Wyndham has announced a new plan this week. open 100 new hotels in Saudi Arabia in the next 10 years. All will be under Super 8, one of its most budget-friendly brands, in contrast to the luxury brands Saudi Arabia has signed over the past few years.
Dimitris Manikis is Wyndham EMEA’s President. He told Skift: “I have always maintained that for Saudi Arabia to reach its numbers and targets, and to provide a holistic model of hospitality, it must be inclusive, and not exclusive.”
According to Knight Frank, only 6% of Saudi’s hotel pipeline is in the economy and midscale segments.
Manikis said the plan was a part of Saudi Arabia’s evolution. The hospitality industry in Saudi Arabia is going through its full cycle. It started with luxurious. The trend is moving to branded homes. We will be able to use it in both the premium and economy economy. It will accomplish exactly what I have been saying for years. It will make traveling possible for everyone.”
Saudi Arabia’s tourism authority has told Skift that it will be launching its website in May 2024. just 20% of the kingdom’s eventual hotel supply would be four-star and above.
What is the Timeline of Events?
The first Super 8 is expected to open in the middle of next year. Saudi hotel operator Le Park Concord will manage all properties as part of a franchise agreement. Manikis stated that while 100 hotels is the ultimate goal, only three hotels are currently being discussed.
“At this moment, [Le Park Concord] He explained that at least two or even three parties are involved in the negotiations. “As time goes on, they will continue to increase the number.” The proof of concept is what I consider most important at this stage. Once you’ve got the first two, three, and the proof of concept again, there are no limits.
Manikis anticipates a slow beginning after the debut next year, but that will accelerate as more people become aware.
“You’ll see that the approach will be phased, and you’ll gain more traction with time. In the beginning you will see less growth. You will see that once we have traction and prove our thesis and hypotheses, there will be more growth each year. The proof of your hypothesis is what matters.”
Where Will They be?
Property will be distributed throughout the country including Riyadh Jeddah Makkah Madinah Al Khobar/Dammam as well surrounding areas. They will be situated wherever there is the most infrastructure being built, including highways which connect developed areas of the country.
Manikis stated: “Wherever there is a need, and wherever the opportunity is, as infrastructure develops throughout the kingdom, we will be focusing our efforts on developing these Super 8s.”
Manikis explained that 30% of hotels would be converted from existing ones and 70% new construction.
Wyndham, in particular, sees an opportunity to connect Saudi’s numerous unregulated hotel using the Super 8 trademark. The most unlicensed hotels can be found in Saudi Arabia’s holy cities which are the main tourist destinations. The authorities announced at the beginning of 2023 that they have closed more than 300 hotel and furnished apartments in Makkah, and Medina. failing to comply with standards.
Manikis explained that “my belief is that once people and owners see the success and ease of conversion of these Super 8s, they’ll be demanding the funds to convert those smaller, independent properties into Super 8s or convert their hotel to the Super 8 brand.”
What about funding?
Wyndham is not using public funding, unlike most of the large-scale hotel deals you see in Saudi Arabia. Super 8 construction is less expensive than other brands. However, when done in mass, costs can add up.
Manikis would not give a cost for the 100 hotels that could be built, but Le Park Concord said it will announce a fund soon.
They are putting together a REIT (real estate investment trust) to support the construction of Super 8s. They already have buckets and funders.
Manikis, Wyndham’s CEO, said that he is not only bucking trend by pursuing private investments but also avoiding government funding.
He said, “At present, the government has limited its exposure to funding. While the government has ticked the box, neither we nor our partners are dependent on government funding. They have their sources of funding. It’s true that this business model is more sustainable and valid because it’s investor-driven.
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