Upbeat Expectations for 2023

The DJIA rose 30 points while Nasdaq was up 86, the S&P 500 rose 13 points and the 10-year treasury yield was down .01 to 3.41%. Lodging stocks were mixed. VCSA was up 6%, SOND was up 5% while AINC was down -5%.

Truist reported on a call they held with the CEO of hotelAVE. The takeaways included that they saw leisure demand start to slow in May while group and corporate recovery is now benefiting from urban and convention hotels. For next year, hotelAVE is expecting group and corporate growth to exceed 2019 levels with corporate at 85% of 2019 levels. Group demand could grow 18% year over year and corporate at 15%. They are expecting a leisure decline of about -5% year over year. ADR will continue to grow with group up 5% and corporate up 10%, making up for an expected flat leisure ADR. As for supply growth, hotelAVE does not see much of it through 2027. There are 20% fewer rooms under construction as of June 2022 versus June 2021 and 11% fewer rooms in the planning stage. 1.2% CAGR is the growth they expect over the next 5 years, well below the 1.8% long term average CAGR. Upscale and Midscale are forecasted to represent higher growth rates of 2.8% and 2.3% in 2023 and 2.8% and 2.6% in 2024.

JP Morgan reported on meetings held with Wyndham Hotels’ CEO and SVP, IR. JPM said the meetings were generally upbeat, reflective of strong demand and pricing trends as well as steady new development and conversion signings. JPM said the new Project Echo extended stay brand, tuck-in franchise acquisitions and continued execution on improving retention should allow WH to accelerate its footprint growth over the next few years. With WH’s 99% franchise model and select service focus, JPM thinks they will outperform the overall US lodging industry. They see the company accelerating capital return given excess cash/liquidity and a low net leverage position.

STR reported US lodging RevPAR rose 14.9% year over year for the week ended 9/10. There were Labor Day comp issues. RevPAR was down -1.8% from the similar week in 2019.

Sunstone Hotel Investors, Inc. announced operations for July and August 2022 reflected continued strong rate growth and recovering occupancy levels. While leisure travel continues to be robust, the Company is seeing the greatest demand growth at its urban and group-oriented hotels which are experiencing higher lead volumes, an increase in near-term booking activity, better than expected attendance at group events and increased business transient demand. Occupancy for the comparable 13 hotels which include all hotels currently owned by the Company, except Montage Healdsburg and Four Points Resort Napa Valley, was down 1,450 basis points in Q3 2022 QTD as compared to the same period in 2019. ADR for the Comparable Portfolio in Q3 2022 QTD was 16.9% higher than the same period in 2019. RevPAR for the Comparable Portfolio was down 2.7% in Q3 2022 QTD as compared to the same period in 2019. 

Choice Hotels International, Inc. announced its board of directors approved an increase in the number of shares authorized under its share repurchase program by five million shares, resulting in a total authorization of approximately 6.7 million shares. CHH was up 4.5% on the day.

The Tampa Edition opens September 20 in a brand-new, 26-story building in the trendy Water Street Tampa District, a $3.5 billion urban mixed-use development expansion project led by Strategic Property Partners, a partnership between Cascade Investment LLC and Tampa Bay Lightning owner Jeff Vinik. The 26-story property houses the hotel and 38 private residences. Spread over the first nine floors, the hotel boasts 172 rooms, a rooftop terrace with a pool, a spa, gym, and seven food and beverage spaces. Multiple event spaces, including two studios, a boardroom and an entertainment venue round out the hotel’s impressive amenities.

Winston Hotels LLC announced the AC by Marriott’s opening date of October 6^th. A once-mixed-use office space will be converted to a fully renovated, upscale home of two hotels, AC by Marriott and Element by Westin, and 1 Watson, a rooftop bar and lounge. Element by Westin and the rooftop bar and lounge are slated to open later this year. Located in the heart of downtown San Antonio, TX, the AC Hotel features 181 hotel rooms, occupies floor 13-20 of the building, and features a first-floor lobby and full-service bar. In addition to the fourteenth-floor rooftop bar and lounge, both AC by Marriott and Element by Westin will share amenities including a business center, 4,000 square feet of meeting space, and a fitness center.

Development team Koplar Properties, HomeBase Partners, and Concord Hospitality are partnering with Midas Construction on an 11-story, 207-room AC Hotel in Clayton, MO, and are targeting an early 2024 opening. The AC Hotel Clayton will feature a number of signature elements including the AC Lounge, AC Kitchen, and flexible meeting and events spaces. The $50 million project plans to revitalize a historic, underutilized site that was the former headquarters for the Clayton Police. 

Gold Key|PHR and the Cavalier Resort confirmed its third and final luxury resort hotel: The Embassy Suites Resort Virginia Beach Oceanfront Hotel is nearing completion. The property will offer 157 suites, conference and event space, an indoor and outdoor pool, a fitness center and two new dining spaces. The hotel is currently accepting reservations for 2023.

Singerman Real Estate plans to redevelop the site of the Doubletree Hotel in Park City, UT into over 250 long-term rental apartments and condos. The 182-room hotel was previously operated by Vail Resorts under a management agreement with Singerman. The project would involve razing the existing building and starting from the ground up. It would include 5,000 square feet of ground floor retail space and over 300 parking spaces. 

Witkoff and Monroe’s plans to redevelop the Shore Club, and rebrand its as Auberge, are moving forward. The Miami Beach Historic Preservation Boardvoted against a rehearing of the redevelopment proposal that the board approved four months ago. 

OTO Development LLC is no longer planning to build an eight-story hotel a block away from Fenway Park, despite receiving the Boston Planning and Development Agency’s approval to do so.

SureStay Hotel Group announced the opening of the SureStay Hotel by Best Western Morganton in Morganton, NC. The hotel features 43 guest rooms including two suites, a fitness center and guest laundry facilities.

HREC Investment Advisors arranged the sale of the 97-guestroom Holiday Inn Express & Suites Dallas North - Addison in Addison, TX. HREC Investment Advisors exclusively represented the seller, Whitestone Hospitality and Addison Hotels, LP, on this transaction. The buyer was a Georgia LLC.

JLL’s Hotels & Hospitality Group closed the sale of The Waterford Inn & Spindler’s Restaurant, in Provincetown, MA. JLL marketed the property on behalf of the seller, THG properties, LLC, in the sale to Sawyer Realty Holdings, LLC. The Waterford Inn includes 15 guest rooms, a small café, a cottage, lush gardens and patio lounge seating. Spindler’s is a 145-seat restaurant. 

CBRE announced the appointment of Bill Grice to the position of President for CBRE Hotels in the United States. Grice will lead CBRE’s hotel business that combines investment sales, finance, valuation, advisory, and research into a single fully integrated service offering. Grice joined CBRE in 2020 and was most recently Co-Head of Hospitality Capital Markets.

HVS has appointed Stephen Still as Associate Director in its London office. Stephen will provide hospitality valuation and advisory services throughout the UK and EMEA regions. Before joining HVS, Stephen was based in the Cayman Islands, providing valuation advice across the Caribbean and Americas region. 

AHC Hospitality announced the appointment of Adam Tanner to assistant vice president of food and beverage, where he will oversee the restaurant and catering programs of AHC Hospitality’s hotels. Most recently, Tanner led the food and beverage program of the Mandarin Oriental Taipei as its executive chef.