Wyndham Hotels & Resorts on Tuesday said it signed its first 50 hotels for its new economy extended-stay brand.
The Parsippany-based hotel franchising company, operating under the working title “Project ECHO” — an acronym for Economy Hotel Opportunity — said the all new-construction brand fills white space within the larger Wyndham Hotels & Resorts portfolio while strategically expanding the company into a segment that has seen record growth and resiliency. 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, (average daily rate) and (revenue per available room),” said Geoff Ballotti, CEO and president, 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% vs. 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.
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.
“Wyndham not only understands its owners and developers, but listens to and acts on their needs” said Carter Rise, chairman and CEO, 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 is debuting with its first two partners: Richmond, Virginia-based Sandpiper Hospitality and Dallas-based Gulf Coast Hotel Management. Each hotel 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, CEO, Gulf Coast Hotel Management. “For us, that went a long way. It showed they’re committed to getting this brand right.”
The brand expects to open its first hotel in 2023 and is actively talking to additional, multiunit operators with experience in the segment, a key part of the brand’s growth strategy.