Wyndham Residence: Latest Entry in U.S. Extended-Stay Hotels

28.10.2024 - 12:05 / skift.com / Donald Trump / Sean Oneill / Geoff Ballotti

Wyndham Hotels & Resorts said Monday it was starting to run upscale extended-stay hotels in the U.S. under the Wyndham Residence label. The move marked the hotel group’s push into the premium segment of the booming extended-stay market.

Wyndham has signed a non-exclusive 10-year development deal with Reside, which provides corporate housing in dozens of countries, to create U.S. properties under the Wyndham Residence concept.

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

During Thursday’s quarterly earnings call, Wyndham president and CEO Geoff Ballotti commented on the high demand for extended-stay lodging in the U.S..

“Demand for extended-stay lodging is outpacing existing supply by a 3 to 1 margin,” Ballotti said. “And if you look at Q3, our economy extended stay revenue per available room was another 200 basis points higher than the overall economy segment of hotels. It’s really no surprise that extended stay is 36% of the domestic pipeline supply.”

Wyndham has been aiming to ramp up the pipeline of its extended-stay portfolio, which includes a few brands:

While Wyndham is expanding its extended-stay offerings, the segment is becoming increasingly crowded.

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

Ballotti said in September that he wasn’t concerned about this competition when he spoke at the Skift Global Forum in New York.

“[Marriott, Hilton, and Hyatt are] moving down from the luxury, upper upscale, and upscale segments into the upper midscale and potentially the midscale, which is really the product that they’re appealing to,” Ballotti said. “We’re always thinking about our competition, but we’re really happy with where we are with our product right now.”

Hilton had painted a more subdued picture of leisure demand. Wyndham’s results show the benefits of having a heavy mix of hotels and resorts in the economy and midscale segments.

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