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North America

Analysts Favor Hotel Brands Over Airbnb

Alan Woinski and Kim Woinski
August 1st, 2023 at 4:25 PM EDT

The DJIA rose 27 points while Nasdaq was up 71, the S&P 500 was down 12 points, and the 10-year treasury yield was up .08 to 4.03%. MAR was up about 1.45% at the close.

Barrons.com published a story, quoting analysts as saying travel is entering a new phase, and investors should pick Hilton and hotel peers over Airbnb. It had very interesting timing given Dow Jones’ recent story about how one of ABNB’s founders has been selling most of his stock, ABNB continuing to hit new highs despite all that, and Marriott and Hilton leading the charge of C-Corp lodging stocks, also to new highs. The article quoted Melius’ analysts as saying the asset-light/fee-based model by hotel brands is a more resilient revenue stream and more defensive relative to other travel sectors. They also expect the international expansion to make up for any real or imagined concerns about the impact of any slowness in bank financing for new hotels. Melius has Buy ratings on HLT, MAR, and Hyatt. They have Hold ratings on ABNB and Expedia.

Marriott International followed Hilton’s lead with a beat, raise and increase in capital returns. For MAR, the strong report was also led by international strength. Even without the new MGM dealMAR’s pipeline grew quarter-to-quarter. Including MGM, the pipeline in 547,000 rooms. 203K rooms were under construction at the end of 2Q.

MCR has acquired two hotels in Phoenix, Arizona, the 169-room Holiday Inn Express & Suites Scottsdale – Old Town and the 121-room Hampton Inn by Hilton Phoenix – Biltmore, located in prime, high-barrier-to-entry submarkets. With the acquisition of the hotels, MCR has nine hotels in Arizona.

Hilton announced the opening of The Bankers Alley Hotel Nashville, Tapestry Collection by Hilton. The property, formerly the historic Gray & Dudley Building, was converted to a 124-key boutique lifestyle hotel in 2017, comprised of 110 guest rooms and 14 suites. The hotel has an on-site art museum which serves as a unique venue for meetings and social events, and is home to the signature restaurant Gray & Dudley. There are 10,500 square feet of art-filled exhibition and meeting space across 10 meeting rooms, including gallery space, private dining rooms, a terrace, and the museum. The building is listed on the National Register of Historic Places.

Coast Rehoboth Beach, Tapestry Collection by Hilton officially opened its doors to guests and the beach community. The 60-room Delaware hotel is Rehoboth Beach’s latest upscale boutique hotel and restaurant experience, two blocks from the Atlantic Ocean. Amenities include coastal-inspired accommodations, on-site dining, a rooftop-indoor pool, an outdoor patio, a 24-hour fitness center, golf cart transportation to and from the beach, on-site resort-inspired activities, and access to bike rentals. Sirocco is the new restaurant concept located on the first floor of the Coast hotel. The property is owned by Harvey Hanna & Associates and operated by TKo Hospitality Management. The Coast is the fourth hotel property collaboration between the two companies and the third Grand Opening in the last 18 months.

The Drayton Hotel in Savannah, GA, announced it will join the Curio Collection by Hilton beginning today. This marks the brand’s debut in Savannah. The hotel opened in 2019 and reinvents one of Savannah’s oldest buildings, dating from the 1890s, restored to embrace the building’s 19th-century exterior and charm of the surrounding neighborhood. The Drayton features 50 rooms and suites, three signature culinary and beverage experiences, including a rooftop bar.

Highline Hospitality Partners, the hospitality investment platform launched by Highline Real Estate Partners, has acquired the Home2 Suites by Hilton Long Island City in New York in a joint venture with an affiliate of Pace Equity Partners, LLC, a Dallas-based private equity manager. The extended stay, 115-room all-suite hotel is HHP’s tenth property. The joint venture is HHP’s second strategic investment with Paceline. The hotel was developed in 2014 and just recently underwent a comprehensive renovation. Its guestrooms average over 360 square feet and include a full kitchen. Eight hundred eighty square feet of meeting space, a 450 square foot media room, a 600 square foot rooftop terrace, and a fitness center round out the amenities.

Hyundai Motor America is the new owner of an hourly rate hotel that the NY Post called “Manhattan’s most famous cheaters’ paradise.”  Hyundai paid $22.5 million to buy the 27-room Liberty Inn in mid-July. The sale is believed to represent the highest price per square foot for a building in NY’s Meatpacking District. The building has a high visibility location across from Genesis House, a showroom for Hyundai’s luxury brand. Hyatt told the NY Post they would give details regarding their plans later.

The Daytona Beach Planning Board agreed to a three-month delay in voting on a rezoning request that will allow South Florida developers to construct an oceanfront condominium-hotel high-rise. The developers have decided to redesign their “Silver Beach Condo-Hotel” project after area residents strongly objected to their original plans for a 27-story, 300-unit tower, which would also include a restaurant and/or lounge that could serve the general public. While there is a lot of opposition, Daytona Atlantic Development LLC is seeking a compromise solution as they have already sunk over $12 million into the project. The investors purchased the vacant lot 18 years ago.

The Inn at Rancho Santa Fe, a luxury resort near San Diego, has sold for about $100 million in the region’s largest hospitality transaction this year by price. GEM Realty Capital acquired the property with 80 rooms from Steve Hermann Hotels of Montecito, California. The sales price ranks as the third-largest hospitality transaction in California this year. Hermann acquired the property in May 2022 for about $42.7 million and then did a top-to-bottom renovation expected to be completed in the fourth quarter.

A small seven-room hotel above a coffee and retail shop in Hampden in the Baltimore, MD, market makes its debut on August 15th. Shawn Chopra and his wife, Anne Morgan, owners of Good Neighbor, are launching a two-floor hotel called Guesthouse that expands on their original concept of combining retail with the feeling of being in someone’s home. Guesthouse opens on August 15, hoping to fill a void in the neighborhood, which has few hotels in the immediate area. The seven rooms are designed in a “hyper-intentional” way to feel like a home rather than a hotel. Each room has a different name, such as Pyramids, Sunsets, and a bunk-bed room called Young Hearts Run Free.

Mighty Equities is working with Houston’s Montrose area city planning officials to secure four variances that would allow it to build Hyde Park Hotel at 702 Hyde Park Blvd. The seven-story hotel would sit on a half-acre lot at the corner of Hyde Park Blvd and Stanford Street. Hyde Park Hotel would feature 25,000 square feet of food, beverage, and entertainment amenities and a pool. The company is seeking approval to open on two residential streets instead of on a major thoroughfare in an area where over 50% of the parcels surrounding the hotel are residential in use. Developers hope to open the hotel within the next two years.

The Splash Indoor Water Park, located inside the Clarion Hotel on East First Street in Oswego, NY, opened as part of a $10 million downtown revitalization plan. The park overlooks the Oswego River and features several slides, pools, and a hot tub.

The newest Great Wolf Lodge resort will bolster 500 family-friendly suites and an expansive 100,000-square-foot indoor water park in Naples, Florida. The resort will sit on 20 acres of land on the eastern edge of Collier County, next to the Paradise Coast Sports Complex. Construction is expected to be completed between 18 to 24 months, and wants to be open in the spring or summer of 2024.

The Atlas Hospitality Group’s latest California hotel development survey shows hotel openings in California declined year over year in the first half of 2023. The survey expects the number of hotels entering the construction phase to decline significantly over the next 18 to 24 months. 

The $102.1 million sale of the Banyan Cay hotel, residential and golf project in West Palm Beach has fallen through. Westside Investment Partners was scheduled to close on the purchase of the 200-acre resort out of US Bankruptcy Court on July 25th, but the attorney for the debtor alleged the buyer had not fulfilled the terms of the asset purchase agreement. Banyan Cay Resort & Golf LLC’s attorney filed a motion on July 30th to compel Westside to turnover the escrow agreement and all evidence relating to monetary transfers for funding of the purchase. The lawyer alleged Westside failed to fund $3.06 million under the escrow agreement and had breached the asset purchase agreement. The debtors are now working to find another buyer. Banyan Cay Resorts & Golf filed Chapter 11 reorganization in March to stay a $95.1 million foreclosure judgment from US Real Estate Credit Holdings in the care of Calmwater Capital. It also blocked a $5 million mezzanine loan claim from a group of foreign investors in the EB-5 visa program. The company owes just over $6.5 million in liens to construction vendors. The debtor owns the 150-room Hyatt-branded hotel under construction at 2020 Banyan Resort Way, a 130-acre golf course, and development sites approved for 179 condo units, 28 single-family homes, and 22 villas.

Personnel Moves

Dimension Hospitality announced the appointment of Greg Friedman as CEO. This follows the sudden death of company founder Sam Friedman on July 2nd. Greg Friedman joined the company in 2000 as General Counsel and most recently served as President.

Sonesta International Hotels Corporation announced the appointment of Jim Mooney as Vice President of Sales, focusing on the company’s Managed Portfolio for Full Service & Focused Service Sales. Mooney most recently was General Manager at the Sheraton Times Square Hotel, a 1,300-room hotel in New York City. Before that, he was VP of Sales with Interstate Hotels, directing the Marriott Residence Inn & Courtyard brands and leading a portfolio of hotels in greater New York.

Alan Woinski and Kim Woinski
August 1st, 2023 at 4:25 PM EDT

Companies: Airbnb, Atlas Hospitality Group, Curio Collection by Hilton, Dimension Hospitality, GEM Realty Capital, Great Wolf Resorts, Highline Hospitality Partners, Hilton Hotels & Resorts, Holiday Inn Express, Home2 Suites by Hilton, IHG Hotels & Resorts, Marriott International, MCR, MGM Resorts, Sonesta International Hotels Corporation, Tapestry Collection by Hilton

Locations: Delaware, Florida, Houston, Naples, Nashville, New York, New York City, Phoenix, San Diego, Savannah

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