Chip's Picks: Five Industry Trends with Chip Ohlsson

1. Infrastructure Construction

Government funding is now in place for more than 37,000 infrastructure projects across the United States. From bridge and interchange construction to the creation of semiconductor plants and the installation or upgrading of wastewater and electrical utility services, there’s no shortage of opportunity for American building and service companies. According to recent data, firms will need to hire more than 500,000 staff just to keep up with demand.

For hotel owners, the growing number of workers in the field represents a largely untapped market with more than $3 billion in opportunity. Wyndham’s Global Sales team has existing partnerships with large companies bidding on infrastructure projects to help owners access this expanding market, grow their guest base, and drive increased revenue. 

Chip’s advice for owners:

• Explore local opportunities and get tips for success. Your business can benefit if you capitalize on infrastructure business, whether it’s white-collar, gray-collar, or blue-collar. Gain insight into the infrastructure market in your area and turn this insight into action during a personalized one-on-one session with Wyndham. Our teams can also help owners find infrastructure opportunities in their own backyard — in turn letting them tap a growing market of extended stay guests. 

2. Extended Stay Expansion

Extended stay will also expand through 2024. According to recent data, the extended stay market will see a compound annual growth rate (CAGR) of 11.8% from 2023 to 2033.

Extended stay focuses on higher occupancy to drive increased RevPAR. Consider a transient room with an ADR of $90 and an extended-stay room with an ADR of $75. If both are equally occupied, the transient room offers higher RevPAR. If, however, the occupancy rate for the transient room is 60% while the rate for the extended stay room is 80%, the numbers change. In this case, RevPAR is $54 for the transient room and $60 for the extended stay. 

Chip’s advice for owners:

• Understand the demand. Three primary guest categories are now opting for extended stays: infrastructure workers, remote workers, and families on vacation. Understanding the demand in your area lets you target specific guest categories.
• Consider the segment. Stay lengths vary across segments. For upscale or luxury brands, extended stays are typically 5-7 nights. For economy brands, stays may range from 21-28 nights.
• Align the amenities. Extended-stay guests often look for amenities such as kitchens with electric cooktops, full-size fridges, microwaves, and access to self-service laundry. Wyndham brands such as ECHO Suites, Hawthorn Extended Stay, and dual-brand La Quinta/Hawthorn hotels can help owners capture this amenity-focused segment by ensuring they have the right amenities for the right guests.

3. Soft Brand Adoption

As guest expectations evolve, many hotel brands are carving out new market niches with the development of soft brands. These brands are partnerships between well-known hotel chains and boutique or specialized hotels that combine the reputation of the local hotel with the power of the global brand. Soft brands are especially impactful in the boutique hotel space, which includes highly discerning guests looking for unique experiences. Partnership with Wyndham can help owners retain the boutique appeal of their hotel while leveraging global sales, marketing, and creative resources. 

Consider owner Manolis Macropulos, whose family purchased their first hotel in 1984. Fourteen years later, they bought the MB Hotel in Miami. Now part of Wyndham’s Trademark Collection soft brand, the hotel is prospering. “We had partnered with other brands who weren’t so well-rounded,” says Macroplous. “Trademark offers the combination of soft brand identity with a solid support structure and good team surrounding it.”

Chip’s advice for owners:

• Pinpoint market potential. Location, location, location. It’s true for real estate, and it’s true for hoteliers — the right location can draw consistent guest interest. But location isn’t enough on its own. To maximize market potential, owners need to identify where soft branding makes sense.
• Get passionate about improvement. While boutique hotels succeed on the strength of their unique value proposition, owners can’t ignore the basics, such as regular upgrading and long-term amenities improvement. For Macropolus, staying passionate about improvement has helped his hotel see sustained success.
• Find the right partner. Soft brand partners should provide reservation, rewards, and technology support. Guests can easily explore amenities and book rooms with the Wyndham mobile app, and Wyndham support teams are always available to help owners navigate technology or operational issues. 

4. Technology Innovation

Technology is changing both hotel operations and the guest experience. For example, Wyndham has invested more than $275 million in technology development over the last five years. With mobile applications now an essential part of the guest experience, Wyndham has gone beyond the basics of rewards account access and easy mobile bookings to include portfolio-wide mobile tipping, which offers benefits for guests, staff, and owners alike.

Other innovations include the deployment of automation tools such as the Mobile Operation Platform (MOP) visual matrix, which helps streamline common front desk tasks. 

Chip’s advice for owners:

• Make it easy for guests. Allowing guests to tip staff via mobile, check into rooms on their devices, and open their doors with digital keycards both streamlines the experience and helps boost engagement. 
• Give staff what they need. Along with technology, staff need the training and support necessary to effectively apply automation, booking, and RMS systems. 
• Don’t skimp on support. Technology is only as good as its last performance. If solutions fail, hoteliers need on-demand support options that can help address issues ASAP.

5. Expanding Owner Opportunities 

Women hold just 10% of leadership roles in hospitality, but on average, hotels with women in ownership roles outperform the brand average RevPAR index by 5% ¹ And of the 60,000 hotels in the United States, fewer than 2% are under Black ownership, despite the significant rise in spending among Black American travelers.  To capture changing guest markets, this needs to change — and change is underway in 2024.

Wyndham programs such as Women Own the Room (WOTR) and Black Owners and Lodging Developers (BOLD) can help current and aspiring hoteliers find the support they need to succeed in the increasingly competitive hospitality market. 

Chip’s advice for owners: 

• Explore the options. Diversification is now a top priority for hotel brands, with many creating support programs to help prospective owners navigate challenges such as financing, operations, and revenue management. As a result, owners are well-served by comparing the options available and finding a brand that offers comprehensive support programs.  
• Look for actions, not words. Words mean nothing without action. As a result, owners are best served by partnering with brands that are committed to moving the needle. For example, 2023 saw Wyndham’s second-annual BOLD symposium, which offered step-by-step guidance and support for Black owners. Prospective and current owners can also access educational events, materials, and expert advice to help support their ownership journey. Recently, Women Own the Room by Wyndham celebrated its 50th signing and over a dozen openings.

Opportunity is knocking in 2024, but owners have to unlock the door. 

In practice, this starts with an understanding of 2024 trends — from infrastructure to extended stay to soft brands, new technologies, and diversity, there’s no shortage of revenue potential. To make the move from potential to profit, however, hoteliers need the key: Robust and reliable support that puts owners first. 

1) Based on 2023 performance of a sample of 400 hotels in the US with women owning a majority or minority of equity interest