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(Yonhap Interview) Wyndham Hotel Group to triple presence in S. Korea by 2018

All News 09:05 June 09, 2016

By Kim Eun-jung

SEOUL, June 9 (Yonhap) -- Wyndham Hotel Group, the world's largest hotel chain by room count, plans to triple its footprint in South Korea with mid-tier Ramada and Days Inn brands to fill fast-growing demand through local partnerships, its senior official said.

With a diverse portfolio of 16 brands all over the world, the U.S.-based group operates 13 hotels in South Korea and plans to increase the number to 40 by 2018 through franchise agreements with local developers and partners, adding 8,670 rooms to its portfolio.

Currently, five hotels are under construction in Incheon, Yongin and Gimpo -- all in the greater Seoul metropolitan area -- and also in Daejeon, near the central administrative city of Sejong, to open in the next two years. The franchise agreements will include such brands as Ramada, Days Inn and Howard Johnson.

"We are confident of the government's plans to boost tourism in the country, and the second tier cities are slated for massive development. We are optimistic that tourism growth in the country will continue, and we seek to expand our offerings to cater to the masses," Davis Wray, vice president of acquisitions and business development at Wyndham Hotel Group, said in a written interview with Yonhap News Agency.

"We intend to continue rolling out our popular brands, Ramada and Days Inn, which are in high demand by developers."

Wray said Wyndham is putting a high priority on the Asia-Pacific region, which is expected to show the strongest growth thanks to a rising middle class in the emerging economies and growing demand for leisure and international travel.

Among them, South Korea is a key market for the group, as it is one of the top outbound destinations from China, the world's largest tourism source market. It is also the sixth most visited country in Asia with 14.2 million arrivals in 2014.

"The focus now is on China, which is a major market segment for the global tourism industry, and especially so for South Korea, where it is the nation's top outbound destination," the official stationed in Singapore said.

Wray said the group's expansion plan comes at a perfect time as there is still a gap in the market when considering the growing demand for quality accommodations in major tourism destinations.

According to a study by Korea's Culture and Tourism Institute, the daily demand for hotel rooms is estimated to be 41,000 in 2017, while the supply is projected to be in the range of 33,000. It leads to a shortage of nearly 8,000 rooms in Seoul.

"Opportunities are vast, but those with a long term growth strategy to build quality accommodation, consistent service and a robust loyalty program will stand to gain in the long run instead of those merely engaging in a price war," he said.

Wray was particularly optimistic about the growth potential in the second-tier cities outside of Seoul. Among the candidates are cities in Gyeonggi Province, including Hwaseong, which are undergoing a massive development of real estate and transportation networks.

"There is immense potential in the outlying tourist destinations where there is a shortage of room supply, and we hope to open more hotels in those areas to meet the growing demand," the official said. "We see them as being extremely valuable to our growth in key tourism spots for both business and leisure."

Wray also pinned hopes on the popularity of Korean pop culture, expecting it to produce a "ripple effect" first in Asia and then in Western nations, taking note of "K-Culture Valley," a cluster of various cultural facilities to be built in Gyeonggi Province.

"These days Chinese tourists and a majority of tourists are looking for more than one experience -- they want attractions, entertainment and shopping. It is no longer enough to just have a limited offering," he said.

With the growth of middle-class business and leisure travelers, the official sets eyes on "millennials who are looking for authentic travel experiences." They are cost-conscious, choosing to save on accommodation but willing to splurge on experiences, he said, noting, "They are currently not brand loyal, which opens up an opportunity for us to win their loyalty."

Once its mid-tier brands establish a firm foundation in the local market, Wyndham will take a step further to roll out luxury brands to target the high-end segment.

"Should the opportunity arise, we will look for areas to launch our upscale Wyndham Hotels and Resorts brand, Howard Johnson and TRYP by Wyndham. We are also actively looking for managed deals in South Korea," he said.


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