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North America

IHG and Iberostar Enter Long-Term Commercial Agreement

Alan Woinski and Kim Woinski
November 21st, 2022 at 5:27 PM EST

Skift Take

  • We may be seeing a short week slowdown already starting in the financial markets. Lodging stocks were modestly lower.
  • Deutsche Bank‘s Gaming, Lodging, Leisure & Restaurant Conference‘soverarching chorus was stability in trends and company outlooks.
  • Pebblebrook Hotel Trust, in their monthly update, referenced that the end of October brought a return of seasonality.

The DJIA fell 45 points while Nasdaq was down 122, the S&P 500 fell 15 points and the 10-year treasury yield was up .01 to 3.83%. We may be seeing a short week slowdown already starting in the financial markets. Lodging stocks were modestly lower. SOND was down -6%.

Deutsche Bank gave a summary of their Gaming, Lodging, Leisure & Restaurant Conference from last week. DB said the overarching chorus was stability in trends and company outlooks. DB said as we move into the holiday season, they expect trading among the predominantly U.S.-exposed names within their Gaming and Lodging coverage sectors to be more tied to macro-economic indicators and broader equity market gyrations. They do believe domestic fundamentals within both the Gaming & Lodging sectors, remain very solid. Lodging pipelines for C-Corp’s appear to remain solid overall, with select service pipelines relatively stronger, compared to full-service pipelines. In terms of RevPAR trends, leisure is still said to be solid and they could not find one management team that identified any signs of a slowdown in RevPAR momentum.

Many said October was the strongest month to date when compared with 2019. The strength is driven by further acceleration in business transient and group/convention demand, primarily in urban markets. The expectation, overwhelmingly, is that these two segments will see sustained momentum into 2023. DB said where RevPAR trends commentary was universally positive, they found greater variance in management teams’ outlooks for hotel-level margins. DB said 2023 margin performance will come down to the ability to hold or grow room rates as occupancy is expected to continue to rebound, particularly in the first half of the year. As for REIT capital allocation, DB said management teams are taking a wait and see approach with respect to meaningful dividend increases even if their current levels of FFO would support larger payouts. REIT management teams are not seeing a sizable number of attractive acquisition candidates.

Pebblebrook Hotel Trust, in their monthly update, referenced that the end of October brought a return of seasonality. In other worlds end of October/beginning of November, business travel picked up the slack for some softening of leisure travel. PEB warned that they expect business travel to slow down through the end of the year, in line with pre-pandemic trends.

InterContinental Hotels Group PLC and Iberostar Hotels & Resorts announced a long-term commercial agreement for resort and all-inclusive hotels. Through this strategic alliance, Iberostar will retain 100% ownership. Up to 70 hotels will be added to IHG’s system under the Iberostar Beachfront Resorts brand, which will become the 18th brand for IHG, boosting IHG’s global system size by up to 3%. The first properties set to join the IHG system this December include: Mexico, the Dominican Republic, Jamaica, Brazil and the Canary Islands. Further properties in Spain and other popular resort destinations in Southern Europe and North Africa are anticipated to joins IHG’s system over the course of 2023 and 2024. The Iberostar Beachfront Resorts brand will be included in a new Exclusive Partners category in IHG’s brand portfolio, which will sit alongside its Suites, Essentials, Premium and Luxury & Lifestyle categories. 

Flynn Properties Inc., in a joint venture with Värde Partners, announced it has acquired an 80% joint venture interest in 89 select service and extended stay hotels in a $1.1 billion implied total enterprise value transaction from affiliates of Highgate and Cerberus Capital Management, L.P. The portfolio comprises 58 Marriott-branded hotels, 24 Hilton-branded hotels, four Radisson-branded hotels, two IHG-branded hotels and one Choice-branded hotel. Affiliates of Highgate and Cerberus will retain a 20% interest in the investment, and Highgate will continue to manage the properties on behalf of the joint venture. Deutsche Bank Securities Inc. served as financial advisor to Flynn Properties and Värde Partners on this transaction.

Kamla Hotels announced the opening of the SpringHill Suites by Marriott in Downey, California. The four-story, 140-suite hotel features a boardroom, over 2,800 square feet of event space, outdoor pool and pool deck, a fitness center, market, and full-service bar.

Maverick Hotels and Restaurants announced the addition of two hotels in the metropolitan Chicago market to the company‘s expanding portfolio. The Fairfield Inn & Suites Chicago St. Charles includes 92 renovated guest rooms and suites, a fitness center, indoor heated pool and free parking. The Fairfield Inn & Suites by Marriott Chicago Naperville/Aurora includes 61 guestrooms, a fitness center and indoor heated pool.

Hyatt Centric Congress Avenue Austin announced the February 1, 2023 opening. Located in the heart of downtown Austin, Texas, the 31-story hotel will offer 246 guest rooms including 5 suites, 2,560 square feet of meeting and event space on the third floor with an additional 1,400 square feet of event space on the thirty-first floor, a dining and bar concept and a fitness center.

Legacy Hospitality purchased Hotel Andaluz, in Albuquerque, New Mexico, from Goodman Realty Group. Goodman is focusing on developments at Winrock Town Center, including a new park, food hall, bar and boutique hotel. The proceeds from the sale will be invested in other hospitality projects around Albuquerque. Legacy Hospitality is planning to pump several million dollars into renovations over the next 18 to 24 months. Changes will include updates to the restaurant and bar equipment, a new branding strategy and the addition of an on-site fitness center. 

MB National, LLC purchased a majority interest in Monterey Bay Suites located on the north end of Myrtle Beach, South Carolina. The beachfront resort offers an indoor/outdoor pool, indoor lazy river and hot tub. It also boasts a unique rooftop pool and hot tub. MB National has selected Brittain Resorts & Hotels as the on-site management company. 

Owner Scott Marr confirmed the sale of the Holiday Inn in Steamboat Springs, Colorado and Rex’s American Grill & Bar will be closing along with the sale. Marr received an unsolicited purchase offer from an undisclosed buyer and the pending sale will occur on January 3. The property will remain a Holiday Inn and the restaurant will remain open under Rex’s management until it changes hands and reopens under a new name once the sale is complete. The hotel offers a seasonal outdoor pool, a year-round indoor pool and fitness center, as well as a business center and plenty of parking.

The opening date of The Yorktowne Hotel, Tapestry Collection by Hilton is delayed a few weeks. The York County, Pennsylvania hotel, which has had ongoing construction for about six years, is experiencing a few supply chain issues that are preventing the grand opening.

In The Woodlands, Texas, The Woodlands Township Board of Directors approved proposed plans for a new open-air mixed-use commercial center on mall property. In total, the proposed product would include at least 80,000 square feet of new air-conditioned retail space, a full-service hotel with convention space and a least 200 rooms, a select-service hotel with at least 125 rooms, and a multilevel parking garage of at least 1,200 parking spaces. Phase 1 would include at least 45,000 square feet of new retail space, at least one of the hotels and the parking facility. Phase 2 would include at least 35,000 square feet of new retail space, the second hotel if not included in Phase 1, and more parking capacity, if necessary.

Richmond, BC, Canada, is getting a new hotel and residential complex by Landa Global Properties. The project, officially called Oval, consists of a hotel building, residential buildings, retail space and five levels of parking. The hotel will consists of 189 rooms while the two residential buildings will include a total of 321 market strata units and 35 Low-End Market Rental units. 

After foreclosing on the Bel-Aire Hotel’s unpaid loans of more than $9 million, the lender has taken over ownership of the shuttered landmark property in Millcreek Township, Pennsylvania. The lender, HDDA LLC purchased the Bel-Aire at a sheriff’s sale and took on the full amount of the outstanding loans of $9.4 million. The 131-room Bel-Aire was owned by Kertra Ltd.

The Pelican Hotel in South Beach is reopening November 24, following a two-year renovation. Located in Miami Beach, the 1950’s art Deco hotel’s revamp featured restored vintage artifacts and furniture from the 30s to the 90s. The accommodations are 32 guest rooms including seven suites, six rooms with ocean views and a penthouse. The hotel’s redesign also included its in-house eatery, the Pelican Café.

A $24.5 million boutique hotel for downtown Longmont, Colorado got initial approval from the city council, after proponents assured councilors that concerns over parking will be given top priority during the development. Councilors voted unanimously for the development agreement between the city, hotel developer Thrash Group, General Improvement District No. 1 and the Longmont Downtown Development Authority, signaling the start of the approval process for the hotel’s construction at the northwest corner of Third and Kimbark. The hotel will have about 85 guest rooms, 5,000 square feet of rooftop restaurant space, and 2,000 – 4,000 square feet of meeting and commercial space. A parking deck will be available providing 65 hotel spaces and 75 public parking spaces. 

A developer purchased the Jones Memorial Library in Lynchburg, Virginia with the intention of developing a boutique hotel to complement the existing historical structure. Library Holdings, LLC submitted a zoning application to the city to allow for the use of an existing building as a hotel as well as the construction of a new building and parking facility. The goal with the property is to develop a destination resort with about 90 guest rooms, three restaurants, a lounge, bar and spa.

Personnel Move

Rosewood Hotel Group appointed Frederic Vidal as Vice President of Operations, Americas. Vidal will be responsible for leading the group’s commercial and business strategies in the United States, Canada, Mexico and South America. Prior to joining Rosewood in 2014, Vidal worked in managerial positions for brands such as Les Thermes Marins de Monte Carlo and MAIA Luxury Resort & Spa.

Alan Woinski and Kim Woinski
November 21st, 2022 at 5:27 PM EST

Companies: Cerberus Capital Management, L.P., Choice Hotels International, Fairfield Inn & Suites, Flynn Properties Inc., Highgate, Hilton Hotels & Resorts, Holiday Inn, Hyatt Centric, Hyatt Hotels Corporation, Iberostar, IHG Hotels & Resorts, Legacy Hospitality, Marriott International, Maverick Hotels and Restaurants, MB National, LLC, Pebblebrook Hotel Trust, Rosewood Hotels & Resorts, Sonder Holdings Inc., SpringHill Suites, Tapestry Collection by Hilton

Locations: Austin, British Columbia, Canary Islands, Colorado, Dominican Republic, Jamaica, Mexico, Miami, New Mexico, Pennsylvania, South Carolina, Spain, Virginia

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