LuxUrban adds 16 hotels to Wyndham’s Trademark Collection

Dive Brief:

Hotel operator LuxUrban Hotels Inc. will bring 16 of its properties into Wyndham Hotels & Resorts’ Trademark Collection brand later this year, the company announced Thursday. The hotels encompass approximately 1,400 rooms in New York, Los Angeles, Miami, Washington, D.C., and New Orleans.
As part of the newly signed deal, Wyndham will provide financial, sales and operational support to LuxUrban, which acquires the operating rights to hotels in key urban locations under long-term Master Lease Agreements.
LuxUrban anticipates the new deal will help advance its asset-light, acquisition-driven growth strategy. In recent months, the operator has signed multiple MLAs and expanded its presence in major U.S. cities, particularly New York.

Dive Insight:

As part of the deal, Wyndham will provide LuxUrban with growth and working capital in the form of development advance notes for existing and future projects, LuxUrban Chairman and CEO Brian Ferdinand detailed in the release.

The deal will provide financial, brand and operating advantages that “make LuxUrban an even more attractive solution for property owners looking to employ [its] asset-light, triple-net lease alternatives, particularly those looking to tap into new sources of capital while maintaining ownership of their asset,” Ferdinand said.

The hotels part of the deal will maintain their LuxUrban branding, similar to the other 185 hotels in the Trademark Collection.

“So many hotels today, particularly those in urban destinations, have a distinct character and unique charm that hoteliers want to hold on to,” Wyndham Chief Development Officer Chip Ohlsson said in a statement. “At the same time, they want the visibility, distribution and support that comes with being part of a well-known brand. Trademark gracefully bridges that gap, affording hoteliers the opportunity to maintain their independence while unlocking the resources of the world’s largest hotel franchisor.”

The deal has put the 2017-founded LuxUrban in “the best position in [its] history to accelerate growth, enhance cash flow and capture the benefits of scale,” Ferdinand said.

Expansion is already underway for LuxUrban, which grew its presence in New York City and Los Angeles in the second quarter. In May, the operator signed a 25-year MLA for the Condor Hotel in the Williamsburg neighborhood of Brooklyn and a 15-year MLA to operate the Trinity Hotel in L.A. In June, LuxUrban signed separate 35-year MLAs for two properties in Times Square.

LuxUrban’s Vice President of Operations, Brandon Elster, previously told Hotel Dive the company plans to continue expanding in NYC and is targeting Boston as a new market to enter.

There is future growth opportunity within Wyndham’s network as well. According to the release, this deal paves the way for other LuxUrban hotels, even those not yet acquired, to join Trademark Collection further down the line.