ALIS Hotel Conference Preview

The DJIA rose 254 points, Nasdaq was up 224, the S&P 500 rose 47 points and the 10 year treasury yield was up .04 to 3.53%. Lodging stocks were higher SOND rose 7%, VCSA was up 6% and SOND and H traded up to a new high.

Jefferies gave their ALIS Conference preview saying they anticipate the lodging management teams will provide incremental color on the trajectory of lodging in a variety of economic scenarios. Jefferies is focused on top line risks which they think manifest in 2H23. Clearly there is a lot of uncertainty from Wall Street on the lodging sector, less so it seems from executives. What we always enjoy is listening to the commentary and seeing the tone of ALIS and then comparing it to the NYU show in early summer. We cannot remember a time when the tone or the commentary was the same. Just think of three years ago when everyone brushed off Covid, at that time the Pneumonia of Unknown Origin, as nothing to worry about. In fact we were the only ones that said differently, arguing this was SARS on steroids, having the one thing SARS did not have, transmissibility. The rest is history.

Marriott International, Inc. announced the company’s deal signings accelerated again in 2022. The company signed a total of 726 management and franchise agreements, an increase of 21% over 2021 signings, representing nearly 108,000 rooms. In addition, Marriott’s City Express transaction is expected to add around 17,000 rooms. Conversions helped drive signings activity, contributing to a robust 20,500 rooms, or approximately 20% of rooms signed during the year. Half of the 2022 rooms signed were in international markets. During the year, the company added 394 properties, representing more than 65,000 rooms, growing the system 4.4%. With a portfolio of nearly 500 luxury hotels and resorts in 69 countries and territories, Marriott is poised to extend its lead in luxury with a record 42 luxury hotel agreements signed last year, representing nearly 8,000 rooms. Select service development opportunities continue to be a key growth driver for Marriott, representing three-quarters of global deal signings and nearly half of signings across international regions. 

Wyndham Hotels & Resorts is setting its sights on a continued expansion in 2023, following a banner year that saw the company cap multiple milestones and accomplishments across the globe. Among its many milestones and accomplishments in 2022, Wyndham significantly expanded its presence in the all-inclusive space, adding 14 new hotels to its Registry Collection Hotels brand. Wyndham nearly doubled the size of its upscale footprint in Europe, the Middle East, Eurasia and Africa with the acquisition of the Vienna House brand from HR Group. The company expanded 13 brands into a combined 22 new markets.

According to Lodging Econometrics’ most recent Construction Pipeline Trend Report for the United States, at the close of 2022’s fourth quarter, the U.S. construction pipeline stands at 5,465 projects/650,626 rooms, up 14% by projects and 12% by rooms YOY. At the close of the quarter, there are 1,008 projects/135,492 rooms under construction. Projects scheduled to start construction in the next 12 months stand at 2,073 projects/235,222 rooms. Projects and rooms in the early planning stage reached all-time high counts of 2,348 projects/279,912 rooms. At the end of the fourth quarter, brand conversion room counts reached record highs of 1,030 projects/102,162 rooms. The renovation pipeline also remained strong, reaching the highest seen since Q1 2019, standing at 900 projects/148,105 rooms. The U.S. Markets with the greatest number of projects in the construction pipeline, at the end of the fourth quarter, are Dallas with 176 projects/20,790 rooms, Phoenix with 116 projects/16,229 rooms, and Nashville with 106 projects/14,198 rooms. Franchise companies topping the pipeline at Q4 are Marriott International with 1,490 projects/180,113 rooms, Hilton Worldwide with 1,378 projects/154,790 rooms, and InterContinental Hotels Group with 789 projects/78,951 rooms. The brands with the largest number of projects in the pipeline at Q4 close are Home2 Suites by Hilton with 521 projects/53,735 rooms; Marriott’s TownePlace Suites with 320 projects/29,802 rooms; and InterContinental Hotels Group’s Holiday Inn Express with 293 projects/27,817 rooms. Throughout 2022, the U.S. opened 464 new hotels accounting for 54,620 rooms. LE’s analysts expect new hotel openings to increase in 2023 with 607 projects/72,665 rooms forecasted to open, and in 2024, 722 projects/82,813 rooms are expected to open.

TPG Hotels & Resorts announced they added nearly 30 new third-party management contracts in 2022. During that time, TPG’s new management assignments spanned the entire chain scale from upscale full-service hotels to independent properties located in top leisure destinations like the Florida Keys and Cape Cod, MA. 

Following joint-venture acquisitions of three select-service hotels over the past eight months, HEI Hotels & Resorts portfolio of managed select-and focused-service hotels has increased to 16 properties across the country, accounting for more than 15% of its managed portfolio. The company now boasts a portfolio of 100+ properties across the United States.

Hersha Hospitality gave an updated investor presentation that contained a 4Q22 operational update. Baird said HT’s update matched their firm’s forecast, suggesting 4Q22 earnings are likely to be near the midpoint of HT’s guidance ranges. Baird said their read is HT’s urban assets performed well while the resorts likely lagged expectations a bit.

A new dual-branded Marriott hotel is coming to Reston, Virginia. According to The Donohoe Companies, the concept, the first of its kind by the company, would bring a Marriott AC Hotel and Residence Inn to the Reston Town Center. The project will feature a 120-key Residence inn and a 147-key “upscale hotel, connected by a direct pedestrian entrance to the new Reston Town Center Metro Station. The project will include a shared lobby, a restaurant, an indoor pool and a fitness facility. An upscale rooftop bar and lounge is also planned. Upon completion in late 2024, Donohoe Hospitality will operate the hotels, and Complete Building Service will provide facilities management services. Donohoe has obtained $74.7 million to finance the hotel’s construction with Artemis Real Estate Partners. 

Canada’s first-ever Canopy by Hilton is slated to open in Toronto on February 7. The 184-room boutique hotel will feature 3,573 square feet of event space across six meeting rooms, a modern, street-facing café, retail boutique, restaurant, indoor heated pool, as well as yoga and fitness studios. The hotel will encompass the second to ninth floors of the building, while the remainder of the 55-story structure will accommodate residential units within the Gupta Group’s forthcoming Rosedale on Bloor condos.

Ennismore, with owner and developer, Soda Urbana, announced the first JO&JOE development in North and Central America, JO&JOE Tulum set to open at the end of 2024 in Mexico. JO&JOE Tulum will offer 84 guest rooms, a bar, restaurant, open kitchen, guest laundry room, locker room and a 50 square meter meeting room. JO&JOE Tulum will be part of a new mixed-use development that will also house 12 retail outlets and a rooftop bar.

Certares Management LLC acquired the Sea Crest Beach Hotel, located along Buzzards Bay in North Falmouth, Massachusetts. The 20-acre resort boasts 263 modernized guest rooms and suites, a charming 3-bedroom cottage, premier onsite dining and bars, year-round activities, and spacious event space for meetings and events. The resort falls within HHM’s Independent Collection. HHM will continue to operate the resort and, alongside Certares, will continue to focus on adding guest experiences, new amenities, and capital improvements to the beach hotel. Leader Bank provided financing for the transaction. 

Ramsfield Hospitality Finance announced the promotion of Brendan McNamarato the position of Principal. McNamara, who has been with Ramsfield for almost nine years, will now take a more active role in the overall operations of the company and new loan execution and asset management. 

CBRE was the top-ranked firm for commercial real estate investment sales in the U.S. during 2022, according to MSCI Real Assets, the seventeenth consecutive year that CBRE has claimed the top spot. MSCI Real Assets credited CBRE with a 15.6% market share across all property types in the U.S. in 2022, a 640 basis point lead over the nearest competitor. CBRE’s market share in the hotel asset class was 11.8%, something they said gave them the top spot.

Blue Diamond Resorts announced the opening of the first Planet Hollywood Beach Resort that will debut in late 2024 in Puerto Plata. The hotel management company will be one of the main players in the industry as part of the Punta Bergantin re-launch project. The Punta Bergantin region will offer Resorts, eco-tourism, an 18-hole golf course, a residential development, shopping and a movie studio. The new Planet Hollywood will feature the signature all-inclusive Vacation Like a Star experience, restaurants and bars, sparkling pools, day and night entertainment, PH Spa and PUMPED fitness center. The company has not yet revealed the number of rooms for the Puerto Plata resort.

The Aruba Tourism Authority announced details of the tourism product developments to drop in the One Happy Island during 2023. Noteworthy developments include: the grand opening of the Embassy Suites by Hilton Aruba on February 1, 2023. The 330-suite resort offers a pool, three dining outlets, designated meeting spaces, fitness center and coming soon, a spa and casino. Hotels presently or recently under refurbishment include: The Ritz-Carlton, Aruba which unveiled its new, contemporary interiors in all guestrooms, suites and corridors. The property also recently rolled out new gastronomic offerings. As 2022 came to a close the Renaissance Wind Creek Aruba Resort finished renovating all of its one-bedroom suites. In December 2022, Radisson Blu Aruba launched the Senses Fine Dining concept. The hotel also opened a new café and specialty coffee shop. Currently in the midst of major renovations, the Amsterdam Manor Beach Resort plans to have re-imagined all of its studio and suite accommodations by April 2023. It also recently completed renovations of its signature restaurant and lounge, as well as its freshwater and kids’ pools.