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North America

IHG’s Data Breach Concerns

Alan Woinski and Kim Woinski

September 12th, 2022

Skift Take

  • The DJIA rose 230 points while Nasdaq was up 154, the S&P 500 rose 43 points and the 10-year treasury yield was up .04 to 3.36%. Lodging stocks were modestly higher.
  • IHG’s hack appears to be a lot worse than the ones at other hotels as the ransomware attack may very well impact their 3Q results as they continue to have their online reservation system crippled by the attack.
  • Watermark Lodging Trust said the proposed acquisition of the company by private real estate funds managed by Brookfield was approved by its stockholders.

The DJIA rose 230 points while Nasdaq was up 154, the S&P 500 rose 43 points and the 10-year treasury yield was up .04 to 3.36%. Lodging stocks were modestly higher. The biggest mover of the day was to the downside with SOND falling -7%,

We didn’t cover the recent news of a data breach at IHG Hotels and their Holiday Inn unit because we go by if we cover something from one company we have to cover them all and at this point it may be less news to report on who HAS NOT had a data breach. The one from IHG appears to be a lot worse than the ones at other hotels as the ransomware attack may very well impact their 3Q results as they continue to have their online reservation system crippled by the attack. The NY Post said some franchisees told them significant disruptions continue, nearly a week later. Occupancy rates have plunged at Holiday Inns as a result of this and it looks like this impact may be there for some time. The NY Post said franchisees are telling them that they have been trying to get in touch with IHG and have not been getting answers and that a class action lawsuit is likely.

The Baird/STR Hotel Stock Index was down -2.7% in August from July. Year to date the index is down -12.6%. The brand sub-index was down -2.3% in August while the hotel REIT sub-index was down -3.7%. The hotel REIT sub index is only down -8.7% in the first 8 months while the brand index is down -13.8%.

Watermark Lodging Trust said the proposed acquisition of the company by private real estate funds managed by Brookfield was approved by its stockholders. WLT common stockholders will receive cash consideration of $6.768 per Class A share and $6.699 per Class T shares with the transaction expected to close on or about October 21.

Hersha Hospitality Trust has entered into definitive agreements to sell Hotel Milo Santa Barbara and Pan Pacific Seattle for gross proceeds of $125 million. Hersha intends to use the proceeds from the sale to pay down approximately $45 million of debt and expects to utilize the remainder for general corporate purposes including, but not limited to, additional debt repayments and dividend payments.

Hilton Worldwide Holdings Inc. has tapped a major development project in Manhattan’s Times Square to debut a boutique hotel, which will be the first under the new Tempo by Hilton flag. The 36-floor hotel will feature 661 rooms when it opens next year. It is part of TSX Broadway, a $2.5 billion tower, located next to Times Square’s red bleachers, and is being built by L&L Holding Co. and Fortress Investment Group. A large portion of the building will be occupied by TSX Entertainment. The hotel will be managed by Hilton.

RLJ Lodging Trust announced the October 1 re-launch of The Mills House Hotel, located in the heart of downtown Charleston’s historic French Quarter neighborhood, following a transformative conversion to a lifestyle hotel and affiliation with the Curio Collection by Hilton, the brand’s first property in South Carolina. The repositioning of this 218-room property included a complete re-imagination of all the original guest rooms and the addition of premium suites. The hotel will now offer multiple new food and beverage concepts, a lush hidden garden complete with fireplaces and shade canopies, first-floor communal spaces, a courtyard, second-floor pool deck and terrace with a new pool bar. 

RLJ Lodging Trust also announced the re-launch of Zachari Dunes on Mandalay Beach, a Curio Collection by Hilton in Oxnard, CA. On October 1, 2022, it will relaunch as a 250-suite lifestyle resort, following a transformative renovation and brand conversion. The company’s full scale re-imagination and rebrand of the resort includes a complete transformation of all the hotel’s suites, the grand arrival experience and the communal public lounge. Zachari Dunes boasts the additional of multiple new food and beverage concepts, a gear rental shop, and a 30% increase in upgraded meeting and outdoor events space. Additional enhanced public spaces include an expansive heated pool and hot tub, with updated lounge seating and cabanas; several inviting outdoor gathering hubs; and a fitness center.

OTO Development announced the grand opening of the Hyatt Place Panama City, the first Hyatt Place hotel in Bay County, FL and the first beachfront Hyatt property along the Gulf of Mexico. The new 11-story hotel features 224 guestrooms and suites; a pool with a lazy river, hot tub and private cabanas; a waterfront fitness center; convenience market and 1,316 square foot meeting and event space, which extends onto a covered balcony. In addition, Hyatt Place Panama City beach is the third location to house Coconut Charlie’s Beach Bar & Grill. 

Kalyan Hospitality has acquired The Berkeley Hotel in downtown Richmond, VA for an undisclosed sum. The property features 55 guest rooms and a total of 4,000 square feet of meeting and event space. Planning is already in motion for an extensive full property renovation starting in the spring of 2023. 

The Mexican Caribbean’s hottest beach spot is getting a tiny new beach hotel. Casa Chablé, set to open on November 1, 2022, is the latest expansion for Chablé. The hotel, all about remoteness, is set 22 miles south of Tulum in the Sian Ka’an Biosphere, and has just 10 rooms and bungalows. Five rooms are set in the hotel’s main villa while the others are set on the beach, with three right on the sand. Casa Chablé is home to a lobby bar, a gourmet eatery, swimming pool, an oceanfront wellness cabana and a gym. There is also a rooftop lounge and bar with a plunge pool and private beach with canopy daybeds and hammocks. Casa Chablé is the fourth in the Chablé portfolio.

RH, formerly known as Restoration Hardware, announced the purchase of an 857-acre property in Napa with plans to develop the resort site into a high-end getaway. The purchase price of the former site of Napa Soda Springs Resort was not disclosed and RH would not provide further details on development plans.

It’s been three years since Mike Wampold and Lenny Lemoine acquired the 111-year-old Whitney National Bank building in New Orleans, LA with plans of redeveloping it into a mixed-use development anchored by a high-end, boutique hotel. The estimated total cost of the redevelopment project, including the purchase price for the iconic 14-story bank building and six adjacent structures, is now well in excess of $100 million. The developers have been shopping for an equity partner to acquire a stake in the project and serve as a co-developer. Plans call for turning four of the seven buildings into a boutique hotel. The hotel would likely cover the first several floors of the tower, with the remaining floors set aside for luxury multifamily residences or corporate apartments. The development would also include restaurants and retail on the ground floor.

Peachtree Group announced the promotion of Brian Waldman to chief investment officer and the appointment of Jeremy Stoler to executive vice president, debt capital markets. Waldman, who joined Peachtree in 2015, will manage Peachtree’s multi-billion-dollar investment portfolio and direct investment strategies across its distinct operating, lending and real estate divisions. Stoler will focus on supporting Peachtree’s operating companies and growth into other real estate sectors. Prior to joining Peachtree, he founded a real estate advisory firm for institutional clients.

Hospitality Ventures Management Group named Jim Haggerty vice president of design & development. Jim will provide innovative solutions that have added tremendous value to the organizations and owners he has worked with in the past. Prior to joining HVMG, Haggerty most recently served as senior vice president of brand development with Vivamee Hospitality.

Arch Amenities Group announced the acquisition of Innovative Spa Management, Privai and Spa Space, the latter of which it gained a majority stake. Innovative Spa Management provides spa consulting and management for the hospitality industry. Privai manufactures botanical skin-care products and is opening spa and salons. Privai operates five salons in the Washington, D.C. metropolitan area. Spa Space is a SaaS platform, software as a service, designed to improve spa utilization and drive revenue through a proprietary algorithm that evaluates customer preferences and connects them with a network of therapists and spas. The software provides real-time reservations and contact less check-in and check-out while automating payments, scheduling and staffing. In conjunction with the acquisition, Ilana Alberico and Christina Stratton, who co-founded Innovative Spa Management, joined the Arch Amenities Group executive team: Alberico as president of Spa Space and Stratton as chief product & creative officer in charge of Privai. Alberico will also provide spa and wellness thought leadership for Arch’s original spa management portfolio and oversee the day-to-day operations of Innovative Spa Management’s hotel spa clients.

Alan Woinski and Kim Woinski

September 12th, 2022

Companies: Arch Amenities Group, Brookfield, Curio Collection by Hilton, Hersha Hospitality Trust, Hilton Hotels & Resorts, Holiday Inn, Hospitality Ventures Management Group, Hyatt Place, IHG Hotels & Resorts, Kalyan Hospitality, OTO Development, Peachtree Group, RH, RLJ Lodging Trust, Tempo by Hilton, Watermark Lodging Trust

Locations: California, Charleston, Florida, Louisiana, Mexico, New Orleans, Santa Barbara, South Carolina, Tulum, Virginia

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