PARSIPPANY, NJ—Underscoring its ongoing effort to increase the Wingate brand’s presence in major markets throughout the U.S. and Canada, parent company Wyndham Hotel Group has inked a multi-property development deal with Corinthian Development Company.
As part of the agreement, Corinthian—along with a capital partner with hospitality development experience—will deploy up to $250 million of total capital to develop more than 15 new-build properties for the midscale brand, which currently consists of 153 hotels in the U.S., Canada and Mexico.
According to Bob Loewen, EVP and COO, Wyndham Hotel Group, “This development deal is about getting Wingate in the top markets.”
Corinthian is a Morgan Hill, CA-based developer of retail, healthcare and themed entertainment destinations, in addition to hospitality. Loewen noted the company has been in discussions with Corinthian—which has also done construction for a number of other traditional hotel brands—for the better part of two years.
“From early on, we talked about raising money and building Wingates in key markets where we need the distribution. They loved the idea; that’s in their sweet spot. So, it’s taken a while to put together, but I think we have a great combination of companies now,” he said, adding that Wyndham Hotel Group is hopeful that the deal will eventually expand to include more than 15 hotels.
Initial sites planned for development include Denver, Seattle and Nashville, TN, and other targeted markets are Boston, Chicago, Los Angeles, New York, Toronto, and Vancouver.
In 2014, Wingate introduced a new-construction prototype designed to reduce development costs. Loewen noted per-key development cost now ranges from $68,000 to $105,000, excluding land costs.
Loewen added that the new prototype was undoubtedly a factor in the deal. “It’s a big part of it. We had started working on the new prototype, and we spent lot of time with Corinthian as well on it. How do we take costs out of it? How do we make it relevant and competitive in today’s marketplace? They were able to strip significant costs out of it but keep the same customer experience for it,” he said.
Loewen added for the new prototype, which features roughly 100 rooms, the company reconfigured some of the room sizes, which had been unusually large. “They put the space where the customer was looking for it,” he said, noting the bathrooms were made larger. Loewen noted the traditional two-story lobby was reconfigured as well to add two bays to the construction.
As part of the most recent development deal, the franchised hotels will be managed by Dallas-based Aimbridge Hospitality. Loewen touted the abilities of Aimbridge, which already manages some 30 properties for Wyndham Hotel Group, primarily under the Baymont brand.
“You need real scale to be successful in limited-service management, and I think Aimbridge has that kind of scale. They have a lot of properties throughout the country, so they can leverage that infrastructure on the management side. They have a lot of expertise, and they’re great partners to work with,” he said.
The limited-service brand, which is primarily new-construction, has some 20 properties with more than 1,900 rooms in the pipeline. Loewen said that, while the brand continues to emphasize new-builds, it would consider a conversion or what the company calls a “readaptation” in high-barrier-to-entry markets. Loewen referenced the company’s property in LAX airport, which was previously a Hampton Inn, as a prime example.
In terms of brand recognition, Loewen maintains there has been a lot of progress, but reiterated the importance of the current distribution strategy. “The customers who go visit the hotel love it, but we’re not in the big markets,” he said.
In addition to the new development deals, the brand is under the direction of new leadership. Long-time Wyndham executive Brian Krause—who was previously regional director, franchise development—was named VP, brand operations for Wingate in May. “He’s taken over the brand, he really understands selling the brand. I think he will be a great leader for the brand,” said Loewen.
The brand’s marketing team also underwent some personnel changes. Loewen noted it has increased regional development programs as well, in the hopes of ramping up distribution. “It’s all about growing this brand,” he said.