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U.S. Hotels Exceed Pre-Pandemic Levels with Strong Recovery in Q1 2023

Alan Woinski and Kim Woinski
May 24th, 2023 at 4:55 PM EDT

Skift Take

  • US hotels surpass pre-pandemic revenue levels in Q1 2023, with a 13% increase compared to 2019, driven by higher room rates.
  • Despite concerns of a recession and liquidity crisis, US hotels continue to perform well, with leisure travel showing strength and business travel gradually returning.
  • Significant hotel developments and renovations are underway in various US cities, including new acquisitions, expansions, and upgrades to enhance guest experiences.

The DJIA was down 256 points while Nasdaq was down 76, the S&P 500 fell 30 points and the 10-year treasury yield was up .02 to 3.72%. Lodging stocks were lower. The only mover of note was AHT, down -6%.

The common consensus among lodging analysts is that the Choice Hotels/Wyndham Hotels rumor makes little sense and won’t happen. Most brought up what we did yesterday, not a very good environment to raise debt or equity capital and the concentration in the economy segment could raise anti-trust concerns. As to why WH stock is staying so strong, despite travel and leisure stocks collapsing around them, there is a sense that this could put WH in play. Once again, not out of the question particularly since for some reason WH has avoided private equity interest even though they have what PE likes, amazing cash flow. The problem is this environment is not a great one to be raising debt financing and most analysts are saying the price tag for WH would have to be around $90 a share. WH ended the day up nearly 3% at $70.74.

Host Hotels held their Investor Day, getting a lukewarm to warm reception from the Sell Side. In other words, the bulls used this as validation, those that are Neutral said HST is in good shape but they are not ready to change their view in this environment. The news out of the Day is that 2023 group revenue pace is now 3.2% above this time in 2019. That is up from +2.5% on March 31. HST management showed how they are going to get to $2 billion in Adjusted EBITDA. We don’t think there is anyone out there that will say the stock is not cheap. The big question is in this current environment, who is going to stick their neck out?

U.S. hotels continue to outperform expectations, despite worries of recession, bank failures and a liquidity crisis affecting the macroeconomy, according to a new PricewaterhouseCoopers report. In Q1 2023, U.S. hotels exceeded Q1 2019 RevPAR levels by 13%, based on data from STR. Room rates continue to be the primary driver in this performance recovery. While occupancy in Q1 2023 was still down 2.1 points from the same period in 2019, ADR increased 17%. Leisure travel continues to be strong and individual business travel and group business has slowly re-emerged. PwC now expects annual occupancy for U.S. hotels this year to increase slightly less than in their November 2022 outlook, increasing to 63.4%. With slowing growth in occupancies for the balance of this year, PwC now expects ADR to increase 4.1% for the year, with resultant RevPAR up 5.5%, approximately 114% of pre-pandemic levels, on a nominal dollar basis. 

STR reported US lodging data for the week ended May 20. US hotel RevPAR was up 2.1% year over year. RevPAR was up 11% versus the week in 2019.

PEG Companies is looking to build a premium Marriott extended-stay hotel at the site of the Peabody Logan Express at the Northshore Mall in Peabody, Massachusetts. The property will offer 142 rooms, an indoor pool, gym, and small pantry.

The 149-room Courtyard Edison Woodbridge, in Edison, NJ, announced the completion of a $6 million renovation. Every aspect of the hotel has been improved, both exterior and interior, including guest rooms, public spaces and back-of-house areas. The property features a living room-like lobby, a fitness center, business center, nearly 1,300 square feet of flexible meeting space and The Bistro. The Courtyard is operated by Hospitality Ventures Management Group.

Cooper Hotels, owners of the Crowne Plaza hotel located at the Bell Tower Shops in Fort Myers, Florida, announced the hotel would join the Hilton portfolio by year-end 2023. The property’s conversion to a DoubleTree by Hilton will consist of major renovations to the lobby, meeting rooms and its café. The hotel’s 225 guest rooms recently underwent extensive renovations. The new DoubleTree by Hilton hotel will continue to be operated by Cooper Hotels. Renovations underway include the addition of an expanded lobby market, a yoga room and Pelaton bikes in the updated fitness center; meeting rooms will be refurbished and undergo a modernization. The popular outside deck portion of the restaurant will be completely replaced and a new outdoor bar will be built. The new DoubleTree by Hilton Fort Myers will also offer an outdoor pool with water feature, a fitness center and a business center.

A proposed project to redevelop the Hyatt Hotel in downtown Miami, Florida is moving forward. The new $1.7 billion project known as Riverbridge will include three towers. There will be 1,806 apartments, a 615-room Hyatt Regency Hotel and 190,000 square feet of meeting space. Project partners include Gencom, Hyatt Hotels & Resorts and Arquitectonica.

Douglas Development Corp. announced the Kimpton Hotel Monaco Baltimore Inner Harbor, in Baltimore, Maryland, is undergoing $6.5 million in renovations to update its hotel rooms, lobby and restaurant. The renovations are expected to be finished in early 2024. The renovations will occur in phases, with the hotel rooms first followed by the public areas such as the lobby. The last stage of the project will be the hotel’s restaurant which will have a reconcepting and a new name.

IHG Hotels & Resorts announced the opening of the newest Holiday Inn Express & Suites hotel in Toronto, Ontario. Owned by 2530497 Ontario Inc and managed by LHM Canada, the Holiday Inn Express & Suites Toronto Airport South features 120 rooms, a business center, fitness center and an indoor pool.

Holiday Inn Club Vacations Inchas acquired four beachfront resorts from Royal Resorts. The acquisition also includes most of Royal Resorts’ related companies and its corporate operations. These resorts will be Holiday Inn Club Vacations Incorporated’s first properties located outside the United States. The four resorts collectively will add more than 850 villas to the company’s growing portfolio of destination resorts. The company expects it will take approximately one year to fully integrate the resorts, and during this process, the resorts will continue to operate normally. The four family-friends resorts include 340-villa The Royal Sands located in Cancun; the 201-villa The Royal Cancun located on Cancun’s north shore; The 252-villa The Royal Haciendas located in Riviera Maya; and the 62-villa Grand Residences by Royal Resorts located in Puerto Morelos.

Four Seasons Hotel Seattle unveiled its newly redesigned two premier suites, The Presidential and Governor’s Suites, as well as 110,500 square feet of meeting and event space. Located in Seattle, Washington, the hotel offers 147 guestrooms, including 13 suites.

Outrigger Hospitality Group has acquired the Ka’anapali Beach Hotel and Lahaina’s Plantation Inn for an undisclosed amount. The Ka’anapali Beach Hotel is a beachfront resort on Maui spanning 11 acres with 432 rooms and recently completed a $75 million property-wide renovation. Outrigger will also take ownership of The Plantation Inn, an 18-room bed and breakfast in historic Lahaina Town in Maui. The transaction is expected to close on July 26.

Placemakr announced its expansion into the condo hotel market in partnership with CA South. Placemakr will operate the majority of the building as high-end furnished rentals for CA South’s latest luxury condo development project, Hyve. Hyve is a collection of 83 premiere, short-term, rental-eligible residences located within close proximity to the Convention Center, Broadway, and So Bro in Downtown Nashville. Placemakr will act as both property manager and hospitality operator of Hyve units. 

Palisociety announced the opening of Palihotel San Diego located in San Diego, California. The 11-story property features 122 guestrooms, a new restaurant, private event space and a rooftop deck with a signature bar. Palihotel San Diego is Palisociety’s fifteenth hotel.

The wrapping is starting to come off at Adolfo Suaya’s Whisky Hotel in Hollywood, California. The project, under construction since 2020, consists of a seven-story building, which will feature 134 guestrooms, ground-floor retail space, a rooftop deck, and a basement garage which will have capacity for more than 100 vehicles. The estimated value of the completed building is just over $78 million.

The 117-room Roost Detroit hotel concept is opening June 1 in the Book Tower in downtown Detroit, Michigan

JLL Capital Markets arranged $36.8 million in construction financing for 550-566 E Colorado BLVD, a six-story, 194-key hotel development in the Playhouse District of Pasadena, California. JLL represented the developer Welcome Group Inc., to secure the three-year loan with two one-year extension options. Slated for completion in 2025, the hotel will operate as an AC Hotel by Marriott. The property will feature a rooftop lounge, a Pelaton fitness room, event space, and its signature AC Lounge.

Europe Highlights

AC Hotels by Marriott expanded its European footprint with the opening of its first property in MaltaAC Hotel by Marriott St. Julian’s. Owned and managed by The Ona Hospitality Ltd. The new lifestyle hotel offers 106 guestrooms and suites, the AC Lounge on the rooftop terrace, a heated outdoor rooftop pool, an indoor pool, meeting space and a gym.

SH Hotels & Resorts and 1 Hotels announced its UK flagship and first European destination, located in the heart of London’s historic Mayfair, is now accepting reservations with an anticipated opening date of July 13, 2023. The nine-story property boasts 181 rooms and suites, multiple food and beverage venues and The Bamford Wellness Spa.

Nobu Hospitality announced its expansion into Portugal marking another significant milestone in the company’s global expansion strategy. The Nobu Hotel and Restaurant Lisbon will be situated in the heart of Lisbon offering travelers direct access to the city’s upscale retail, five-star restaurants, and key cultural landmarks.

Hyatt Hotels Corporation announced a Hyatt affiliate entered into a franchise agreement with S/C Hospitality GmbH for Kennedy 89, a luxury hotel currently under development. Set to open within the Unbound Collection by Hyatt brand later this year, the 181-room hotel marks the brand’s first hotel in Frankfurt and second hotel in Germany. The new-build Kennedy 89 hotel will feature a destination restaurant with extensive outdoor seating, standalone bars on the first floor and rooftop and nearly 1,400 square feet of banqueting space with meeting rooms.

Alan Woinski and Kim Woinski
May 24th, 2023 at 4:55 PM EDT

Companies: 1 Hotels, AC Hotels by Marriott, Ashford Hospitality Trust, Choice Hotels International, Cooper Hotels, Courtyard by Marriott, DoubleTree by Hilton, Four Seasons, Hilton Hotels & Resorts, Holiday Inn Club Vacations, Holiday Inn Express, Host Hotels & Resorts, Inc., Hyatt Hotels Corporation, Hyatt Regency, Hyve, IHG Hotels & Resorts, JLL, Kimpton, Marriott International, Nobu Hotels, Outrigger Hospitality Group, Palihouse, Palisociety, Placemakr, SH Hotels & Resorts, The Ona Hospitality Ltd., The Unbound Collection by Hyatt, Welcome Group, Wyndham Hotels & Resorts

Locations: Baltimore, Detroit, Germany, Lisbon, London, Los Angeles, Malta, Massachusetts, Maui, Miami, Nashville, New Jersey, San Diego, Seattle, Toronto

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