Wyndham Expects Consumer Confidence to Fuel Summer Travel
Wyndham Hotels & Resorts is developing a record-high number of rooms amid its anticipation of a healthy summer season.
The hotel chain released earnings Thursday (April 25) showing it has 243,000 rooms in its development pipeline, an 8% increase year-over-year, primarily at the company’s “midscale and above” properties.
Management said Wyndham is targeting higher-end properties in the wake of Choice Hotels’ failed $7.8 billion takeover bid, which ended last month.
“I would say actively we are certainly pushing into higher chain scales … but we will always be looking to lead in the economy segment,” said CEO Geoff Ballotti.
Asked during an earnings call about Wyndham’s anticipation for the summer travel season, the chief executive noted there is some “concern” about middle-income guest traffic weighing on the company.
“But what we’re seeing is that that middle-income guest is more employed, and we look at their wages and their savings, it’s they’re higher than they were back in pre COVID levels,” Ballotti said. “Their home prices are up, their stocks are up, their deposit levels are stable and they’re in good shape.”
Consumer confidence is growing too, he added, with the company seeing longer lengths of stay.
“Booking windows, we look at daily, and they continue to tick up. We talked about our trends looking out to Memorial Day weekend and into May,” said Ballotti. “But our booking windows are similarly up 7% to last year from 19 to 21 days now.”
Recent research and reporting by PYMNTS shows that the travel sector may have cause for optimism this summer.
Younger and more affluent shoppers are showing resilience when it comes to spending on travel and other experiences, a trend that recently led American Express to note that Generation Z and millennial consumers made up the bulk of its new accounts. Spending on travel and entertainment was up 8% during the credit card company’s most recent quarter.
Meanwhile, toymakers Hasbro and Mattel both recently reported a decline in revenue from their consumer product divisions as people turn their income toward experiences.
“During times of economic uncertainty, consumers may turn to experiences as a means of seeking comfort, stress relief, and escape from everyday worries,” PYMNTS wrote earlier this week. “This could lead to increased spending on experiences that provide emotional fulfillment and relaxation, such as dining out, vacations, or attending concerts and events, even if shoppers need to cut back on spending on products to afford these.”
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