Case_Study

• Declining financial health of Patriot American Hospitality's in 1999 made structural changes necessary, as such a new strategic focus was introduced- focus on operations, running premier-brand full-service hotels, and growing the property chain with the Wyndham flag; • Financial restructuring signed in 1999, gave Wyndham management a few years time to implement strategic changes with less financial constrains. Many of the "nonstrategic" assets were sold, so resources could be reinvested into growing the Wyndham brand; • As a rapidly expanding chain it doubled the number of its flagged properties in a few years. Wyndham was striving to become the lodging brand of choice in upscale and high upscale class. The market was dominated by entrenched competitors. • Large chain competitors had complex structure, mainly due to separation of property ownership and hotel management, as well as using franchising agreements to accelerate brand growth strategy. Separation of ownership and hotel management had an impact on consistency of operations, brand specifications and customer experience in the lodging industry; • Wyndham had significant advantage comparing to its large chain competitors- it owned and operated 85% of properties flying the Wyndham flag. This integration means it was easier for Wyndham to introduce organizational changes, such as implementation of brand standards, centralization of IT infrastructure, obtaining the capital required. Most of their major competitors would be less efficient in structural changes, as they would deal with non-owned assets, franchises, etc; • The lodging industry had significant lack of IT standardization, due to a complex industry stricture, high industry fragmentation and non-aligned interests of the parties responsible for information technology expenditures. Even in the same chain of hotels, different software platforms were used, on number of operating system and from multiple vendors; • This threat was named "commoditization of hotel product" and lack of brand recognition. To tackle this, dominant chains started introducing guest-loyalty and guest recognition programs; • As more and more Customer Relationship Management (CRM) was developed, this lead to increased frictions between brands, owners and operators, questioning who has ownership of the valuable guest information.