The DJIA fell 150 points Friday while Nasdaq was down 50, the S&P 500 fell 24 points while the 10-year treasury yield dropped notably, down .13 to 4.04%. The trading action is more in Treasuries than stocks these days. Lodging names were mixed; SLNA was the only mover of note, up 6% (although that is only a nickel).
It was a mixed day of earnings reports, but thankfully, we are well past the halfway point. Apple Hospitality, RLJ, and Sunstone Hotel Investors beat. APLE benefited from select service, upscale/upper midscale being the focus with diversified business and leisure exposure. Even with that, they lowered guidance slightly. RLJ beat, repurchased 2.5 million shares for $25.5 million in the quarter, and said they were increasing their quarterly dividend by 25% to $0.10 per share. SHO beat on the bottom line. They repurchased $2.85 million of shares in the quarter, well below what they did in 1Q, totaling $21.4 million in the first six months. Their quarterly dividend was raised to $0.07, a 40% jump.
DiamondRock Hospitality missed estimates, most likely due to their resort/leisure overweighting of their portfolio. DRH repurchased $2 million in shares in the quarter. DRH said they are considering selling some smaller urban assets for which buyers can more easily get financing. Ryman Hospitality Properties also missed but said 2Q bookings for future stays were very strong, with ADR for those bookings at a new record. Playa Hotels, as most probably would have expected, missed estimates given their leisure focus. That is even though they have so many properties outside the US, where everyone is now saying travelers are heading. PLYA bought back 3.7 million shares for $34.2 million in the quarter and $24 million more in July.
Airbnb reported a better-than-expected 2Q, beating adjusted EBITDA by double digits. The guide for 3Q also was higher than the consensus. ABNB repurchased $500 million of stock in 2Q, which is 2% of the diluted share count.
According to the most recent United States Construction Pipeline Trend Report from Lodging Econometrics, in the second quarter of 2023, the franchise companies with the largest pipelines in the US are Marriott International with 1,511 projects/181,632 rooms, Hilton Worldwide with 1,470 projects/164,848 rooms, and IHG Hotels & Resorts with 811 projects/80,516 rooms. The leading brands for each of these companies are Home2 Suites by Hilton with 565 projects/57,970 rooms, IHG’s Holiday Inn Express with 306 projects/28,756 rooms, and Marriott’s TownePlace Suites with 345 projects/32,190 rooms. Other prominent brands in the pipeline for these companies are Marriott’s Residence Inn with 258 projects/31,119 rooms, Hampton by Hilton with 292 projects/29,796 rooms, and IHG’s avid hotel with 132 projects/11,102 rooms. In the second quarter of 2023, LE recorded 1,085 conversion projects accounting for 106,408 rooms. Of these conversion totals, Hilton leads with 142 projects/17,468 rooms. Following Hilton, the franchise companies with the largest number of conversion projects are G6 Hospitality, Marriott, Best Western Hotels & Resorts, and IHG. Through Q2, Hilton opened 57 new hotels/6,398 rooms, Marriott opened 56 new hotels/7,309 rooms, and IHG opened 22 new hotels/2,304 rooms. Top brands with the largest number of openings in the first and second quarters of 2023 are Home2 Suites by Hilton with 19 new hotels/1,956 rooms, Hampton by Hilton with 19 new hotels/1,977 rooms, and Marriott’s SpringHill Suites with 9 hotels/1,158 rooms. LE anticipates that Hilton will open the largest number of new hotels in 2023, with 145 new hotel projects and 17,793 rooms. Marriott is forecast to open 144 hotels/18,206 rooms, followed by IHG with 84 hotels/9,416 rooms. In 2024, LE forecasts that Marriott will lead new hotel openings with 192 projects/22,898 rooms. Hilton is anticipated to open 176 new hotels/20,004 rooms, and IHG with 111 new hotels/10,924 rooms. In 2025, LE analysts predict Marriott will open 256 new hotels/29,572 rooms, IHG is projected to open 202 new hotels/19,390 rooms, and Hilton is forecast to open 139 new hotels/14,780 rooms.
San Francisco’s only new hotel of 2023 is opening in September in the heart of the Financial District. KHP Capital Partners is rebranding the former Le Meridien hotel as The Jay after a major renovation. Although the owners prefer to keep the details of their investment in 360-room The Jay confidential, they did share that they have invested a substantial amount on the best furniture, bedding, branding, and other elements to create a best-in-class property and exceptional guest experience.
Wyndham Hotels & Resorts and LuxUrban Hotels, Inc. signed a deal to bring 16 LuxUrban hotels, representing approximately 1,400 rooms across New York, Washington DC, Miami, New Orleans, and Los Angeles, into the Trademark Collection by Wyndham brand later this year. The agreement also paves the way for additional LuxUrban hotels, including any locations not yet acquired, to join Trademark in the future.
Vista Hospitality announced the purchase of the 104-suite Hampton Inn & Suites by Hilton Ft. Lauderdale Airport/South Cruise Port in Hollywood, Florida, and the 126-room Hampton Inn by Hilton Miami-Airport West in Doral, Florida. Both properties feature a fitness center, an outdoor pool, a meeting room, and laundry facilities.
A $49 million, new eight-story, 252-guestroom Hilton Hotel in Jacksonville, Florida, will begin construction after securing a permit from the city. The hotel is expected to be completed by 2025 and will have 16,000 square feet of meeting space. The project is a partnership between Mayo Clinic and Hilton. Whitman Peterson is the property manager.
Ty Warner Hotels and Resorts and Four Seasons Hotels and Resorts have been working together to prepare for the re-opening of both the Four Seasons Resort, The Biltmore Santa Barbara, and Four Seasons Hotel New York, in the fall of 2024. Renovations and enhancements are planned throughout. Furthermore, during its temporary closure, the Coral Casino Beach and Cabana Club in Santa Barbara transformed and is scheduled to re-open in September 2023.
IHG Hotels & Resorts announced the opening of a recently renovated and converted Holiday Inn Express & Suites Cut Off-Galliano in southern Louisiana. The 69-room hotel features a fitness center, business center, and 250 square feet of meeting space. The hotel is owned by Parker Development Enterprises, LLC, and is managed by Gary Hotels.
The Mogharebi Group arranged the sale of the Budget Inn, a 24-key limited-service hotel located in Anaheim, California. The buyer was Sunstone Development which intends to explore long-term alternative strategies for the site, including full-service hotel uses. The off-market transaction completes Sunstone’s 1.1-acre land assemblage at the gateway to Disneyland Park, including the purchase of the adjacent 44-key Days Inn by Wyndham last year.
Pride Opportunity Developers, Inc. is looking to build the 83-room La’ Creole Luxury Boutique Hotel in North Lafayette, Louisiana. The hotel is scheduled to be completed by March 2025 and will join Choice Hotels. S&L Hospitality Group will manage it.
In celebration of its 170th anniversary, The Mills House Hotel, a historic destination in Charleston, South Carolina, has completed a multi-million dollar renovation, increased the hotel from five to seven stories, and included revamped guest rooms, premium suites, a rooftop pool, and the opening of two new restaurants. In December 2022, The Mill House became part of the Curio Collection brand by Hilton.
WaterWalk announced the opening of its newest property under the brand’s Gen 2.0 model, WaterWalk Tucson, marking the second Arizona location for the brand. The property boasts 126 rooms, 75 fully furnished “STAY” units, and 50 ready-to-furnish “LIVE” units. Common areas of the property include the Living Room, modern fitness center, back patio with lounging furniture, firepits, lawn games, and a grilling area.
DSH Hotel Advisors arranged the sale of the 48-room Super 8 by Wyndham Ormond Beach, Florida, for an undisclosed price. DSH Hotel Advisors represented the buyer and the seller, 3Hospitality of Ormond, LLC.
In Dallas, the 218-room Ritz-Carlton Hotel and the nearly 195-room Crescent Court Hotel, both owned by an investment fund created by Crescent Real Estate, just secured almost $300 million in new debt. The largest of the loans was a $245.75 million mortgage issued by Goldman Sachs Mortgage Co. The two-year debt has a maximum 8.15% interest rate. Berkadia Commercial Mortgage LLC is the loan servicer.
International News
Hilton Hotels & Resorts celebrated the opening of the Hilton Garden Inn La Romana hotel project in the Dominican Republic in collaboration with Riverhome Capital SAS. The new seven-story hotel features 130 guestrooms, pools, bars, a restaurant, a gym, meeting and multipurpose rooms, and outdoor areas for social and corporate celebrations.
The Four Seasons Resort Punta Mita, a five-star oceanfront resort on Mexico’s Pacific coast, announced the re-opening of the fully re-imagined Bahia, the resort’s signature beachfront restaurant.
