Economy leader unveils developer-driven prototype prioritising owner return on investment and operating efficiencies

Wyndham Hotels & Resorts, the world’s largest hotel franchising company with approximately 9,000 hotels across nearly 95 countries, has unveiled new details about its upcoming economy extended-stay hotel brand. Among them, newly 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 Wyndham Hotels & Resorts 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. Wyndham has been developing the brand since summer 2021.

Economy extended-stay hotels are proven to consistently perform throughout all stages of the lodging cycle and are particularly resilient amid a downturn. During the global pandemic, US RevPAR for the segment grew 8 per cent versus 2019 while the rest of the industry declined 17 per cent. Further, in 2021, the average US occupancy for economy extended-stay hotels was over 78 per cent — 20 points higher than all other US segments combined.

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. 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 highly successful Del Sol prototype, currently at over 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 prioritise owner return on investment with an emphasis on value engineering and streamlined operations, helping optimise operating margins on a recurring basis.

The purpose-built, 124-room Project ECHO prototype requires just under two acres of land, has a highly competitive cost per key, and features multiple characteristics that intentionally separate it from traditional economy brands. Coming in at just over 50,000 sq ft — nearly 74 per cent of which is rentable—individual rooms average 300 square-feet and consist of single and two-queen studio suites with in-suite kitchenettes while efficiently-designed public spaces — a lobby, fitness centre and guest laundry — help to limit labour needs.

With 50 hotels 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 is targetting at least 300 hotels over the next 10 years in the US with potential for additional growth internationally.