Canada Notches Record High Average Room Rates

The DJIA fell 431 points while Nasdaq was down 248, the S&P 500 fell 59 and the 10-year treasury yield jumped another .12 to 4.80%. Lodging stocks were lower. New lows were set by VAC and AINC. SOND and AHT were each down -7%, while PEB and ABNB were down -6%.

Wedbush initiated coverage on some lodging REITs this morning. Ryman Hospitality and Host Hotels were started at Outperform with price targets of $94 and $19 respectively. Park Hotels and Pebblebrook Hotel Trust were initiated at Neutral with $13 and $14 price targets respectively.

Keybanc cut their rating on Airbnb to Sector Weight from Overweight.

A new report by Morning Consult shows that, after years of inflation and rising travel costs, the era of “revenge travel” may be coming to a close. According to The State of Travel & Hospitality report, travel intentions are increasing in several countries, but flat lining or falling in others, most notably in Europe. Intentions to travel dropped 11 percentage points in France and six in Germany. Interest to travel also fell in Canada and Russia (-4 percentage points each). Pent-up demand was expected to have greater staying power in Asia-Pacific, where Covid border restrictions were kept in place longer than other parts of the world. Pent-up demand fueled travel in AP in the first half of 2023, but since then, the trend is starting to reverse, noting a drop in Singaporean visitors to Malaysia following a surge in late 2022. Japanese enthusiasm to travel remains muted, with just 53% of respondents planning leisure travel in the next 12 months, the lowest of the 15 countries in the survey. Travel is booming in China though. As the country celebrates the Golden Week holiday, domestic bookings are up nearly 6x, and outbound bookings more than 20x, year-on-year.

Average room rates reached record highs across Canada this summer. Driven by a strong and sustained rebound in tourism and overnight visitors, Canada’s hotel industry smashed records for average rooms rates in May, June, and again in July, according to CoStar. The country’s ADR reached $232 in July, a 29% increase compared with the pre-pandemic July 2019 rate. In Vancouver, July hotel room average rates soared to $346, the highest monthly rate ever recorded by a Canadian City. Vancouver’s hotel occupancy was also the highest among the country’s major markets, at 87%. Vancouver has high occupancy because hotel supply is constrained and has been over the past decade. The city’s record-breaking cruise business this year has been a key driver of hotel rates. According to a recent economic analysis from Destination Vancouver, Metro Vancouver needs 20,000 new hotel rooms by 2050. The report also predicts that within the next three years, the demand for hotel rooms in the city of Vancouver will exceed supply and continue to grow by an average 2.7% each year, with nearly 14 million overnight visitors expected by 2050. The prospect of continued growth have piqued the interest of a number of investors, who aim to develop 1,200 rooms by 2027, according to city permit application records.

Lodging Dynamics Hospitality Group has been appointed to manage the 248-suite Residence Inn by Marriott Los Angeles/Redondo. This hotel is the ninth managed by Lodging Dynamics in Southern California and one of several Southern California hotels developed and owned by Mogul Capital. 

Despite the rumors, an Aloft by Marriott hotel project in El Dorado Hills Town Center, in California, is still active. The 115-room Aloft by Marriott project is being developed by Core Hotels LLC. Some hotel details include a bar/lounge, fitness center and meeting space.

Highgate announced the 368-room Romer Waikiki at The Ambassador, formerly known as the Ambassador Hotel Waikiki, has reopened following a multimillion-dollar and multiyear renovation. 

A tower being built in Midtown Okalahoma City will be home to a hotel combined with a private club and executive office suites, a first for the city and possibly Oklahoma. Recently filed permits for The Citizen show Dallas-based WoodHouse is going to operate the 18-room boutique hotel on the second floor, topped by executive suites on the third floor and Citizen House, a private club on the fourth floor. The 12-story tower, developed by Bond Payne and Renzi Stone, is set to open by July 2024 with the club and hotel to open in late 2024.

Indus Hotels announced the former Varsity Inn, located in Columbus, Ohio, has reopened as the Olentangy Motor Inn, following a six month renovation. The motel’s 55 rooms were gutted and a Crimson Cup Coffee & Tea was added to the building, complete with a drive-thru. The Olentangy Motor Inn is one of two buildings that operated as the Varsity Inn. The second building is closed as Indus prepares to demolish it and replace it with a Home2 Suites by Hilton next year.

The Whitney Peak Hotel, in downtown Reno, Nevada, is joining the Hilton family of properties. The Reno hotel will join Tapestry Collection by Hilton as Whitney Peak Hotel Reno, Tapestry Collection by Hilton and is slated to open later this year.

A meeting will be held to discuss Daytona Atlantic Development LLC’s newly revised plans to build an oceanfront condo/hotel high-rise on Silver Beach Avenue in Daytona Beach, Florida. The new plan calls for the construction of a 25-story, 274-room high-rise, which would be slightly shorter and small that the original proposal, which would have been 27 stories tall and 304 rooms. The new design calls for three swimming pools and a first floor restaurant and lobby. Floors one through six would also include a parking garage. 

The Silverton Casino Lodge, in Las Vegas, Nevada, has undergone a complete $40 million renovation. The renovated hotel features 300 “cowboy glam” guest rooms and suites new experiences such as Wine Time, and Social Hour and The Sundance Grill has resumed its 24-hour-a-day format. The Silverton renovation also included new casino carpet, slot and video poker upgrades, and refreshes to restaurant menus. Coming in early 2024 is an all-new $10 million backyard and pool renovation called The Swimming Hotel, which will include poolside dining, cabanas, fire pits, sports and movies at the pool, and more.

The Sunseeker Resort in Port Charlotte, Florida, has applied to the Army Corps of Engineers to build a 182-slip commercial marina. The project site abuts the 785-room hotel being built by Allegiant Travel Co. An opening date for Sunseeker is set for sometime in the last quarter of 2023.

Hunter Hotel Advisors announced the sale of the Hampton Inn & Suites Atlanta Airport/Camp Creek Parkway. Logos Hotels purchased the property from BPR Properties. Hunter arranged the sale for BPR Properties. The Hampton Inn & Suites offers 119 rooms, a business center, fitness center and an outdoor pool.

Stockdale Capital Partners closed $50 million of acquisition financing to purchase a Houston hotel adjacent to Texas Medical Center. Varde Partners supplied the loan for Stockdale’s acquisition of InterContinental Houston. Stockdale acquired the 464-room hotel from MediaStar for $86.5 million. Newmark arranged the debt transaction. Stockdale plans to invest additional capital into the hotel as part of a targeted business plan.

RLA Global, Four Corners, and Global Branded Residences announced a new strategic alliance among the three firms that will expand services and opportunities for clients globally. The three firms will jointly pursue engagements, combining their strengths into a unified consortium. RLA Global brings hospitality and destination development experience, Four Corners offers transactional and contractual capabilities, and Global Branded Residences provides specialized knowledge in luxury branded property advisory services and brand/operator engagement. 

Personnel Move

Sonder Holdings Inc. announced the appointment of Adam K. Bowen as Chief Accounting Officer, effective October 9, 2023. Most recently, Bowen served as Vice President & Chief Accounting Officer for BlueLinx Holdings Inc.

Europe Highlights 

Raffles Hotels & Resorts announced the opening of Raffles London at The OWO this past Friday. The OWO is home to the first Raffles hotel in London, The OWO Residences by Raffles, and a collection of independent restaurants and bars. Raffles London at The OWO features 120 guestrooms and suites, signature dining experiences, entertainment spaces including a grand ballroom, and an extensive spa in partnership with Guerlain and Pillar Wellbeing.

The new ibis Styles Rotterdam Ahoy has opened in Rotterdam-Zuid, adjacent to the Rotterdam Ahoy Convention Center. Operated by HR Group, the hotel boasts 250 rooms, a chic Italian eatery, and a modern fitness center.

Hotel Investment Partners announced Barcelo Benidorm Beach has reopened following a €27 million renovation of all its facilities. Located on Levante Beach in Benidorm, Spain, the 264-room hotel comprises a buffet restaurant, a new La Santa Maria Gastrobar by Barcelo Hotel Group, a lobby bar, rooftop bar, fitness area, pool and solarium.

JW Construction plans to establish a new mega sports and hotel complex near Warsaw, Poland, as well as a luxury property in the heart of Krakow. The company is also exploring the feasibility of transforming some of their older hotels into senior homes, as part of a new pilot program. The Warsaw complex, which is set to be completed in one and a half to two years, will feature a 200-room hotel, extensive sports infrastructure, and 800 apartments available for purchase.

A hotel south of Blackpool, England that has been in administration for almost a year has been put back up for sale after a potential deal fell through. The sale of the Waterfront Southport Hotel is being led by Christie & Co and Savills while an asking price has not been revealed. The 131-bedroom hotel is located next to the planned £73m Marine Lakes Events Centre.