Wyndham Signs First 50 Hotels for New Economy Extended-Stay Brand

Rhea-AI Summary

Wyndham Hotels & Resorts has launched its economy extended-stay hotel brand, Project ECHO, aimed at enhancing owner return on investment with efficient prototypes. The company signed contracts for 50 new hotels, partnering with Sandpiper Hospitality and Gulf Coast Hotel Management. The brand targets a growing segment that saw 2021 U.S. occupancy rates surpassing 78%. Project ECHO is expected to open its first hotel in 2023, with plans for 300 hotels over the next decade across the U.S.

Positive

• Signed contracts for 50 new hotels in collaboration with Sandpiper Hospitality and Gulf Coast Hotel Management.
• Project ECHO meets a growing market need with occupancy rates above 78%.
• Plans to open the first hotel in 2023 and target at least 300 hotels over the next ten years.

Negative

• None.

Economy leader unveils developer-driven prototype prioritizing owner return on investment and operating efficiencies

PARSIPPANY, N.J., March 22, 2022 /PRNewswire/ -- Wyndham Hotels & Resorts, the world's largest hotel franchising company with approximately 9,000 hotels across nearly 95 countries, today unveiled new details about its upcoming economy extended-stay hotel brand. Among them, newly awarded contracts to develop 50 new construction projects with its first two partners: Richmond, Va.-based Sandpiper Hospitality and Dallas-based Gulf Coast Hotel Management.

Operating under the working title "Project ECHO"—an acronym for Economy Hotel Opportunity—the all new-construction brand fills whitespace within the larger Wyndham Hotels & Resorts portfolio while strategically expanding the company into a segment that has seen record growth and resiliency, not just amid the pandemic but throughout the last lodging cycle. Wyndham has been developing the brand since summer 2021.

"Over the last two years, economy extended-stay hotels outperformed all other segments, and in 2021, set new records for occupancy, ADR and RevPAR," said Geoff Ballotti, president and chief executive officer, Wyndham Hotels & Resorts. "Demand for these accommodations only continues to climb—both from guests and developers alike—making now the right time for Wyndham, the definitive leader in the economy segment, to bring our experience and expertise to this high-potential space."

Economy extended-stay hotels are proven to consistently perform throughout all stages of the lodging cycle and are particularly resilient amid a downturn. During the global pandemic, U.S. RevPAR for the segment grew 8% versus 2019 while the rest of the industry declined 17%. Further, in 2021, the average U.S. occupancy for economy extended-stay hotels was over 78% — 20 points higher than all other U.S. segments combined.

A Developer-Driven Approach 
Project ECHO 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 purpose-built, 124-room Project ECHO prototype requires just under two acres of land, has a highly competitive cost per key, and features multiple characteristics that intentionally separate it from traditional economy brands. Coming in at just over 50,000 square-feet—nearly 74% of which is rentable—individual rooms average 300 square-feet and consist of single and two-queen studio suites with in-suite kitchenettes while efficiently-designed public spaces—a lobby, fitness center and guest laundry—help to limit labor needs.

"From day one, Wyndham has made a point of reaching out and asking, 'What should be done differently?' It wasn't about dictating to us what the brand would be but rather, wanting to understand its potential and how our experience and expertise could best help developers meet their goals," said Ian McClure, chief executive officer, Gulf Coast Hotel Management. "For us, that went a long way. It showed they're committed to getting this brand right."

Strategic Growth via Multi-Unit Operators 
With 50 hotels already in the initial pipeline—25 each from Sandpiper and Gulf Coast over the next five years—Wyndham is now eyeing additional growth opportunities. The brand expects to open its first hotel in 2023 and is actively talking to additional, multi-unit operators with experience in the segment, a key part of the brand's growth strategy.

Wyndham intends to be thoughtful with early development partners, prioritizing brand integrity while building a robust multi-year pipeline. To assist qualified developers, the Company has identified possible development markets across the U.S. and will make available various incentives to select early developers. Wyndham is targeting at least 300 hotels over the next ten years in the U.S. with potential for additional growth internationally. 

Industry-Leading Support, Experienced Extended-Stay Leadership 
Recognizing the immense importance of early franchisee success and the unique business model of economy extended-stay, Wyndham has assembled a dedicated leadership and operations support team around Project ECHO, one deeply rooted in experience with extended-stay brands.

Led by Vice President of Operations Dan Leh, a hospitality industry veteran with more than 25 years of extended-stay experience, the team brings extensive expertise across all facets of extended-stay operations, including but not limited to, design and construction, pre-opening operations, sales, revenue management, labor management, owner relations and more. Their efforts are complemented by dedicated Project ECHO sales teams, both at the local and national level, who will focus exclusively on matching hotels with Wyndham's robust and expanding list of long-term guests across small, mid-size and Fortune 500 businesses.

On a broader scale, Project ECHO enables Wyndham to now offer guests and developers a portfolio of extended-stay offerings. Hawthorn Suites by Wyndham, the Company's existing midscale extended-stay brand, is a pivotal part of the Company's new dual-brand concept with La Quinta by Wyndham, which continues to see robust interest from developers with 36 hotels currently under development—two of which are being developed by Trusha Patel, inaugural member of Wyndham's Women Own the Room program.

Additional details around Project ECHO—including the brand's official name—are slated to be announced when the brand formally launches later this year. For more information, including development opportunities, visit www.projectecho.wyndhamhotels.com.

About Wyndham Hotels & Resorts 
Wyndham Hotels & Resorts (NYSE: WH) is the world's largest hotel franchising company by the number of properties, with approximately 9,000 hotels across approximately 95 countries on six continents. Through its network of over 810,000 rooms appealing to the everyday traveler, Wyndham commands a leading presence in the economy and midscale segments of the lodging industry. The Company operates a portfolio of 22 hotel brands, including Super 8®, Days Inn®, Ramada®, Microtel®, La Quinta®, Baymont®, Wingate®, AmericInn®, Hawthorn Suites®, Trademark Collection® and Wyndham®. Wyndham Hotels & Resorts is also a leading provider of hotel management services. The Company's award-winning Wyndham Rewards loyalty program offers over 92 million enrolled members the opportunity to redeem points at thousands of hotels, vacation club resorts and vacation rentals globally. For more information, visit www.wyndhamhotels.com.

Forward Looking Statements
This press release contains "forward-looking statements" within the meaning of U.S. federal securities laws, including the expected addition of hotels and similar statements concerning possible future results or performance. You are cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future results or performance, speak only as of the date of this press release and are subject to numerous risks and uncertainties, including the risks described in Wyndham Hotels and Resorts most recent Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission, any of which could cause actual results or performance to be materially different from the future results or performance expressed or implied by such forward-looking statements. Except as required by law, Wyndham Hotels and Resorts undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, subsequent events or otherwise.

 

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SOURCE Wyndham Hotels & Resorts

FAQ

What is Project ECHO by Wyndham Hotels & Resorts?

Project ECHO is Wyndham's new economy extended-stay hotel brand, aiming to fill gaps in the economy segment.

How many hotels has Wyndham signed for Project ECHO?

Wyndham has signed contracts for 50 new hotels with its partners for Project ECHO.

When does Wyndham plan to open its first Project ECHO hotel?

Wyndham plans to open its first Project ECHO hotel in 2023.

What are the growth targets for Wyndham's Project ECHO?

Wyndham is targeting at least 300 Project ECHO hotels over the next decade.

Who are the partners involved in developing Project ECHO?

Wyndham is partnering with Sandpiper Hospitality and Gulf Coast Hotel Management for Project ECHO.