Wyndham signs first 50 hotels for economy extended-stay brand; US debut but international potential

29 March, 2022

Wyndham Hotels & Resorts has unveiled new details about its upcoming economy extended-stay hotel brand. Among them, newly awarded contracts to develop 50 new construction projects across the US with its first two partners: Sandpiper Hospitality and 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 and 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,” says Geoff Ballotti, president and chief executive officer, Wyndham Hotels & Resorts. “Demand for these accommodations only continues to climb – both from guests and developers alike”.

Economy extended-stay hotels are performing strongly

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, US RevPAR for the segment grew +8% versus 2019 while the rest of the industry declined -17%, according to Wyndham. Further, in 2021, the average US occupancy for economy extended-stay hotels was over 78% - 20 points higher than all other US segments combined.

Project ECHO prototype offers insight into concept

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 own in-house design and construction team.

The purpose-built, 124-room Project ECHO prototype requires a footprint of just under two acres of land, offering 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 centre and guest laundry – help to limit labour needs.

A concept born on things being ‘done differently’

From day one, Wyndham has made a point of reaching out and asking, ‘What should be done differently?’ says Ian McClure, chief executive officer, Gulf Coast Hotel Management. “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.”

With 50 hotels already in the initial pipeline – 25 each from Sandpiper and Gulf Coast over the next five years – Wyndham is 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 says it intends to be “thoughtful” with early development partners, “prioritising brand integrity” while building a robust multi-year pipeline. To assist qualified developers, the company has already identified possible development markets across the US and will make available various incentives to select early developers. Wyndham is targeting at least 300 hotels over the next ten years in the US with potential for additional growth internationally.