It was an interesting day with the DJIA up 3 points but Nasdaq down 228. Don’t you love earnings season? The S&P 500 fell 29 points, the 10-year treasury yield was down .09 to 4.02% and lodging stocks were mixed. The biggest mover was MCG, up 9%.
Wyndham and Hilton kicked off the lodging earnings season, both with solid reports. WH beat results, which is not surprising, raised its full-year outlook and after $142 million of share repurchases last quarter, said their board of directors was raising their repurchase authorization by $400 million. WH was up 2%
Hilton beat on EBITDA but was a little light on revenue while RevPAR was at the high end of their guide. HLT made it quite clear they are seeing no slowdown in business, saying 4Q system-wide RevPAR is exceeding prior peaks. HLT repurchased 4 million shares in the quarter for $497 million. HLT was down -1%.
Meanwhile, hotel RevPAR for the week ended 10/22 was up 27.8%, according to STR. When compared with the same week in 2019, RevPAR was up 16.1%.
According to Lodging Econometrics’ third quarter Construction Pipeline Trend Report for the United States, the U.S. construction pipeline stands at 5,317 projects/629,489 rooms, up 10% by projects and 6% rooms Year-Over-Year. At the close of Q3, there are 987 projects/135,050 rooms under construction in the U.S. Projects scheduled to start construction in the next 12 months, stand at 2,074 projects/236,894 rooms, up 14% by projects and 13% by rooms YOY, respectively. Project counts in the early planning stage reached record highs in Q3, standing at 2,256 projects/257,545 rooms, a 14% increase by projects and 7% increase in rooms YOY. At the end of Q3 2022, brand conversion rooms counts reached highs of 988 projects/99,474 rooms. The renovation pipeline remained strong with 893 projects/140,440 rooms. The upper midscale chain scale continues to have the largest project count of all chain scales in the U.S. construction pipeline at Q3, standing at 2,127 projects/214,473 rooms. Following is upscale which stands at 1,528 projects/202,907 rooms at the close of the quarter. The brands with the largest number of projects in the upper midscale chain scale are Home2 Suites by Hilton with 494 projects/50,809 rooms; InterContinental Hotels Group’s Holiday Inn Express 297 projects/28,323 rooms; and Marriott’s TownePlace Suites with 291 projects/27,329 rooms. In the upscale chain scale, the top brands are Marriott’s Residence Inn with 234 projects/28,659 rooms, and its SpringHill Suites brand with 148 projects/16,350 rooms, followed by IHG’s Staybridge Suites with 125 projects/12,962 rooms. At the end of the Q3 ‘22, 1,846 projects/189,289 rooms in the U.S. construction pipeline are extended stay projects. Home2 Suites by Hilton currently has the largest extended stay pipeline with 494 projects/50,8099 rooms followed by Marriott’s TownePlace Suites with 291 projects/27,329 rooms and its Residence Inn brand with 234 projects/28,659 rooms. Thus far, throughout 2022, the U.S. opened 343 new hotels, accounting for 39,772 rooms, with another 182 projects/22,261 rooms anticipated to open by the end of the year. LE analysts expect new hotel openings to increase in 2023 and 2024, representing a 1.3% supply increase for 2023 and a 1.4% supply increase for 2024.
STR’s U.S. “bubble” chart update for mid-October 2022 highlights the best- and worst-performing hotel markets in terms of occupancy. Data for the four weeks ending October 15 shows that New York City widened its performance lead over the other large markets and that leisure travelers flocked to autumn destinations as well as resorts far removed from the path of the hurricane. Among the Top 25 Markets, New York City had the highest occupancy at 84.7% followed by Boston (81.6%), Anaheim (80.7%), Nashville (79.3%) and San Diego (79.1%). One a RevPAR basis, two of the five large market occupancy leaders exceeded their matched 2019 RevPAR after accounting for inflation. San Diego indexed at 115 for the recent four weeks, with Anaheim/Orange County indexing at 106. Notable large market deficits in real RevPAR indices occurred in New Orleans (86), Houston (84) and Minneapolis (76). It remains clear that leisure-oriented travel remains a dominant force within the industry. Outdoor, recreations, and recently, “leaf season” submarkets continued to lead. Vermont North Area (90.2%) and Portland downtown, ME (89.1%), gained top spots but Disneyland, CA (86.9%), also had a strong four weeks. Rounding out the top five, NYC’s Village/Soho/Tribeca submarket (86.3%) and JFK/Jamaica (86.2%) excelled in large part due to recent United Nations meetings.
U.S. hoteliers are negotiating their 2023 corporate accounts with rate in mind while things clients are looking for included breakfasts, sustainability efforts and last room availability, according to CoStar. McNeill Hotel Company feels that brands have done their best to help protect rates throughout the pandemic. Over the last couple of years, McNeill, like other hotel companies, did not renegotiate rates with corporate clients, but for next year, it has been. According to McNeill Hotel Company, every market is different, but labor cost increases alone are north of 25% to 30%. Food costs are up as well. The company has been holding its ground in negotiations. According to HP Hotels, roughly 75% of accounts are switching to dynamic pricing. Many companies are more interested in that since the pandemic started because they enjoyed flat rates that carried over the last few years and expected prices to increase this year. Dynamic pricing will get them the best rate or discount off the best rate.
TMGOC Ventures, a partnership between The Montford Group and Opterra Capital, closed on the acquisition of the three select-service Marriott- and Hilton-branded hotels totaling 430 rooms in Myrtle Beach, SC, Charlotte and Roanoke Rapids, NC. TMGOC acquired a portfolio comprised of the fee simple interests in the 135-room Courtyard Myrtle Beach Broadway, the 147-room Hilton Garden Inn Roanoke Rapids, and the 148-room Courtyard Charlotte Airport. TMGOC will invest in substantial physical enhancements across the portfolio while optimizing operations to drive market share and increase profitability. The company hired Aimbridge Hospitality to operate the North Carolina hotels; Marriott manages the Courtyard Myrtle Beach.
Hilton announced the opening of the largest Embassy Suites by Hilton hotel in the U.S., Embassy Suites by Hilton Downtown Nashville. The new-build, 30-story hotel boasts 506 suites, more than 32,000 square feet of indoor and outdoor meeting and event space, four unique dining concepts, and a fitness center. Embassy Suites by Hilton Nashville Downtown was developed by Crescent Real Estate and is owned in partnership by a controlled affiliate of Starwood Capital Group and Crescent Real Estate. Davidson Hotels is the property’s operator.
OTO Development announced plans to rebrand the former Best Western in Fort Walton Beach, FL. Upon completion of the extensive renovation, the property will reopen in May 2023 as Beal House Destin-Fort Walton Beachfront, part of the Tapestry Collection by Hilton. The six-story Beal House will comprise 100 guest rooms, a fitness center, outdoor pool, direct beach access and an onsite restaurant/bar.
LBA Hospitality has been selected to manage another hotel owned by BPR Properties. The Residence Inn by Marriott in Greenville, NC features 97 suites, 768 square feet of meeting space, a full-service bar, outdoor pool, fitness center and a putting green.
IHG announced the opening of Kimpton Shorebreak Fort Lauderdale Beach Resort in Fort Lauderdale Beach, FL. Formerly the Kimpton Goodland, the newly-branded, three-story resort features 95 guest rooms, a new restaurant, ground-floor pool, rooftop pool and bar, a new restaurant and a fitness center.
Hersha Hospitality Trust closed on the previously announced sales of The Hotel Milo Santa Barbara and The Pan Pacific Seattle. The sales of these two hotels, coupled with the dispositions of the Urban Select Service portfolio and other pending dispositions, total approximately $650M in gross proceeds and will reduce the Company’s debt load by approximately $500M while generating unrestricted cash of nearly $120M.
Pendry Washington DC – The Wharf officially opens today in Washington D.C. The Wharf features 131 guest rooms and suites, three food and beverage concepts, a rooftop lounge, a pool and a spa.
After the derecho in August 2020, the Marshalltown Holiday Inn Express in Iowa was badly damaged and had to close for repairs. Two years later, Hawkeye Hotels announced the hotel is operating once again.
Springboard Hospitality announced it would manage The Hills Hotel in Laguna Hills, CA. The brand of the hotel has not been announced. The city’s ordinance said it would be a six-story hotel.
NewQuest Properties continues to find missing parts for Cottonwood Creek Market, with new commitments from two hotels and three dining spots at the multiphase development at New Road and Interstate 35 in Waco, TX.
HREC Investment Advisors arranged the sale of the 90-room Hampton by Hilton Inn Florence-Midtown in Florence, AL. Baron Hospitality acquired the property. HREC Investment Advisors exclusively represented Yedla Management Company Inc. on this transaction.
Marcus & Millichap announced the sale of the Fairfield Inn & Suites in Bessemer, AL. Marcus & Millichap’s Fort Lauderdale office has the exclusive listing to market the property on behalf of the seller. The buyer will be required to complete a major renovation post-closing. Hotel amenities include a business center, fitness center, and indoor pool.
Atlantis Paradise Island announced a series of major developments within its dining roster just ahead of its milestone twenty-fifth anniversary of the iconic Royal Towers. The acclaimed resort is launching a dazzling array of new food and beverage offerings opening this fall and next year including: Paranza, opening early 2023; Shake Shack opening in 2023; Café Martinique reopening October 2022; Pita now open; Bimini Road opening November 2022; Frezca opening November 2022; The Dilly Club opening December 2022; Bar Sol opening early 2023; and Moon Bar opening mid-yea 2023. Throughout 2022 and into 2023, Atlantis Paradise Island is rolling out multimillion-dollar renovations and exciting new partnerships throughout the resort, from a complete renovation of The Royal Towers to a re-imagined Atlantis Casino and much more.
