyatt compounded by the fact that the travel and tourism market was already suffering from the backlash of the September 11, 2001 tragedy make Wyndhams challenge somewhat overwhelming. In addition to less than desirable branch recognition, Wyndham was just entering year three of a significant debt restructuring plan composed of a $1 billion equity investment, as well as a $2.45 billion restructuring of debt. Under such tight purse strings it is unlikely there will be any surplus funds available for any capital investment, excepting that which is deemed mandatory. Currently there is $30 million allocated for the ByRequest advertising campaign, however if this is consumed, where will additional funding be generated from? Current financials (Exhibit 1 of the case) are display a net loss to the business in 2001 of almost $139 million. The leisure travel business is also changing evidenced by the following comment, hotel products competing in the same segment are becoming indistinguishable in the customers eyes (Wyndham International: Fostering High Touch with High Tech, p. 7). There has been a tendency towards increasing competitiveness in the industry focusing upon price which has been propagated by internet technology. Technology has effectively enabled consumers to access data to book their own deals creating a lower cost delivery structure. According to Porter Model, there are three strategies that can act as differentiators against competitors. They are cost leadership, differentiation and niche strategies (Turban, Leidner, McLean & Wetherbe, p.44). Clearly, in the face of financial restructuring Wyndham can neither afford to price out of the market nor afford to be the lowest cost provider. Establishing a differentiated experience or a niche strategy in the face of low brand recognition is a daunting task. Wyndham differentiation strategy to build brand recognition and share of wallet in the upscale business and leisure travel market, hinges to substantial degree upon the success of a guest recognition program named Wyndham ByRequest. The design of the program is focused upon offering personalized service to the members. CRM capability and investment in technology is pivotal to successful delivery. Interestingly enough, marketing research indicates that the primary elements driving selection decisions by business travelers were location and previous experience (Wyndham International: Fostering High Touch with High Tech, p. 8). Wyndham is obviously trying to capitalize upon the experience piece. While Wyndham strategy plays well to this market research, one in three surveyed indicated that frequent-guest points and airline miles are important and this in itself presents a challenge to overcome. Finally, while technology is an integral component of the strategy, Wyndham personalized focus hinges on the client experience and consistent execution. The challenge here is the staffing component, standardized training and communication to ensure that the client experience is outstanding regardless of the location. The technology infrastructure allows delivery of an experience and ByRequest is not a technology, it is a culture (Wyndham International: Fostering High Touch with High Tech, p. 12). A culture that that needs to be diligently fostered. How infrastructure strategy impacts overall IT goals and investments

In this business, the infrastructure was a critical factor in determining the technology strategy for Wyndham successful implementation and speed to delivery. The majority of key competitors in the upscale business and leisure lodging market were franchisee based. Wyndham International presented an anomaly to this standard structure, as 85% of the distribution network was owned and operated. In a franchise based business, the IT expenditure typically fell upon the franchise owners and consequently budget decisions regarding technology were often given less focus. The result was a lack of standardization in IT. Lack of a standardized computing infrastructure was due to the complex structure of the lodging industry, it high degree of fragmentation and the conflicting interests of the parties involved in making technology purchasing decisions (Wyndham International: Fostering High Touch with High Tech, p. 4). The competitive advantage that Wyndham strategically chose to focus upon was a differentiated, personalized client experience. Centralization of client relationship management (CRM) data and ease of accessibility to this data was an essential ingredient for success. The fact that Wyndham controlled 85% of the distribution infrastructure complemented the IT and overarching business strategy perfectly. Centralization of the IT piece allowed Wyndham to not only integrate the property management system with the central reservation system and ByRequest, but also generate efficiencies and economies of scale. IT staffing numbers were reduced, centralized systems and applications were more nimble. The IT investment was in an application service provider (ASP) model which facilitated access to centralized applications via internet web browser. It is very evident in this case that the future direction and strategy was determined by business and that technology acted as an enabler. There was an organizational commitment to deliver an outstanding client experience for ByRequest members and the IT augmented this strategy. As mentioned, the success of Wyndham ByRequest, a key strategy, hinged upon the ensuring that every employee embraced the program. In an industry known of high staff turnover, consistency of delivery and training for key staff presented quite an obstacle. Current research indicates that Wyndham International has leveraged centralization of technology to provide a competitive edge with respect to training. Instead of relying upon more costly traditional training methods, such as: face to face , conference calls, e-mail and fax distributions, Wyndham collaborated with Centra, a company in the business of licensing its software and services for online learning and training. The benefit of using Centra was the realized in the ability to bring all property management system training in-house, instead of contracting it out to a vendor. The savings to date in 2006 are estimated to be more than $800,000 (Wyndham Deploys Strategic Applications and Frequent Guest Program using Centra Online Collaboration, 2006). This collaboration could not have been realized without the centralized infrastructure. Able to leverage IT to foster High Touch environment? Competitive advantage and Sustainability? This question launches an interesting debate. Based upon the information in the case regarding the ByRequest program, it seems that Wyndham International exhibited some early success with the high touch concept. The membership in the program grew exponentially from about 55,000 in February 2001 at the time of launch to approximately 600,000 some 20 months later. Additionally, the program was held responsible for contributing $60,000 in revenue in 2001. While the initial growth in revenue was a rather insignificant amount, it was anticipated to grow considerably. Today, Wyndham ByRequest is 1.8 million members strong and still growing. As well, statistics show that from the year 2001 to 2002, Wyndham doubled the number of customers that stayed more than two times per year (Wyndham Deploys Strategic Applications and Frequent Guest Program using Centra Online Collaboration, 2006). The information in the case really conveys the adoption of the strategy into the culture of the organization. Managers were specifically employed to deliver the human piece and given additional autonomy to ensure the needs of guests were satisfied. The CRM capability, centralization of IT and integration of the PMS and CRS with ByRequest made this a cutting edge program in 2001. Wyndham infrastructure strategy allowed the IT to successfully work in tandem with the client loyalty program. I believe at the time in 2001 when Wyndham launched ByRequest, they actually offered a differentiated strategy that did create a competitive advantage. They offered a personalized, client

experience rather than loyalty points and the differentiator in an increasingly commoditized market became service. Had they been able to maintain this dedicated focus on ByRequest I believe the competitive advantage would have proven sustainable. Since the case was written in 2001, Wyndham has gone through tremendous change due to financial pressures, collapse of the travel industry after 2001 and two changes in ownership. In June of 2004, Wyndham International was acquired by the Blackstone Group for $3.24 billion. By this time Wyndham had gone through a period of financial belt tightening including the sale of nonstrategic assets, corporate downsizing and the debt restructuring which fundamentally changed the infrastructure landscape of the corporation. By this juncture only 46% of their properties were company owned, leased or managed (Blackstone to add Wyndham to lineup, 2005). While Wyndham continued to focus upon innovation and change particularly with respect to technology via their focus on Breakthrough Transformational Leadership, their IT budget in 2005 was still far short of that in 2000 (Lodging Hospitality Effecting Change at Wyndham, 2005). I believe the lack of dedicated IT dollars in concert with the increase in franchisee ownership and truly a lack of ability to focus on the brand rendered the high touch strategy unsustainable. Direct competitors who were not encountering such dismissal financials would have easily been able to duplicate Wyndham strategy and drive anyway any competitive advantage that they initially had. In October of 2005, Cendant acquired 82 franchise agreements, 27 management contracts and the worldwide rights the brand for hotel and timeshare from Blackstone for $101 million. This collaboration left behind owned real estate assets only. A couple of comments from a May 2006 article in Lodging Hospitality talk to the difficulty that Wyndham has had. Steven Rudnitsky, chairman and CEO of Cendant expects to terminate some Wyndhams to bring brand standards up and the make the brand more consistent. As well, when Peter Strebel, president of Wyndham Hotels and Resorts, began talking to owners in the winter of 2005, he discovered some frustration with the branch because its main focus was on owned assets rather than its franchises. During the past few years, Wyndham was in more of a sell mode, so refocusing, let alone refreshing; the brand was not on the front burner (Lodging Hospitality Cendant Upscale Gambit, 2006).