Business Travel Will Return to Pre-Pandemic Levels by Late 2023

The DJIA fell 154 points but Nasdaq was flat while the S&P 500 fell 9 points and the 10-year Treasury yield was up .02 to 3.05%. Lodging stocks were mixed. The biggest mover was SOND, up 6%.

Citigroup upped its price target on Sunstone Hotels to $12 from $10.50.

Morgan Stanley upped its price target on Airbnb to $125 from $100.

The New York Marriott Marquis announced the completion of an extensive renovation. Situated at the epicenter of Times Square, the comprehensive transformation includes 1,971 newly designed guestrooms and over 110,000 square feet of modern meeting and event spaces. New York Marriott Marquis has now partnered with Union Square Hospitality Group and Union Square Events on the food and beverage concepts at three updated restaurants, as well as the catering for hotel events. The property also features an expansive eighth-floor Atrium Greatroom lobby.

Flag Luxury Group, developer of The Ritz-Carlton Residences, New York, NoMad, announced that 50% of the property’s Residences sold before the hotel even opened and for record-setting prices. The hotel opened last week and includes three dining destinations, a Ritz-Carlton Spa and Fitness Center, and business meeting spaces including a vast outdoor terrace. 

Three factors are contributing to the slower recovery of business travel demand: company work-from-home policies, executives reevaluating the value of business travel and a broader economic slowdown. According to CoStar, hotel demand from business travelers, which has been the slowest to bounce back in the U.S. hotel’s industry’s recover from the COVID-19 pandemic, will return to peak 2019 levels by the end of next year. Year to date, the occupancy gap to pre-pandemic 2019 levels is widest both at hotels in urban locations and in the middle of the week. Hotels in urban locations are trending in the right direction, but still have the greatest shortfall or gap to the 2019 comparison. While weekend demand is basically fully recovered, lower midweek hotel demand points to business travelers booking fewer rooms. Traditional shoulder days, Sundays and Thursdays, have recovered almost as rapidly as weekends, and certainly recovered more quickly than weekdays.

Sonesta Irvine, formerly Sonesta Irvine, Orange County Airport, announced the completion of an extensive $20 million renovation. The hotel offers 339 dramatically updated guest rooms, a modern lobby, an indoor pool, an exciting new dining destination and a newly outfitted fitness studio. Sonesta Irvine boasts nine flexible meeting rooms comprising more than 8,700 square feet of function space, including a 3,700 square foot ballroom. The hotel is the first Sonesta property to introduce the Sonesta Work Suites, a new multi-zone functional space that accommodates both small gatherings and large groups. 

Charlestowne Hotels announced the addition of Hotel One75 to its growing collection of university properties. The newly refurbished hotel, located one mile from Colgate University, offers 93 rooms making it the largest lodging venue in the Village of Hamilton, NY. The property features a banquet rooms and an outdoor courtyard with a fire pit and lawn games. Hotel One75 is Charlestowne’s eleventh hotel in a university market. 

In Cincinnati, OH, the developer converting the former Covington YMCA building into a $22.5 million extension of the Hotel Covington plans to expects guests before the end of the year. On October 22, the Salyers Group and vR Group will host their first event in the ballroom of what they’re calling North by Hotel Covington, a conversion of the city’s former YMCA building into a bourbon experience, bridal showroom and 53 luxury suites and lofts.

The Grand Adirondack Hotel, located in Lake Placid, NY, is set to reopen on August 31 after nearly two years of construction and more than $20 million in renovations. Formerly the Hotel Marcy, the hotel offers 92 rooms and multiple dining venues including a rooftop bar and event space that may not open until spring. A Main Street mainstay for more than 93 years, Wright Investments purchased the hotel in 2018 from Northwoods Inn LLC. The Grand Adirondack Hotel is housed under the Marriott Tribute brand.

Duetto announced its revenue strategy platform has been selected by Soul Community Planet. Duetto GameChanger has been implemented for SCP Hotel room revenue optimization and Duetto ScoreBoard for business analytics and reporting.

HREC Investment Advisors arranged the sale of the 2.13-acre Murrieta Gateway Hotel Development site in Murrieta, CA. The site will be developed into a five-story, 120-room Home2 Suites by Hilton. The buyer is Mid-Continent Hospitality. HREC Investment Advisors exclusively represented the seller on this transaction.

Driftwood Capital provided financing to an institutional owner of hospitality assets across the U.S. for the acquisition of an economy, extended-stay hotel portfolio located predominately in the Southeast. The proceeds cover the acquisition of 26 hotels, the majority of which operation under the G6 Hospitality Brand totaling 3,067 keys, along with the refinancing of an additional 15 hotels. Through its lending fund, Driftwood Lending Partners, Driftwood originated a three-year, $44.5 million mezzanine loan, with two one-year extension options. The mezzanine loan sits behind a $226 million senior facility, originated by Starwood Property Trust.

Europe Highlights

Marriott is set to open a new UK hotel under its lifestyle Moxy brand in Plymouth next year. The 200-room, new-build Moxy Hotel Plymouth will be situated on Millbay Boulevard. Completion is expected in early 2023. The six-floor hotel will feature a ground-floor restaurant and bar. The £6 million Millbay Boulevard project will also eventually comprise residential, office and retail spaces, as well as a new public square. 

TRIBE Hotels announced the opening of TRIBE Canary Wharf in the United Kingdom, marking the band’s eighth hotel. The first lifestyle boutique hotel in the area features 320 rooms set across six floors, multiple food and beverage options and a sun-soaked terrace. 

The boutique lifestyle brand, Thompson, recently announced the September opening of a new 197-key property in Spain. Thompson Madrid is set within two historic buildings in the Spanish capital’s Golden Mile District. The 10-story hotel has 175 rooms and 22 suites, three dining venues, a rooftop pool, fitness center, two ballrooms and a variety of meeting/event spaces. In addition to the new Madrid location, the brand is planning a 2023 opening of Thompson Shanghai and Thompson Vienna in 2024.

The MAXX Hotel Aalen has celebrated its opening in the city of Aalen, Germany. In addition to 133 modern, spacious guest room and suites, the new hotel features three conference rooms, a fitness and wellness area and an onsite restaurant. MAXX Hotel Aalen is the sixth hotel under the midscale brand name MAXX by Deutsche Hospitality and is operated by Scoop Hotels GmbH.

MDJM LTD announced that its wholly owned subsidiary in the United Kingdom, MD Local Global Limited agreed to purchase Fernie Castle Hotel from Braveheart Hotels Limited. Fernie Castle Hotel, located in the heart of Fife, Scotland, is situated in 17 acres of woodlands with its own lake. The company intends to position the castle as the headquarters for its business in iconic assets and plans to maximize the castle’s unique historical and cultural value through branding and other strategic initiatives.