Wyndham Hotels & Resorts has agreed a USD100m financing partnership that will support a more diverse range of hoteliers to become franchisees of Wyndham hotel brands.
The arrangement with investment company Lafayette Square will provide debt finance to business people who might otherwise struggle to obtain funding through traditional sources, such as mainstream banks, in their bid to grow their hotel ownership portfolios. While applicants will still need to meet minimum viability hurdles, it will be Wyndham that will initially vet applications. If the hotel group considers a project to be viable, it will then be recommended and provided with a direct connection to the teams at Lafayette Square.
Broadening support for minorities
The funding initiative will help to support existing Wyndham initiatives, which aim to help certain groups who may have struggled to join traditional mainstream hotel owners. Both Wyndham BOLD (Black Owners and Lodging Developers), and Women Own the Room, are initiatives launched by the company to improve the diversity of owners. There is also an Accelerator Circle, which focuses on helping support individuals to maximise hotel revenues, and to move them forward on their steps towards hotel ownership.
Access to capital at a sensible cost has been one of the key challenges for those looking to develop new hotels, following the Covid pandemic. A temporary spike in construction cost inflation also meant some previously initiated projects struggled to stay viable, when already in development.
The Wyndham initiatives are cutting through, the company reports. BOLD and Women Own the Room have between them led to more than 100 hotel deals being signed with black and women hoteliers, and more than 20 of these projects are already open and trading successfully.
“Inequities still exist within hospitality, especially when it comes to financing,” said Galen Barrett, VP, for strategic franchise initiatives at Wyndham. “Champions like Lafayette Square, who believe in our same mission, can help us bring greater representation to our industry. There are deserving, credible hoteliers that continue to face roadblocks, and we’re committed to using our network to not only give the keys to hotel ownership to more diverse owners, but ultimately help give them the access to tools, resources and partners they need to succeed.”
The first franchisee to receive funding via Lafayette Square is Amina James, who had struggled to find sufficient sensibly priced funding for her planned hotel in Lake Charles. This was despite the fact that she had a successful track record, as the project was not her first, but her second hotel.
A better finance offer
As a BOLD member, James was vetted by Wyndham and introduced to Lafayette Square, who backed her with a superior offer. The result is the newly opened Wyndham Lake Charles. Thanks to the financing package, upgrades to the asset are planned, as well as the onboarding of a third party management company, to help streamline operations.
She commented: “Because of Wyndham’s support, the credibility they saw in me and their connection to Lafayette Square, I can now say I own two hotels. BOLD and Women Own the Room are actively changing hospitality by forging the path – and knocking down the barriers along the way – to make hotel ownership possible.”
