Wyndham Hotels & Resorts, lifestyle hotel mogul Sam Nazarian and Grammy Award winner Marc Anthony doing something together may seem like the beginning of a joke, but this unlikely bed… We're here with the news that our friends are launching a new lifestyle hotel brand.
Wyndham and lifestyle hospitality group SBE, which was founded by Nazarian and recently partnered with Anthony as an equity partner, announced Monday morning that the new lifestyle hotel, tentatively titled “Project HQ Hotel & Residences,” Launched the concept.
Project HQ welcomes guests to a truly achievable lifestyle hotel movement at a time when the lifestyle hotel movement, hotels that focus on destination dining and nightlife as well as design, are out of reach for many wallets. The purpose is to provide an experience.
Wyndham CEO Jeff Ballotti said at a press conference ahead of Monday's announcement that rates for the project headquarters would likely be between $250 and $500 per night. The new brand, which operates under the Wyndham Registry Collection umbrella, also offers Wyndham His Rewards loyalty members an entirely new concept for the possibility of redeeming award stays.
“This aspirational opportunity for redemption that we feel right now is exactly what we have,” Ballotti said. “It's completely different.”
Rapid growth model for project headquarters
The brand is expected to grow rapidly and tap into hotel owners looking to transition from existing brands they partner with to new concepts. Nazarian's team aims to offer a brand that encompasses the type of residential stays that draw travelers to Airbnb, while also offering a strong on-site lineup of restaurants and bars and other amenities like branded residences. We believe there is an opportunity to lay the foundations for a style hotel concept. and health and welfare facilities.
Nazarian cited existing hotels and underutilized office buildings as ways the project headquarters could grow. Wyndham and SBE plan to open 50 project headquarters hotels by 2030, with half of that growth expected in the United States and half overseas.
A map provided to TPG shows cities such as New York City, Washington DC, Philadelphia, Miami, Nashville, Chicago, Dallas, Las Vegas, Los Angeles, and Denver as part of Project HQ's target U.S. market. I am. Targets for international growth include markets such as Saudi Arabia, the Caribbean, Latin America, Hong Kong, Seoul, Singapore, Doha, the United Kingdom, and Asia.
The companies noted that the project headquarters is likely to grow by 80% through conversion of existing buildings and 20% through ground-up construction. Renovations are cheaper than building a new hotel, but a cheaper option doesn't necessarily mean it's cheaper. A hotel owner should expect a renovation to Project HQ brand standards to cost him between $30,000 and $50,000 per room.
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By comparison, converting to Wyndham's newest Days Inn concept costs owners about $2,500 per room.
After all, no one said the project headquarters lifestyle was a construction bargain.
not-so-strange partner
This project may be a headache for some people. Although the company has expanded into the all-inclusive resort and luxury segment in recent years, it is best known for combining affordable hotels with brands such as La Quinta, Days Inn, and Super 8.
Meanwhile, Nazarian is a long-time leader in the lifestyle space, having overseen SBE's hotel brands and management platform (including brands like SLS, Delano, Mondrian, Hyde, and more) and various food and beverage brands. best known.
Many of the hotel and restaurant concepts partnered with Accor before being acquired by the French hotel giant and spun off into its Ennismore Lifestyle division in 2020, which includes non-SBE entities such as The Hoxton.
“I've been away from the game for just over three years, and in that process we, as a team here at SBE, have reflected on what will be the biggest disruptor and what will happen as we return to the hotel industry. “What categories do we really want to focus on?” Nazarian said.
But Barotti and Nazarian pointed out that what brings the two companies together on this project dates back more than 20 years. Wyndham may not be the first hotel company people turn to when it comes to lifestyle hotel products, but they're making a big splash in the space of offering authentic lifestyle hotel products at a price that's more affordable than anything else out there. There is certainly room for opportunity. today.
Many lifestyle hotel brands claim to want to foster community with the surrounding area, but when restaurants are booked out months in advance and prices are as high as $1,000 a night, that claim can be challenged. It can be difficult to be taken seriously.
Significantly, Ian Schrager, one of the founders of the boutique hotel movement who is ending his partnership with Marriott under the Edition brand, will be leaving Edition to focus on the Public brand. The brand describes it as “luxury for everyone,” but it often comes at a price. It is even more powerful than the Edition brand.
There is one point that project headquarters should keep in mind. While both Marriott Edition and Schrager's Public are popular and have attracted the attention of many celebrities, neither brand leader has grown as much as they touted when they first launched. Back in 2008, Marriott executives actually expected about 100 Edition hotels to open by today, not 18. Schrager is still the only public facility open in New York City.
Offering a truly accessible product in this space with an appealing dining element, which Nazarian is able to achieve with its own brands such as Umami Burger and Mediterranean Smooth Sum and other SBE-supported products, is a significant addition to the hotel's trajectory. It can be transformative. Just look at all the new affordable brands launched by companies like Marriott, Hilton, and Hyatt in the last year alone.
It is clear that the hotel industry recognizes that it is not doing enough to capture the more affordable end of the hotel food chain.
Why Project HQ is a big winner for Wyndham
While some naysayers may expect Wyndham to operate primarily under the guise of an affordable extended stay brand, this greatly increases its potential appeal to young travelers with disposable income. It turns out. Stay tuned to Marriott to see how such a partnership comes to fruition.
When Marriott first launched Edition, the company's late CEO appeared on a talk show with Mr. Schrager and explained why Marriott needed the nightlife and hotel legend.
“One of the discussions within our team is, what if? [around how] We just opened this hotel in New York,” the late former Marriott CEO Arne Sorenson said in a 2015 interview with Charlie Rose. I think the answer is no. Ian allowed us to be in this space. ”
When asked last week if Windham had similar thoughts about Nazarian, Balotti agreed.
“We can never create this on our own. It's not in our DNA,” Ballotti said. “We're really focused on economics and the mid-range sector. We love that sector. We're not shying away from it. We're moving out of the low-intensity sector. , we're not saying we want to move into a high-intensity field.'' We're going to continue in that field. ”
But he also pointed out that there is a valuable loyalty play here. Wyndham needs more options at the top of the chain scale to give Wyndham Rewards members something worthwhile to redeem points for.
“What our loyalty members want, what blue-collar workers and middle-income Americans want, is the experience that SBE creates,” Barotti added.
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