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North America

Global Travel Investment Still 22.5% Below 2019 Levels

Alan Woinski and Kim Woinski
August 22nd, 2023 at 5:08 PM EDT

Skift Take

  • Pebblebrook Hotel Trust warns of 3Q impact from Tropical Storm Hillary. CoStar’s July 2023 report shows mixed U.S. hotel performance. Global travel deal activity down -35.7%.
  • Travel & Tourism investment grows 11.1% in 2022, below 2019 levels. WTTC forecasts 11.5% growth in 2023, warns of challenges from interest rate hikes.
  • Ashford converts hotel, St. Joe builds new property. Personnel changes across industry, Alberto Pirozzini joins Pellicano Hotels as COO.

The DJIA was down 175 points, Nasdaq was up 8 while the S&P 500 fell 12 points, and the 10-year treasury yield was down .01 to 4.33%. Lodging stocks were mixed. BHR, AHT, and VCSA set new lows.

Pebblebrook Hotel Trust became the first to warn that Tropical Storm Hillary could hurt 3Q results. PEB said the storm did not cause any damage to PEB properties in San Diego or Los Angeles but said they saw an acceleration of cancellations and early checkouts in the lead-up to the storm. PEB said demand is also hurting due to travel disruptions and media coverage of southern California.

According to CoStar’s July 2023 results, the U.S. hotel industry reported mixed performance results month over month. July 2023 (percentage change from July 2022): Occupancy: 69.1% (-0.5%); ADR: $160.31 (+1.3%); RevPAR: $110.80 (+0.8%). Among the Top 25 Markets, San Diego experienced the highest occupancy level (86.5%). Markets with the lowest occupancy for the month included New Orleans (54.3%) and Phoenix (58.9%). 

Many global industries have grappled with subdued deal activity during January-July 2023. The travel and tourism industry saw deal activity decline YoY by -35.7%. The latest industry analysis revealed that 438 deals were announced in the sector globally during January-July 2023 compared to 681 during the same time in 2022. Volatile economic conditions continued to impact the deal-making sentiments in the industry, with most of the top markets experiencing a double-digit decline in deal volume. In fact, the top two markets by deals volume, the U.S. and the U.K., saw respective deal volume reduced to almost half. The number of deals announced in the USA fell by 45% from 218 to 120. The deal volume for the U.K. declined 43.8% from 80 to 45. India, Australia, France, South Korea, Japan, The Netherlands, and Italy witnessed a YoY decline in deal volume by 16.7%, 21.7%, 19%, 5.9%, 60%, 1.3%, and 10%, respectively. However, China is the notable exception and registered 12% YoY growth in deal volume. In terms of regions, Europe, Asia-Pacific, North America, Middle East and Africa, and South and Central America witnessed YoY decline in deal volume by 44.8%, 14.4%, 44.6%, 13%, and 20%, respectively, during January-July 2023. All the deal types under coverage witnessed a YoY decline in deal activity. The number of mergers and acquisitions, private equity, and venture financing deals declined by 37.5%, 36.8%, and 29.7%, respectively, during January-July 2023.

The World Travel & Tourism Council’s Travel & Tourism Economic Impact 2023 Global Trends Report said Travel & Tourism investment in 2022 surged to $856 billion, up 11.1% from the previous year but still -22.5% short of 2019 levelsThe U.S. led the top 10 markets of absolute investment in the sector in 2022 with $213 billion. China was in second place with $146 billion, and Saudi Arabia rounded out the top three with $42 billion. WTTC is forecasting 11.5% growth in investment in 2023 to $955 billion, with a full return to pre-pandemic levels anticipated by 2025. They warned that the global hikes in interest rates create a challenge for future investment.

Ashford Hospitality Trust, Inc. announced that its Crowne Plaza La Concha Hotel in Key West, Florida, will convert to a Marriott Autograph Collection property in 2024 after completing a $35 million renovation. At that time, it will be rebranded to Autograph La Concha. The Property Improvement Plan includes transforming the lobby, bar, and restaurant, as well as upgrading the exterior, 160 guestrooms and bathrooms, corridors, pool, and meeting space. The previously underutilized spa will be converted into premium roof-top suites as part of the renovation. The Company believes that post-conversion, the new Autograph La Concha property could achieve a 20% to 30% RevPAR premium compared to pre-conversion. Remington Hospitality will continue to be the property manager. 

The St. Joe Company is working on building its 12th hotel in the Florida Panhandle and its sixth in Bay County, as the 121-suite Residence Inn by Marriott is being built in Panama City Beach. The property is adjacent to the 124-room TownePlace Suites by Marriott, and both properties stem from a partnership between St. Joe and InterMountain Management. Officials hope the hotel’s construction will be complete sometime in the spring of 2024. 

The Rancho Cordova Planning Commission will review a proposal for a new four-story, extended-stay, 112-room Hyatt House hotel on White Rock Road in Rancho CordovaCaliforniaWhite Rock Hotel LLC’s plans show an L-shaped building with outdoor amenities such as a pool, sport court, and dog run area. The hotel’s first-floor plans show a fitness center, meeting space, and kitchen/serving area. 

Extended Stay America announced the opening of the Extended Stay Premier Suites Boise-Meridian located in Meridian, IdahoRREAF Holdings developed the property, and Aimbridge Hospitality will manage it. The four-story, 124-room newly constructed property will feature a fitness room, onsite guest laundry, and Extended Stay America’s signature spacious lobby with additional vending options.

Arriba Capital closed a $52.5 million ground-up construction loan for a Holiday Inn Express and Staybridge Suites dual-brand property in Houston’s central business district. The property is being developed and managed by Neway Hospitality. The loan was sized to 75% loan to cost with a $34.5 million senior loan and $18 million of C-PACE financing. The property will feature 275 guestrooms, an outdoor pool, a meeting space, a bar, a fitness center, a business center, and a dining area. The hotel is expected to open in the fourth quarter of 2025. 

The new Hideaway at Royalton Blue Waters, An Autograph Collection All-Inclusive Resort, will open in late November in Montego Bay, Jamaica. The resort will have 352 rooms and suites and is adjacent to the Royalton Blue Waters Montego Bay resort. The adults-only resort will boast 12 different fine-dining eateries, an infinity pool, a dedicated Diamond Club pool, Royal Spa, 11 bars, an entertainment plaza, and several private cabanas. Guests will have open-ended access to Royalton Blue Waters. Hideaway at Royalton Blue Waters will be Marriott’s sixth all-inclusive resort in Jamaica.

Personnel Moves

Sage Hotel Management announced that Robert Butler had been promoted to Executive Vice President and Chief Operating Officer. In this role, Butler will oversee Sage’s growing portfolio of more than 60 independent, branded, and soft-branded hotels in 16 states and the District of Columbia. Butler spent 14 years at Sage from 2004-2028 and, after a short time away, returned to Sage in August 2022 as Executive Vice President of the Premier and Upscale Collections.

IHG Hotels & Resorts hired Lori Tirado to fill a new role as Director of Capital Markets. In this role, Tirado will focus on building debt-broker and lender relationships to help secure capital for hotels owned, managed, or licensed by IHG. Most recently, Tirado served as head of business development at Access Point Financial. 

SH Hotels & Resorts announced the appointment of Pranav Jampani as Vice President of Sustainability. In this role, Jampani will advance sustainability efforts across S.H. Hotels & Resorts, primarily focusing on 1 Hotels. Jampani joins S.H. Hotels & Resorts from Venetian Las Vegas Gaming, where he was the Head of Sustainability & Corporate Social Responsibility.

Colliers announced it hired Marc Johnson as an Analyst to join the firm’s hospitality practice group. Before completing graduate school, Johnson worked as a Senior Analyst at Capital Properties, Inc., an Analyst at Duff & Phelps, and a Real Estate Associate at Ralph Lauren Corp.

Pellicano Hotels welcomes Alberto Pirozzini as its COO. Pirozzini returns to the Pellicano Hotels group after previously serving as area general manager between 2016 and 2022. Following the announcement of the strategic alliance with Aermont Capital that will bolster the growth plans of Pellicano Hotels group and fuel investments to enhance its portfolio of destination hotels across Italy, Pirozzini’s role as COO will be pivotal in shaping the group’s continued success.

Alan Woinski and Kim Woinski
August 22nd, 2023 at 5:08 PM EDT

Companies: Aimbridge Hospitality, Ashford Hospitality Trust, Autograph Collection, Braemar Hotels & Resorts Inc., Colliers, Crowne Plaza, Extended Stay America, Extended Stay America Premier Suites, Holiday Inn Express, Hyatt Hotels Corporation, Hyatt House, IHG Hotels & Resorts, Marriott International, Pebblebrook Hotel Trust, Pellicano Hotels, Residence Inn by Marriott, SH Hotels & Resorts, Staybridge Suites, The St. Joe Company, TownePlace Suites, Vacasa

Locations: Boise, California, China, Florida, Florida Keys, Jamaica, New Orleans, Phoenix, San Diego, Saudi Arabia

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