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Cendant's Project Restore to Purge Substandard Hotels -
300 Properties Put on Notice;
 Hotel Group Cutting 15 percent of its Hotel-related Employees
August 20, 2002 - Cendant Corporation's hotel group today announced the launch of a long-term strategic business plan "designed to ensure the future growth and competitiveness" of the company's hotel brands and franchised hotels.

Steve Rudnitsky, hotel group chairman & chief executive officer, said the plan is founded on four principles: 

  1. re-establishing the brands' value proposition, 
  2. improving the profitability of the company's franchised hotels, 
  3. ensure the integrity and consistency of the franchised hotels and 
  4. growing the system carefully through judicious site selection.
A key component of the strategic plan is Project Restore, a campaign to purge its systems of substandard quality hotels as well as franchisees who have defaulted on fee payments. The first 300 properties were put on notice last week.
 
Project Restore will eliminate up to an incremental 40,000 rooms, or 7 percent of Cendant's domestic hotel system, in addition to the normal 20-30,000 rooms terminated annually, Rudnitsky said. "We will work hard to support our good operators, who reinvest their hard-earned profits to maintain their properties and strive to deliver outstanding service, every day."

Paralleling Project Restore, Cendant plans to remove brand signs more quickly from the hotels 


Steve Rudnitsky
of terminated franchisees who refused to do so on their own.

Project Restore will be supported by a "new, strategic approach to franchise sales that will enhance the value proposition of our brands," he said. This will involve repositioning some brands and restructuring franchise development efforts into a portfolio sales approach.

In conjunction with the rollout of the strategic plan, Cendant's hotel group today implemented a 15 percent reduction in force to "realign the staff with the strategic plan and reallocate resources, making millions of additional dollars available for media advertising across all of our brands," Rudnitsky said.

In a letter to hotel franchisees, he said Cendant is "redeploying our brand, marketing and support services teams on high-value programs designed to drive more revenue to your hotels. Improved clarity of direction will enable our team members to deliver against the respective brand plans with greater speed and effectiveness."

Among several initiatives to re-establish its value proposition, the hotel group early next year will introduce the "most important marketing initiative in the hotel group's history," a companywide frequent-traveler program, Rudnitsky said. "This exciting, innovative program will give your hotels a huge advantage in today's challenging marketplace."

In addition, he noted, Cendant has accelerated efforts to increase yield from the Internet, "our most cost-effective reservation channel." The company's redesigned hotel brand Web sites are "setting new records by the day and week because they are easier to use and more appealing than those of the competition," he said.

Rudnitsky reminded franchisees of Cendant's ongoing commitment to technology, including improvements to brand Internet sites, the installation of satellite communications in franchised hotels and an ongoing program to replace outdated property management systems with new-generation hardware and software.

"This has been a difficult year for the hotel industry," he said. "However, this will be a defining year for Cendant's hotel group. I am confident that our strategic business plan will set the stage for a new era of prosperity for our brands and our franchisees."

Rudnitsky announced the following staff changes today:

Jean Thomas was named senior vice president, brand strategy, responsible for developing comprehensive, long- and short-term marketing strategies for Cendant's nine lodging brands as well as managing the hotel group's research team and overseeing multicultural and cause-related marketing. She formerly was a vice president of marketing for Kraft Foods, responsible for a variety of consumer and business-to-business marketing organizations. During her tenure, she directed the integration of the Kraft and Nabisco food-service marketing organizations.

Bob Weller, who had served as group president & chief executive officer in charge of the Super 8(R), Wingate Inn(R), AmeriHost Inn(R), Knights Inn(R) and Villager brands, now will administer a reorganized group consisting of the Days Inn(R), Super 8, Howard Johnson(R), Travelodge(R), Knights Inn and Villager brands. Weller, a 28-year veteran of economy lodging who has served 26 years in positions of executive leadership, had served as group president & chief executive officer since November 2001. Prior to that, he led Cendant's Super 8 brand for eight years and the AmeriHost Inn brand for a year.

Joe Kane, a 36-year lodging veteran who had served as group president & chief executive officer overseeing the Days Inn, Ramada(R), Travelodge and Howard Johnson brands, will return as president & chief executive officer of the Days Inn brand, which he headed for six years until last November. "Joe's leadership, knowledge and passion for the Days Inn brand, its franchisees and the lodging industry makes him the perfect candidate to help us re-establish the brand as the leader in the economy lodging segment," said Rudnitsky. Kane replaces Tom Higgins.

Nancy Poor was named Travelodge president & chief executive officer. A 25-year marketing and hospitality veteran, she had served as group vice president of marketing, supporting the Days Inn, Ramada, Travelodge and Howard Johnson brands. From 1997 to 2001, she served the Days Inn brand as vice president of marketing. From 1993 to 1997, Poor served Cendant as vice president, marketing services. A seasoned advertising executive, she worked for 17 years in major New York City advertising agencies.

John Valletta was named Super 8 president & chief executive officer. A 30-year hospitality industry veteran, he had served as president & chief executive officer of Travelodge Hotels Inc. since February. Prior to joining Travelodge, Valletta served Prime Hospitality Corp. of Fairfield, N.J., as senior vice president of operations for its Wellesley Inns & Suites chain. He served La Quinta Inns Inc. of Dallas as vice president of operations for its Midwest Region from 1999 to 2000 and regional manager from 1993 to 1999.

Paul Hanley, Ramada president & chief executive officer, and Keith Pierce, president & chief executive officer of the Wingate Inn and AmeriHost Inn brands, now will report directly to Rudnitsky.

The hotel group of Cendant Corporation , based in Parsippany, N.J., is the world's largest lodging franchisor with 6,606 open hotels representing 547,303 rooms on five continents under the Super 8, Days Inn, Ramada, Travelodge, Howard Johnson, Knights Inn, Villager, Wingate Inn and AmeriHost Inn brands.  All hotels are individually owned and operated under franchise agreements with Cendant subsidiaries.


 
Contact:

Rich Roberts
Communications Director
Cendant Corporation, Hotel Group
+1-973-496-0750
[email protected]
http://www.cendant.com/



 
Also See: Cendant Enhances Support for Hotel Franchisees With Several Senior Appointments / Nov 2001
Cendant's Nine Lodging Brands Will be Organized Under the Leadership of Joe Kane and Bob Weller / November 2001
Anthony A. Falor Named President & CEO of Cendant's Knights Inn and Villager Brands / December 2001


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