Skift hold

The real test will be whether Wyndham can expand this extended-stay hotel concept beyond a handful of trophy locations while maintaining the upscale positioning needed to justify higher rates.

Sean O’Neill

Wyndham Hotels & Resorts announced Monday that it is starting to manage upscale extended-stay hotels in the United States under the Wyndham Residence label. This decision marks the hotel group’s breakthrough into the premium segment of the booming extended stay market.

Wyndham has signed a 10-year non-exclusive development agreement with Residewhich offers corporate housing in dozens of countries, to create properties in the United States according to the Wyndham Residence concept.

Key details

• Consider corporate housing, without residential brand. Wyndham Residence accepts nightly reservations. Properties feature fully equipped kitchens, integrated laundry facilities and amenities such as 24-hour gyms.

• Not a “new brand”. The company said Wyndham Residence is not a new brand but rather “a tier under the Wyndham hotel brand.”

• The concept started abroad. Wyndham Residence already operates outside the United States, including the United Arab Emirates and Greece.

The issues

Wyndham’s move comes as demand for extended-stay accommodations continues to grow, particularly in urban markets.

During Thursday’s quarterly earnings call, Wyndham President and CEO Geoff Ballotti commented on the strong demand for extended-stay accommodation in the United States.

“Demand for extended stay accommodations outstrips existing supply by a ratio of 3 to 1,” Ballotti said. “And if you look at the third quarter, our economy extended stay revenue per available room was still 200 basis points higher than the overall economy hotel segment. It’s really no surprise that extended stays account for 36% of the nation’s pipeline supply.

Wyndham aims to accelerate the pipeline of its extended stay portfolio, which includes a few brands:

• Extended Stay ECHO Suites (Economy)
• Hawthorn Extended Stay (Mid-Range)
• Extended Stay WaterWalk (Premium)
• Wyndham Residence (upscale)
• As of 2021, Wyndham offers a handful of other Reside-managed extended stay properties as part of its Trademark Collection for booking through its site, app, and loyalty program.

Potential headwinds?

As Wyndham expands its extended stay offerings, the segment is increasingly popular.

The success of these new Wyndham residences will likely depend on their ability to differentiate themselves. Marriott, Hilton and Hyatt have announced new upscale and midscale extended-stay hotel brands over the past two years, adding to the traditional upscale extended-stay brands in the market.

Ballotti said in September that he was not concerned about the competition during his speech to the Skift Global Forum in New York.

“(Marriott, Hilton and Hyatt) are moving from luxury, upscale and upper-end segments to upper midscale and potentially midscale, which is really the product they are appealing to,” Ballotti said. “We’re always thinking about our competitors, but we’re really happy with where our product is right now.”

Performance of the accommodation sector stock index since the beginning of the year

What am I looking at? The performance of stocks in the hotel and short-term rental sector within the ST200. The index includes publicly traded companies on global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations and timeshares.

The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more hotels and short-term rental financial industry performance.

Read the full methodology behind the Skift Travel 200.