in a higher echelon of product . Ballotti also said that Wyndham Rewards has “ become younger ” in membership , making it vital to fill in gaps where the franchisor is not already represented .
Pricing for the product would be more in the range of $ 250 to $ 500 a night , Ballotti said , “ which our dual-income guests can increasingly afford .”
BUILDING IT OUT The new brand also taps into what is an increasingly “ on-trend ” development play : conversions , or taking existing stock and repurposing it . It ’ s especially effective in a period of higher borrowing costs that has increased the cost of capital and made it more difficult to generate robust returns . According to Nazarian , development costs would be a palatable $ 30,000 to $ 50,000 per key . The brand is also positioned to be global : Nazarian said they are already touring potential sites in Europe , the U . S . and the Middle East . College campuses are also a target .
“ We ’ ve talked so much about how this conversion market is overheated right now and with the some 17 million rooms around the world — more than 50 % of them are unbranded ,” Ballotti said . “ Developers are looking for something that ’ s going to put more relevance into the real estate .”
At this , Nazarian turns nostalgic ; you get the sense that Nazarian ’ s hope for his new hotel execution will mirror some of the trailblazing brands of yesteryear — from Starwood ’ s seminal W to André Balazs ’ Standard and Chateau Marmont . “ Back in the day , when W first started , the initial idea Barry [ Sternlicht ] had was taking great buildings and slapping a great brand on them , and bringing in people like Rande Gerber to run the bars — that was disruptive ,” he said , similarly invoking Balazs and his buying up “ cool buildings in L . A .” and flipping them upside down . “ It was a place we all wanted to be — the who ’ s who of those communities coming there and enjoying it . That ’ s really what I think is missing today .”
Despite sbe and Wyndham on the surface appearing like strange bedfellows , Nazarian said there really wasn ’ t another hotel company that he considered , and that speaks to his long friendship with Ballotti , a relationship that stretches back decades to when Ballotti was with the now-defunct Starwood Hotels & Resorts , acquired by Marriott International in 2016 , but which one could argue was the first large hotel company to successfully mine the luxury / lifestyle space at scale .
A simple text from Nazarian to Ballotti started what was to become the eventual partnership , which was consummated within weeks . Ballotti acknowledged that Wyndham could never do a brand like this on its own (“ it ’ s not in our DNA ”) and that the core focus remained in the economy and midscale segments . He emphasized that Wyndham has also now fully exited from managing hotels to become a pure-play franchisor . In the case of the new brand , sbe would be the manager .
BRAND BUILDING Getting a new brand off the ground takes time , planning and focus . Nazarian admits that his prior brands , like SLS , were created first and the real estate was identified second . By the time SLS had its first location in Beverly Hills , the brand was fully fleshed out , with iconoclasts like Philippe Starck and José Andrés already onboard to deliver design and F & B . Project HQ is a bit different , with locations first being identified as the brand takes shape . One thing is certain , food and beverage and entertainment are at the core of a lifestyle experience and , Nazarian stressed , elemental to the new brand .
“ I think lifestyle is an overused word today ,” Nazarian said . “ Everything ’ s lifestyle , but at its core , the authentic definition of lifestyle is experiences and we have always made it a mission to bring the
DEVELOPERS ARE LOOKING FOR SOMETHING THAT ' S GOING TO PUT MORE RELEVANCE INTO THE REAL ESTATE
– GEOFF BALLOTTI , PRESIDENT AND CEO , WYNDHAM HOTELS & RESORTS
hotel piece and the food and beverage and entertainment piece all under one common operation .”
More than half of all revenue can often be generated from F & B and entertainment in a lifestyle hotel , Nazarian said . Certainly , sbe has been at the vanguard in delivering those experiences , and its current roster of F & B and entertainment brands will be cornerstones of the new brand .
The overriding message : Never bet against sbe : “ No one would have thought that we were going to build a 14,000-square-foot restaurant around Spanish tapas in Beverly Hills ,” referring to the Bazaar , at SLS Beverly Hills , which subsequently closed in 2020 . “ They thought we were nuts , right ?” Nazarian said . “ But we took a chance .”
Wyndham and sbe hope the odds are in their favor again .
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