PARSIPPANY, New Jersey—Wyndham Hotels & Resorts announced the continued expansion of its ECHO Suites Extended Stay by Wyndham brand, which in just one year, now has more than 200 hotels in its development pipeline.
Outpacing initial growth expectations, the developer-driven brand caters to the extended-stay market, which continues to outperform other industry segments. Late last year, the brand broke ground on its first three hotels and nearly two dozen more ground breaks are expected for this year. The first ECHO Suites hotel is on track to open by the end of this year with additional hotels fast following in 2024.
“By virtually every metric, ECHO Suites is a phenomenal success, becoming not only the fastest-growing brand in our industry but the largest brand launch in the history of Wyndham,” said Chip Ohlsson, chief development officer, Wyndham Hotels & Resorts. “Its rapid growth is a testament to the power that comes with the scale and resources of the world’s largest hotel franchising company and what can happen when brands take the time to truly engage and understand the needs of the development community.”
Infrastructure Tailwinds
The arrival of ECHO Suites coincides with infrastructure investments in the United States, including $1.2 trillion in approved funding as part of the 2021 Infrastructure and Jobs Act. Concentrated on repairing the nation’s major roads and highways, bridges, airports, and rail system, among other investments, these projects are creating a tailwind for the everyday business traveler, particularly construction and other trade workers, many of whom will be in need of long-term accommodations as they travel to job sites across the country. Wyndham and its brands are already seeing a lift as a result of investments made to grow its share, with general infrastructure-related revenues up more than 20 percent in Q4 2022, the seventh-consecutive quarter of double-digit growth.
Compounding the opportunities created by the Infrastructure and Jobs Act is the $280 billion CHIPS and Science Act of 2022, of which over $50 billion is for U.S. semiconductor research, development, and manufacturing, which is driving the construction of chip manufacturing plants across the United States. Since the Act was first signed, more than 22 plants have been announced in states including Arizona, Texas, Ohio, and Indiana. Collectively, between the two pieces of legislation, Wyndham believes there is a long-term opportunity for franchisees to realize $3.3 billion in additional room revenue, generating more than $150 million in incremental royalties for the company over the multi-year period of spend.
Ohlsson added, “The investments we’re seeing in infrastructure represent an incredible opportunity poised to pay dividends for select-service and extended-stay hoteliers for years to come. It’s truly one of the most exciting times to be a part of our industry, Wyndham, and ECHO Suites.”
ROI-Focused Design
ECHO Suites was crafted with the help of a development council consisting of some of the largest owners and operators in the extended-stay segment. The council’s insights were paired with the experience of Wyndham’s in-house design and construction team, which spearheaded the creation of La Quinta by Wyndham’s Del Sol prototype, Microtel by Wyndham’s Moda prototype, Hawthorn Suites by Wyndham’s Haven prototype, and Wyndham Garden’s Verde prototype.
Wyndham’s prototypes prioritize owner return on investment with an emphasis on value engineering and operations, helping operating margins on a recurring basis. That attention to owner ROI is a key part of what attracted Dennis Wong, co-founder of SPI Holdings, and his business partner, Richard Squires of Lennox Capital, to recently sign a deal with Wyndham to develop multiple ECHO Suites hotels, focusing on markets like San Diego, Las Vegas, and Seattle, among others.
“Extended-stay is the hot segment within hospitality right now and ECHO Suites Extended Stay by Wyndham is undoubtedly the hot brand within that segment,” said Wong. “What differentiates Wyndham is their owner-first approach, a commitment to ROI-driven design, and best-in-class technology, marketing, and distribution. As developers—it’s everything we’re looking for.”
The 124-room ECHO Suites prototype requires under two acres of land and has a competitive cost per key. Coming in at approximately 50,000 square feet—nearly 74 percent of which is rentable—individual rooms average 300 square feet. The rooms consist of single- and two-queen studio suites with kitchens as well as public spaces—a lobby, fitness center, and 24/7 guest laundry—that help to limit labor needs.
