How a chance encounter led to Wyndham, Ovolo deal

INTERNATIONAL REPORT — The seeds of Wyndham’s new partnership with Ovolo Group were planted a year ago when old friends – unnamed executives working for Wyndham and Ovolo – had a chance meeting on the Gold Coast of Australia.

“They both very quickly realized there’s a lot we should continue talking about because there’s a lot of synergies between the two companies,” said Joon Aun Ooi, president, Asia Pacific for Wyndham Hotels & Resorts. “That’s how the whole thing started.”

The partnership, which will begin in the fall, will see five Ovolo hotels across Australia and Hong Kong join the Wyndham hotel network brand later. Under the deal, Ovolo Group will continue to own and manage the brand that will add “a Wyndham Hotel” sub-branding while exclusively working with Wyndham on franchise development opportunities throughout Asia Pacific.

The strategic collaboration makes sense for both companies, Ooi said.

The brand is available to us to develop further, to grow further and the growth will be good for both Ovolo and for Wyndham.

Joon Aun Ooi

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“There’s a lot of synergies between these two parties coming together,” he said. “What Ovolo offers to Wyndham is an upscale lifestyle brand, which complements our suite of 25 brands… They have currently five hotels in great locations in Hong Kong, Sydney, Melbourne, Canberra and Brisbane. They are in great locations in those cities and that enhances our upscale presence and especially our upscale lifestyle presence.”

While the deal will add 450 rooms to Wyndham’s system at a time when net unit growth is essential for public companies, the real opportunities lie in future development, Ooi said.

“The brand is available to us to develop further, to grow further and the growth will be good for both Ovolo and for Wyndham,” he said. “Something we bring to the table is our skill and capabilities in growth and development, especially around Asia Pacific.”

Details of the deal

While the ink is still drying on the deal, it’s a bit premature to get into specific numbers for future growth, Ooi said.

“We do have aspirations… and it’s how both parties work together to achieve the growth. We will grow where the consumers are going and where owners are building upscale lifestyle hotels… That’s where we will pursue the opportunities.”

While the initial five hotels are in Hong Kong and Australia, growth could come anywhere in Asia Pacific, Ooi said.

“Both parties have established a framework of how the growth opportunities can be sourced and taken forward,” he said. “We have a very complementary framework that has been set up between the two parties.”

Ovolo will continue to own and manage the brand and the five hotels, but future growth could also come through franchising.

The Ovolo Woolloomooloo in Sydney is one of the hotels joining Wyndham's system.

“It could be an opportunity where they acquire another asset… Another one is purely just franchising. So, we will be taking both opportunities,” Ooi said.

“For franchising, Ovolo could be managing the asset as well, or it could be a pure franchise [play. We are looking at the full spectrum of possibilities with no specific predetermined model for how the new opportunities should be.”

Ovolo hotels currently have a partnership with Small Luxury Hotels of the World (SLH), where Hilton Honors members can earn and burn points. At some date in the future, Hilton members will no longer be able to use points at Ovolo and it will switch to the Wyndham system.

Growth in Asia Pacific

Wyndham’s growth in the Australia-New Zealand area is already strong, with close to 50 hotels presently. Ooi said this partnership will grow throughout Asia Pacific and maybe even beyond that.

“We feel that the Ovolo brand will not be in demand just in Australia… Asia Pacific is a natural expansion, but it does not stop at [those] borders,” he said.

We feel that the Ovolo brand will not be in demand just in Australia… Asia Pacific is a natural expansion, but it does not stop at [those] borders.

Joon Aun Ooi

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There’s also no prerequisite that hotels added need to be new builds, Ooi said.

“What’s most important is that the ethos of the Ovolo brand must be present in all the new development opportunities,” he said. “So, if the hotel has all those characteristics, then it could be a quick fit for a conversion into the Ovolo brand. If not, then there will be some renovation requirements.”

Wyndham is open to other partnerships and Ooi said those have been a significant vehicle for the company’s APAC growth.

“It’s fair to say that we are always on the lookout for potential partnerships,” he said. “Our growth in the region has been because of the diversity of business partnership models that we have at play.”

Did the deal take long to come together? Well, that’s in the eye of the beholder, Ooi said.

“Depending on how you look at it, one year can be a long time, or one year can be a short time,” he said. “We feel that it came together quite well because both parties realize what the other party could bring to the table.”