The DJIA plunged 1,276 points while Nasdaq was down more than -5%, down 633. The S&P 500 fell 178 points and the 10-year treasury yield surged to 3.42%, up .06. Any hope the Fed would be slowing down interest rate hikes just went right out the window with today’s inflation numbers. Lodging stocks were hit rather hard. Those who got the worst of it include AHT with a -9% drop, SOND down -8%, AINC down -7% and SVC, HT and PEB each down -6% on the day.
According to Atlas Hospitality Group, during the first half of 2022, the total dollar volume for hotels bought in the Bay Area market in California was $660.5 million, down 66.8% from the $1.99 billion in hotel purchases during the first six months of 2021. During the first six months of 2022, California hotel purchases generated $3.45 billion in transactions, a slide of 33.6% from the record $5.19 billion in hotel deals in the first half of 2021. The average price for hotel purchases in the Bay Area during the first half of 2022 was $16.9 million, down 39.6% compared with the first six months of 2021, when the average hotel purchase was $28 million. The number of hotels bought was down 42.3% during the first six months of 2022 compared with the same period in 2021 and the number of rooms involved was down 57.9%. Atlas Hospitality stated interest rates and inflation are increasing, making it harder to complete deals.
Developer Zachary Kupperman and his partners purchased the Homewood Suites in Covington, LA from Deepak Patel in April and now intend to transform it into an 86-unit apartment complex called The Fairlane. The total acquisition and conversion cost will be approximately 9 million. Kupperman is partnering in the Fairlane venture with SL Capital Group. The partners are currently eyeing about 6 more properties in Louisiana and Texas for similar conversions of limited service, all-suite properties. Amenities will include two pools, a fitness center, business center, a co-working space, a small putting green and parking.
Sonesta International Hotels Corporation announced several key developments to support future expansion in Latin America and the Caribbean, including the renewal of its ongoing master franchise relationship with GHL Hoteles and the hiring of three lodging development leaders with extensive hospitality experience in these regions. The three lodging development leaders include Marco Roca, Development Lead – South & Central America/Mexico/Caribbean. Roca is a senior executive leader with over 30 years of global experience in real estate, hospitality, casinos and restaurants. Adrian Francois, Franchise Development – Latin America. Previously Francois was the executive global Senior Vice President of Sales & Development for CMNet. Jayson Clemons – RVP, Franchise Development Mexico & Caribbean. Most recently Clemons worked as an independent hospitality consultant on several projects for various clients in Europe, the Caribbean and Latin America.
Langham Hospitality Group announced it will own and manage a new luxury hotel and branded residences in downtown Seattle, slated to open in 2026. The Langham, Seattle and The Langham Residences will be housed in a new 42-story building rising up from the façade of the former Terminal Sales Annex Building. Once construction is complete, The Langham, Seattle will offer 187 spacious guestrooms and suites, a new destination cocktail bar at lobby level, and a wellness center with Chuan Spa, a pool, and a gym. The Langham, Seattle will also offer highly flexible banqueting and meeting spaces.
Salamander Resorts is expanding its resort portfolio to Southwest D.C. with the purchase of the Mandarin Oriental Hotel. To purchase the Mandarin, the Company partnered with Henderson Park, of London, for a $140 million deal. Work on the 373-room Salamander DC is scheduled to take place over the next few months. It will be business as usual at the hotel as enhancements are made to the courtyard, spa, fitness center, pool, lounge and restaurant.
Red Roof announced the opening of Red Roof Inn & Suites in Midland, TX. The 66-room hotel offers a seasonal outdoor pool, a fitness facility, and a guest coin laundry facility.
The Hacienda, in New Port Richey, FL, is set to reopen on September 15. Jim Gunderson bought the property and has been refurbishing it for the last four years.
Strada Development Group filed plans with the city of Henderson, NV for a 22-story project featuring 110 hotel rooms and 225 apartments. The project, The Waterfalls, would also include meeting rooms, offices and other commercial space, and a restaurant and sky lounge on the top floors. Strada hopes to break ground in mid-2023.
The SureStay Hotel by Best Western Spring North Houston has recently completed a $600,000 renovation of its guest rooms, lobby and outdoor pool. The Spring, TX property features 74 updated guest rooms, a business center, and outdoor pool.
Yesterday we reported on the NY Post article regarding the breach of IHG Hotels and Resorts’ technology systems. IHG did not agree with the commentary in that NY Post story and asked us to include this statement: Our security measures following the unauthorized activity in our technology systems are continuing. Since last week, our web, mobile channels and OTAs have been reactivated and our Reservations & Customer Care (RCC) call centers are back online and fielding calls from guests. As we work to maintain the stability of our systems, services may be intermittent.
Original Group expands its Temptations Resorts brand to the province of El Seibo in the Dominican Republic, specifically in the bay of Miches, with the opening scheduled for October 1, 2022, of its hotels for adults Temptation Miches Resort and Temptation Grand Miches Resort, with a total of 496 rooms and an investment of over $190 million. Temptation Miches Resort will offer 382 suites and Temptation Grand Miches Resort will offer 114 suites, along with entertainment areas and all-inclusive amenities. This is the first time that Original Group has expanded its Temptations hotels brand outside of Mexico. The construction of the two facilities began on September 4, 2020.
A $12 million renovation effort at Couples Sans Souci, in Ochos Rios, Jamaica, is scheduled to be completed by December 1, 2022. The massive overhaul to the five-star resort, famed for having its own natural mineral grotto, includes new culinary offerings and expansions to the Balloon Bar; upgraded facilities throughout the public spaces, including the spa; and a fresh, updated look in all the suites.
According to Skift, Generator has gained management control of Paramount, a 605-room hotel located in New York’s Times Square. The Company, owned by Queensgate Investments, had never managed a hotel as a third party, but instead, has had an ownership interest in its properties. CEO Alastair Thomann said the Company is ready for third-party management and they have more deals to announce shortly. Next year they start doing franchise deals and possibly licensing deals. Generator’s takeover of the Paramount, from RFT, will coincide with an extensive refurbishment of guestrooms and public spaces. If Generator follows its typical playbook, a lot of extra space in the Paramount will be streamlined. The takeover underscores how Generator will step toward becoming a more asset-light company.
DoveHill Capital Management currently has 15 properties across North America, including a concentration in Florida, and is not done investing. The Company rapidly expanded its portfolio through the pandemic focusing on off-market preferred equity investments. DoveHill made six of these investments for a total of $27 million, collateralized by six hotels: one each in New York City, North Carolina and Maryland, and three in Pennsylvania. To achieve its growth goals, DoveHill launched its Deal Reward Program, an innovative approach to sourcing new acquisitions. The Program offers DoveHill “deal partners” a fee of up to 50 basis points in addition to the seller-paid commission for sourcing and underwriting new investments. The Program also offers consultants the option of contributing capital and co-investing in the deals they source.
Hospitality Industry Veteran Phil Hugh announced the launch of Hugh Hotel Group, an organization focused on maximizing profitability and value for hoteliers through partnerships and relationships.
Hyatt Hotels Corporation announced the appointment of Arlie Sisson as senior vice president and global head of digital. Arlie will help the company continue to use digital to redefine on-property experiences for their guests and World of Hyatt loyalty members, experiment with new ways to drive high-quality direct revenue for hotel owners and innovate with emerging technologies. Sisson previously served as Chief Executive Officer of UpPurpose, a global technology SaaS platform.
Marcus & Millichap Capital Corporation hired Pete Fehlman as Managing Director. Fehlman will lead a Dallas-based hospitality finance practice. Fehlman will focus on hospitality and resort debt and equity advisory transactions throughout North America on behalf of institutional, middle market, and private clients. Fehlman was most recently a Managing Director in the Capital Markets practice at Hodges Ward Elliott.
Sonder Holdings Inc. announced changes to the Company’s Board of Directors, including the appointment of Michelle Frymire. Ms. Frymire served as Chief Executive Officer of CWT. Prior to serving as CEO, Frymire was President and CFO. She was also appointed to the United States Travel and Tourism Advisory Board. In addition, Manon Brouillette, Executive Vice President and CEO of Verizon Consumer Group, has resigned from Sonder’s Board of Directors in order to focus on her current professional responsibilities at Verizon.