Wyndham Hotels & Resorts has conducted its first annual Hotel Owner Trends Report in partnership with Wakefield Research. A multimonth effort spanning two industry-wide surveys of hundreds of hotel owners and property developers, the findings suggest the hospitality industry remains confident in its resilience and long-term growth prospects.
“There’s a lot of noise in the marketplace right now and yet, more than 90 percent of hotel owners and developers are optimistic about what the next five years hold for them,” Amit Sripathi, chief development officer, Wyndham Hotels & Resorts, said in a statement. “That’s because they know that in hospitality, they’re playing the long game. Case in point: While most admit to having concerns over current economic volatility, four out of five say they still plan to expand their portfolios over the next five years.”
Brands Matter
Virtually all owners surveyed (98 percent) said that they are currently open to exploring new branded offerings, and 55 percent are interested in traditional or hard brands while just under half (45 percent) are seeking soft brand opportunities.
Owners and developers also are looking for:
- Support and Leadership Access: Ranking the top two factors owners and developers look for when choosing which brand to join, support from industry experts tops the list (including marketing, revenue management and operational expertise), followed by access to executive leadership.
- A Strong Loyalty Program: More than 80 percent of hotel owners and developers say a strong loyalty program is very important or critical to a hotel’s success, with nearly two-thirds (62 percent) of those open to joining a brand or switching brands citing it as a top five factor they consider.
- Brand Offerings: When looking at expansion, interest spans virtually all segments. Just over a third (39 percent) have lifestyle and boutique hotels in their sights, while a similar number (36 percent) are looking at midscale and upper-midscale. The same is true for economy (35 percent).
Capitalizing on Extended-Stay
Extended-stay hotels continue to be front and center for hotel owners and developers. Buoyed by historically high demand and developer ROI, nearly all surveyed (96 percent) see opportunity in extended-stay, highlighting it as an investment with great potential.
Discussing the segment, owners and developers said:
- The Model Matters: Operating in extended-stay means operating in a way that’s different from traditional brands. Nearly three-out-of-five surveyed (59 percent) recognize this, a highlight that embracing the unique operating model of extended-stay is critical to success.
- All Eyes on Infrastructure: With historic multi-year infrastructure spend on the rise, 100 percent of respondents said they anticipate an increase in new business over the next five years (including those outside of the extended-stay segment) as a result of the many projects these investments are funding.
- Cross-Sell and Upsell are Key: Both in extended-stay and beyond, when it comes to driving increased revenue, more than 80 percent of hotel owners and property developers say cross-sell and upsell opportunities are key, describing them as either critical or very important to their hotel’s success.
Technology
When choosing a brand, the majority of owners and developers list access to best-in-class technology as one of their top five factors. What’s more, one in five (20 percent) say investing in technology is how they plan to differentiate their hotel from the competition.
Owners and developers shared other insights about technology:
- Investing in Tomorrow’s Traveler: Recognizing the role technology plays in delivering a great guest experience, nearly two-thirds (61 percent) of hotel owners have already invested in, or are considering investing in, things like streaming, digital room keys and self-service kiosks. Meanwhile, nearly half (46 percent) have done or are considering the same when it comes to EV charging stations.
- Harnessing the Power of AI: More than 90 percent of hotel owners are already leveraging AI in some capacity. Notably, more than 70 percent are deploying the technology to support operations while more than 60 percent are using it for guest-facing services.
- An Interconnected Guest Experience: When it comes to guest messaging platforms, one-in-three hotels (33 percent) are already utilizing this technology, with nearly another third (30 percent) looking to invest in or increase their investment in it. The same is true for mobile tipping: a third of those surveyed (33 percent) say they already offer mobile tipping, with nearly another third (30 percent) expecting to invest or increase their investment in it.
Select-Service Strength
Over the past twenty-five years, select-service hotels have repeatedly proven their resilience in weathering challenging environments. From 2000 to 2023, U.S. select-service revenue per available room increased at a 2.6 percent compound annual growth rate. During periods of economic volatility, Wyndham’s select-service hotels have consistently outperformed STR’s upscale and above segments. In 2001, following the attacks of 9/11, they outperformed by 300 basis points. In 2008, in the wake of the global financial crisis, they outperformed by 500 basis points. And most recently, in 2020, amid the backdrop of the global pandemic, they outperformed by 2,500 basis points.
A white paper detailing the findings of Wyndham’s first-annual Hotel Owner Trends Report is slated to be available for download later this month.