Brands Play Vital Role in Wyndham Report
Wyndham Hotels & Resorts has released its inaugural Hotel Owner Trends Report. This report is the result of a multi-month effort that involved two industry-wide surveys conducted with hundreds of hotel owners and property developers. The findings present a picture of an industry that is confident in its resilience and long-term growth prospects, despite the ongoing tumultuous news cycle.
“There’s a lot of noise in the marketplace right now and yet, more than 90% of hotel owners and developers are optimistic about what the next five years hold for them. That’s because they know that in hospitality, they’re playing the long game. Case in point: While most admit to having concerns over current economic volatility, four-out-of-five say they still plan to expand their portfolios over the next five years.” – Amit Sripathi, Chief Development Officer, Wyndham Hotels & Resorts.
Brands Matter
The survey highlights the essential role that brands play in hotel ownership. Almost all respondents (98%) indicated that they are open to exploring new branded offerings, emphasizing the advantages that brands offer compared to operating independently. Additionally, a majority of respondents (55%) expressed interest in traditional or hard brands, while nearly half (45%) are looking for opportunities with soft brands.
Here’s what owners and developers are also looking for:
- Support and Leadership Access
Ranking the top two factors owners and developers look for when choosing which brand to join, support from industry experts tops the list (including marketing, revenue management and operational expertise), followed by access to executive leadership. - A Strong Loyalty Program
More than 80% of hotel owners and developers say a strong loyalty program is critical to a hotel’s success, with nearly two-thirds (62%) of those open to joining a brand or switching brands citing it as a top five factor they consider. - A Robust Array of Brand Offerings
Interest in expansion spans virtually all segments. Just over a third (39%) are interested in lifestyle and boutique hotels, while a similar number (36%) are considering midscale and upper-midscale. The same is true for the economy (35%).
Capitalizing on Extended-Stay
Extended-stay hotels continue to be a focus for hotel owners and developers. Buoyed by historically high demand and developer ROI, nearly all surveyed (96%) see opportunity in extended-stay hotels, highlighting them as an investment with great potential.
Here’s what else owners and developers are saying about extended-stay:
- The Model Matters
Operating in extended-stay means operating differently from traditional brands. Nearly three-out-of-five surveyed (59%) recognize this, highlighting that embracing the unique operating model of extended-stay is critical to success. - All Eyes on Infrastructure
With historic multi-year infrastructure spending on the rise, 100% of respondents said they anticipate an increase in new business over the next five years (including those outside of the extended-stay segment) due to the many projects these investments are funding. - Cross-Sell and Upsell are Key
When it comes to driving increased revenue, more than 80% of hotel owners and property developers say cross-sell and upsell opportunities are key, describing them as critical or very important to their hotel’s success, both in extended stays and beyond.
Fueling the Future with Technology
When selecting a brand, most owners and developers cite access to advanced technology as one of their top five priorities. Additionally, one in five (20%) states that investing in technology is their strategy to differentiate their hotel from competitors.
Here’s what owners and developers are also saying about technology:
- Investing in Tomorrow’s Traveller
Recognizing the role technology plays in delivering a great guest experience, nearly two-thirds (61%) of hotel owners have already invested in, or are considering investing in, things like streaming, digital room keys and self-service kiosks. Meanwhile, nearly half (46%) have done or are thinking the same regarding EV charging stations. - Harnessing the Power of AI
Over 90% of hotel owners are already leveraging AI in some capacity. Notably, more than 70% are deploying the technology to support operations, while more than 60% use it for guest-facing services. - An Interconnected Guest Experience
Regarding guest messaging platforms, one-in-three hotels (33%) are already utilizing this technology, with nearly another third (30%) looking to invest in or increase their investment in it. The same is true for mobile tipping: a third of those surveyed (33%) say they already offer mobile tipping, with nearly another third (30%) expecting to invest or increase their investment.
“The message from today’s hotel owners and property developers is clear: it’s not just about growing their portfolios, it’s about growing their portfolios with the right brands and the right partners. They also want the best. The best technology, the best rewards program, the best support. The good news? That’s exactly what Wyndham offers, and its why our franchisee retention rate has grown to nearly 96%, including our economy brands, which are among the highest in the industry.” – Scott Strickland, Chief Commercial Officer, Wyndham Hotels & Resorts.
Proven Resilience
Over the last twenty-five years, select-service hotels, such as those owned and operated by most Wyndham franchisees, have consistently demonstrated resilience in challenging environments. From 2000 to 2023, the revenue per available room (RevPAR) for U.S. select-service hotels grew at a compound annual growth rate (CAGR) of 2.6%. During some of the most significant economic events in history, Wyndham’s select-service hotels have continually outperformed the upscale and above segments reported by STR.
For instance, in 2001, following the 9/11 attacks, these hotels outperformed the market by 300 basis points. In 2008, during the global financial crisis, the outperformance increased to 500 basis points. Most notably, in 2020, amid the global pandemic, they outperformed by an impressive 2,500 basis points. These results are not mere coincidences; they reflect the enduring, long-term value proposition of Wyndham’s select-service brands.
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