The DJIA rose 331 points on Friday while Nasdaq was up 288, the S&P 500 rose 74 points and the 10 year treasury yield was up .09 to 3.48%. Lodging stocks were higher. SLNA topped the list with a 10% gain followed by AHT and VCSA, both up 6%.
We start today’s newsletter on a sad note as many of you probably heard that Bruce White, the founder and chairman of White Lodging, passed away at the age of 70. If you get a chance, try to read some of the tributes/quotes from various lodging icons. They really tell the story of what an icon he was and the respect so many people had for him. Our condolences to the White family and everyone at White Lodging.
Pebblebrook Hotel Trust gave a January operations update and include an update on 4Q preliminary results. Remember they roiled the Lodging REIT stocks when they preannounced weaker than expected 4Q results. The 4Q results seemed a little ahead of their previous guidance but still below the guide they gave with 3Q results. While their important San Francisco market remains weak, PEB’s January update suggests a good start to the year there even with the heavy rain which has brought some cancellations.
The U.S. hotel industry reported lower performance from the month prior but improved comparisons with 2019, according to December 2022 data from STR. December 2022 (percentage change from December 2019): Occupancy: 53.6% (-0.8%); ADR: $146.72 (+15.8%); and RevPAR: $78.63 (+14.8%). Among the Top 25 Markets, New York City had the highest occupancy level (82.8%). Markets with the lowest occupancy for the month included Minneapolis (43.8%) and St. Louis(47.6%). San Francisco reported the steepest decline in occupancy when compared with 2019 (-23.9%).
According to 2022 data from STR, the U.S. hotel industry reported ADR and RevPAR that were the highest for any year on record for the full year. 2022 (percentage change from 2019): Occupancy: 62.7% (-4.9%); ADR $148.83 (+13.6%); and RevPAR $93.27 (+8.1%). Among the Top 25 Markets, Oahu Island reported the highest occupancy level (75.4%). While none of the Top 25 Markets reported an occupancy increase, Tampa came closest to its pre-pandemic comparable (-0.8% to 71.6%). Major markets with the lowest occupancy for the year included Minneapolis (55.5%) and Houston (57.6%). Miami posted the largest ADR increase over 2019 (+30.0% to $253.11), while Tampa registered the highest growth in RevPAR (+25.2% to $119.27). The steepest RevPAR deficit was in San Francisco (-33.4% to $135.65).
Hyatt Hotels Corporation announced they are positioned for continued transformative growth in 2023 and beyond with a record pipeline of approximately 117,000 rooms worldwide as of year-end 2022. Nearly one in four pipeline properties is classified as a lifestyle hotel, further strengthening Hyatt’s leadership position in the luxury, lifestyle and leisure segments. A notable drive of this growth is the announced asset-light acquisition of Dream Hotel Group’s lifestyle hotel brand and management platform which is expected to bring Dream hotels, Unscripted hotels and The Chatwal into the Hyatt portfolio. Additionally, the Caption by Hyatt brand is poised for significant growth. The brand is expected to grow its presence in Tennessee and enter California. The Caption by Hyatt brand is expanding internationally with properties expected to open in China and Japan in 2023, Vietnam in 2025 and Sydney in the coming years. The Park Hyatt brand is set to reestablish its presence in South Africa, make its entrance to Morocco, return to London and expand in the Asia Pacific region including Taiwan, Malaysia and Vietnam. In 2023, the Andaz brand will celebrate expansion into new markets such as Qatar, Thailand, Mexico, Macau and Greater China. Hyatt’s Unbound Collection and Independent Collection feature a healthy pipeline of expected openings in 2023 and 2024 including the growth of Thompson Hotels with two chic urban properties; expansion of the Hyatt Centric brand in prime destinations; the anticipated debut of the Destination by Hyatt brand in Florida as well as in Asia Pacific; the planned debut of the JdV by Hyatt brand in Rhode Island and in Goa; and the anticipated opening of The Unbound Collection by Hyatt in Mexico. Hyatt also offers a healthy pipeline of expected openings of all-inclusive resorts in 2023 including Bulgaria, and Mexico.
First Hospitality said they realized significant growth in 2022, increasing hotels under management by 25%. The company expanded into three new markets, bringing First Hospitality’s diverse portfolio of branded and independent properties to over 50 hotels across 11 states.
Tru by Hilton announced the opening of its first property in Mexico and its second in the Caribbean and Latin America, Tru by Hilton Monterrey Fundidora. The 120-room property is owned and managed by Hoteles BL De Mexico SA. Developed from the ground up, the property features signature elements including the large lobby called The Zone, with areas to work, play games, eat and lounge. The property also offers a fitness center.
The 428-room Hilton Alexandria Mark Center, in Alexandria, VA, completed its multi-million dollar renovation. The refresh included the debut of the new Sushi Bar and Marketplace, revitalized lobby and public spaces, guest rooms and over 48,000 square feet of meetings and events rooms.
In Fort Worth, Texas, the Sheraton Fort Worth Downtown started an extensive transformation. The $45 million transformation will include a redesigned entryway, additional suites, several new work-space studios for small meetings, a signature restaurant-bar and second restaurant. From the new exterior and Sheraton signage to the refresh of the 403 guest rooms and almost 30,000 square feet of conference space, the transformation will meet the most frequent request of the hotel’s guests, a brighter and more open space. The year-long project is slated to be completed in fall of 2023.
The Hotel Group, an affiliate of Hotel Equities, announced the addition of two Downtown Seattle Hyatt hotels to its management portfolio. The Hyatt House Seattle Downtown includes a fitness center, business center, H market and H Bar. The Hyatt Place Seattle Downtown Hotel features an indoor pool, fitness center, boardroom and meeting space. The hotels have a combined key count of 332 guest rooms.
Loews luxury beachfront hotel on Ocean Ave. in Santa Monica, California, announced a temporary closure and is set to lay off 320 employees according to a recent Worker Adjustment and Retraining Notification Act filing. The layoffs will take effect March 4, 2023. According to The Santa Monica Daily Press, “the owners of Loews Santa Monica Beach did not renew Loews Hotels & Co’s management agreement, and as of March 4, 2023, the hotel will no longer be operated by Loews.”
Main Street Hospitality has assumed the management of two new hotels; Chebeague Island Inn on Chebeague Island, Maine and Port Cunnington Lodge in Dwight, Ontario. Located in the Casco Bay region of Main, the Inn welcomes travelers with 21 guest rooms, front lawn games and wedding and event venues. Lodging accommodations at Port Cunnington Lodge include cozy one-bedroom options to five-bedroom chalets. Certified wellness experts are on-site and the lodge offers lakeside dining.
Noelle, an experiential hotel operated by Makeready and owned by Rockbridge, announced its transition to independence after operating under Marriott’s Tributeportfolio since its opening in December 2017. Noelle offers 75 studios and 12 luxury suites along with five food and beverage concepts.
Sage Hospitality Group announced the recent addition of Hotel Van Zandt and Geraldine’s, its restaurant and music venue, to its diverse portfolio of more than 110 hotels, restaurants and entertainment venues in 14 states across the U.S. Located in Austin, Texas, the newly-independent hotel joins Sage Independent Hotel Collection which is now comprised of 18 properties. The 319-room hotel offers a rooftop pool, and 12,000 square feet of event and meeting space.
EKN Development Group is partnering with culinary-first hotel brand Appellation, co-founded by hospitality veteran Christopher Hunsberger and American chef Charlie Palmer, to launch Appellation Petaluma, California’s first experiential boutique hotel. Debuting 2026 in Sonoma County, California, the five-story, 93-room property will have the only rooftop bar in town.
Hawkins Way Capital has acquired parcels of land located at 3850 and 3840 State Street, together comprising 150 hotel rooms, a retail pad and multiple pools across approximately 4.0 acres in Santa Barbara, California. The parcels are currently improved with a 68-room Best Western Plus Pepper Tree Inn branded hotel and adjacent 82-room unbranded hotel. Hawkins Way Capital intends to combine the two properties into a single Best Western Plus Pepper Tree Inn. A property improvement plan is underway. Renovations will consist of refreshed guest rooms and bathrooms, new FF&E and case goods, activate underutilized common area spaces and upgraded exterior landscaping and pool areas.
Pebblebrook Hotel Trust announced it had executed a contract to sell the 151-room the Heathman Hotel in Portland, Oregon for $45.0 million to a third party. The sale of The Heathman Hotel is subject to normal closing conditions, and the Company offers no assurances that this sale will be completed on these terms, or at all. The sale is targeted to be completed later in the first quarter of 2023.
Aspen Skiing company’s hospitality division, The Little Nell Hotel Group, has been rebranded as Aspen Hospitality. The Company is expanding The Little Nell and Limelight Hotel brands into new urban and resort communities. In tandem, Alinio Azevado has been promoted to Chief Executive Officer of Aspen Hospitality, from his most recent leadership role as Managing Director and Chief Operating Officer for the Company. Under Alinio’s leadership, Aspen Hospitality will continue to pursue opportunities for further expansion. Aspen Hospitality will open several new properties in the coming years with the following properties currently under development: Limelight Hotel & Residences Mammoth, Mammoth, California, estimated opening late 2024; and Limelight Hotel Boulder, Boulder, Colorado, estimated opening early 2025. Additional properties in the pipeline will be announced soon.
SH Hotels & Resorts announced the launch of their European Corporate office helmed by Robert Koren, who joins the company as Senior Vice President & Area Managing Director of Europe, the Middle East & Africa. In this role, Robert will oversee all aspects of SH Hotels & Resorts operations, development, and owner relationships in the region.
HREC Investment Advisors arranged the sale of the 118-guestroom Hampton Inn by Hilton Jacksonville Downtown I-95 located in Jacksonville, Florida. The property was acquired by HDG in partnership with Fortune Investments, LLC. HREC Investment Advisors exclusively represented the seller, and an affiliate of Broadshore Capital Partners, on this transaction.
HREC also arranged the sale of the 149-guestroom Hampton Inn Ann Arbor South located in Ann Arbor, Michigan. The property was acquired by an affiliate of the Bacall Companies. HREC Investment Advisors exclusively represented the seller, and affiliate of Broadshore Capital, on this transaction.
Breakwater has advised the borrower on the refinance of the Wall Street Hotel, a 180-room property located in the heart of New York City’s financial district. The hotel has a destination restaurant, lobby lounge and a rooftop bar opening later this summer. Breakwater has also served as the Asset Manager of the Wall Street Hotel since pre-opening in 2021.
LivAway Suites arranged $85 million in debt financing through Keystone National Group for its first locations nationally. Following two years of market research and brand development planning, LivAway Suites has assembled numerous sites in top extended stay markets across the United States that will break ground in 2023.