now has 265 contracts , according to Wyndham , including 60 new construction projects awarded in July , including its first hotels in Canada .
For comparison , on Hilton ' s Q2 call , President and CEO Chris Nassetta said Project H3 , which launched in May , has more than 300 deals in negotiation . Project H3 joins Homewood Suites and Home2 Suites as Hilton ' s third extended-stay brand . The company opened its 600th Home2 in the second quarter .
However , Wyndham Hotels & Resorts President and CEO Geoff Ballotti is quick to point out that ECHO Suites is far different than the likes of Project H3 , Hyatt ’ s new extended-stay entry Hyatt Studios and Marriott International ’ s StudioRes .
“ These competitive launches are not economy extended-stay competitors ,” he said , noting that they are larger footprints by some 20 %, with things like additional elevator banks , more capacious public spaces , higher amenity requirements and operating costs . “ Our ECHO developers continue to believe that ECHO will drive a higher ROI due to a much lower cost per key , and that ' s the way we ' re marketing it — lower ongoing operating costs and higher gross operating profits .”
Wyndham , along with other franchisors of economy brands , should see an even larger jump in performance tied to federal infrastructure spending arising from The Infrastructure Investment and Jobs Act , which was signed into law by President Biden in November 2021 .
“ We believe that the 1.8 million companies out there contracting for accommodations for their infrastructure workers are going to be seeking economy average daily rates with average length of stays approaching over 30 nights versus that midscale and above
average daily rate ,” Ballotti said . “ We ' re in the early innings of what will play out over the next eight years and it ’ s a $ 3-billion revenue opportunity for our franchisees and our owners .”
As of June 30 , 2023 , Wyndham ' s global development pipeline consisted of nearly 1,850 hotels and approximately 228,000 rooms , representing a 10 % YOY increase , including 22 % growth in the U . S . Approximately 72 % of the company ' s pipeline is in the midscale and above segments ; approximately 57 % of the company ’ s development pipeline is international ; and approximately 81 % of the company ' s pipeline is new construction , of which approximately 35 % has broken ground .
In China , Wyndham opened 3,000 rooms in the quarter , driving a 4 % sequential and a 13 % China direct net room growth . It opened 10 new construction hotels and 30 conversion properties .
According to Ballotti , most of what goes into the pipeline , comes out complete , around 66 % or so , he said . “ We ' re not seeing any issues there or any changes there , so a larger pipeline gives us confidence into the future on accelerating our net room growth ,” he said , adding that 80 % of the pipeline is now new construction . " From signing to opening , it usually exits after it enters on average four years . And the other third , the conversion rooms are averaging less than a year to come out of the pipeline .”
BY THE NUMBERS Wyndham ' s Q2 global RevPAR grew 7 % compared to the same time a year ago , while system-wide rooms grew 4 % year-over-year . Its development pipeline grew 1 % sequentially , with signings of rooms totaling 24,000 , growth of 6 % YOY and 7 % compared to 2019 .
WE ' RE IN THE EARLY INNINGS OF WHAT WILL PLAY OUT OVER THE NEXT EIGHT YEARS AND IT ’ S A $ 3-BILLION REVENUE OPPORTUNITY FOR OUR FRANCHISEES AND OUR OWNERS
– GEOFF BALLOTTI , PRESIDENT AND CEO , WYNDHAM HOTELS & RESORTS
September 2023 hotelsmag . com 31