Half of Wyndham Hotels & Resorts’ more than 8,000 hotels are in the economy segment. It makes sense that one of the largest hotel franchisors in the world wants to add more. Wyndham’s newest brand extension seeks to do just that.
Wyndham has launched Dazzler Select by Wyndham, which targets independent hotels in the U.S. considered to be in what Wyndham calls the “lifestyle economy” space. Dazzler Select is a riff off of Dazzler by Wyndham, a boutique brand that currently serves Latin America.
The impetus to launch this new affiliation brand, Wyndham said, comes from the more than 16,000 independently owned economy hotels in the U.S., according to STR. “Independent owners have been often overlooked, whether from a technology support standpoint or from distribution,” said Amit Sripathi, chief development officer at Wyndham Hotels & Resorts. He pointed to the breadth of independent economy hotels that, he noted, are largely family owned and have a unique identity that they want to maintain. “This is where Dazzler Select comes in,” Sripathi said.
The first Dazzler Select comes with the conversion of Magic Moment Resort & Kids Club in Kissimmee, Fla. Beyond Magic Moment, Wyndham has signed two additional hotels and it said is in active discussions with more than 25 additional developers. Target markets include areas where there is some sort of attraction, such as a national park. “It could be next to a big entertainment destination, like Walt Disney, or a beach,” said Sripathi, adding that these hotels typically won’t be ones where someone is just pulling over to stay the night. “These hotels will have character. The markets will have characteristics that intentionally bring people to them,” Sripathi said.
Over the next five years, the company is targeting 50 additional openings.
Ease of association is one of the hallmarks of Dazzler Select, Wyndham said. There will be a flat monthly brand fee that covers traditional royalty and marketing fees, which Wyndham said lowers the barrier to entry for independent hotels looking to tap into a larger distrubution system. The barrier to join Dazzler Select is not unduly onerous: hotels must carry a 4.0 guest rating or higher on Google and offer free Wi-Fi, 24-hour water and coffee stations, one complimentary breakfast item per guest and boutique-inspired design elements.
Wyndham said that in order to join Dazzler Select, hotels will have to go through a modest property improvement plan (PIP) “to ensure alignment with brand fundamentals.”
Target Audience
Dazzler Select was partially launched by Wyndham to tap into the younger generations of travelers, said Leo Danese, VP of lifestyle brands at Wyndham Hotels & Resorts, citing Gen Z and millennials. “They’re traveling more than any other generation before them,” he said, as many as five trips per year, in some instances. Dazzler Select, he said, is lifestyle inspired and boutique in feel, but at an approachable price point. “Consistency and quality are key,” he said.
Asked if lifestyle/economy is an oxymoron, Sripathi pushed back. “They absolutely can be,” he said, comparing it to other consumer brands, especially clothing brands, such as Uniqlo, which are fashion forward at affordable price points. “This is no different than that,” he posited. “You have a guest who wants to feel like they’re not walking into a hotel that everyone else is. It’s not necessarily a lifestyle. Lifestyle just means it can be something. The unique elements about the hotel are preserved and kind of showcased. There’s something there. That’s what we’re trying to achieve here.”
Soft brands or affiliation networks have become more popular as a lodging company offering—especially during a time when new development has been constrained by variables including higher cost of debt and higher construction costs. By allowing current hotels the ability to join a brand, lodging companies can increase net unit growth quicker as opposed to having to wait for the period of time for the hotel to open. Other soft brands in the hotel industry include the likes of Choice Hotels’ Ascend Collection, Marriott International’s Autograph Collection and Hilton’s Tapestry Collection. Wyndham operates another soft brand called Trademark, whose hotels, in the upper-midscale segment, skew higher than what Dazzler Select will be.
Danese said that Dazzler Select fills a gap rather than just being another collection brand concocted to keep up with the Joneses. “We’re always trying to learn and develop from our existing owners, and a lot of them are moving into this space and want our help—that’s where we decided to develop this brand,” he said.
Sripathi said that Wyndham’s track record in the economy space gives it an edge to create a brand for the independent hotelier. “There was a clear gap for this type of product in the space, both from an owner perspective and a guest perspective,” he said. “And we know this customer better than anyone else.”
Since Wyndham already franchises a heavy volume of economy hotels, there is the potential of the new brand cannibalizing exisiting Wyndham hard brands, such as Super 8, Days Inn or Travelodge. It’s a notion that Sripathi disagrees with. “We put a lot of thought into it and this fills a niche where we don’t currently have an economy brand that provides for the guest who is looking for a certain kind of design essence and boutique lifestyle experience,” he said, adding that Dazzler Select being part of Wyndham Rewards gives it even more strength.
Driven by the current upside-down economy, hotels in the economy space have been challenged, contrary to hotels in higher chain scales that have performed better. In September, at the Hotel Data Conference, STR Senior Analyst Hannah Smith said that U.S. luxury hotel demand is increasing, but demand is falling in the economy segment, adding that the segment has shown 18 straight months of declines in RevPAR on a rolling 12-month basis. Still, Sripathi is confident in the space.
“Hospitality is a very resilient industry,” he said. “Owners are choosing to join the Wyndham system not for 12 months, not for 24 months. This is a longer term. Sure, there’s going to be ups and downs, but we’ve had an incredible run prior to COVID and recovery after COVID, and we think we’re going to see similar in the years ahead.”
