Wyndham and Soliteight Bet Big on Budget Travel in Spain and Portugal with Super 8 Expansion

The hospitality sector’s post-pandemic rebound has been uneven, but one segment is proving particularly resilient: budget travel. Amid rising inflation and shifting consumer priorities, travelers are increasingly seeking affordable accommodations without sacrificing quality. Now, Wyndham Hotels & Resorts (NYSE: WH) and Spanish real estate firm Soliteight have announced an ambitious partnership to capitalize on this trend: expanding the value-driven Super 8 brand to Spain and Portugal with 40 new hotels over the next decade. The move underscores a strategic bet on two of Europe’s most tourism-dependent economies—and one that could reshape the competitive landscape for budget lodging in the region.

Spain and Portugal are among the world’s top destinations for global tourists, with combined annual visitor numbers exceeding 100 million pre-pandemic. Even as travel rebounded in 2022 and 2023, however, occupancy rates for mid-range and luxury hotels have lagged behind pre-2020 levels. By contrast, budget hotels have thrived, driven by younger travelers, families, and business travelers seeking cost-conscious options. The Super 8 brand—known for its no-frills, high-value proposition—is a natural fit for this market. For Wyndham, which already operates nearly 8,000 hotels globally, the expansion represents a chance to deepen its footprint in a region where its competitors like Marriott (MAR) and Hyatt (H) have historically focused on upscale segments.

The economics of the partnership are compelling. Soliteight, which specializes in hotel development and management in Iberia, will handle local construction and operations, while Wyndham provides branding, technology, and supply-chain efficiencies. The 40 hotels—projected to total around 5,000 rooms—could generate over $1 billion in lifetime revenue for Wyndham, assuming average occupancy rates and pricing. But the real value lies in market share. In a region where 60% of hotel rooms are budget-tier, Super 8’s entry could pressure smaller, independent operators to consolidate or cede ground to a brand with global scale.

Yet the plan isn’t without risks. The hospitality industry remains cyclical, and Spain and Portugal’s tourism economies are highly sensitive to external shocks—from geopolitical tensions to currency fluctuations. The euro’s recent volatility, for instance, has already made European travel more expensive for U.S. tourists, potentially dampening demand. Additionally, competition is fierce. Brands like Ibis (part of Accor) and Travelodge (Whitbread) already dominate the budget segment, and local operators often offer deeper discounts on rooms and amenities.

Still, the math for Wyndham appears favorable. The company’s economy-focused brands, including Days Inn and Ramada, have been growth engines in North America, contributing over 40% of its global RevPAR (revenue per available room) gains in 2023. Expanding Super 8’s reach into Europe could replicate that success. Analysts estimate that Iberia’s budget hotel market alone could grow at 4-5% annually through 2030, outpacing the broader sector by two percentage points. And with Soliteight’s local expertise—particularly in navigating Spain’s complex land-use regulations—the partnership reduces execution risk.

For investors, the move offers a window into Wyndham’s broader strategy: leveraging its scale to dominate undervalued markets. The company’s stock, which has outperformed the S&P 500 by 25% over the past five years, now trades at 18.5x forward earnings—slightly below its five-year average but within a range that suggests further upside if the Super 8 rollout meets targets. Meanwhile, the partnership’s emphasis on franchising (rather than owning properties) aligns with Wyndham’s low-risk, high-margin model, where profits are less tied to construction costs or occupancy variability.

In conclusion, Wyndham and Soliteight’s venture into Spain and Portugal is a shrewd play on two converging trends: the enduring appeal of budget travel and the underpenetrated European market for value-driven brands. With 40 new hotels and 5,000 rooms on the horizon, the partnership could deliver both top-line growth for Wyndham and a stronger foothold in a region that’s critical to the global travel economy. While risks remain, the data—from occupancy trends to brand performance—suggests this is a bet worth watching. For investors, it’s a reminder that in hospitality, as in many industries, the winners are often those who see the future before it arrives.