London, Miami and Singapore Report Record ADRs

The DJIA ended Friday with a gain of 105 points, while Nasdaq was down 76, the S&P 500 was down 5 points, and the 10-year treasury yield was up .09 to 4.17%. Lodging stocks were mixed. The big mover was SHCO, up 15% on what some said was a mixed earnings report, and what others said was a result higher than expected. The main thing we believe carried the stock higher was Soho House saying membership revenues were way ahead of expectations and their waitlist is up 7% quarter to quarter.

Truist is still positive on vacation ownership stocks but is tempered a bit by Marriott Vacations' poor quarterly results and reduced guidance. While Truist blamed the issues at MVC on their poor presentation of the new Abound by Marriott Vacations, the sizeable VPG decline does not look like it will be a one quarter thing. The biggest cut in target prices by Truist was on VAC, lowering their PT to $190 from $219, but they maintained their Buy rating.

STR and Tourism Economics lowered their year-over-year growth projections in their revised 2023-24 U.S. hotel forecast. For 2023, growth in RevPAR was lowered by 0.5 percentage points due to a 0.6ppt downgrade in occupancy growth. While that RevPAR growth remains above the long-term historical average, most of the increase was frontloaded to the early portion of the year. For 2024, the RevPAR growth projections were also lowered by 0.5ppts on a 0.5ppt downgrade in occupancy. ADR was upgraded to 0.1ppts for 2023 but kept flat for 2024. The global ADR for hotel bookings exceeded earlier predictions, rising 29.8% YoY to $161 in 2022. Occupancy rates have been high, but so have labor, energy, and food and beverage costs. In fact, several cities across the globe, including London, Miami, and Singapore, reported their highest ADRs on record in 2022. Meanwhile, hotel construction remains down from its pre-pandemic peak, creating supply constraints. With fewer properties to compete against, existing hotels can sustain their pricing power for longer, even though ADR gains are slowing. ADRs are projected to climb a further 4.3% to $181 in 2023 and 3.3% to $187 in 2024. ADRs in Latin America also rose sharply by 26.9% YoY in 2022, as several countries experienced double-digit inflation. Now, with inflation appearing to have peaked, ADRs are expected to grow by 9.1% in 2023 and 5.6% in 2024. In-person meetings and events have rebounded more robustly than many had expected. The average daily cost per attendee was $160 in 2022. This is expected to increase to $169 in 2023 and then $174 in 2024.

Demolition of the Tahoe Biltmore Lodge and Casino in Crystal Bay, Nevada, is set to start soon as EKN Development Group prepares the site for the Waldorf Astoria Lake Tahoe project. The plan for the site is to have all buildings torn down by the end of the year. Completing the demolition will allow the site to be ready for grading by next year's construction season, which starts on May 1.

Officials in Simpson County unveiled a new hotel on the property of Kentucky Downs. The hotel is a 114-room SpringHill Suites by Marriott and is the first one in Franklin, Kentucky.

IHG Hotels & Resorts announced the opening of a new Holiday Inn Express hotel in Cabot, Arkansas. Owned by The Retzer Group, Inc., the 80-room property features an outdoor pool, fitness center, business center, and meeting room facilities. 

Diversified Partners LLC is getting ready to build a 107-room Cambria Suites hotel in Southwest Mesa, Arizona, as part of the E&E at Gateway mixed-use development. The Cambria by Choice Hotels will be four stories tall and will have a pool and a rooftop deck.

Left Lane Real Estate wants to bring another hotel to downtown Savannah, Georgia, and make some changes to the historic building they are putting it in. Left Lane wants to renovate the historic, 10-story Manger Building that was originally a hotel in 1912. The developer plans to add a pool deck, rooftop bar, new elevator, and a separate, two-story event venue right next to it.

Legacy Vacation Resorts debuted their latest eco-friendly renovation project at the company's signature Lake Buena Vista, Florida,-property. The multi-million dollar redevelopment includes enhancements to the resort across the design, guest experience, and sustainability programs. Encompassing 28 three-bedroom villas, highlights of the project include a new solar panel array, elimination of single-use plastic amenities, eco-friendly building materials, low-flow plumbing fixtures, Verdant smart thermostat system, Energy Star-rated appliances, high-efficiency windows, and more. The project also introduced a completely new room category for the resort, a deluxe three-bedroom suite that can accommodate up to 10 guests.

The Tideline Ocean Resort and Spa in Palm Beach, Florida, has closed for $20 million in renovations, and Jeff Greene, the owner, expects an October grand reopening. Renovation work at Tideline includes installing new flooring, cabinetry, and furniture in the hotel's 135 rooms and replacing the hotel's air-conditioning systems. The resort's two restaurants are also targeted for renovations. Concord Hotels currently manage Tideline.

The Iron Horse Hotel in Milwaukee could have a new owner by mid-October as Tim Dixon of Rider Hotel LLC, the hotel's current owner and developer, looks to sell the property to resolve its ongoing Chapter 11 bankruptcy. Dixon opened the 102-room boutique hotel in 2008 after redeveloping a six-story former warehouse building. In 2022, Dixon filed for bankruptcy, citing the impact of the COVID-19 pandemic on the hotel industry. According to new court filings, Dixon intends to market and sell the hotel to reach an agreement with its lender, as that is the best option to maximize value for its estate and creditors. Beginning in July, JLL began marketing the property, which Rider Hotel LLC is seeking court approval to hire.

Best Western Hotels & Resorts announced the Best Western Acadia Hotel opening in Crowley, Louisiana. Owned by Om Shanti Om Seven LLC, the hotel features 49 guestrooms, a fully renovated lobby, an outdoor pool, and a business center.

CaliberCos Inc. has agreed to a deal with L.T.D. Hospitality Group. L.T.D. will contribute nine Virginia-based hotel properties to its subsidiary, Caliber Hospitality Trust. This is the second of several planned contributions and is expected to close by the end of the third quarter 2023. Upon closing, this contribution will expand Caliber Hospitality's portfolio to 15 hotels. All nine properties include a mix of upscale to upper-upscale hotels across multiple IHG and Marriott brands.

Loren Hotels started construction on its third operation and its first in Turks & Caicos, targeting a 2026 opening of The Loren at Turtle Cove. The luxury hotel will offer 6 beachfront villas, 34 rooms, and 25 condominiums. The hotel will also include a beachfront restaurant, pool, lobby bar, fitness center, tennis courts, kid's club, and a smaller marina restaurant for lighter fare. The hotel's beach club section will offer two infinity-edge pools, snacks and drinks, and oceanfront cabanas with private bar service.

Melia Hotels International announced that its 14th hotel in Mexico will open soon. A new luxury property under the ME by Melia brand, located in the city of San Miguel de Allende, is currently under construction and is expected to open in 2025. It will have 140 rooms and all the signature attributes of ME by Melia, including onsite dining, a luxury spa, a gym, and an exclusive rooftop bar.

Europe Highlights

The BoTree announced it will open on September 15 in the heart of London's West End. The hotel boasts 199 guestrooms, including 30 contemporary suites. Tao Group Hospitality will oversee all the hotel's dining and bars. Additional developments include a unique event space, a private bar, a wellness space, and a rooftop boasting panoramic views across London. The BoTree will open as a member of Preferred Hotels & Resorts' prestigious Legend Collection.

On a sad note, Savills notified us of the passing of Tom Baker, a major part of Savills' hospitality team. Baker started his career with Marriott but wound up as part of Savills when Savills bought his own Humboldt Hospitality.