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North America

Certares Closes $284 Million Hospitality Fund

Alan Woinski and Kim Woinski
July 26th, 2023 at 4:33 PM EDT

Skift Take

  • Market Summary: DJIA rose 82 points, Nasdaq fell 17, S&P 500 down 1 point, 10-year treasury yield down to 3.85%. Uncertainty remains about the Fed’s rate hike decision.
  • Certares Real Estate Hospitality Fund: Certares closes its first real estate fund with $284 million in equity commitments, investing in 10 U.S. hotels.
  • Hilton and Travel + Leisure face mixed responses from investors. JD Power study highlights staff service as the highest contributor to guest satisfaction in hotels.

The DJIA rose 82 points, Nasdaq fell 17, the S&P 500 was down a point, and the 10-year treasury yield was down .06 to 3.85%. The Fed may be done with their rate hike today or may not be. Every inflation and jobs report will be scrutinized until we get a clear indication of what they will do. Lodging stocks were mixed. MAR traded up to a new high, while TNL was down -5% after their earnings reports.

Certares, the travel-focused investment firm, announced the close of its first Real Estate Hospitality Fund, with $284 million of equity commitments. Certares, a private equity firm whose portfolio companies include Hertz, Liberty TripAdvisor, and Azul, has closed its first real estate fund. The fund has investments in 10 hotels in the U.S., including the Sea Crest Beach Hotel in Cape Cod, the Courtyard San Diego Downtown, and the EAST Miami.

Hilton didn’t get the greatest response from the investment community despite a solid earnings report and an increase announced in their capital returns plans, but analysts and the media liked it. While there has been quite a bit of doom and gloom hanging over the group, the top C-Corps have been stellar stock performers, so a bit of sell-on news is not that surprising. For HLT, they beat on the strength of their international business and gave higher guidance but lowered their net unit growth expectations. HLT also said they now expect to return $2.4 to $2.6 billion to shareholders this year in buybacks and dividends, up $500 million at the midpoint. That would imply an acceleration in buying back stock in 2H23, as $1 billion was returned in the first half of the year. HLT bought back 3.3 million shares for $470 million in 2Q23.

Travel + Leisure received a rude response from investors even with an inline quarter and no change to their guidance. TNL bought back $2.6 million shares of stock for $100 million in the quarter and now has $275 million remaining under its share repurchase authorization.

According to the J.D. Power 2023 North America Hotel Guest Satisfaction Index Study, staff service garners the highest level of satisfaction among all guest experience factors measured. Driven largely by a hiring surge in the leisure and hospitality sector during the past 12 months, new and returning hospitality workers provide a generally positive hotel stay experience. Key findings of the 2023 study include: overall satisfaction with hotel staff is 701 (on a 1,000-point scale), making it the single highest-scoring factor in this year’s study. Guests’ experience with hotel lobbies/common areas can positively affect overall satisfaction and value for the price paid, given that the quality and service received are still top of mind for hotel guests. The following hotel brands rank highest in guest satisfaction in their respective segments.

LuxuryWaldorf Astoria788
Upper UpscaleHard Rock Hotels723 (tie)
Upper UpscaleMargaritaville Hotels & Resorts723 (tie)
UpscaleCambria Hotels & Suites738
Upscale Extended StayHyatt House729
Upper MidscaleTrademark Collection by Wyndham762
Upper Midscale/Midscale Extended StayHome2 Suites by Hilton681
MidscaleTru by Hilton708
EconomyAmericas Best Value Inn637
EconomyMicrotel by Wyndham637 (tie)
Economy Extended StayWoodSpring Suites637 (tie)

JW Marriott announced the opening of JW Marriott Dallas Arts District, marking the brand’s debut at the epicenter of the cultural arts scene in Dallas, Texas. The 267-room hotel features three restaurants, the JW Market, two lobby spaces, over 20,000 square feet of flexible meeting space, and a grand mid-air pool and deck with cabanas. 

Twenty-Four Seven Hotels announced that The Steward, a Tribute Portfolio Hotel by Marriott, has opened in Santa Barbara, California. The property features a lobby library, an outdoor dining area, a cozy bar, a signature restaurant, and a historic bar hosting a modern fitness area, complete with a yoga lawn and picnic area, inviting event venues, and an outdoor pool.

Aloft Santa Clara, in San Jose, California, announced the completion of a multi-million dollar renovation. Every element of the hotel was updated in the guestrooms and public space. Managed by HRI Lodging, the property features 174 guestrooms, a Re:mix Lounge, a Recharge gym, an outdoor Splash pool, a WXYZ bar, and more than 3,890 square feet of flexible meeting and event space, including an outdoor deck. 

A joint venture of Highgate and Cerberus Capital Management has missed two months of payments on their $415 million loan for 30 Courtyard by Marriott hotels. Three of the 30 hotels are located in Florida, and waiting on a hurricane insurance payment is one reason for the venture asking for an extension on the floating-rate loan.

Red Roof announced the opening of three new properties: the Red Roof Inn Painted Post, New York; the HomeTowne Studios by Red Roof Painted Post, New York; and the Red Roof Inn in Lancaster, Texas. The Red Roof Inn Painted Post, NY, is a 60-room hotel with a seasonal outdoor pool and coin laundry facility. Adjacent to the Red Roof Inn, the HomeTowne Studios by Red Roof Painted Post, NY, offers 45 rooms, a seasonal pool, and coin laundry facilities. Situated in Lancaster, Texas, the Red Roof Inn offers 51 guestrooms.

Marcus Hotels & Resorts announced that The Pfister Hotel in Milwaukee, Wisconsin, is undergoing an extensive, multi-phase renovation. The $20 million renovation, which began in June, will feature a full revitalization of the ballrooms and meeting spaces, followed by its 307 guestrooms, and conclude with enhancements to the hotel’s lobby, lobby bar, and Café at the Pfister. All phases of this renovation are expected to be completed by spring 2024.

WaterWalk celebrated the opening of WaterWalk Boise-Meridian, its second Gen 2.0 property and first in Idaho, with a ribbon-cutting ceremony. WaterWalk Boise-Meridian boasts 126 rooms with 75 fully furnished “Stay” units and 50 ready-to-furnish “Live” units.

Lark Hotels announced the opening of The Coco this summer. The new, 8-room property marks the fifth hotel within The Edgartown Collection on Martha’s Vineyard in Massachusetts. 

The Radical, a new boutique hotel, is set to join the River Arts District this fall in Asheville, North Carolina. Now accepting reservations for stays beginning October 8, 2023, The Radical features 70 guestrooms and suites, original dining and bar concepts, and an outdoor courtyard with multiple terraces perfect for events, weddings, and community programming. The Radical is owned by Hatteras Sky and operated by Lark Hotels.

Margaritaville-branded hotel is proposed for the Riviera Beach Marina in Riviera Beach, Florida. The developer hopes to break ground by December.

A 15-story boutique hotel is now on the drawing boards for the central beach section of Fort Lauderdale, Florida. The 42 Hotel application, filed with the city, calls for 75 guestrooms, 47 parking spaces, a gym, a sky lobby with a coffee shop, an outdoor terrace on the fifth floor, and a rooftop pool deck and bar. Hariohm Realty LLC acquired the 0.25-acre site for $2.8 million in June. 

Pier Sixty-Six Resort, the centerpiece of a $1 billion redevelopment project in Fort Lauderdale, Florida, is set to reopen in the fall of 2024 following a property-wide transformation. The resort boasts 325 rooms and suites, a spa, a fitness center, a multi-level pool, more than 40,000 square feet of entertainment and meeting space, 12 culinary venues, a marina promenade, and a marina with 164 deepwater slips. The resort also includes the property’s first residential offerings. The Residences at Pier Sixty-Six features an exclusive collection of 91 private residences across two 11-story condominium buildings and two four-story resort residence buildings. The first Residences at Pier Sixty-Six are projected to be completed in 2024, coinciding with the debut of the re-imagined Pier Sixty-Six Resort.

HVS Brokerage & Advisory announced the sale of the 104-key Hampton Inn Warrenton in Warrenton, VirginiaGuests, Inc. purchased the property from Highlands of Warrenton LLC

Sonnenblick-Eichner Company, on behalf of Steve Hermann Hotels, has arranged a $100 million sale of The Inn at Rancho Santa Fe located in Rancho Santa Fe, California. The 85-room resort is undergoing an extensive top-to-bottom renovation. An institutional investment fund purchased it and will be operational in the fourth quarter of this year.

The first of what will probably be a few reverse splits was detailed by Sonder Holdings in a proxy filing. SOND wants to do a 1 for 10 reverse split to get their share price high enough to regain Nasdaq compliance. We can count on one hand the number of reverse splits we have seen in the past 30 years that worked out well for shareholders and have a finger or two that is free. SOND also said their chief accounting officer would be leaving. Chris Berry will leave on August 18. CFO Dominique Bourgault will take on the additional chief accounting officer role.

Sereno Hotels announced that an affiliate of KSL Capital Partners had acquired a majority interest in the company. The Contreras family will remain significant investors in Sereno, and Sereno’s current team will continue to deliver the service for which Sereno has become known. The terms of the transaction were not disclosed.

IHG Hotels & Resorts announced the opening of a newly converted and renovated Holiday Inn Express hotel in Mexico City. The 90-room Holiday Inn Express Mexico City Satelite features a coffee shop, terrace restaurant, fitness center, and onsite business center. The property is owned by Prados Camelinas, SA de CV, and managed by GOSA Hoteles

Personnel Moves

Marriott Vacations Worldwide Corporation announced that Jason Marino has been named Executive Vice President and Chief Financial Officer, effective September 30. He will succeed Anthony Terry, who announced his intent to retire from the company earlier this year. With nearly 10 years at the company, Mr. Marino currently serves as Senior Vice President, Strategy, Financial Planning & analysis and Operational Finance – Vacation Ownership. Before joining the company, Mr. Marino served as Managing Director and head of business development and corporate finance at Cantor Commercial Real Estate.

Rona Kay has been named vice president of operations for Carter Hospitality Group. In her new position, Kay will supervise more than 450 employees, overseeing management teams for each property in the Carter portfolio with an emphasis on supporting general managers, improving efficiencies, driving financial objectives, designing new guest experience opportunities, and elevating guest satisfaction scores. Kay was most recently the general manager for Canyon Ranch’s Woodside Retreat.

Alan Woinski and Kim Woinski
July 26th, 2023 at 4:33 PM EDT

Companies: Aloft Hotels, Americas Best Value Inn, Cambria Hotels, Carter Hospitality Group, Certares, Choice Hotels International, Courtyard by Marriott, Hard Rock Hotels & Casinos, Hard Rock International, Highgate, Hilton Hotels & Resorts, Holiday Inn Express, Home2 Suites by Hilton, HomeTowne Studios, HVS, Hyatt Hotels Corporation, Hyatt House, IHG Hotels & Resorts, JW Marriott Hotels & Resorts, KSL Capital Partners, Lark Hotels, Marcus Hotels & Resorts, Margaritaville Hotels & Resorts, Margaritaville Island Reserve All Inclusive Resorts, Marriott International, Marriott Vacations Worldwide, Microtel, Red Roof, Red Roof Inn, Sonder Holdings Inc., Sonesta International Hotels Corporation, Trademark Collection, Travel + Leisure Co., Tribute Portfolio, Tru by Hilton, Twenty Four Seven Hotels, Waldorf Astoria Hotels & Resorts, Woodspring Suites, Wyndham Hotels & Resorts

Locations: Boise, California, Dallas, Florida, Massachusetts, Mexico City, New York, North Carolina, San Jose, Texas, Wisconsin

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