Marriott Grows Conversion Pipeline in Latin America

The DJIA ended Friday up 3 points, but Nasdaq was down 31, the S&P 500 was up a point, and the 10-year treasury yield was down .02 to 3.84%. Lodging stocks were mixed. MAR traded up to a new all-time high, while ABNB hit a new 52-week high.

Baird said they expect good 2Q23 reports from Hilton and Marriott with an upward bias to earnings estimates. They believe international strength and favorable operating leverage should be the upside drivers this earnings season, particularly for MAR, despite softer domestic RevPAR trends that materialized during the quarter. They expect continued positive commentary and updates from both companies.

Wells Fargo upped its target price on Hilton to $160 from $151 and on Hyatt to $127 from $113. They lowered their target price on Choice Hotels to $113 from $122.

According to data from Lodging Econometrics, the pipeline of brand conversions in Latin America jumped by 22% in the first quarter of 2023 compared to the first quarter of 2022, totaling 67 projects and 9,464 rooms. Marriott’s data parallel global trends, with the first quarter of conversion activity accounting for 29% of rooms signed and 25% of rooms opened by the company globally. Marriott International has been boosting its organic growth with increased conversion activity. The company added nearly 17,500 conversion rooms in 2022 and signed 20,500 rooms, approximately 20% of rooms signed globally last year. In the Caribbean and Latin America, more than 50% of Marriott’s room signings were conversions in 2022. As of the first quarter of the year, the region had more than 3,000 conversion rooms in the pipeline, building on the success of the company’s strategy. Examples of recent Marriott conversions in CALA include the JW Marriott Hotel Sao Paulo in Brazil; The Westin Porto de Galinhas, an All-Inclusive Resort, also in Brazil; and The Sanctuary Cap Cana, a Luxury Collection Adult All-Inclusive Resort, in the Dominican Republic.

The 123-room Courtyard by Marriott North Charleston Airport/Coliseum in Charleston, South Carolina, has sold for $12 million. The buyer is affiliated with Baron Hospitality, and the seller was NewcrestImage and Hospitality Capital Partners. The purchase was part of the buyer’s $100 million acquisition of multiple properties. The hotel will remain a Courtyard by Marriott, and it will be one of the “newest prototype Courtyards” as Baron Hospitality plans to fully renovate the property starting later this year into the summer of 2024. 

Hilton announced the signing of a management agreement for the 540-room Hilton Cancun Mar Caribe All-Inclusive Resort. Formerly known as Royal Uno All-Inclusive Resort & Spa, the property is owned by Tortuga Resorts and will be managed by Hilton. Now accepting reservations and expected to open in November of this year, the newly-renovated property features 459 guestrooms and 81 suites, five diverse dining options, five bars, multiple pools, a spa, a fitness center, and a kids and teens club featuring waterslides and an exclusive kids pool.

White Lodging announced the topping out of the first Kimpton Hotel in San Antonio, Texas. Set to open in the fourth quarter of 2024, the 10-story building seamlessly merges an 18th-century, historic schoolhouse with sleek, ultra-modern rooms and amenities. The main landmark building will be repurposed to become the property’s high-end steakhouse. The additional historic structures are being re-imagined into eight guest suites and a charming courtyard cocktail bar—a unique whisky bar and rooftop bar round out Kimpton San Antonio’s food and beverage offerings. In addition to 16 luxury guest suites and ample food and beverage options, the new 347-room Kimpton San Antonio will feature a rooftop pool and more than 11,000 square feet of flexible meeting and event space.

Plans for a new 112-room hotel in Redwood City, California, were approved by the city’s Planning Commission, moving forward with plans to replace a two-story motel downtown. Viren Patel plans to build a five-story Hyatt Place hotel and 91 onsite parking spots, replacing the 17-room motel. 

The land currently occupied by the Belle Mead Plaza shopping center in Nashville, Tennessee, was purchased by AJ Capital this week for $87 million after the firm achieved a Specific Plan rezoning for the site earlier this year. AJ Capital finalized the sale this Wednesday under the title BMTN Owner LLC. The approved plan to redevelop the shopping center includes constructing several buildings, including condo homes, rental apartments, a hotel, and retail space. 

Choice Hotels International, Inc. continues its growth in the extended stay segment with the construction of the Everhome Suites Lexington underway in Lexington, Kentucky. The four-story property is being developed by New Circle Investments and is slated to open in the second quarter of 2024. The Everhome Suites Lexington will feature 114 spacious apartment-style rooms, a market, a fitness center, and guest laundry facilities.

The Gulfstream Hotel and vacant land next to it could be sold to a firm specializing in historic restoration, marking the latest twist in the saga of the downtown Lake Worth Beach, Florida property. After three years of on-again, off-again efforts, Restoration St. Louis is close to finalizing a contract to buy 100% of the membership interest in Gulfstream Owner LLC, according to CDS International Holdings, which owns the hotel and the land. The sale is expected to close in mid-October, and renovation of the historic hotel could begin by November 1. The deal includes the hotel and six land parcels for an additional 50 hotel rooms, plus 85 apartments and a parking garage in an eight-story building. To make the deal financially feasible, Restoration St. Louis said an expansion of the hotel was necessary and would include a restaurant, rooftop pool, banquet room, salon, and gym.

A former doctor’s office on Main Street in Danville, Virginia, is being transformed into a boutique-style hotel. The Holbrook Hotel, being developed by Ed Walker, will include 45 luxury suites and is slated to open in October.

The Oneida Nation announced a $370 million capital investment in Turning Stone Resort and Casino in Verona, New York. The tribe will expand the facility to include a new conference center, outdoor event spaces, a hotel, and more. The two-year project will be the resort’s largest expansion since opening in 1993. The new conference center will include eight new meeting rooms with outdoor patios, two new ballrooms, an outdoor courtyard with three event spaces, and an indoor parking garage with 2,000 parking spots. The new hotel will feature 258 rooms and a Salt Seafood & Raw Bar. On October 1, Oneida Nation Enterprises will become Turning Stone Enterprises. 

The former Metropolitan Hotel building in New London, Connecticut, was put up for sale this week for $567,000, according to the CREXI property listing website. The owner Brandt Gentry, operating under the name Creative Concepts, LLC, states the four-story property with a basement is gutted and ready for build-out.

Jackson, Mississippi, leaders are again seeking a developer to build a hotel across from the Jackson Convention Complex. In July, the city requested proposals for a master developer to transform the parking lot across from the convention center into a mixed-use development, complete with a 335-room hotel, 1,200-space parking garage, and community green space. This is the second time the city has sought a developer for the project under Mayor Chokwe Antar Lumumba. Previous efforts under two former Mayors fell through. The property in question includes about 7.75 acres currently used for convention center parking. The city or the Jackson Redevelopment Authority owns almost all the parcels. The first phase will consist of constructing a hotel, parking structure, and open space for entertainment. The second phase will include commercial properties around the parking garage, while the third phase will include 400 apartments or condos, a second parking structure, and more open space. 

Best Western Hotels & Resorts announced the Best Western Heartland Inn opening in Mattoon, Illinois. Owned by Manny Patel, the hotel features 46 standard rooms in addition to 14 suites, an indoor pool, a fitness facility, a business center, and laundry facilities. The Best Western Heartland Inn recently underwent a $3.5 million renovation.

The Victoria Inn in Hampton, New Hampshire, has sold for $1.5 million. Tracey Dewhurst sold the property to Victoria Inn LLC. The Inn features seven unique rooms, a white linen cloth dining room, and a service bar. It also features a pavilion in the back. 

JLL’s Hotels & Hospitality group arranged the sale of the 125-room Holiday Inn Express & Suites Pittsburgh-South Side in Pittsburgh, Pennsylvania. JLL represented the seller and procured the buyer. The Holiday Inn Express & Suites Pittsburgh-South Side offers 600 square feet of meeting space, a fitness center, an indoor pool, and a business center. 

International Headlines

Hilton plans to bring the Tapestry Collection by Hilton brand to Northern Ireland, with an opening in the popular seaside town of Portrush, as part of a franchise agreement with Andras House. The 83-room hotel will boast a café, restaurant, and bar.

Scandic Hotels Group AB has grown its portfolio to 269 hotels and almost 56,000 rooms. It plans to debut its new economy band with the September 5th opening of the Scandic Go Upplandsgatan 4 in Stockholm. The company also has five hotels and 1,524 rooms in its pipeline. All but eight of its hotels are in the Nordic region. That pipeline includes a second Scandic Go hotel in Stockholm, set to open next summer with 221 rooms.

The Accor Group, Andera Partners, and partner investors have entered into exclusive negotiations for Accor to acquire a 63% stake in Potel & Chabot, which it does not currently own. After this transaction, Accor will become the sole shareholder of Potel & Chabot, which will be consolidated within the Group’s Luxury & Lifestyle Division. Closing is expected to occur in the fall of 2023.