American hospitality giant Wyndham sees big opportunity in India’s new hoteliers

Wyndham Hotels’ chief executive Geoffrey A. Ballotti, who is in India for a hospitality summit by HVS Anarock HOPE 2025 in Goa, told Mint that the desire among the new crop of local hotel owners to have greater control over their business is transforming the company’s India strategy.

“These new hotel owners want more control of their hotels, unlike those that have worked with traditional management contracts. They don’t need a big, expensive third-party management company to run their hotels now, they want to run their own businesses,” he said. This approach has already helped Wyndham nearly double its footprint in India—from 35 in seven years to almost 70 operational hotels—and expand its development pipeline from a dozen to over 50 in the coming years, with most new properties in the midscale and above categories.

In a hotel franchise business, owners pay to use a brand’s name, while a management contract involves hiring a company to oversee hotel operations for a share of the revenue.

At the heart of its India push, he said, is the belief that the country’s infrastructure boom will unlock massive demand for quality, affordable hotels. “Think about driving down the highways and byways of India and compare the availability of quality, affordable, clean, new hotels with other countries like China, Thailand, or the US,” Ballotti said. With Prime Minister Narendra Modi’s emphasis on infrastructure growth, he sees room for new properties in these underserved markets.

“Your prime minister is probably more ahead of us in terms of that ramp-up of infrastructure when I look at 75-150 airports now in India and what’s already been spent on your highways. India’s infrastructure spending is beginning to catch up to a level that it should have been at for a long time and wasn’t at even in a market like the US. Your GDP is very strong. India’s hotel occupancy has increased from 66 to 70% for us,” he said.

Ballotti said the company’s projections for 2025 look better than they did in 2024. “Every leading economic indicator around the world speaks to rising demand (for hotel rooms). Our pipeline growth in India was 20% year-on-year for 2024. We’re in the first or second year of a multi-year global recovery in what will hopefully be a 10-11 year run,” he said.

Speaking on rising hotel prices globally, he said consumers are never pleased with increasing rates, but hotel prices still lag behind real inflation. “There’s still significant pricing power in the industry because, when adjusted for inflation, hotel prices are trailing behind everyday costs like consumer goods and groceries since pre-covid levels,” he emphasized.

In 2024, the company launched its Trademark by Wyndham (its fastest-growing brand in the US) in India and Wyndham Grand in Udaipur, Rajasthan, earlier this week. Wyndham’s India ramp-up comes amid an industry report that said branded hotel rooms in the country are likely to swell past 300,000-mark by 2029.

The company is also preparing to launch its other brands Microtel, adding to its existing eight brands. India now leads the company’s direct franchising pipeline in the Europe, Middle East, and Africa (EMEA) region, which Ballotti said is “growing the fastest percentage-wise than anywhere in the world, albeit on a smaller base.”

In the quarter ended December 2024, the company said in its results that its global hotel network grew 4%, driven by a 4% rise in the US in the midscale and above segments and 7% growth in higher RevPAR (revenue per available room) regions like EMEA and Latin America. RevPAR measures how much revenue a hotel earns per available room. The company has approximately 9,300 hotels across the world. Of this, more than 6,000 hotels are in the US, accounting for over 500,000 rooms.

But while competitors focus on premium segments, the company remains committed to the economy and midscale spaces. “We’re the world’s largest hotel franchising company and want to continue to be that. Unlike our other peers that say they don’t want to be in the economy space, we do,” Ballotti said.

Despite its aggressive expansion, Wyndham is not looking to acquire a local hotel brand in India—at least, not yet. Ballotti said any potential purchase would need to deliver immediate financial benefits. “We’re always open to and looking for M&A opportunities, but if we could make inroads with an existing brand in India without capital, our returns are infinitely higher,” he said, adding that the company is already well-established in key segments.

For now, its strategy is simple: harness India’s entrepreneurial energy and infrastructure growth to expand its hotel network—without owning or managing properties. “We generate a large amount of cash, and we have the highest cash flow conversion and operating margins in the industry,” he said. “Our focus is to use that cash flow not to buy back stock, but to grow our business.”

Betting big on midscale hotel growth

The top executive of the company said that overall growth in the hotel industry and the economy has been limited. However, growth has been stronger in the upscale segment. Wyndham’s focus for future expansion is on midscale and above hotel categories. In the US, for instance, about 85% of the company’s development pipeline—excluding one brand—falls within the midscale, upper midscale, upscale, and upper upscale segments. Midscale hotels provide standard amenities at moderate prices, while upscale hotels offer higher-end services and features for a more premium experience.

Despite this focus, it will not exit the economy hotel segment, he clarified. This is because institutional investors are currently favouring economy and midscale hotels. There is also an increasing demand for their value brands like ‘Super 8’ and ‘Days Inn’ due to their strong performance during the pandemic. The company’s fastest-growing brand, Echo Suites by Wyndham, is dedicated to extended stays, mainly serving blue-collar workers, with most properties being newly-built.

Ballotti was also at the head of the company when Choice Hotels was pursuing a hostile takeover of Wyndham for $7.8 billion in October 2023. Choice finally abandoned the acquisition bid in March 2024 after several months of opposition since Wyndham rejected the offer multiple times. The company deemed Choice’s offer inadequate and risky. “The board was very clear that they did not want to own Choice’s stock. There has never been a hostile takeover in the hotel business. Generally, hostile takeovers don’t have a lot of success,” he said.

Global expansion, but with a local approach

The company continues to see opportunities for growth across regions, particularly where infrastructure spending is rising. “Our brands in China, and this is true of all of our competitors, tend to be more upscale hotels than other Asian markets. This is because labour is cheaper and margins are higher and the return on invested capital allows for this. China has traditionally been a very strong market—we were opportunistic there—and 20 years ago sold our Super 8 brand to a successful developer, and added nearly a thousand of these hotels subsequently,” he said. It has since added 500 direct franchising agreements too and is far ahead of its businesses in other regions.