Canada’s Hotel Pipeline for Q2 2022

The DJIA fell 58 points, Nasdaq was down 151, the S&P 500 was down 18 points, and the 10-year treasury yield was up .03 to 2.80%. The calm was nice while it lasted. Lodging stocks were mixed.

The second half of the earnings season included a sparkler from Hyatt, while IHG went back to returning money to shareholders with dividends and up to $500 million in share buybacks. Marriott Vacations also added $500 million to their buyback, while Hilton Grand Vacations met on revenue, beat on adjusted EBITDA by a wide margin.

We start out on a sad note as it was announced that Corry W. Oakes III, the CEO, who was also a co-founder, of OTO Development passed away unexpectedly on August 7. Oakes, Todd Turner and Jim Ovenden provided the initials to name the hotel development and hospitality management company they founded alongside George Dean Johnson Jr. and the late H. Wayne Huizenga in May 2004. OTO Development is part of The Johnson Group.

According to the recently released Q2 2022 Canada Construction Pipeline Trend Report from Lodging Econometrics, at the close of the quarter, the total construction pipeline in Canada stands at 261 projects/35,662 rooms, up 3% by projects year-over-year and up 7% by rooms YOY. In the first half of the year, Canada has 10 new hotel openings accounting for 1,053 rooms. LE’s forecast for new hotel openings predicts another 24 new hotel openings in the second half of the year, for a total of 34 projects/4,103 rooms to open in 2022. In 2023, LE is forecasting 38 projects/4,182 rooms to open and 2024 should see 43 projects/4,576 rooms open.

Canada Hotel Pipeline Q2 2022

Canada Hotel Pipeline Q2 2022 by Province

Canada Hotel Pipeline Q2 2022 by City

Canada Hotel Pipeline Q2 2022 by Company

Canada Hotel Pipeline Q2 2022 by Brand

Canada’s hotel performance was the highest of the pandemic era, with monthly hotel room rates reaching an all-time high, according to STR’s June 2022 data. June 2022 (percentage change from June 2019) is as follows: Occupancy: 71.7% (-2.8%); ADR: CAD197/87 (+8.8%); and RevPAR: CAD141.97 (+5.7%). In addition to the highest ADR level on record, the June RevPAR level was the country’s highest since August 2019, while occupancy was its highest since September 2019. Among the provinces and territories, Nova Scotia recorded the highest June occupancy level (79.7%), 5.5% above the pre-pandemic comparable. Among the major markets, Toronto saw the highest occupancy (84.4%), a 0.9% increase from 2019. Of note, Montreal, which hosted the Canadian Grand Prix, reached an occupancy level of 75.8%. The lowest occupancy among provinces was reported in Alberta (62.1%), down 2.1% against 2019. At the market level, the lowest occupancy was reported in Edmonton (-8.9% to 53.6%). 

The Hilton Dallas Lincoln Centre, in Dallas, TX, has completed a $24 million renovation of the entire hotel and conference center. Renovations began in 2020. The North Dallas conference center hotel renovation includes a full redesign of all 503 guest rooms, food and beverage outlets, and the hotel’s meeting spaces, totaling 55,000 square feet. The hotel’s meeting spaces were completely updated, including new furnishings, modern artwork, the latest in technology and the addition of a new 6,600-square-foot Lakeside Ballroom. Other updates include refreshed lobby areas, front and concierge desks, the fitness center, elevator landings, guest room hallways, public restrooms, safety and security systems, as well as upgraded internet capability.

Home2 Suites by Hilton announced the official opening of Home2 Suites by Hilton Wildwood-The Villages, in Wildwood, FL, the area’s first extended-stay all-suite hotel. Boasting 96 suites across four floors, the hotel features an expansive lobby area, The Oasis, outfitted with collaboration and individual workspaces and the brand’s Inspired Table. The property also offers the Home2 MKT, a business center, Spin2 Cycle, and a saline pool. The hotel is developed and owned by Liberty Group and McKibbon Hospitality manages and operates the property.

Rocket Hotels announced the opening of the Springhill Suites Raleigh Apex in Apex, NC. The six-story, 96 suites hotel offers 500 square feet of adaptable meeting space, a lobby bar, fitness center, indoor pool, guest laundry, electric-car charging stations and a 24-hour Market. 

Fairfield by Marriott announced the opening of Fairfield by Marriott San Jose Airport Alajuela, celebrating the brand’s debut in Costa Rica. The 120-room hotel delivers three event venues with 1,474 square feet of total function space, one signature restaurant, a fitness center, and The Corner Market. 

Sonesta International Hotels Corporation opened 13 hotels during the first six months of 2022, adding nearly 700 new guest rooms to its portfolio. The new hotels include: Americas Best Value Inn, Ocean Shores, WA; Americas Best Value Inn, Salmon, ID; Americas Best Value Inn, Lockhart, TX; Americas Best Value Inn, Hardeeville, SC; Americas Best Value Inn, Cameron Park, CA; Americas Best Value Inn, Sandpoint, ID; Americas Best Value Inn, Beaver, UT; Canadas Best Value Inn, Fort St. John, BC; Canadas Best Value Inn, Cold Lake, Alberta; Red Lion Inn & Suites, La Pine, OR; Red Lion Inn & Suites, Yakima, WA; Signature Inn, Oakland/Berkeley, CA; and the Knights Inn, College Station, TX. 

Hersha Hospitality Trust entered into a definitive agreement to sell seven of its non-core Urban Select Service properties outside of New York for gross proceeds of $505 million. The following hotels are included in the transactions: Courtyard Brookline; Hampton Inn, Philadelphia; Hilton Garden Inn M Street; Hampton Inn, Washington D.C.; Courtyard Sunnyvale; Courtyard Los Angeles Westside; and TownePlace Suites Sunnyvale. Hersha intends to use the proceeds from the sale of the USS Portfolio to provide immediate liquidity for a significant net debt reduction of approximately $460 to $480 million. In addition to approximately $390 to $410 million of corporate debt, the Company expects to reduce mortgage debt associated with the USS Portfolio by approximately $75 million. The transaction is expected to close in the third quarter of 2022. 

Wyndham Hotels & Resorts announced the upcoming opening of Wyndham Grand Cancun All-Inclusive Resort & Villas through a franchise agreement with Grupo Cancun. The resort, which will be the first Wyndham Grand in Mexico, is now accepting reservations and will open on November 1, 2022. The oceanfront property features 364 guest rooms, suites and villas, seven restaurants, five bars, four pools, a spa, gym, retail shops, beach club, tennis courts, a kids club, and more. 

IHG Hotels & Resorts announced the opening of its newly renovated Crowne Plaza Atlanta NE - Norcross Hotel, located in Norcross, GA. Owned and Managed by Apsilon Hotels, the property boasts 9,400 square feet of meeting and event space, an onsite restaurant and lounge, a fitness center, outdoor pool and sauna.

Ennismore announced the launch of its latest residential project, SLS Bahia Beach Residences, due to open in the heart of Novo Cancun, Mexico. The luxury residential tower will be set over 20 floors, accommodating 111 residential condominiums including 6 penthouses, games rooms, restaurant, pool, bar and gym. On completion, SLS Bahia Beach will be the fourth luxury tower of the successful SLS brand in Cancun, along with SLS Harbour Beach and SLS Marina Beach towers, which will together form an exclusive community in Novo Cancun.

The RMR Group is planning its first foray into Boston development with what would be one of the city’s tallest buildings: a 700-foot office and hotel tower near North Station. The project has not been formally proposed, but RMR representatives have had preliminary meetings with both the Boston Planning & Development Agency and District 1 City Councilor Gabriela Coletta.

In Calumet City, IL, Roaring Rivers Water Park is set to become the latest addition to River Oaks Mall, taking over the space that formerly belonged to Sears. The proposed attraction will feature a rooftop pool, lazy river, multiple slides, as well as an entertainment venue with arcade games and rock climbing. An adjacent hotel and conference center is also expected to break ground. Jackson Nuckolls Group will lead the development on the property, which is expected to debut in late 2023 or early 2024.

Plans for a hotel and conference center in downtown Frederick, MD, are expected to come before the city in the fall, the next step in the lengthy process between the city and Plamondon Hospitality Partners. The planned 200-room Marriott-branded hotel, on the former site of the Frederick News-Post, is also expected to include 22,000 square feet of meeting and event space. While the city will control the property, the hotel and conference center would be built with private funds on a long-term lease with Plamondon Hospitality Partners.

HREC Investment Advisors arranged the sale of the TownePlace Suites by Marriott Dallas Las Colinas in Irving, TX. HREC Investment Advisors exclusively represented the seller, a special servicer, on the transaction. NewcrestImage acquired the 135-room property and plans to complete extensive property renovations while retaining the Marriott flag.

Marcus & Millichap announced the sale of Sleep Inn Kingsland, a three-story, 72-room hotel in Kingsland, GA. The 1.23-acre property sold for $6,200,000. Marcus & Millichap’s Miami office had the exclusive listing to market the property on behalf of the seller, Kingsland Lodging Masters, LLC. The property was purchased by Red Diamond Hospitality, LLC. 

Personnel Moves

McNeill Investment Group announced that CEO Phillip H. McNeill, Jr. will transition to the new position of Executive Chairman of McNeill Investment Group. In that role, he will oversee the Board and provide strategic direction to the company. Concurrently, Chief Financial Officer Chris Ropko becomes Managing Director, Chief Executive Officer of McNeill Investment Group, with responsibility for the growth and strategic oversight of the company’s restructured organization.

Inspirato Inc. appointed Scott Berman as a director to its board of directors. Berman most recently served as a Partner and Industry Leader of PricewaterhouseCoopers LLP hospitality and leisure consulting practice.

Europe Highlight

Travelodge unveiled the first two new-build hotels featuring its recently-launched “budget luxe” design concept. The 350-room London Docklands Travelodge is the seventy eighth property in the capital. The 69-room Hexham Travelodge is the second Travelodge property to open in the North East in the last seven months, joining Newcastle Cobalt Business Park Travelodge. The two new hotels bring Travelodge’s UK, Ireland and Spain portfolio to 595 properties. Travelodge is actively looking for 127 hotel sites across London, and 16 in the North East, including potential new destinations for the band in Beverley, Bridlington, Headingley, Grimsby/Cleethorpes, Knaresborough/Wetherby, Northallerton, Ripon, South Shields and Thirsk.