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North America

SVC Likely Done Buying Hotels This Year

Alan Woinski and Kim Woinski
August 9th, 2023 at 4:42 PM EDT

Skift Take

  • Major stock indexes and several lodging stocks experienced declines. Service Properties Trust signaled a shift away from hotel acquisitions after buying the Nautilus Hotel in Miami.
  • New hotels opened in Cincinnati, Yuba City, Orange, TX, and Pennsylvania. Notable construction and restoration projects are underway in Houston, Hastings, and Longmont. Several properties announced upcoming renovations or management changes.
  • RobertDouglas managed a $60 million sale of three properties; Cronheim Hotel Capital refinanced Hotel Phillips in Kansas City. Key personnel changes occurred at Valor Hospitality Partners and the Rosewood Hotel Group.

The DJIA fell 191 points, NASDAQ was down 162, the S&P 500 fell 32 points, and the 10-year treasury yield was down .01 to 4.01%. While the biggest movers in lodging stocks were to the downside, the group was mixed on the day. BHR was down -6%, while AHT, VCSA, and SLNA each were down 5% on the day.

The big takeaway from Service Properties Trust’s conference call is that they may be done buying hotels for the rest of the year. SVC purchased the Nautilus Hotel in South Beach, Miami, in 2Q, but on the call, they described the transaction market as drying up and that they don’t believe buying hotels is the best use of capital at the moment. They will be renovating the Nautilus hotel and will rebrand it to Sonesta International’s James hotel brand.

STR reported US lodging data for the week ended 8/5. US hotel RevPAR was up 1.2% on a year-over-year basis. Group RevPAR was up 4.8%.

Hotel Equities reported noteworthy performance growth in 2023 YTD, significantly surpassing 2019 benchmark levels. Through efforts focused on key performance indicators, the company has achieved substantial performance results surpassing 2019’s enterprise RevPAR by 20% and 2022’s by 26%, showcasing the company’s ability to optimize revenue generation while maintaining the highest levels of guest satisfaction. These achievements can be attributed to several initiatives implemented by Hotel Equities’ expert revenue generation team, including maximizing ADR during weekends and recognizing and adapting to trends and changes in guest behavior influence performance. The company’s success can also be attributed to its strong organizational structure and people-first culture. Also, in July, HE partnered with Grazzy to roll out a digital tipping platform adding another benefit for its associates. 

Sandpiper Hospitality has been awarded the management contract for the Courtyard by Marriott Fort Collins, Colorado. The hotel is owned by a subsidiary of 44 Group Hospitality Investments. The hotel features 112 guestrooms, an indoor pool and hot tub, outdoor fire pits, a fitness center, and a convenience store. The hotel will undergo a major renovation starting later this year.

Greater Cincinnati’s newest hotel is now open in Mason and is the only dual-branded hotel in the region. SpringHill Suites and TownePlace Suites Cincinnati – Mason has just over 120 rooms. There are 61 SpringHill suites and 60 TownePlace suites. There is a shared lobby and amenities such as a bar/lounge area, outdoor patios with Weber grills, a fitness center, and a heated pool. A grand opening ceremony for the new Marriott hotel will be held on September 14.

Crescent Hotels & Resorts announced the addition of the Grand Bay Hotel San Francisco to its Latitudes: Lifestyles by Crescent portfolio. The 421-key Grand Bay Hotel San Francisco offers a fitness center, heated outdoor pool, in-house restaurant, and 20,000 square feet of meeting space.

Holiday Inn Club Vacations Incorporated broke ground today for the latest expansion to its flagship resort in Orlando, FloridaThe Residences at Orange Lake Resort. The Residences will feature six-bedroom vacation homes that comfortably sleep 20 guests, each offering its own private pool. The first phase of The Residences will include four homes, and in the future could include up to 16 homes on the site. Across the property’s four villages, guests can enjoy several pools, a lazy river, waterslides, restaurant and dining options, four golf courses, retail and golf pro shops, arcades, sports courts, and more.

Owner Janki Dubal announced the grand opening of the Holiday Inn Express in Yuba City, California. The property offers 93 rooms, a fitness center, a pool, and a community conference room. Lotus Management Group is managing the hotel.

Red Roof announced the opening of the HomeTowne Studios in Orange, TX. The 60-room, extended-stay hotel offers paid laundry and a snack center. 

The Exton & Chester Hotel & Conference Center in Exton, Pennsylvania, is for sale on Crexi’s digital auction platform with a starting bid of $2.5 million. Bidding starts at noon on September 11, and the hotel is being offered free of any branding and has a total assessed value of $2.35 million. Innvest Hotel Brokers is representing the seller. Property records show that RRR Hotel LLC currently owns the hotel. The Exton & Chester Hotel & Conference Centerhas 15,000 square feet of meeting space, an outdoor pool, and a liquor license that comes with the property. However, the restaurant and kitchen are not currently in operation.

Mighty Equities is planning a boutique hotel in the Montrose area of Houston, Texas. The proposed seven-story Hyde Park Hotel would feature 25,000 square feet of food, beverage, and entertainment amenities in addition to a pool and a 54-car parking garage. 

The restoration of a historic factory building in Hastings, Minnesota, will bring a 77-room boutique hotel, event space, 9 loft-style apartments, and a new bar and restaurant to the riverfront this fall. The Confluence Hotel is set to begin taking reservations next month and will be managed by IDM Hospitality. The Confluence will be part of the group’s Heritage Collection. A grand opening date has not yet been announced but is expected in late summer or fall.

Construction should begin on a new boutique hotel by The Thrash Group, in downtown Longmont, Colorado, by the end of the year. If all goes according to plan, the forthcoming hotel could open for business by late 2024. The five-story hotel is expected to have roughly 85 rooms, along with a rooftop restaurant and bar. An accompanying two-floor parking garage with roughly 60 spaces for hotel guests and 60 spots for the general public will be constructed on-site, also. The property will be either an Origin or Hotel Longmont and will offer space for small conferences, weddings, and other events.

RobertDouglas represented MCR in selling three premium select-service properties to the Braintree Group, which Resolute Road Hospitality will manage. The off-market transaction for the three properties was valued at approximately $60 million. Totaling 330 rooms, the properties include the Courtyard by Marriott Lehi at Thanksgiving Point and the SpringHill Suites by Marriott Lehi at Thanksgiving Point, both in Lehi, Utah; and the Hilton Garden Inn Las Vegas/Henderson, in Henderson, Nevada

Cronheim Hotel Capital secured a $25,800,000 loan to refinance the existing note for Hotel Phillips in Kansas City, Missouri. The loan will replace the existing note plus anticipated capital expenditures to be completed. The sponsors, Arbor Lodging and Lubert Adler, acquired the 216-key hotel in 2018.

Personnel News

Valor Hospitality Partners announced a corporate restructure for the Americas division as the company plans for further rapid growth due to recent portfolio and corporate team expansion. To support this, the company added several new leadership positions to its corporate Americas office, introducing Managing Director Craig Strickler as Valor Americas President and ushering three corporate directors into vice president positions to oversee the department-level strategy. 

Joerg Zobel has been appointed chief operating officer of the Rosewood Hotel Group. In his role, he will be responsible for the hotel group’s global operations across its four brands: Rosewood Hotels & Resorts, New World Hotels & Resorts, Asaya, and Carlyle & Co. Zobel will lead the group’s retail and e-commerce teams, as well as Rosewood’s global customer relationship management and guest experience teams. Zobel was most recently chief executive and chairman of the board of Eschenbach Optik GmbH. Before that, he was the general manager of Asia Pacific for Puma.

International News

Ibis Styles is set to open a new property in Benidorm, Spain, in 2025. The new ibis Styles will be in an existing establishment acquired by Extendam and its operating partner DG Invest Hospitality. Having undergone a thorough renovation and repositioning, the Ibis Styles Benidorm hotel will boast 131 rooms, a restaurant, an outdoor pool, and a rooftop. 

Accor opened an Ibis Styles hotel in Warsaw, Poland, near the airport of Fryderyk Chopin. The new property is an investment of the ISWM Group and features 124 guestrooms, a bar, a restaurant, meeting and conference rooms, and parking.

The Handwritten Collection is joined by the first property in Poland and the second in Eastern Europe. The Crown Krakow Handwritten Collection is a four-star hotel located in Krakow. The five-story property features 44 rooms and oval suites, a restaurant, bar, conference, and banquet space, and a fitness area.

Alan Woinski and Kim Woinski
August 9th, 2023 at 4:42 PM EDT

Companies: Ashford Hospitality Trust, Braemar Hotels & Resorts Inc., Braintree Group, Courtyard by Marriott, Crescent Hotels & Resorts, Cronheim Hotel Capital, Hilton Garden Inn, Hilton Hotels & Resorts, Holiday Inn Club Vacations, Holiday Inn Express, Hotel Equities, IHG Hotels & Resorts, Marriott International, MCR, Red Roof, Rosewood Hotels & Resorts, Sandpiper Hospitality, Selina, Service Properties Trust, Sonesta International Hotels Corporation, SpringHill Suites, The James, TownePlace Suites, Vacasa, Valor Hospitality Partners

Locations: California, Cincinatti, Colorado, Houston, Kansas City, Las Vegas, Miami, Minnesota, Orlando, Pennsylvania, San Francisco, Texas

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