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Wyndham Achieves "Critical Mass" in the Caribbean

By Suzanne Marta, The Dallas Morning News
Knight Ridder/Tribune Business News 

Feb. 17, 2003 - When Wyndham International Inc. debuts its 156-room resort in Vieques, Puerto Rico, this month, it will be the Dallas-based company's 14th property in the Caribbean and Florida Keys and the fourth to open in the region in the last year. 

The Caribbean � where Wyndham now operates more hotel rooms than any single brand � has become one of the most important regions for the company, which struggled financially as business travel dried up in the wake of Sept. 11. 

Last year, Wyndham's 34 resorts, out of 202 hotel properties, accounted for about one-third of its sales. The Caribbean resorts were responsible for 15 percent of the total revenue. 

As a result, Wyndham has been able to "prosper better than if we were just a business hotel or an urban or airport brand," said Dave Johnson, Wyndham's executive vice president of sales and marketing. 

The recent additions have given Wyndham "critical mass" in the Caribbean, said Scott Smith, vice president of the southeast region for PKF Consulting in Atlanta. 

"It makes it easier for them to sell to the client because they're able to rotate their meetings from one property to the next each year." 

The newest properties include the 800-room Wyndham Nassau Resort and Crystal Palace Casino in the Bahamas and the 300-room Wyndham Sapphire Beach Resort on the island of Saint Maarten. 

Their openings were well timed. Since the Sept. 11 terrorist attacks, Americans have sought vacation destinations closer to home, both for security and economic reasons, and the Caribbean has become a chief destination of choice. 

"People don't think of terrorists walking on the beach in Martinique," said Tom Parsons, founder of Arlington-based Bestfares.com. 

The latest Caribbean resort, the Wyndham Martineau Bay Resort & Spa in Vieques, is being developed for Dallas-based Rosewood Hotels & Resorts. It is being marketed as an upscale property with villas and suites. 

Wyndham already has five properties in Puerto Rico, but "there are still a lot of opportunities for us to grow and develop our brand," Mr. Johnson said. 

Resorts also are a good fit for its business customers. The company's sales team can pitch contracts that include group meetings in the United States and incentive trips to the Caribbean. 

"We can be all things to our customer," Mr. Johnson said. "If a company is going to book five meetings this year, including incentive events, we can satisfy all five and offer them better rates." 

Wyndham's last major boost to its resort business was in 1998, when it acquired two resort companies � Arizona-based Carefree Resorts and Williams Hospitality, which operated out of Puerto Rico. 

The Carefree merger added the Boulders Resort & Golden Door Spa in Carefree, Ariz.; The Peaks at Telluride in Colorado; the Lodge at Ventana Canyon in Tucson, Ariz.; and Carmel Valley Ranch in California to the Wyndham fold. Williams added the El Conquistador Resort & Country Club in Las Croabas, Puerto Rico. 

Wyndham made what it considers a key strategic acquisition in 1998 when it bought the Golden Door Spa in Escondido, Calif. 

Spa services have grown increasingly important in the luxury hotel business, though they're hard to define. Spas can range from a small salon with a massage table to a 40,000 square-foot complex. 

"Golden Door is an extremely respected name," Mr. Johnson said. "It has been a key point of differentiation for our customers." 

And it has also helped to lure partners and developers to Wyndham. With nearly $3 billion in debt, and a stock price of about 21 cents, the company must rely on winning management contracts to expand its brand. 

Its reputation as a strong operator in the Caribbean has made those contracts easier to come by. 

"It's rare that we aren't in a conversation when a property that fits our brand profile is coming up to be re-flagged or developed," Mr. Johnson said. "We're very aggressive about pursuing deals." 

Wyndham's position as the No. 1 brand name in the Caribbean offers it an important competitive edge, travel industry experts said. 

Resort guests prefer to stick to a brand even as they try out different locations, said Mary Tabacchi, a professor of hotel administration at Cornell University in Ithaca, N.Y. 

"The brand name really pulls consumers because they assume they'll get consistency," she said. 

Depending on the property, 15 percent to 40 percent of Wyndham resort guests are repeat customers. 

The resort business also hasn't suffered as much as other hotels in the economic downturn, and they offer higher profit margins than hotels that depend on business travelers. And Caribbean tourism is steady pretty much year-round, compared to resorts in Mexico or those that cater to skiers. 

Resort occupancy and rates have been lower in the last two years, but not to the same degree as for the hotel industry overall, according to figures collected by Smith Travel Research. Occupancy in 2002 was 59.2 percent for U.S. hotels, compared with 60.7 percent for resorts. 

On average, guests spend twice as much each day at a resort than at a standard business hotel. And guests stay from four nights to two weeks at a resort, compared with one or two nights at a standard hotel, Ms. Tabacchi said. 

"A business hotel is pretty much just full Tuesday through Thursday," she said. "Even in a down economy, people go to resorts. They may stay a shorter period, but they still go." 

-----To see more of The Dallas Morning News, or to subscribe to the newspaper, go to http://www.dallasnews.com. 

(c) 2003, The Dallas Morning News. Distributed by Knight Ridder/Tribune Business News. WYN, 


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