ATLANTA — Economy hotel demand in the U.S. has suffered in the last year, but Wyndham Hotels & Resorts CEO Geoff Ballotti has confidence in the segment's short- and long-term health.
Despite the fact that travel has suffered slowdowns and declines thanks to general economic volatility, Ballotti said he's "still bullish long term on a very resilient piece of our country's hotel industry," which are the economy to midscale hotel segments.
"Infrastructure spending is happening," he said during an interview at the Hunter Hotel Investment Conference. "We've been seeing it pick up and continue over the last two years."
He cited projects such as the high-speed rail line in the works between Dallas and Houston and airport expansion projects around the country as positive signs that infrastructure spending will bring new business to economy and midscale hotels.
But above all, Ballotti pointed to the resilience of middle-class travelers, and how the economy and midscale hotel segments typically outperform coming out of stressful times. The majority of Wyndham's more than 900,000 hotel rooms worldwide sit in the economy and midscale segments.
"We're 70% leisure, 30% business," he said. "Leisure travel has seen a pickup throughout 2024 ... and we're continuing to see longer booking windows and longer lengths of stay."
"Our economy and our midscale travelers are squarely middle class, and those middle-class travelers remain more employed than ever; their household savings are in good shape," Ballotti said.
Loyalty also has grown among Wyndham's core traveler cohort, which bucks the "myth" that economy travelers typically care less about loyalty than luxury travelers, he said.
In recent years, Wyndham launched new brands and brand partnerships to help keep its loyal members in the family — notably, Alltra by Wyndham midscale all-inclusive resorts, and Project HQ Hotels & Residences, a lifestyle brand partnership the company launched with SBE last year.
In January, Wyndham and SBE CEO Sam Nazarian said the first Project HQ will be a rebranding of the Hodges Bay Resort and Spa in Antigua, West Indies.
Ballotti said it's possible the brand will debut this year.
"It's something that we're very excited about," he said. "With [Nazarian's] brilliance in terms of bringing that food, that beverage, that nightlife, what he's planning for that resort is something we're really excited about."
Watch the video above for more from Ballotti about hotel development trends in today's economic environment and more.