The DJIA was down 199 points while Nasdaq was down 148, the S&P 500 fell 31 points, and the 10-year treasury yield was up .02 to 4.29%. Lodging stocks were modestly lower. SHCO traded up to a new high.
Truist gave their forward-looking booking and pricing trends for U.S. hotels report, saying they see no signs of any demand slowdown. In fact, they see 4Q23 U.S. RevPAR growing stronger than that of 3Q23. Truist said the strength is being driven by a very strong pace of group business, a lower seasonal mix of leisure business, a moderate acceleration of business travel growth, especially for smaller and midsized businesses following 2Q23’s relatively different y/y comps, and international visitors returning to the U.S. Based primarily on group bookings, Truist said 2024 looks very encouraging. They do not see anything material in the hotel booking data at this moment that indicates the sell-side bear case of negative y/y RevPAR growth in 2024 will come to fruition. Truist said they actually see the opposite of “one vocal industry research & consulting firm” that said fundamentals will slow in later 2023. Truist said they would not be surprised if, at Marriott’s investor day at the end of this month, their 3Q23 U.S. + Canada RevPAR growth will come in towards the higher end if not slightly above the 2-4% guide and if they modestly raise their RevPAR guide. Of the lodging stocks, Truist continues to have Hyatt as their favorite name and Ryman Hospitality as their favorite REIT.
According to an interpretation of data collected by CoStar, as summer fades into fall, family travel is slowing, group events are strengthening, and business travel appears to be returning based on weekday trends. U.S. hotel occupancy during the week of August 20-26 was 65%, lower for the fifth consecutive week and in line with normal seasonal patterns. Occupancy is still expected to trend down for the next two weeks and then grow as group/conference travel climbs to its annual peak. Group demand among luxury and upper-upscale hotels, which is generally slow during this time of year, increased 3.6% compared to the same week last year. Over the past six weeks, group demand was up 1.7% compared to the same four weeks last year.
Hilton Grand Vacations Inc. provided an update on its business in Hawaii following the recent wildfires on Maui. The company has 13 properties in the Hawaiian Islands, including two properties and sales centers in Maui: K’anapali Beach Club in K’anapali and the recently opened Maui Bay Villas in Khei. Neither Maui property sustained physical damage, and the company maintains business interruption insurance at both properties. In the trailing 12 months ending June 30, 2023, contract sales in all of HGV’s Hawaii sales centers represented approximately 16% of total contract sales. The company’s two Maui properties contributed over 20% of Hawaii’s contract sales in that same period. Their most recent guidance contemplated that Hawaii, and Maui in particular, would be larger contributors to growth in the second half of this year versus the first half, owning to the expected continuing market recovery. Currently, HGV estimates that the impact to Q3 2023 will be $20 to $25 million in contract sales and $12 to $15 million in Adjusted EBITDA.
Ault Alliance Inc. announced its wholly owned subsidiary Ault Global Real Estate Equities, Inc. (AGREE), plans to list for sale its four recently renovated Midwest hotels: the Hilton Garden Inn in Madison West, the Residence Inn in Madison West, the Courtyard in Madison West, all in Wisconsin, and the Hilton Garden Inn in Rockford, Illinois. The decision to sell the hotels follows the decision to list a St. Petersburg, Florida property and is driven by the company’s desire to focus on its core businesses. The company plans to use the proceeds from the sales of the hotel properties to pay off debt and commit more capital to its core businesses. AGREE plans to sell all four properties through Hospitality Real Estate Counselors and intends to seek approximately $100 million for the four hotels. The company completed major renovations at all four properties by hiring the management firm G.F. Hotels & Resorts.
Presidio Cos. has applied to build a new 90-room, boutique Hilton hotel behind the Hilton Garden Inn in downtown Davis, California. The new hotel would replace a two-story rear addition to the Hilton Garden Inn, which would continue to operate and be six stories. It features event and meeting space and a rooftop bar. In addition to 2,200 square feet of event space, the new hotel will have a ground-floor lounge and fitness center. Construction is planned to begin in mid-2024, with completion in 2025.
Crestline Hotels & Resorts has been selected to manage the Rochester Airport Marriott in Rochester, New York. The 210-room hotel boasts 5,538 square feet of meeting space, an indoor pool and hot tub, a workout room, and a signature restaurant.
Sonesta International Hotels Corporation announced the opening of The Royal Sonesta Washington, D.C. Capitol Hill, the newest addition to The Royal Sonesta portfolio. The 274-room property features a 10-story atrium; Sonesta Work Suite, an experiential meeting space; a 3,100 square foot ballroom; and a 2,400 square foot conference center. Additional amenities include a French restaurant, a large fitness center, a private yoga studio, and E.V. charging stations.
Starlight Haven announced the opening of its expanded resort in Hot Springs, Arkansas. The expansion introduces geodesic domes, safari-inspired tents, treehouses, and a range of communal areas and hiking trails throughout the 27-acre site. At the heart of the expansion lies a communal clubhouse with a cozy fireplace, plush lounge area, various games, and a magnificent 1,200-square-foot outdoor deck. Starlight Haven has also launched tailored experiences and packages for guests to enjoy.
The Landmarks Preservation Commission has approved a major renovation project at the 17-story, historic Martinique New York Hotel located in the Koreatown section of Midtown, Manhattan. Owned by Burnett Equities, the scope of work includes the installation of marquee signage, modern light fixtures, the restoration of the building’s existing windows to historic conditions, and new entryways for retail tenants.
Developer Harvey Hanna celebrated the grand opening of Coast Rehoboth Beach, the newest hotel in Rehoboth Beach, Delaware. Formerly home to the Sandcastle Motel, the property underwent a multi-million-dollar renovation over approximately 18 months and will include a full-service restaurant. The new hotel is part of Hilton’s Tapestry Collection.
The city of Cocoa, Florida, is seeking new proposals to develop the old City Hall after plans to develop a boutique Radisson hotel in Cocoa Village fell through last year. Under the new plan, developers will have to have financing in place to apply, an issue that ended up being a major disruption to the original plans for the property. The old plan was to build a seven-story hotel with 107 guestrooms, a rooftop bar, and ground-floor retail space.
Mille Lacs Corporate Ventures, the parent company of Grand Casinos, announced that the 494-room Grand Casino Mille Lacs in Minnesota and 563-room Grand Casino Hinckley hotels are getting multimillion-dollar makeovers. The hotels will continue to operate during the project, which is expected to finish early next summer. MLCV, which the Mille Lacs Band of Ojibwe owns, plans to decorate the hotels with art crafted by Indigenous artists. Plans also include newly designed lobbies, modernized rooms, and enhancing Presidential Suites with steam showers, sauna, and new themes.
Gardendale, Alabama, could get a new hotel for one of its major corridors. La Quinta Gardendale LLC requests “conditional use” approval of land at 2301 Mount Olive Road that would allow for the hotel. The property already has zoning that allows for a hotel.
Construction has begun on an IHG-branded Atwell Suites Hotel in Henderson, Nevada. Adjacent to both The Pass Casino and America First Center, Atwell Suites Henderson at The Pass will anchor the ongoing redevelopment of the city’s Water Street district. Owned by DeSimone Companies, the 96-suite hotel will have a pool, fitness center, bar, and a T.V. lounge with board games.
The development of a hotel planned for Pentagon Village in Edina, Minnesota, is facing another snag. Rise Construction Services LLC, the construction arm of Rise Modular, terminated its contract with Fifth Side Lodging LLC to build the hotel, according to a lawsuit filed by Fifth Side Lodging in the U.S. District Court. Fifth Side Lodging LLC is an affiliate of Hawkeye Hotels. According to the complaint, the termination came months after Rise was hired to be the contractor on the project, inquiring about Fifth Side Lodging’s financial viability to fund the project. In the lawsuit, Fifth Side Lodging alleges that Rise Construction Services’ termination was a breach of contract and that Rise never intended to meet Fifth Side’s timeline and completion date of June 14, 2024. The hotel concept, which consisted of a Fairfield Inn and TownePlace Suites hotel, was put on hold due to the Covid-19 pandemic. According to the suit, the two parties started to reengage in talks in the summer of 2021 and, on June 1, ultimately agreed on a project cost of $25.1 million. Fifth Side Lodging has already paid Rise $2.4 million for the project and has made all necessary payments to date required by the agreement. Therefore, it argued that Rise had no legal basis to terminate the agreement. Fifth Side Lodging is asking the court, among other things, to rule that Rise’s termination was wrongful and for a full reimbursement of the $2.4 million.
AmericInn, the hotel in the heart of Hailey, Idaho, is changing its name and rebranding. As of May 1, 2023, the property has been renamed Mountain Valley Lodge better to represent the local culture and values of the area.
Hershler Hospitality arranged the sale of the Miranda Gardens Resort in Miranda, California. The property is located on the Avenue of the Giants adjacent to Humboldt Redwoods State Park.
PMZ Realty Capital LLC announced the arrangement of a $27 million acquisition loan for the Holiday Inn Express & Suites Jacksonville Southeast Medical Center Area in Jacksonville, Florida, and the Hampton Inn Jacksonville Ponte Vedra Beach Mayo Clinic Area, Jacksonville Beach, Florida. The 104-room Holiday Inn Express & Suites features over 1,500 square feet of meeting space, a business center, a fitness center, and an outdoor pool. The 117-room Hampton Inn features over 1,000 square feet of meeting space, a business center, a fitness center, and an outdoor pool. Both properties are located on opposite sides of The Mayo Clinic in Florida.
Hall Structured Finance originated a $52 million loan for developing The Somm Hotel and Spa, Autograph Collection, in Woodinville, Washington. Developed by Woodinville Hotel Partners, LLC, the 164-room hotel will feature a spa, a restaurant with a private dining room, a rooftop bar, a meeting space, and retail space. The hotel will be the centerpiece of Harvest Wine Village, a 20-acre master-planned development.
Personnel News
HVS announced the expansion of its North America Brokerage & Advisory division with the addition of Josh Williams as Senior Managing Director. Josh was previously part of the National Hospitality Group at Marcus & Millichap, and he was also co-founder and Senior Managing Director of Paramount Lodging Advisors.
Dimension Hospitality announced the appointment of Jeff Shockley as Executive Vice President of Development and Analytics, responsible for growing the company’s portfolio of nearly 80 all-suite hotels and expanding operational and analytical technologies. Shockley previously helped develop and open more than 560 hotels under Marriott and Hilton flags and led the business intelligence team.
Fontainebleau Development has named David Snyder as Senior Vice President of Culinary. Snyder oversees all facets of Fontainebleau Development’s culinary operations, ensuring a seamless integration of creativity, innovation, and exceptional quality across the company’s dining portfolio. Before joining Fontainebleau Development, Snyder held several roles, including Vice President of Culinary Operations and Restaurant Development, Executive Chef, and Banquet Chef in several resorts on the Las Vegas Strip.
The Indigo Road Hospitality Group promoted team members in its Lodging & Lifestyle Adventures division. Rising from general manager to senior director of lodging operations, Gabriel Perez will oversee the operations of a portfolio of boutique hotels in the Southeast. Before joining Indigo Road, Perez was general manager for IHG Hotels & Resorts and Highgate. Stepping into the lodging operations director and task force manager role, Marcos Oliviera previously was director of rooms at The Indigo Road for two years. Before that, he held general manager positions at properties for major brands.
Brick Hospitality announced its launch and its newly appointed group of leaders. Its seasoned executive leadership team includes: Robert A. Rauch, who will be the chairman and the company’s chief strategist. The hotelier has over 40 years of hospitality experience and founded hotel management firms R.A. Rauch & Associates and RAR Hospitality. Brick Hospitality brings Dallas King as chief executive officer, who will be directly responsible for leading and developing Brick Hospitality’s hotel management team. Sarah Lynch is the chief operating officer and will lead sales and marketing, guest satisfaction, operations excellence, and profit-driven results for Brick Hospitality’s hotel portfolio.
