Wyndham to launch economy extended-stay brand

Wyndham Hotels & Resorts will be launching an as-yet-unnamed economy extended-stay hotel brand later this year, the 23rd on its roster. The company has already 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 company 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, the company reports. Wyndham has been developing the brand since summer 2021.

“It really is a whitespace that we were not in,” said Chip Ohlsson, EVP/chief development officer, Wyndham. “It’s something that we’ve been looking at for the past few years…It was very interesting that we happen to be working on this as the market started to pick up and the trend started to happen that economy extended-stay was going to be the hottest segment out there. So, we’re launching it really at the perfect time.”

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, according to Wyndham. 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 Del Sol prototype, currently at more than 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/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 124-room Project ECHO prototype requires just under two acres of land and has a cost per key of approximately $70,000 to $75,000, according to Ohlsson. Coming in at just over 50,000 sq. ft.—nearly 74% of which is rentable—individual rooms average 300 sq. ft. and consist of single and two-queen studio suites with in-suite kitchenettes, while 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?’” said Ian McClure, CEO, 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. For us, that went a long way. It showed they’re committed to getting this brand right.”

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 reports that is actively talking to additional, multi-unit operators with experience in the segment, a key part of the brand’s growth strategy.

“As you see us going forward, we’re going to be looking to develop only with really seasoned, experienced developers in this space, not necessarily just developers, but developers who understand this space because the model is different the way you handle the operations is going to be different,” said Ohlsson.

The company 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 10 years in the U.S. with potential for additional growth internationally.

The company has assembled a dedicated leadership and operations support team around Project ECHO, one deeply rooted in experience with extended-stay brands.

Led by VP of Operations Dan Leh, who has 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, the compay reports. Their efforts are complemented by dedicated Project ECHO sales teams, both at the local and national level.

Additional details around Project ECHO—including the brand’s official name—are slated to be announced when the brand formally launches later this year.