Q4 2020 Covid development update: Wyndham Hotel Group

by | 31 Oct 2020 | Chains

We explore how the plans of Wyndham Hotel Group, the company behind more than 9,000 properties worldwide under flags like Wyndham Grand, Dolce and Tryp, have been affected by coronavirus using exclusive insights from the TOPHOTELPROJECTS construction database.

The business model underpinning many big multinationals has been ripped up by the coronavirus pandemic, and even global powerhouses like Wyndham have been forced to completely rethink the guiding principles that served them well for decades.

The group, also known as Wyndham Hotels & Resorts, has a complicated corporate history, but its roots can be traced back to 1981 when real estate developer Trammell Crow founded a hospitality specialist in Dallas. It now claims to be the world’s largest hotel company by number of properties, and the figures are quite simply staggering; today, the New Jersey-based business boasts more than 9,000 hotels across 90 countries and six continents, with well over 800,000 rooms on its books. The group’s brand portfolio is pretty impressive too, encompassing the likes of Wyndham Grand, Dolce, Wyndham, Tryp, Esplendor, Dazzler and Trademark Collection in the upper tiers, alongside a host of flags in the midscale and economy segments where it enjoys dominant market positions.

Traditionally, the New York Stock Exchange-listed company has been admired by investors for its aggressive expansion strategy, but this approach is fraught with difficulty in times like these when economic conditions take an abrupt turn for the worse, with various countries and territories imposing strict lockdowns and travel bans that have severely dented consumer confidence.

Wyndham’s development slate is shrinking

To see if Wyndham’s ambitious development drive remains intact despite the advent of coronavirus, or whether lots of its proposed schemes have fallen by the wayside, our researchers have been monitoring some of its key stats over recent months, and TOPHOTELNEWS can now publish these figures for the first time:

Group
In progress
On hold
Cancelled this month
Date
Wyndham Hotel Group
129
15
1
05/13/2020
Wyndham Hotel Group
126
17
1
06/02/2020
Wyndham Hotel Group
124
18
3
07/02/2020
Wyndham Hotel Group
122
19
1
08/04/2020
Wyndham Hotel Group
115
23
2
09/02/2020
Wyndham Hotel Group
118
25
1
10/02/2020

The first column provides a snapshot of how many schemes are actively moving forwards on a month-by-month basis. We can immediately see that Wyndham had 129 projects in progress as of 13 May 2020 when Covid19 was spreading like wildfire through much of the US – where more than half of the company’s properties are located – but that this figure gradually fell in the following weeks, hitting 118 as of 2 October. In percentage terms, this equates to a striking fall of 9% in just five months, which will certainly raise alarm bells for anyone who works closely with the hospitality industry generally and Wyndham in particular.

Meanwhile, the second column perhaps gives us a clearer picture of what’s happening to those ill-starred projects that Wyndham is deactivating. The data shows that 15 schemes were on hold as of 13 May, but that this figure steadily climbed in every subsequent month, reaching 25 as of 2 October. It represents a worrying rise of two-thirds (67%) over the course of the summer, although we should perhaps caveat this by pointing out that the numbers analysed here are relatively small, and therefore just a few status changes on the ground can dramatically alter the overall impression.

Last but not least, the third column allows us to appreciate how common it is for Wyndham schemes to be jettisoned altogether. On this particular point, admittedly, the stats are less illuminating, since only one project was cancelled in the month leading up to 13 May, and the same was true in the month ending 2 October. Again, these figures are so small that they’re highly prone to being distorted by a single atypical month, so we’ll refrain from drawing any firm conclusions at this early stage.

While we’re on the subject of handling the data fairly, incidentally, it’s probably worth stressing that there’s nothing unusual in the odd project failing to materialise; groups often part ways with developers, builders or operators when schemes run into difficulties, which means we should resist the temptation to attribute every last slipup to coronavirus. And we’ve also previously seen lots of exciting projects mothballed for months or even years on end, before making an unlikely return and being successfully driven through to completion when corporate priorities change, so there’s every chance that some of the dormant entries we’ve identified will eventually come good in the end.

Wyndham’s adopting a cautious approach in the post-Covid era

Of course, there’s precious little visibility as to what the future may bring in these extraordinary times, but on current evidence it seems that Wyndham’s slowing down its rate of expansion as management waits to see how quickly the Covid19 outbreak can be brought under control. But this isn’t to say that all building work’s ground to a halt by any means, as the group’s still working to realise the vast majority of its pipeline. Indeed, we’ve seen plenty of examples of the company continuing to expand in recent months, not least strengthening its footprint in Japan, announcing two Turkish additions to its La Quinta brand, and ramping up its presence across the subcontinent.

Ultimately, the company’s still progressing almost 120 projects right now, which feels significant given how many hotel development analysts were issuing dire predictions earlier in the year that the industry would be forced to make wholesale cancellations. It’s true that some of its peers are taking a more optimistic view and maintaining, or even increasing, development activity during the pandemic, but Wyndham seems to be erring on the side of caution. If scientists are able to find a vaccine for Covid19, or even just help hospitality go about its business while the virus persists, hopefully this influential group will soon decide to scale up its operations once more.

Click here to read our exclusive Q4 2020 Covid development update series in full: Marriott International | Hilton Worldwide | Accor | IHG | Hyatt Hotels Corporation | Radisson Hotel Group | The Ascott | Wyndham Hotel Group | What the data tells us

Many TOPHOTELNEWS articles draw on exclusive information from the TOPHOTELPROJECTS construction database. This subscription-based product includes details of thousands of hotel projects around the world, along with the key decision-makers behind them. Please note, our data may differ from records held by other organisations. Generally, the database focuses on four- and five-star schemes of significant scale; tracks projects in either the vision, pre-planning, planning, under-construction, pre-opening or newly opened phase; and covers newbuilds, extensions, refurbishments and conversions.

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With more than 9,000 hotels around the world, Wyndham Hotels & Resorts has an extraordinary global footprint unlike any other.

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