The DJIA fell 233 points while Nasdaq was up 53, the S&P 500 rose 4 points and the 10-year treasury yield was down .04 to 3.80%. Is there anyone who understands a Federal Reserve Board that paused interest rate hikes but tells the financial markets there will be at least two more in the next 6 months? The market had every reason to be confused today. Lodging stocks were modestly lower. SOND was the only mover of note, down -7%.
JP Morgan reported on management meetings held with Marriott. They see post-pandemic themes persisting, namely blended business/leisure travel, group adding incremental demand on top of larger events and large corporates reducing short duration travel. MAR believes there remains opportunity to push ADR outside of the higher end luxury segment where rate is ahead of 2019 levels on a real basis. While visibility is limited, so far there has been no sensitivity on price. MAR sees any potential recession scenario as more constructive for ADR relative to historical recessions, with branded operators now representing higher market shares and operating with more sophisticated revenue management systems. In the event of the leisure consumer becoming more sensitive to price, MAR would look to maintain ADR and incentive demand through other channels such as free parking. In terms of capital allocation, a recession scenario would result in shrinking share repurchases first, followed by more selective discretionary investment decisions.
Truist reported on a conference call they held with CoStar’s STR, which said 2023 and 2024 RevPAR growth should be 5% with rate representing three points of the growth. In part due to inflationary cost pressures, ADR is growing in Nominal terms but far less impressively in terms of real ADR growth. CoStar is forecasting 2023 real ADR to be at 100.9% of 2019 levels while up 117.4% in nominal ADR. They expect occupancy levels to remain below 2019 levels through 2025. Real RevPAR growth in the U.S. versus 2019 is forecasted to reach 97.2% in 2023 and 101.8% in 2024. CoStar expects 4Q23 RevPAR to be flattish year over year with a decline in occupancy particularly evident for midscale and economy hotels facings tougher y/y demand comps. Resort room rate growth turned negative in March and they are seeing signs of higher end travelers starting to switch to substitutions including cruising and many international destinations given the strength of the US dollar and the world reopening.
CoStar/STR reported US lodging data for the week ended 6/10. RevPAR was down -1.2 year over year.
Elm Street Hotel LLC, said they are finalizing design and construction plans so that work on the Westin Greensboro in Greensboro, NC can begin upon completion of the five-story park. The six-story, 180-room hotel is planned to include a public restaurant, a rooftop bar and numerous meeting and event spaces.
Hilton announced DoubleTree by Hilton South Charlotte Tyvola has joined the portfolio, following a multimillion dollar renovation and rebrand to a DoubleTree by Hilton hotel. Formerly Hilton Charlotte Executive Park, the Charlotte, North Carolina property features 181 rooms and suites, a fitness center, outdoor pool, outdoor terrace and a lobby bar and restaurant. In addition, the hotel provides 10,000 square feet of flexible meeting and event spaces.
IHG Hotels & Resorts announced the opening of its newest Staybridge Suites hotel in northwest Houston, Texas. Owned by Quartz Hospitality, LP and managed by Commonwealth Hotels, the Staybridge Suites Houston NW Cypress Crossing hotel features 106 suites and 510 square feet of meeting space.
CoralTree Hospitality announced the addition of Hotel Columbia in Telluride to its collection of hotels and resorts in Colorado. The 21-room hotel offers several room configurations including 13 suites, a selection of penthouse suites and two hot tubs. Hotel Columbia is also home to COSMOpolitan, rated the No. 1 restaurant in Telluride.
Kirkwood Collection acquired three luxury historic properties in Palm Springs, California: the 18-room La Serena Villas; The Del Marcos Hotel with 17 rooms; and The Three Fifty Hotel with 10-rooms. Kirkwood partnered with Somera Capital Management on the acquisition.
Tristan Schukraft, the founder and CEO of Mistr, has acquired The Tryst, the iconic boutique hotel, restaurant and bar located on Condado Beach in San Juan, Puerto Rico. The purchase includes the real estate and all assets associated with the property. With a $6 million renovation underway, the 36-room property will transform Condado Beach into the center of LBTQ Life. The Tryst remains open during renovations, Circo Bar is scheduled to reopen this fall.
The former Holiday Inn in McCall, Idaho, has changed its name to The Evergreen Hotel. Additionally, the look and feel of the hotel are changing. The first two floors of the property have been remodeled and overhauled. The third floor, lobby and conference center will be completed by January 2024, when the renovations will be finished.
A new 100-room hotel is planned for downtown Sarasota, Florida at the site of the nearly century-old Palm apartments building and an office building, both of which will be demolished. A schematic drawing of the building, by Developer M2RE Partners, shows a total of 18 floors with a three-story parking structure above a street-level lobby area. Above the parking are five floors of rooms, a sixth floor amenity space and a smaller eight-story tower above that topped by a rooftop amenity space.
The Nob Hill Inn, a three-story, 21-room timeshare hotel property in San Francisco, California, is seeking a buyer. The homeowner’s association in possession of the property filed for Chapter 11 protections this month. The debtor, Nob Hill City Plan Owners, lists assets of just over $8.5 million, with about $8.25 million of that value attributed to the property itself. Nob Hill Inn’s owners are retaining Maven Commercial to market the property for sale.
WaterWalk announced the grand opening of WaterWalk Atlanta located within metro Atlanta’s Perimeter Center. The 128-unit property is the first in the WaterWalk brand to debut in Georgia and is the company’s third converted “Gen 2.0” property open to the public. Shared public amenities include an outdoor pool, grilling area and fitness center.
Former industrial buildings in West Palm Beach, Florida, are receiving a facelift with Nora, a mixed-use district intended to transform the area. In the first phase, the project will feature public parks, a plethora of food and drink options, boutique fitness and wellness centers, lifestyle retail and a social club. In future phases, Nora will receive residential and office buildings, along with a 200-key high-end hotel. The $1 billion project will be constructed in phases and the first phase will be completed in late 2024. The hotel and retail establishments are well underway. The hotel development is in collaboration with BD Hotels and Sean MacPherson.
Braemar Hotels & Resorts Inc. finalized an extension of its $435 million mortgage loan secured by four properties: The Notary Hotel, The Clancy, Sofitel Chicago Magnificent Miles, and Marriott Seattle Waterfront. The loan is being extended beyond its original initial maturity in June 2023 for an additional twelve months. In conjunction with the extension, the Company paid down $142 million of the loan utilizing corporate cash on hand, which reduced the balance to approximately $293 million. As part of the extension, the Company also purchased an interest rate cap through June 2024 with a strike rate of 4.69%.
Personnel Moves
Remington Hospitality has welcomed Joseph Klam as the company’s Chief Financial Officer. Klam will lead efforts out of the company’s corporate offices in Dallas and will oversee financial planning, accounting, and global financial operations for Remington Hospitality. Klam joins Remington from Highgate Hospitality where he served as Chief Accounting Officer.
RLJ Lodging Trust announced the appointment of Chad D. Perry as Executive Vice President and General Counsel. Prior to his appointment, Mr. Perry served as Executive Vice President, General Counsel and Secretary of Tanger Factory Outlet Centers, Inc. In this role, Mr. Perry will lead the Company’s legal department.
Service Properties Trust elected Rajan Penkar to its Board as Independent Trustee, effective immediately. With the addition of Penkar, SVC’s Board now has eight Trustees, including six independent Trustees. Mr. Penkar has served as president and founder of Supply Chain Advisory Services, LLC since 2014.
European Highlights
Radisson Hotel Group announced the opening of the Radisson Hotel & Suites Zurich, marking the debut of the company’s first serviced apartments offering in Switzerland. Radisson Hotel & Suites Zurich offers 104 hotel rooms as well as 343 fully furnished serviced apartments, multiple dining options, a fitness area and laundry rooms on every floor.
Hyatt Hotels Corporation announced a Hyatt affiliate entered into a franchise agreement with Botteghe Oscure s.r.l., for the first Thompson Hotels property in Italy, with Thompson Rome. Expected to open by mid-2024 in the heart of the Italian capital, the 70-room luxury lifestyle hotel will be the brand’s second property in Europe. Thompson Rome will boast four dining outlets, two dedicated meeting rooms and a fitness center.
Moxy Hotels announced the opening of Moxy Tromso in Northern Norway. Operated by Core Hospitality A/S, the hotel marks the northernmost property in Marriott Bonvoy’s global portfolio. Moxy Tromso offers 208 bedrooms and Sky Bar Moxy.
