Wyndham Hotels Predicts U.S. Franchising Growth Supercycle
Photo Credit: A guestroom at one of Wyndham's newsest brands, Tryp by Wyndham. Source: Wyndham. Wyndham Hotels and Resorts
Skift Take
The world's largest franchisor of hotels, Wyndham, makes a persuasive case that the U.S. is entering a multi-year boom in the franchising of economy — and midscale — hotels.
With turmoil rattling the markets short-term, it's easy to overlook factors that signal long-term optimism. Wyndham Hotels & Resorts executives touted on Wednesday an upswing in the number of hotel investors that believe the U.S. is entering a "supercycle" of growth that might last for a decade.
"Our franchisees are feeling that they're beginning a cycle that hopefully is going to run another 10 years," said president and CEO Geoffrey Ballotti during an earnings call with analysts. "Their leverage is down. Their balance sheets are in much better shape."
The term "supercycle" refers to above-average growth that defies the gravity of a typical economic boom and bust cycle. Historically easy-to-obtain financing at low-interest rates, a spike in government spending on infrastructure, and forecasted comparative weakness in alternative real estate assets may push the franchising of roadside, economy, and midscale hotels into a multi-year expansion.
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