ORLANDO, Florida—Forecasted returns and operational synergies were the driving factor in Wyndham Hotel Group’s decision to develop its first fully owned property, The Wyndham Grand Orlando Resort Bonnet Creek, president and CEO Eric Danziger told HotelNewsNow.com.
“This is a rare, but appropriate exception to our asset-light business model,” Danziger said.
He cited “operational and other synergies” with Wyndham Vacation Ownership, which has a 1,149-unit timeshare resort near the Wyndham Grand.
For example, all guests at both Wyndham Grand Orlando Resort Bonnet Creek, the hotel, and Wyndham Bonnet Creek Resort, the timeshare property, have access to both property’s amenities, including pools, recreation facilities and the hotel’s spa, food-and-beverage outlets, fitness center and game room. Both properties also share security and transportation services as an added convenience for guests.
“From a customer perspective, guests staying at either property receive the great added bonus of having access to a multitude of amenities,” said Jurgen Schafers, GM at the hotel.
The 400-room Wyndham Grand was announced in May 2006, financed internally, and broke ground in April 2008. After a delayed construction, it opened 1 October. Wyndham plans to hold on to the asset, Danziger said.
“This was a unique opportunity to establish a world-class Wyndham hotel just inside the gates of Walt Disney World,” he said. “We broke ground on the project in April 2008 but decided soon thereafter to slow development. Like everyone else, we were unsure as to how long the downturn would last and what profile the recovery would take.”
Development Ad Will Appear Here
Since opening, the hotel has been doing “very well,” Schafers said.
“We’re very excited about the energy and excitement it has received; this is especially exciting as we go into the holiday season,” he said. “With each weekend, we are seeing increased occupancy and a good mix of leisure and group business.”
Danziger wouldn’t discuss forecasted performance, but said “we anticipate this property being quite successful.”
New construction
Outside of the diversion from today’s typical franchising model, the opening of the flagship Wyndham hotel is unique in that it is a newly constructed property in a time of severely muted industry supply growth.
The total active U.S. hotel development pipeline comprises 2,951 hotels, a 13.3% decrease compared to this time last year, according to data from the September STR/McGraw Hill Construction Dodge Pipeline Report. However, a large number of rooms are under construction in key U.S. markets such as Orlando, New York, Miami and Washington, D.C.
In Orlando specifically, year-to-date occupancy is at 70.1%, up 6.7% from the same period last year, according to data from STR, parent company of HotelNewsNow.com. Average daily rate is up 4.4% to US$95.53, and revenue per available room is up 11.4% to US$66.95.
Supply in Orlando is up 0.2% year to date, while demand is up 6.8%, according to STR. There are seven hotels representing 2,833 rooms under construction in Orlando. There are an additional seven hotels in the final planning stage and 17 more in planning.
Some key projects in Orlando, other than the Wyndham, are Disney’s Art of Animation Resort, which will feature 1,984 rooms and open in phases beginning June 2012. A 450-room Embassy Suites will open in fall 2012, and construction on a 444-room Four Seasons Resort at Walt Disney World will begin later this year.
The Wyndham Grand Orlando Resort Bonnet Creek was designed by interior design firm Baskervill and constructed by Welbro Building Construction. It will be managed by Wyndham Hotel Management, which operates 21 hotels in the Wyndham Hotels and Resorts portfolio and eight in Ramada’s portfolio.