Wyndham Hotels and Resorts has awarded contracts to develop 50 new construction projects for its new economy extended-stay hotel brand.
Operating under the working title “Project ECHO”—an acronym for Economy Hotel Opportunity—the all new-construction brand fills whitespace within the larger Wyndham portfolio while moving the company into a segment that has seen record growth and resiliency over the last couple of years. Wyndham has been developing the brand since summer 2021.
During the Covid-19 pandemic, U.S. revenue per available room (RevPAR) for the segment grew 8% versus 2019 while the rest of the industry declined 17%. Furthermore, 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 owners and operators currently in the economy extended-stay segment.
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 has identified possible development markets across the U.S. and will make available various incentives to select early developers. The company is targeting at least 300 hotels over the next ten years in the U.S. with potential for additional growth internationally.
Project ECHO increases Wyndham’s exposure to the extended-stay sector, joining Hawthorn Suites by Wyndham, the company’s existing midscale extended-stay brand.
Additional details around Project ECHO—including the brand’s official name—are slated to be announced when the brand formally launches later this year.
What They Said
Geoff Ballotti, president and CEO of Wyndham, said: “Over the last two years, economy extended-stay hotels outperformed all other segments, and in 2021, set new records for occupancy, ADR and RevPAR. 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.”
Carter Rise, chairman and CEO of Sandpiper Lodging Trust, said: “Wyndham not only understands its owners and developers but listens to and acts on their needs. 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.”