Hotel Online  Special Report

Ramada Repositioning Includes Termination of Thousands
of Substandard Rooms; Improving Overall Product
Quality a Priority to Ensure Brand’s Competitiveness


PARSIPPANY, N.J. (Nov. 8, 2004)  — Cendant Corporation’s Hotel Group today announced a multimillion-dollar repositioning of its Ramada brand aimed at improving overall product quality, guest experience and value to ensure its future growth and competitiveness in the mid-market segment.

The repositioning will entail significant enhancements including a new Ramada logo and signage, a new prototype, upgraded standards and amenities, development incentives and a sweeping initiative to improve product quality and consistency, according to Steven A. Rudnitsky, Hotel Group chairman and chief executive officer. 

To simplify the brand’s position in the marketplace, its structure will be consolidated under the Ramada and Ramada Plaza tiers. Existing Ramada Inns and qualifying Ramada Limited properties will be consolidated under the Ramada tier with updated architectural and operating standards. 

Rudnitsky said the plan is founded on four goals: improving overall product quality; strengthening the franchise and consumer value proposition; maximizing system growth and revenue opportunities through the pursuit of high-quality conversion and new-construction opportunities; and continuing organizational alignment.

“We will secure our share of the market by offering a superior product with all of the services and amenities that travelers expect from a mid-market hotel,” he said. “From our new logo, signage and prototype and enhanced standards and amenities to the termination of thousands of substandard rooms, we expect the results to be transformational.”

The brand conducted 18 months of consumer experience research in 48 markets throughout the United States and Canada that revealed a significant opportunity for the brand to capitalize on its high consumer awareness ratings, according to Keith Pierce, a Cendant group president who also serves as president of the Ramada chain.

“Our research indicates that the Ramada name, which has been a staple on the American lodging scene for 50 years, has tremendous brand equity and recognition,” he said. “The time is right to take the brand to new heights in a continued effort to provide excellent value for our franchisees as well as our guests.”

To improve overall system quality, owners with substandard rooms have been notified that their franchises will be terminated unless they complete significant improvements.  Concurrently, the brand will introduce a revamped quality assurance process with more stringent scoring that addresses guest concerns as identified in a recent J.D. Powers and Associates study.

In addition, Ramada franchisees will gain real-time access to quality assurance reports and a new electronic guest satisfaction survey system.  Franchisees also will be given a software program that suggests ways to solve specific deficiencies.

To further improve overall quality and consistency while adding value to its franchisees, the Ramada brand has doubled its field support staff, realigned its regional marketing structure, implemented a new uniform program for hotel employees and established an online interactive standards manual that specifically addresses areas related to guest service and operations standards, Pierce said.

Among several initiatives designed to re-establish its value proposition, the brand will upgrade its complimentary breakfast, introduce an in-room, spa-inspired amenity package, mandate high-speed Internet access at every property and renovate hospitality areas.

One of the most identifiable changes franchisees and consumers will experience is the launch of the brand’s new logo. According to Pierce, the new, contemporary logo has a “relaxed feel” to represent “a rejuvenated brand.”  The brand’s new signage program is scheduled to roll out to all existing properties in December with implementation completed by October 2005.

To further enhance the overall quality of the brand’s portfolio of hotels, the Ramada brand will offer incentives to build new hotels, including prototype plans featuring new interior design schemes.  A development financing program also will be available for qualified new-construction and “high-profile” conversion and retention projects that provide brand exposure in gateway cities and other major markets, Pierce said. 

In addition to repositioning the domestic Ramada system, Cendant is setting the groundwork for its international expansion.   In September, Cendant Hotel Group signed a non-binding letter of intent to purchase Ramada International Hotels & Resorts from Marriott International Inc.  The acquisition would add 204 hotels representing 27,728 rooms in 26 countries and territories to the Ramada system and complete Cendant’s acquisition of worldwide trademark rights for the Ramada brand.  Cendant earlier this year acquired the trademark rights for the United States and currently is the master license holder for the Ramada brand in Canada.

There are currently 881 Ramada properties throughout the United States and Canada. 

With approximately 90,000 employees, New York City-based Cendant Corporation (NYSE:CD) is primarily a provider of travel and residential real estate services to businesses and consumers in more than 100 countries.  Cendant’s Hotel Group, based in Parsippany, N.J., is the world’s largest lodging franchisor with 6,334 hotels representing 507,915 rooms on five continents under the Super 8®, Days Inn®, Ramada®, Travelodge®, Howard Johnson®, Knights Inn®, Wingate Inn® and AmeriHost Inn® brands.  All hotels are individually owned and operated under franchise agreements with Cendant subsidiaries.

Cendant Corporation, Hotel Group
Evy Apostolatos
Senior Manager, Media Relations
(973) 496-0750
Also See: Anthony L. Berger Named Group President of Cendant’s Ramada and Howard Johnson Brands / June 2003
Anthony Berger Named Chief Operating Officer Cendant's Hotel Group; Other Appointments Made to Improve Franchisee and Company Value / April 2004
Cendant's Project Restore to Purge Substandard Hotels - 300 Properties Put on Notice; Hotel Group Cutting 15 percent of its Hotel-related Employees / Aug 2002

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