Wyndham Grows Direct Franchising Business in China; Signs Nearly 600 Hotels Over Five Years

Rhea-AI Summary

Wyndham Hotels & Resorts has achieved a significant milestone in China, signing nearly 600 direct franchise agreements across the country in five years. As China's largest U.S.-based hotel company, Wyndham operates more than 1,600 hotels and 180,000 rooms across 13 brands. The company's growth includes over 70 new direct franchise agreements in key markets during H1 2024, and nearly 300 direct franchised hotel openings since 2019. This expansion aligns with China's trajectory to become the world's largest travel and tourism market by 2035. The company has also introduced new brands like Hawthorn by Wyndham and La Quinta by Wyndham to the Chinese market.

Positive

• Signed nearly 600 direct franchise agreements in China over 5 years
• Operates 1,600+ hotels and 180,000+ rooms across China
• 70+ new direct franchise agreements signed in H1 2024
• Successfully expanded portfolio with introduction of new brands
• Reduced reliance on master licensees for growth
• Growing presence in world's future largest travel market

Negative

• None.

Insights

Market Research Analyst

Wyndham's strategic expansion in China through direct franchising represents a significant market positioning move. The signing of 600 hotels in five years and current footprint of 1,600+ hotels demonstrates strong execution in the world's fastest-growing tourism market. The shift from master licensees to direct franchising enhances brand control and profit margins while building stronger franchisee relationships.

The diverse brand portfolio spanning economy to upscale segments positions Wyndham to capture various market segments as China's domestic tourism grows. The 70+ new franchise agreements in H1 2024 in key markets like Beijing and Guangdong indicate robust growth momentum. The $325 million technology investment and 112 million Wyndham Rewards members provide competitive advantages in distribution and customer loyalty.

Financial Analyst

The transition to direct franchising model has significant financial implications. Direct franchising typically yields higher margins compared to master license arrangements, as it eliminates the intermediary. With China projected to become the world's largest travel market by 2035, this strategic positioning could drive substantial long-term revenue growth.

The expansion across diverse price points and locations, particularly in high-growth regions, suggests strong unit economics and return potential. The technology infrastructure investment demonstrates commitment to operational efficiency and scalability. The robust pipeline, including multiple brands and property types, indicates healthy demand from property owners and suggests continued strong cash flow generation potential.

Milestone comes as China looks to become world's largest travel and tourism market by 2035; builds on Wyndham's reacquisition of direct franchising rights for Days Inn in 2019

SHANGHAI, Oct. 29, 2024 /PRNewswire/ -- Wyndham Hotels & Resorts surpassed a major milestone in China: signing nearly 600 direct franchise agreements across the country in just five years. The achievement is a testament to Wyndham's owner-first approach to franchising and increased efforts in recent years to reduce its reliance for growth on master licensees—a move underscored in 2019 when the Company reacquired direct franchising rights for its Days Inn brand in China.

Today, Wyndham is the largest U.S. based hotel company in China by number of properties, with a footprint spanning more than 1,600 hotels and more than 180,000 rooms across 13 of its 25 brands. In the first half of 2024 alone, Wyndham signed direct franchise agreements for more than 70 hotels in key markets including Beijing, Jiangsu and Guangdong. The milestone comes amidst a travel and tourism surge in China, where it is on track to become the world's largest travel and tourism market by 2035, giving owners an opportunity to capitalize as guests look to explore the country.

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"We have an industry-leading footprint in China, and as the country's tourism segment continues to grow, it's more important than ever to showcase the value of joining forces with the world's largest hotel franchisor. Through direct franchising, we gain greater control over the consistency and direction of our brands in China while unlocking the benefit of building long-term relationships with franchisees—all of which are key to driving further expansion."

- Joon Aun OOI, President, Asia Pacific, Wyndham Hotels & Resorts

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A Brand for Every Owner and Guest
In line with its mission of making hotel travel possible for all and catering to the diverse needs of Chinese travelers, Wyndham has opened nearly 300 direct franchised hotels in China over the last five years spanning economy to upscale accommodations. What's more, the Company continues to broaden its portfolio of brands in the country, introducing both Hawthorn by Wyndham and La Quinta by Wyndham during that same time, the latter of which now has four hotels open and another six in the pipeline.

Standout hotel openings since 2019 include:

• Hawthorn by Wyndham Dali Erhai Park: Marking the first Hawthorn by Wyndham in Asia Pacific, the hotel offers an urban retreat catering to business and leisure guests alike. The hotel offers easy access to the bustling city center as well as relaxing walking trails around Erhai Lake at Erhai Park, as well as amenities like a breakfast buffet, Tea Bar and laundry.
• La Quinta by Wyndham Weifang South: Marking the first La Quinta by Wyndham in Greater China, this contemporary hotel is surrounded by lush landscape and Yuhe River views. Guests can enjoy modern amenities including a fitness center, three restaurants and event space for up to 2,500 guests.
• Wyndham Garden Qionglai Downtown: Tucked away in Qionglai, one of Sichuan Province's oldest cities, the 88-room hotel boasts a unique design that retains its traditional courtyard architecture balanced with a modern, renovated interior to cater to today's guest. Just 70 kilometers from Chengdu Shuangliu International Airport and minutes from Wenjun Well and other local attractions, the hotel is the ideal home base for travelers looking to explore the area.
• Wyndham Grand Shanxi Xiaohe Xincheng: Joins La Quinta by Wyndham Shanxi Xiaohe Xincheng and Wyndham Shanxi Xiaohe Xincheng as part of the Shanxi Xiaohe Xincheng project, a cluster of three hotels accounting for more than 1,000 rooms. This hotel is situated in the city's buzzing business district with a manicured courtyard, stylish lobby and gourmet Chinese cuisine. The hotel offers direct access to the Xiaohe International Convention and Exhibition Center along with impressive meeting and event space of its own.
• Wyndham Shanghai Nanxiang: Located in the heart of Nanxiang's cultural and business district, the hotel puts guests in the prime spot to enjoy the rich history of the surrounding area dating back 1,500 years. Just 18 kilometers from Shanghai Hongqiao International Airport and 15 kilometers from Shanghai Hongqiao Railway Station, the hotel perfectly caters to those traveling for business and sightseeing alike.
• Wyndham Sun Moon Lake: Nestled on the shores of Sun Moon Lake, Taiwan's largest natural lake, the 15-story hotel boasts state-of-the-art wellness facilities including a fitness center, outdoor pool and tranquil spa. Its prime location gives guests easy access to iconic attractions like the Sun Moon Lake Ropeway, Nine Frogs Stack and Wenwu Temple.
• Wyndham Tai'an West: Located at the foot of Mount Tai, the 342-room hotel allows guests to immerse themselves in the stunning natural beauty and rich cultural heritage of the Shandong Province. The hotel offers easy access to the Beijing-Fuzhou Expressway, Jingfu Expressway and the high-speed Tai'an Railway Station, as well as notable attractions including Mount Tai Global Geopark, the historic Dai Temple and the Dawenkou Cultural Site.

Growth in Greater China is powered by the Wyndham Advantage—a combination of world-class marketing, distribution and other resources designed to put owners on the path to success. Inclusive of more than $325 million in innovative technology investments over the past six years, owners have access to best-in-class technology from industry-leading providers, including next-gen property management systems, as well as a growing member base of approximately 112 million enrolled Wyndham Rewards members globally.

For more information on development opportunities with Wyndham Hotels & Resorts, visit development.wyndhamhotels.com.

Images associated with this release can be found here.

About Wyndham Hotels & Resorts
Wyndham Hotels & Resorts (NYSE: WH) is the world's largest hotel franchising company by the number of properties, with approximately 9,200 hotels across over 95 countries on six continents.  Through its network of approximately 893,000 rooms appealing to the everyday traveler, Wyndham commands a leading presence in the economy and midscale segments of the lodging industry.  The Company operates a portfolio of 25 hotel brands, including Super 8^®, Days Inn^®, Ramada^®, Microtel^®, La Quinta^®, Baymont^®, Wingate^®, AmericInn^®, Hawthorn Suites^®, Trademark Collection^® and Wyndham^®.  The Company's award-winning Wyndham Rewards loyalty program offers approximately 112 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally. For more information, visit wyndhamhotels.com.

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SOURCE Wyndham Hotels & Resorts

FAQ

How many direct franchise agreements has Wyndham (WH) signed in China since 2019?

Wyndham has signed nearly 600 direct franchise agreements across China in the past five years since 2019.

How many hotels does Wyndham (WH) currently operate in China?

Wyndham currently operates more than 1,600 hotels with over 180,000 rooms across 13 brands in China.

How many new hotels did Wyndham (WH) sign in China during first half of 2024?

Wyndham signed direct franchise agreements for more than 70 hotels in key markets including Beijing, Jiangsu and Guangdong during the first half of 2024.

Which new brands has Wyndham (WH) introduced to China in recent years?

Wyndham has introduced Hawthorn by Wyndham and La Quinta by Wyndham to the Chinese market in the past five years.