The DJIA fell 195 points, Nasdaq was up 14, the S&P 500 fell 4 points and the 10 year treasury yield was down .17 to 3.53%. How is that for a weird market? Lodging stocks were mixed. VCSA was down -5% while SLNA traded down to another new low.
Truist gave their observations on the latest forward-looking booking and pricing trends for US hotels and checks with contacts. Truist said they have observed some modest pressure on corporate bookings and pricing power over the past 45 days. They believe the greatest degree of pressure is coming from additional weakness in the tech sector. Group demand and pricing remains relatively solid albeit with bookings very short term in nature. Growth rates for group 2023 will be significantly lower in 2023 but that is because of tough comps. Truist said forward looking domestic leisure RevPAR trends continue to be resilient, almost entirely driven by ADR at this point as new competitive supply from short term rentals and the reopening of international markets combine with favorable FX for American travelers and the return of cruising as a value-priced vacation alternative are putting some pressure on domestic hotel occupancy. Truist pointed out with Christmas and New Year’s on a Sunday versus Saturday last holiday season, some school vacations are being pushed into January. That has the RevPAR growth for the back half of December looking weak while the beginning of January looks strong given the easy y/y comp. Truist said their view on the lodging sector at the moment is one of relative optimism though more so for the global C-Corps and less so for the hotel REITs, a view more favorable than the bear case of relative pessimism. Their favorite name is Hyatt in the C-Corps and Ryman Hospitality for the REITs.
STR’s global “bubble chart” update through November 19, 2022 showed the strongest performance of the year thus far. Egypt, Argentina, Israel, Singapore and the United Arab Emirates were the top five performing countries in RevPAR on an actual basis. Europe saw less representation at the top of the leader board. Egypt benefited from hosting the UN Climate Change Conference COP27 in early November as its RevPAR reached $154. Twelve countries recorded growth in both occupancy and ADR during the 28 day period. While 37 countries grew RevPAR, 8 of the 11 countries still behind their 2019 comparables were in Asia. On the other hand, Europe maintained its strong recovery position as 4 of the 5 top performing countries in RevPAR were in the continent. At a market-level, Munich joined the RevPAR top five for the first time due to its strong event calendar and rescheduled events. Algarve also shined with occupancy growth of 25% versus its 2019 comparable. Qatar, the in the leadup to the World Cup, reached ADR growth of nearly 100% while occupancy was still behind 34% below 2019 levels. Of course, Qatar’s occupancy will be much higher in STR’s next update, which will include the primary World Cup period, as preliminary data has shown levels doubling in the host country.
The U.S. Travel Association’s latest biannual travel forecast shows a downgrade in international inbound travel for the remainder of this year and for 2023. The association points to long wait times for first-time visa applicants having 400- to 800-day wait times to meet with U.S. consular officials. In June, Tourism Economics estimated international visitation volume would reach 67% of 2019 levels by the end of the year and 82% in 2023. That has shifted down to 63% for 2022 and 75% for 2023.
Taconic Capital Advisors LP and HEI Hotels & Resorts have jointly acquired Hyatt Regency Jersey City from Affiliates of Hyatt Hotels Corporation and Veris Residential Inc. The property is a full-service, 351-key hotel located adjacent to Exchange Place on a pier extending over the Hudson River in Jersey City, New Jersey. The property boasts 20,000 square feet of meeting space, a gym and indoor heated pool, and a restaurant and lounge.
A burst of new hotel construction is sweeping across South Carolina’s Horry County as the lodging industry continues to recover from pandemic-era travel restrictions. The American Hotel and Lodging Association projects hotel occupancy rates to be at nearly 64% by the end of the year – up from almost 58% in 2021. The latest on some of the big ticket projects happening now around the Grand Strand include the city’s planning commission last week approved a big change for Prince Resort, an oceanfront complex whose properties include The Horizon at 77th, Grand Shores and the Towers at North Myrtle Beach. Officials in 2019 authorized an amendment to the development’s governing documents clearing the way for construction of a 127-room Hampton Inn & Suites and parking garages with space for 147 vehicles. It is not clear when work will begin on the venture, which still needs final approval from the City Council. More than a dozen acres of undeveloped land is being built into a Holiday Inn Club Vacations resort on the south end of Myrtle Beach, across from the company’s South Beach resort. Once complete, the property will boast 152 villa-style rooms, a marketplace with indoor and outdoor dining, covered parking, private cabanas and a multi-level pool. Myrtle Holiday 1 LLC will develop the site.
Blackstone Inc. agreed to sell its 49.9% stake in two Las Vegas hotels in a deal that values the properties at $5.5 billion. Blackstone is selling its stake in the MGM Grand Las Vegas and the Mandalay Bay to Vici Properties Inc., which owns the other 50.1% stake in the properties. Blackstone will receive $1.27 billion in cash and Vici will assume Blackstone’s share of approximately $3 billion in debt.
A new name and future enhancements were announced for the former Ritz-Carlton Golf Resort, Naples, Florida. With a fresh name, The Ritz-Carlton Naples, Tiburon is committed to its future with resort enhancements to be unveiled over the next few years including a new restaurant concept and guestroom renovation. Exterior changes are already underway, with the repainting of the façade which will be complete in February 2023. Expanding the culinary offerings at the resort for guests and locals, a new restaurant concept will debut in late 2023, featuring a destination bar and seasonal menus. This latest chapter in the resort’s transformation complements the recent unveiling of an enhanced poolside experience including new luxury cabanas and immersive water feature, The Reservoir, as well as a Latin American-inspired restaurant. The 295-room resort will be unveiling newly renovated guest rooms and suites in 2024. The luxury resort is home to a pair of 36-hole signature Greg Norman gold courses at Tiburon.
Courtyard by Marriott announced the opening of the new Courtyard by Marriott Mazatlan Beach Resort, making it the first Courtyard resort to open in Mexico. The new resort offers 195 rooms and suites, a variety of restaurants and bars, a spa, outdoor pool and a fitness center. The hotel has event spaces for up to 300 people.
All-Inclusive by Marriott Bonvoy announced the signing of three all-inclusive luxury resorts in Mexico with AB Living Group. The three properties are: Almare, a Luxury Collection All-Inclusive Resort, Isla Mujeres opening in 2024; JW Marriott All-Inclusive Costa Mujeres opening in 2026; and W All-Inclusive Costa Mujeres opening in 2026. The JW Marriott All-Inclusive Costa Mujeres features 283 guest rooms, six dining destinations and several pools. The resort will also feature 53 residential units and ample meeting rooms. The 300-room, adults-only W All-Inclusive Costa Mujeres features indoor and outdoor gathering spaces, five restaurants, bars, lounges and expansive pools. The complex will also be home to 10 residences and offer more than 9,000 square feet of event space. A 70,000 square foot central entertainment venue will connect both resorts. Almare, a Luxury Collection All-Inclusive Resort Isla Mujeres is an adults-only 105-room resorts offering four dining venues, two pools and a vibrant beach club.
Trammell Crow Company and MetLife Investment Management announced the opening of The Morrow Hotel, Curio Collection by Hilton, located in the NoMa neighborhood of Washington, D.C. The newly constructed, 12-story property boasts nearly 12,000 square feet of meetings and events space, a lobby beverage cart and four new food and beverage venues.
The InterContinental Hotel, located in the Central Business District of New Orleans, Louisiana, unveiled a $3.5 million renovation to its third-floor meeting space and the La Salle Ballroom. The floor-to-ceiling renovation presents a glamorous look and feel featuring new marble flooring in the pre-function spaces, dazzling chandeliers, sumptuous carpet, and new wall coverings. The La Salle ballroom encompasses 8,330 square feet and can be divided into three separate areas.
IHG Hotels & Resorts announced the opening of the voco hotel Guadalajara Neruda, the brand’s first property in Mexico. Owned by Grupo Hotelero Luna Azula SA de CV and managed by MonByHotels, the 104-room hotel features a rooftop terrace and onsite dining.
Nobu Hospitality and Simon celebrated the opening of Nobu Hotel & Restaurant Atlanta at Phipps Plaza, a mixed-use development. The property is Nobu’s fifteenth location overall and first in Georgia. The hotel features 152 rooms and suites, a rooftop pool with surrounding event space, corporate conference rooms, a fitness center and Nobu Atlanta Restaurant.
RIU Hotels & Resorts announced the opening of Riu Palace Kukulkan in Cancun. The all-inclusive property includes 428 rooms, seven restaurants, five bars, four pools, direct beach access, and the Renova Spa. With this new opening, the hotel chain now has 22 hotels in six destinations in Mexico: five in Cancun; three in Los Cabos; three in Riviera Nayarit; and six in Playa del Carmen.
FibraHotel is looking to buy resorts and all-inclusive hotels in the coming years while shedding some under-performing properties, aiming to seize on what it describes as a boom in beach travel by U.S. tourists. Los Cabos, Puerto Vallarta and Cancun are among the sunny Mexican spots where the company could be making purchases, but the decline to disclose how many hotels the company plans to add, or on what timeline. The firm holds 86 hotel properties in 26 states operated by international brands such as Marriott and Hilton, and aims to add more prestigious partners with the new acquisitions. The firm is also considering selling some of its buildings in urban areas in Nuevo Leon and Sonora states, citing a slower pick-up in urban tourism despite recovery from the pandemic.
A Utah developer plans to convert a North Dallas, Texas hotel into rental apartments. The Sonesta ES Suites hotel on Alpha Road contains 114 one- and two-bedroom units in a single building with an interior courtyard. PEG Cos. plans to convert the hotel into a 114-unit rental community called Avia Apartments on Alpha. In May, Peg Cos. purchased nine extended stay hotels, including the property in North Dallas. The developer’s Peg Extended Stay Conversion Fund L.P. has bought 15 extended stay hotels so far, including the nine hotels this year. The fund is raising $130 million for the conversion program. The developer plans to begin construction in February on the North Dallas hotel and plans to complete the work by next summer.
Icona Resorts has a $6.5 million agreement to buy a former bank building in downtown Ocean City, NJ, and plans to remake it as the chain’s latest boutique hotel. Icona plans to remake 801 Asbury Avenue into a hotel will require an investment of millions of dollars more and a use variance from the city, which is also interested in the property. Hotels are not a permitted use downtown. The proposal also needs approval from Judge Andrew Altenburg of the Bankruptcy Court in Camden. James McCallion, the principal owner of 801 Asbury Avenue LLC, is in bankruptcy. The trustee for the property filed a request for the court’s permission to sell the building. The proposed sale will include a parking lot behind the building. Icona plans to put $15 million to $20 million into the seven story structure to remake it as a downtown hotel, with a restaurant and retail space on the ground floor. The company hopes to have the new business open by the summer of 2024.
Mumford Company completed the sale of two limited-service properties in Virginia’s Shenandoah Valley. In two Separate transactions, Mumford Company represented Dominion Lodging, Inc, in the sale of the Sleep Inn of Staunton, VA to HWY81 Hotel, LLC, and the nearby Best Western of Staunton to North Star BW Staunton, LLC.