The DJIA rose 206 points while Nasdaq was up 199, the S&P rose 44 points and the 10 year treasury yield was up .03 to 3.49%. Lodging stocks were modestly higher. The biggest movers included ABNB and SOHO both rising 5% while SOND was down -6% on the day.
Hotel Asset Value Enhancement gave their findings of the ALIS conference. Attendees believe the frustrating transaction market will change in the second half of this year and that there will be more transactions than foreclosures this year. Lenders will continue to work with borrowers, the main reason why the expected flow of distressed buying opportunities has yet to emerge. The investing opportunity of 2023 may be preferred equity/mezzanine debt as there is a gap to fill to meet obligations for loan extensions and to comply with brand standards. hotelAVE said most of the development opportunities discussed at the conference have a residential component that is supporting the overall return. Very few standalone full-service deals are penciling to acceptable yields based on current construction pricing. In 2023, hotelAVE expects decelerating RevPAR growth and the reinstatement of brand standards. They believe asset management focus on cost control and labor efficiency will be the key to maximizing flow to the bottom line.
The foreclosure auction for Minnesota’s largest hotel, the Hilton Minneapolis, has been rescheduled for March 10 as business approaches pre-pandemic levels. Wells Fargo Bank, the trustee for JPMorgan Chase, which provided a $180 million loan to investors in 2018, sued in October 2020 over the loan default. The 186-room Hilton hotel is owned by Haberhill LLC and Walton Street Capital.
Spark GHC has acquired the Hampton Inn by Hilton – Downtown Cleveland in Cleveland, OH. Spark GHC plans to significantly upgrade this asset with a multi-million capital improvement plan. Spark GHC is a joint venture between Spark Hotels and Green Harvest Capital. This is the 11th acquisition for the sponsors since 2018 and increases combined Spark GHC assets under management to above $100 million.
IHG celebrated the “Topping Off” of InterContinental Hotel – Bellevue at the Avenue located in Bellevue, Washington. The hotel, will mark the IHG Luxury & Lifestyle Collection brand’s Pacific Northwest debut upon its projected fourth quarter 2023 opening. Featuring 208 rooms, InterContinental Hotel – Bellevue at the Avenue, will occupy nine floors of a 26-story tower within the sprawling mixed-use complex at the heart of Bellevue’s retail and cultural district.
Developer AD1 Global Hotels LLC put eight Florida properties using Marriott, Hilton, Hyatt and IHG brands under bankruptcy protection, blaming rising interest rates, Hurricane Nicole and allegedly unreasonable demands by lender HPS Investment Partners LLC. The parent company of the hotels isn’t part of the bankruptcy. It plans to seek an equity investor for the properties, and potentially refinance their debt and sell assets. The bankruptcy filing covers eight newly constructed or renovated properties that owe $165 million to HPS Investment Partners. AD1’s chief operating officer stated, in a declaration in bankruptcy court, the portfolio of properties has been valued at $210.5 million to $262 million. The AD1 affiliates had no choice but to file for chapter 11, given they didn’t have enough cash to fund operations, including payment of staff and contract labor, according to the declaration. To keep operating its business, AD1 is seeking permission from the bankruptcy court to use cash that is collateral for the loans from HPS.
The Hyatt Regency Conroe Hotel and Conference Center, which has been in the works since 2015, is anticipated to finish up construction and open in 2023. Located in Conroe, Texas, the seven-story hotel will feature 250 guestrooms, food and beverage facilities, a fitness center, pool, restaurant, club lounge, lobby bar, business center, outdoor pool terrace with amenity deck and a marketplace area.
Grande Lakes Orlando, the 500-acre luxury resort destination, anchored by the 582-room Ritz-Carlton Orlando and the 1,010-room JW Marriott Orlando, celebrated the full completion of its new waterpark experience, on the heels of its recently completed multi-million dollar, property-wide renovation project that encompassed both hotels. The newly reconfigured and expanded Grande Lakes Waterpark at JW Marriott Orlando now features six distinct zones, a restaurant, VIP firepit lounge, an abundance of private, full-service cabanas and daybeds. In addition to the enhanced waterpark experience at the JW Marriott Orlando, guests can explore the recently enhanced aquatic fun at The Ritz-Carlton Orlando. Debuting with its recent renovation, the property showcases a new Solaire heated pool lined with luxury poolside cabanas. Grown-ups can escape to an adults-only lap pool and hot tub and the Ritz-Carlton Spa.
The Mogharebi Group arranged the sale of the Inn at Avila, a 32-room beachfront hotel property in the Central Coast city of Avila Beach, California, for $16.25 million. TMG represented the seller of the hospitality property that traded to a Los Angeles-based private investor. The property includes a rooftop coffee house, grilling area, a business center and laundry services.
A $100 million expansion of The Woodlands Mall, in The Woodlands, Texas, will begin with a design process through 2024 with plans to have shovels in the ground by 2025. The expansion includes two new hotels with 30,000 square feet of conferencing space, 80,000 square feet of retail space and a parking garage with up to 1,200 stalls.
A class-action lawsuit filed Wednesday alleges that four of the main Las Vegas Strip resort operators colluded, via data-sharing software, to artificially inflate the prices of their hotel rooms. The suit named Caesars Entertainment, MGM Resorts International, Treasure Island, and Wynn Resorts Holdings. Together these four companies control 26 of the 33 resorts situated on or near the Las Vegas Strip. The Las Vegas Review Journal first reported attorneys with law firm Hagens Berman claim that Rainmaker, a revenue management platform employed by 90% of Strip hotels, uses real-time pricing and supply information data from competitors to formulate rate recommendations that maximize profits for its hotel operator users, in violation of the Sherman Antitrust Act. The lawsuit, filed in US District Court, seeks to force the defendants to repay plaintiffs who were forced to illegally overpay. In addition to the Strip resorts, the class-action suit also names Cendyn Group, a hospitality data analytics firm, and Rainmaker Group Unlimited.
JLL’s Hotels & Hospitality Group closed the sale of a portfolio of three recently renovated independent leisure hotels totaling 169 keys in high-barrier, drive-to New England markets. JLL represented the seller, Wardman Group, in the sale. The portfolio was unencumbered by brand and management. The first property in the portfolio is the Ocean Gate Resort, a 65-key resort in Southport, Maine. The resort features a full array of recreational activities, including and outdoor heated pool and hot tub, canoes and kayaks, a miniature golf course, fire pits, bikes, tennis and basketball courts. Next is the 57-key Seven Hills Inn in Lenox, Massachusetts. The inn offers modern amenities including an outdoor pool, life-size chess, firepits, recently renovated guest rooms and two food and beverage outlets. The third hotel is The Lodge at Mount Snow, which totals 47 keys, in West Dover, Vermont. On-site amenities include an indoor hot tub, outdoor pool, fitness center and the Trailhead Tavern.
JLL Capital Markets arranged a $30 million refinancing for The Madeline Hotel, Auberge Resorts Collection, an 83-key luxury resort with 56 separately-owned condominiums in the mountain town of Telluride, Colorado. JLL worked on behalf of the borrower, Flynn Properties Inc., to secure the five-year, floating-rate loan through Värde Partners. The resort underwent extensive renovations in 2020 and 2021 and features a spa, fitness studio, outdoor retail plaza, and the Sky Terrace which includes an outdoor pool, two oversized spas, multiple firepits and a bar. The hotel also offers multiple food and beverage outlets and direct ski-in/ski-out access to the 147 trails of the Telluride Ski Resort.
Europe Highlights
Mandarin Oriental Hotel Group announced it will manage a new beach resort on the island of Mallorca, Spain, scheduled to open during the second half of 2024. The new luxury resort is being developed by Blasson Property Investments. Following the renovation of the former H10 Punta Negra hotel, the hotel will be named Mandarin Oriental Punta Negra, Mallorca. The resort will feature 131 guestrooms, including 44 suites and nine bungalows; a variety of local and international restaurants; indoor and outdoor event spaces; three outdoor pools; and the Spa at Mandarin Oriental with an indoor pool.
Hotelbeds and NH Hotel Group are celebrating the positive first year of their partnership, with bookings made last year increasing 69% versus 2019. The agreement provides Hotelbeds’ clients with access to NH Hotel Group’s 355 properties in 31 countries around the world as part of its preferred partnership status. The group operates under eight brands focusing on Anantara, Tivoli, NH Collection, Avani, nhow Hotels, and NH Hotels. The collaboration has also given the Spanish hotel group access to 60,000 travel buyers based in more than 140 source markets around the world, including high-value channels such as travel agents, tour operators, airlines, and points redemption programs, expanding its clients reach.
