Wyndham targets economy sector with new extended stay brand

Insight Comment The extended stay segment fared better than other segments during pandemic due to its demand resiliency. Now Wyndham is making a big bet that this will continue.

Wyndham Hotels and Resorts is launching its first extended stay brand aimed at the economy segment.

The company has been working with a number of developers on the new project and plans to release further details later this spring.

Speaking on a conference call with analysts after the release of the company’s fourth-quarter results, Wyndham CEO Geoff Ballotti, said that “extended stay demand has proven to be just absolutely recession and pandemic proof. And we know that the demand is growing.”

He pointed to the growth of its mid-scale extended stay brand, Hawthorne Suites, which has seen a 50% increase in its pipeline over the last year.

“Our developers are asking for an economy extended stay brand, our franchisees are asking for it. And most importantly, our corporate accounts are asking for it. I mean we know that there are over 10 million construction workers out there that travel every week. And we also know that relocation and long-term assignments are going to continue to pick up,” Ballotti added.

All-Inclusive Expansion

If the economic climate indicates a rosy future for the extended stay market the same is true of the all-inclusive leisure segment. Wyndham launches its 22 and most recent brand, Alltra, last October, forming a strategic alliance with Playa Hotels & Resorts.

And while Wyndham is envisaging aits new extended stay brand to have a large footprint Alltra will be “more strategic” Ballotti said.

“We're working on several applications right now in the Caribbean, in Mexico and in Central America. We've seen some interest as well in Europe in places like Tenerife and Costa del Sol. And certainly, the consumer interest in that space is growing. We've got a great partner with Playa. But it will be opportunistic where it makes sense for us both domestically and internationally. And again, our focus is in the economy and the mid-scale and select for those larger growth brands,” he said.

Q4 Results

• Wyndham reported revenue of $392 million in the three months to the end of December, a 32% rise. The company swung from a pre-tax loss of $9 million to a profit of $67 million.
• Fourth quarter RevPAR in the U.S. exceeded 2019 levels by 9% while international RevPAR declined 19%.
• The company's global system grew 180 basis points, reflecting 70 basis points of growth in the U.S. and 350 basis points of growth internationally.