Wyndham to Launch Extended-Stay Economy Brand

Main Photo: The look and feel of the new Wyndham brand, as yet unnamed

Date: May 2022

Name: TBA

Location: Global

Number of Keys: TBA

Owner: As usual individual franchise partners

Brand Owner: Wyndham Hotels & Resorts

Wyndham Hotels & Resorts is on track to launch it’s first extended-stay brand for the economy segment later this spring. President and CEO Geoff Ballotti announced the new brand during the company’s investor call to discuss fourth-quarter and full-year 2021 results.

The segment, he said, has proven itself to be both “recession- and pandemic-proof,” and demand for more extended-stay options is growing: “We’ve seen, in our upper-midscale extended-stay brand, Hawthorn Suites, a 50 percent increase in our pipeline over the last year and we know that demand is up there for an extended-stay economy brand.” 

The brand’s name has not been announced at this point.  The working title “Project ECHO”—an acronym for Economy Hotel Opportunity was created with the help of a seven-member development council, which consists of some of the largest and most experienced owners and operators currently in the economy extended-stay segment. The council’s insights are being paired with the experience and expertise of Wyndham’s in-house design and construction team. In recent years, the team has spearheaded the creation of La Quinta by Wyndham’s highly successful Del Sol prototype, currently at over 130 hotels with another 56 in its pipeline; and more recently, Microtel by Wyndham’s Moda prototype, which has another 40 hotels under development. At a time when rising construction costs are driving the need for ultra-efficiency, all three prototypes prioritize owner return on investment with an emphasis on value engineering and streamlined operations, helping optimize operating margins on a recurring basis.

“Wyndham not only understands its owners and developers but listens to and acts on their needs” said Carter Rise, chairman and chief executive officer, Sandpiper Lodging Trust. “That commitment, paired with best-in-class design and a deep, fundamental understanding of the economy guest, is a differentiator in our industry and is ultimately why we chose to partner with Wyndham.”

The brand, he added, would have a price point on par with Extended Stay America and Choice Hotels International’s extended-stay brands. CFO Michele Allen said the company would “put a good amount of capital to work” on rolling the brand out. “We are very interested in committing to the brand for long-term success,” she said.

The company expects an 18 to 24-month timeline to develop each property. Among them, newly awarded contracts to develop 50 new construction projects with it’s first two partners: Richmond, VA based Sandpiper Hospitality and Dallas-based Gulf Coast Hotel Management.

In 2021 the company awarded 655 new contracts representing over 82,000 rooms, including nearly 590 direct franchise management agreements, 12 percent more than 2019. On Dec. 21, the company’s global development pipeline grew more than 5 percent to more than 1,500 hotels and more than 194,000 rooms, 24 percent of the current system size and the highest level on record. The pipeline grew 5 percent year-over-year, including 3 percent domestically and 6 percent internationally. Approximately 65 percent of the company’s development pipeline is international and 79 percent is new construction, of which approximately 35 percent has broken ground. Over 80 percent of the global development pipeline is in the midscale and above segments, including over 70 percent in the U.S.

During the fourth quarter of 2021, the company decided to pursue the sale of it’s two owned hotels.

Price: Undisclosed

THPT Comment: Wyndham continuing their expansion charge with this new extended stay economy brand

First Seen: Hotel Management

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