Treasury Today Country Profiles in association with Citi

Wyndham Worldwide

Wyndham Worldwide Corporation, Highly Commended, Best Cash Management Solution

Hadyan Soemarjono and Rachel Tang, Wyndham Worldwide Corp, Christine Tan, J.P. Morgan

By changing its cash management practices extensively, Wyndham Worldwide Corporation leveraged leading-edge practices and innovation to shift from a traditional treasury structure with high expenses, to a new solution that improved efficiency, yields and risk management. The company has adopted J.P. Morgan’s ACCESS solution together with the bank’s host-to-host solution.

Photo of Hadyan Soemarjono and Rachel Tang, Wyndham Worldwide Corp, Christine Tan, J.P. Morgan.

Jeffrey Leuenberger

Treasurer

Wyndham Worldwide Corporation is a global hospitality company. The company offers individual consumers and business customers a wide range of hospitality services and products through a portfolio of brands.

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The challenge:

Despite having an industry-leading market position for its services, Wyndham’s treasury activities in Asia were uncoordinated, requiring multiple staff across various business units which often led to duplicative efforts. The treasury infrastructure was inadequate to support the company’s expected growth in Asia.

The solution:

This solution enables Wyndham to:

  • View and control all of its liquidity positions locally, regionally, and centrally. By gaining the ability to conduct balance and portfolio reporting by currency, country, and account, Wyndham was able to leverage intercompany reporting, through an integration with J.P. Morgan and their treasury management system, that showed loan positions and assigned transfer rates, as well as transaction history and balance statements.

  • Bring account information into a single location and improve cash visibility. Wyndham has rationalised its bank accounts, centralised cash at an in-house bank, and enhanced yields.

  • Amend debit and credit interest rates and adjust loan positions with back valuation, as well as its withholding tax rate. Counterparty limits between participant and master accounts could also be amended, a usage limit could be set, and alerts could be received when the limit was exceeded.

  • Download standard reports to support accounting and reconciliation of intercompany loan positions which enables Wyndham to initiate investments by viewing rates and execute them directly from the J.P. Morgan Access portal and view a summarised maturity schedule of its investments.

Wyndham decided to use a liquidity management account (LMA) to provide stable operating flows and gain the potential to earn enhanced returns. Balances are fully liquid and available as a source for operating needs, and they can be placed into overnight, one-month, three-month and six-month balance tiers which automatically earn an incremental value. Implementation of a group LMA solution further broadens the solution by enabling multiple global accounts to participate in a single group arrangement. The value of the group is automatically incorporated in the interest rate of the local accounts, and balances are fully liquid and available as a source for funding at the participating account level.

“The new account structure enables employees to leverage real-time reporting of account balances to manage positions proactively from a central location,” explains Jeffrey Leuenberger, Wyndham’s Treasurer. “Intercompany loan and interest reporting enables us to automate many of our accounting processes.”

To optimise collections, the firm implemented a Virtual Reference Solution (VRS). This means a unique reference number is provided for each of its customers to use for its collection account, enabling Wyndham to identify the payer far more easily. The VRS also matches incoming payments to Wyndham’s actual bank account, posts the Virtual Reference Number in the reference field for easy identification, updates its ERP, and offers the additional benefit of fraud protection because Wyndham’s true collection account numbers are not sent to its customers.

Using the technology solution has enabled integrated payments and information reporting capabilities using a consistent workflow through a single, simplified user interface. The adoption of J.P. Morgan’s ACCESS solution for Wyndham’s hospitality business, as well as the bank’s host-to-host (h3H) solution for its RCI business, proved to be a winning combination, which ultimately helped Wyndham overcome many of its challenges.

Best practice and innovation:

In changing its cash management practices extensively, Wyndham leveraged leading-edge practices and innovation to shift from a traditional treasury structure with high expenses, to a new solution that improved efficiency, yields and risk management.

Key benefits:

  • Reduced costs.

  • Full visibility over its cash.

  • Reduced the need for costly FX transactions with lower cost intra-company loans.

  • Overcome the technology constraints previously encountered by the Group by increasing automation and coordinating treasury solutions.

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