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North America

Price of U.S. Hotels Shows Strength in Most Regions

Alan Woinski and Kim Woinski
February 8th, 2023 at 4:35 PM EST

Skift Take

  • The DJIA rose 208 points while Nasdaq was down 203, the S&P 500 fell 46 points and the 10-year treasury yield was down .02 to 3.65%.
  • STR reported US lodging RevPAR for the week ended February 4. RevPAR was up 26.6% year over year. When compared with the same week in 2019, RevPAR was up 6.1%.
  • Three historic buildings in downtown Cincinnati, Ohio will soon become a hotel when combined with a newly built seven-story tower.

The DJIA rose 208 points while Nasdaq was down 203, the S&P 500 fell 46 points and the 10-year treasury yield was down .02 to 3.65%. Lodging stocks were lower. MCG was down -11%, SOND fell -9%, BHR was down -6% and VCSA ended the day down -5%.

STR reported US lodging RevPAR for the week ended February 4. RevPAR was up 26.6% year over year. When compared with the same week in 2019, RevPAR was up 6.1%.

According to the Cornell Center for Hospitality Researchthe price of U.S. hotels showed strength in all regions except the South Atlantic this quarter, with all regions except New England experiencing double-digit growth year-over-year. Hotels in non-gateway cities posted higher quarterly and yearly gains relative to gateway cities, with non-gateway hotels’ prices increasing 4% for the quarter, compared to 2% for gateway properties. On a year-to-year basis, non-gateway hotels recorded a 195 increase versus 3% for gateway properties. However, regardless of price changes, the transaction volume for all hotels fell this quarter. As in the previous period, Q3 of 2022, the Cornell Center for Hospitality Research’s economic-value-added and shareholder-value-added metrics continue to indicate that the cost of borrowing exceeds the return for hotels, with the cost of hotel debt financing continuing to rise this quarter as well as year-over-year. Looking toward the next quarter the leading indicators of hotel price performance indicate expecting slower or declining price momentum for larger hotels but not necessarily for smaller hotels.

Three historic buildings in downtown Cincinnati, Ohio will soon become a hotel when combined with a newly built seven-story tower. Rolling Hills Hospitality is working on the Moxy, a 111-room hotel with an outdoor courtyard and a rooftop bar, slated to open in late 2024.

The Los Angeles City Council officially approved Orion Capital’s proposed seven-story, 168-room Marriott hotel in South Central. 

Rockbridge and Makeready announced The Junto, an independent lifestyle hotel, will open May 2023 in Franklinton, a historic area of Columbus, Ohio and is now welcoming online reservations. The 198-room hotel boasts multiple food and beverage venues, more than 13,000 square feet of event and meeting space, a fitness center and The Gear Garage, offering recreation equipment including bikes, scooters and long boards. 

The Hyatt Regency Hill Country Resort and Spa, in San Antonio, Texas, announced a multi-million dollar renovation to its 500 guest rooms and meeting and event spaces. The enhancements are expected to be completed in the spring of 2023, coinciding with the resort’s 30-year anniversary as a premier Texas destination.

The Columbia Gorge Hotel & Spa, located in Hood River, Oregon, unveiled the completion of a multi-million dollar transformation to the entire property. The 42-room hotel features a full-service spa, four meeting rooms, wedding venues and multiple food and beverage venues. The Columbia Gorge Hotel & Spa is managed by A-1 Hospitality. 

Developer RREAF Holdings and Innisfree Hotels are jointly developing a $110 million, 334-key project in Galveston, Texas under the name RREAF Grand Beach Development. Construction will begin later this month and will be complete in 2025. The 14-story project will feature a pool and amenity deck, restaurant, family entertainment center and conference center. The Galveston Resort will have direct access to East Beach

In an addition to our coverage from yesterday on The Pierside Hotel in Santa MonicaSage Hospitality Group announced the addition of The Pierside to their portfolio of more than 110 hotels, restaurants and entertainment venues in 14 states. The Pierside joins the Sage Independent Hotel Collection, bringing the number of fully independent, lifestyle hotels that Sage operates to 18. It is the eleventh property added to Sage’s independent portfolio in less than two years.

LuxUrban Hotels Inc. signed separate, multi-year Master Lease Agreements to operate two short-term stay hotels: The O Hotel in downtown Los Angeles, CA via a 20-year MLA, inclusive of options; and 101 Bogart Street in Brooklyn, NY via a 10-year MLA. The O Hotel, a 68-room boutique property, is expected to commence operations in the first quarter of 2023. 101 Bogart Street, which is expected to commence operations in the second quarter of 2023, is a mixed-use, seven-story property offering 65 units in East Williamsburg-Bushwick, Brooklyn.

Nobu Residences Los Cabos will celebrate its official opening in March 2023, as an extension of the Nobu Hotel Los Cabos. Located in Baja California Sur, Nobu Residences Los Cabos is home to 60 exclusive residences and offers guests exclusive restaurants and special amenities. In addition to the opening of the residences, the resort introduces a fresh, new dining concept, alongside the iconic Nobu Los Cabos Restaurant. The rooftop Muna Restaurant will be accompanied by M Bar.

The Rehoboth Beach, Delaware planning commission is set to get its first look at the new version of the Atlantic Crowne Hotel during a concept review on Friday, February 10. The project by Rehoboth hotelier Gene Lankford would sit on four lots and be four stories tall. The plan comprises 55 rooms, a ground-floor restaurant and bar and an outdoor dining patio. There will be on-site parking and an underground parking garage accessed through the Atlantic Sands parking garage, also owned by Lankford.

Hodges Ward Elliott arranged the sale of the Hampton Inn located in Canton, Mississippi. The four-story, 80-key Hampton Inn Canton features a business center, outdoor pool, and a fitness center. The HWE team brokered the sale of the property on behalf of the seller.

Sonnenblick-Eichner Company arranged $50 million of construction financing for Phase 1 of the Lionsback Resort in Moab, Utah, a 175-acre development adjacent to Canyonlands and Arches National Park in eastern Utah. Proceeds from this fixed-rate, non-recourse construction loan will be used to complete the Phase 1 onsite infrastructure improvements and vertical construction of the initial 34 single-family homes, as well as the horizontal infrastructure of Phase 11. To be built over five phases, at build-out, the $350 million development will include 188 single-family residences and a luxury, destination resort hotel. The project will be the first luxury residential development in the city of Moab.

Personnel Moves

JLL Capital markets announced Jeffrey Altman joined the firm’s M&A and Corporate Advisory platform as a Senior Managing Director based in New York. While he will work across all property sectors, Altman will have a particular focus on hospitality given his extensive background in the lodging and leisure industry. He joins JLL from Jeffries where he was Managing Director and Head of the Lodging and Leisure practice.

Hilton named Katherine Lugar as executive vice president of corporate affairs, effective April 2023. Lugar most recently served as CEO of the American Beverage Association and prior to ABA, was the president and CEO of the American Hotel & Lodging Association. Hilton’s corporate affairs department includes communications, government affairs and ESG functions globally for the company. Lugar will also serve as a member of the executive committee.

Maybourne Hotel Group announced the appointment of Roland Fasel as Chief Operating Officer, from April 2023. Fasel’s most recent role was with the Aman Collection where he was Chief Operating Officer for the last six year, and prior to that an eight-year tenure at The Dorchester Collection. In his new role at Maybourne Hotel Group, Fasel will be responsible for the commercial success and quality of the current portfolio of hotels, building on their reputation for unrivaled service and personalized guest experiences, as well as helping spearhead a program of international expansion. 

Alan Woinski and Kim Woinski
February 8th, 2023 at 4:35 PM EST

Companies: Best Western Hotels & Resorts, Hilton Hotels & Resorts, Hyatt Hotels Corporation, Hyatt Regency, Innisfree Hotels, JLL, LuxUrban Hotels Inc., Makeready, Marriott International, Maybourne Hotel Group, Moxy Hotels, Nobu Hotels, Orion Capital, Rockbridge Capital, Soho House and Co Inc., Sonder Holdings Inc., Vacasa

Locations: Cincinatti, Columbus, Delaware, Los Angeles, Los Cabos, Mississippi, New York City, Oregon, San Antonio, Texas, Utah

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