Wyndham’s Latest Deal Signals Importance of Boutique Hotel Brands During Pandemic Recovery

A seven-hotel Wyndham expansion may not seem like much, but it says a lot about where the general hotel industry sees future growth.

Seven hotels owned by Mississippi-based The Thrash Group, including its five-hotel Origin Hotel Collection, are taking on Wyndham brand affiliation, the company announced this week. But the hotels will largely maintain their current boutique feel and name with the exception of adding “A Wyndham Hotel” at the end — essentially becoming what the industry calls a soft brand.

The portfolio growth also further accelerates Wyndham’s push into the lifestyle hotel sector, where individual properties make as much as half their revenue from food and beverage offerings — an increasingly competitive field for the entire industry.

“Once we established what [The Thrash Group founding partner] Ike [Thrash] and his team were doing and how they wanted to grow, we looked at our portfolio and saw this tucks in very nicely with what we’re doing with the Wyndham brand and how we want to continue to grow in the lifestyle space,” said Chip Ohlsson, chief development officer at Wyndham Hotels & Resorts.

Leaders at Wyndham, like most of its competitors, have made clear their plans to grow the company’s portfolio by inking new deals with owners of existing hotels to take on a Wyndham flag affiliation, a deal known as a conversion. But this soft brand conversion, where the hotels essentially retain all their pre-Wyndham identity, has significantly less capital involved in adhering to Wyndham brand standards.

Wyndham is keeping much of the existing look intact as it works to beef up its presence in the lifestyle hotel sector.

The hotels — in locations like Raleigh, North Carolina, and outside Denver — are all less than three years old. Some are still completing construction and are slated to open later this year. As long as the hotels maintain high TripAdvisor ratings, they can maintain their own branding beyond Wyndham-affiliated signage and not have to abide by standards of other Wyndham soft brands like Trademark, Ohlsson said.

“We were able to keep our own name, which was really important to us,” Thrash said. “We spent all this time and effort to develop the brand, and they were accommodating with that.”

But a deal like this is more than just growing Wyndham’s room count. The lifestyle hotel sector is a highly competitive area that most major hotel companies are directing resources.

Accor spun out its lifestyle brands like SLS and Delano last year into a merged entity with Ennismore, owner of brands like The Hoxton. Earlier this week, Accor entered a partnership with Miami-based Faena on building more of that company’s luxurious lifestyle hotel “Faena Districts” in markets like Dubai.

Hyatt announced an expansion last year of its Thompson Hotels lifestyle brand, and IHG rolled out plans to expand its Voco lifestyle hotel concept across the U.S. and China.

Wyndham is unlikely to stop its own lifestyle growth with these seven hotels.

“There are a lot of regional brands out there that can be a great partner, and we believe we can own the space and be the best partner for these people who want to keep their identity and independence,” Ohlsson said.

The soft brand conversion strategy could also accelerate how fast Wyndham can grow within the lifestyle space.

“A lot of the big hotel companies are wanting to get into the boutique space, but this deal saves them five years of developing out something new,” Thrash said. “They don’t have to invent something.”

Wyndham’s current lifestyle push is also a win for The Thrash Group, which has a lot of transient business and leisure travel at its hotels. But the company was looking for ways to build up its national appeal to corporate travelers.

Low occupancy rates at the beginning of the pandemic compelled the company to begin talks with bigger hotel companies about brand affiliation options.

“We’ve always talked about maybe aligning ourselves with the right brand to get more corporate business and things like that,” Thrash said. “I think the pandemic rushed that decision along a little bit.”