Such personal touches have served Holmes, 53, well throughout his career. He’s often been the key problem-solver in the transformation and birth of the businesses that make up Wyndham Worldwide, one of the largest lodging companies in the world.Â
Wyndham Worldwide franchises 7,150 hotels under 12 brands, including the namesake chain, Travelodge, Howard Johnson, Ramada, Super 8 and Days Inn. It also operates time-share properties and a large time-share exchange company, Wyndham Exchange & Rentals (formerly Group RCI).As a corporate entity, Wyndham is only 4 years old, having been spun off from Cendant in 2006. But its businesses have a colorful history dating to the early 1990s, with complex acquisitions, mergers, spinoffs and painful corporate divorces.Â
Through it, Holmes, an accountant by training, has been a constant in Wyndham’s offices, navigating the spinoff from its parent and charting a new course as a publicly traded company recovering from one of the industry’s deepest downturns.Â ”They’re flying under the radar,” says Joe McInerney, CEO of the American Hotel & Lodging Association. “You hardly see Steve in front. He’s a low-key guy. It’s a very low-key company. He’s not a guy to beat his chest about how great (he is). But he’s the backbone of the company.”
Â Welcoming guests
Â The company started when Henry Silverman, a noted private-equity investor, created Hospitality Franchise Systems (HFS) in the early 1990s to buy hotel franchises.
Â Silverman issued shares of HFS in 1992, and the stock performed well throughout the decade as it grew to become one of the largest hotel franchisors. HFS was subsequently renamed Cendant, which later split its business units into four major companies. Holmes, who had been operating Cendant’s largest unit â€” hotels and time shares â€” assumed control of Wyndham Worldwide in 2006.
Â Holmes owes much of his career to Silverman, having worked with him since the early 1980s when the two met at private-equity firm Reliance.
Â In 1982, Holmes, then an internal auditor at Reliance, was fiddling with a Tandy computer in the evenings, learning a spreadsheet program. Silverman would often walk by and observe, intrigued by the young man’s efforts.
“I feel this presence standing outside,” Holmes recalls. “After a month of stopping by, he came in and said, ‘Show me what you’re doing.’ I didn’t know who he was. He said, ‘Can you take the spreadsheet and run the numbers out?’ ”
Silverman was pleased with the result and hired Holmes on his staff.
“(I) get a lot of questions: ‘How do you get a break in life to become a CEO?’ ” Holmes says. “Mine started in 1982. It all started because I had the intellectual curiosity to figure out how this thing works. And he had the intellectual curiosity to say, ‘Can I take this and use it somewhere else?’ ”
Silverman took Holmes with him to the Blackstone Group, a private-equity company, and HFS. “I was a kid,” Holmes says. “(Silverman) put me into positions that no one else my age was getting to do â€” negotiating deals, integration of companies, major acquisitions. And I went and did it.”
Holmes also impressed Silverman with a “self-effacing” personality that would work well in buying and integrating new companies, Silverman says.
Employees and other business associates echo Silverman’s impressions of Holmes’ modest, easy-going personality. He’s known for remembering employees’ names. He frequently uses the company cafeteria and doesn’t have his own restroom. “I don’t know any CEO at that level who doesn’t have his own restroom,” Ballotti says.
Bump in the road
Holmes’ calm demeanor came in handy when Silverman made the decision in 1997 to buy CUC International, a direct-marketing company, for $14 billion. The newly combined company changed its name to Cendant, and CUC’s founder Walter Forbes took over as CEO.
A few months later, the deal closed, and Cendant discovered a massive accounting fraud at CUC, resulting in one of the largest financial scandals of the 1990s. When Silverman announced the discovery, Cendant’s shares lost $14 billion in market value in a single day in 1998. Forbes and then-vice chairman Kirk Shelton were subsequently convicted of fraud and each ordered to pay $3.28 billion in restitution, the largest payout in U.S. corporate history at the time.
As bad headlines piled up, Silverman relied heavily on Holmes, who was a board member and in charge of the hotel business at the time. Holmes was deployed to assure customers and employees that the operating businesses were running fine despite the fraud at CUC.
A key lesson Holmes learned from Silverman â€” a hands-off management style â€” still resonates at Wyndham. Holmes empowers his unit presidents by giving them autonomy to set their strategies and execute plans, Ballotti says.
Holmes says he stays close to his business but doesn’t like to meddle. “My goal is to give them the tools to succeed. But I hold them accountable to executing our business plans.”