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North America

Hotel Rates Expected to Continue Rising Globally in 2024

Alan Woinski and Kim Woinski
October 10th, 2023 at 4:45 PM EDT

Skift Take

  • CBRE U.S. Hotels State of the Union (October 2023) shows August RevPAR declined by -0.7%, with a -1.7% occupancy drop. Total revenue growth outpaced RevPAR growth in July by 2.5%. U.S. loan origination decreased, and hotel job openings continue to decline.
  • Hotel rates are expected to rise globally in 2024, with potential increases of up to 17.5% in some cities, according to American Express Global Business Travel’s Hotel Monitor 2024.
  • The Baird/STR Hotel Stock Index was down -2% in September. Year-to-date, the Hotel Brand sub-index increased by 23%, while the Hotel REIT sub-index decreased by -1.5%.

The DJIA rose 135 points while Nasdaq was up 79, the S&P 500 rose 23 points and the 10-year treasury yield plunged .14 to 4.66%, possibly a flight to safety amidst the Middle East turmoil. Lodging stocks were higher. AHT was the biggest winner, up 7% but H rose 6% and BHR was up 5% on the day.

Hyatt Hotels stock jumped in after-hours last night and trading today on the news they were added to the S&P MidCap 400 index.

Key takeaways of CBRE U.S. Hotels State of the Union October 2023 Edition include August RevPAR declined -0.7% on a -1.7% decline in occupancy. Real RevPAR continues to decline as nominal RevPAR lags inflation. Total revenue growth continued to outpace RevPAR growth. In July, total revenue rose 2.5%. U.S. loan origination was down again in August versus 2022. Hotel job openings continue to decline, lowering wage growth. CBRE raised its 2023/2024 GDP outlook from 1.9% in June to 2.7% in September. The 2025 GDP forecast was negatively revised from 2.3% to 2.0%. According to the report, the international inbound and outbound travel gap is narrowing. Office attendance rose to 50.3% in the week following Labor Day, suggesting material gains in the near-term are unlikely. Hotel demand growth declined -1.3% in August while short-term rental demand rose 7.6%. 

Hotel rates likely will continue to rise in most locations globally during 2024 despite an expected softening of leisure travel demand, according to the consulting team at the American Express Global Business Travel. The Hotel Monitor 2024 finds that rates could rise by as much as 17.5% in some cities. Amex GBT’s Hotel Monitor 2024 forecasts hotel price trends in more than 80 major cities and some predictions for top business travel destinations include: Chicago +12.6%; New York +6.8%; San Francisco +6.2%; Paris +11.0%; London +9.1%; Berlin +9.4%; Bengaluru, India +11.1%; Sydney +4.9%; Shanghai +8.4%; and Singapore +7.5%.

The Baird/STR Hotel Stock Index was down -2% in September from August. Year to date the Hotel Brand sub-index is up 23% while the Hotel REIT sub-index is down -1.5%. In September, the Hotel Brand sub-index was down -2.4% from August while the Hotel REIT sub-index was down -0.4%.

InterContinental Hotels & Resorts announced it is embarking on a new chapter with the launch of an extensive global brand evolution. According to the company, this isn’t a rebrand or repositioning; rather, it’s a comprehensive transformation from start to finish of InterContinental, ensuring the company stays at the forefront of crafting a luxury experience for the modern luxury traveler. New initiatives include reducing travel fatigue through scientifically backed food and beverage programs and guestroom spaces. InterContinental will develop innovative Concierge Galleries in hotel lobbies, transforming them into epicenters of unrivaled local, cultural knowledge. The company will further elevate micro-occasions for guests who wish to enjoy any number of life’s milestones through its brand-new Incredible Occasions program. Bringing together expertise, infrastructure and imagination, InterContinental will also unveil Celebration Suites across its global portfolio. These are re-imagined spaces designed specifically to help guests elevate life’s most special moments.

The 138-room Aloft Hotels by Marriott at Fort Lauderdale Airport is set to open in November. Managed by Green Park Management, the property offers a fitness center, 14th floor covered deck, rooftop pool and a lobby bar.

Island Hospitality Management assumed management of the 100-room Inn of Naples Tapestry Collection by Hilton. The property is owned by Mission Hill Hospitality and is located one mile from the beach. Inn of Naples offers an outdoor pool and onsite restaurant.

Last year, Intracorp announced plans to build a 65-story high-rise in Austin, Texas. The tower would have a Conrad hotel with more than 300 rooms, 136 luxury condominiums, restaurants and retail space. There has been a change as CBRE is now marketing the entire half block, or portions of it, for sale.

Montgomery Realty Group, the developer behind a planned 18-story San Francisco hotel, has filed for Chapter 7 bankruptcy, according to the Real Deal. The proposal for the building included 198 hotel rooms, nine residential units and two restaurant spaces.

The newest hotel in Vilano Beach, Florida, the Hyatt Place, is slated to open on Wednesday. The 120-room hotel will have more features than the typical Hyatt Place location including a ballroom with more than 7,000 square feet of space. It also has indoor/outdoor flex space of 20,000 square feet and, this Hyatt Place has a restaurant and rooftop bar. 

It took less than a week for Sanibel Island’s vintage Anchor Inn to have a purchase contract after being put on the market last weekend for $3.5 million. Although the buyer backed out, Pfeifer Realty Group says others are considering the opportunity in the aftermath of Hurricane Ian’s battering. The property offers 11 guestrooms, a manager’s apartment, an office area and a laundry facility. 

Curator Hotel & Resort Collection announced the addition of three new members. The 73-room Bernardus Lodge & Spa, in Carmel Valley, California, offers a spa, destination restaurant and bar, a café and an intimate dining room. The Pierside Santa Monica, located in Santa Monica, California, features 132 guestrooms, a fitness center, rental shop, hydration stations and a signature restaurant. In Gleneden Beach, Oregon, the Salishan Coastal Lodge by SCP Hotels boasts 205 rooms, an 18-hole golf course, world-class spa, and two restaurants. 

Minute Suites opened its fourth, and largest, location in Atlanta’s Hartsfield-Jackson International Airport. Located in Concourse E, the new site offers 16 suites, 2.5 bathrooms including showers, and will be open 24 hours daily. 

DoveHill Capital Management completed its investment in the dual-branded 207-key Hilton Philadelphia City Avenue and 122-key Homewood Suites Philadelphia City Avenue. The Hilton and Homewood Suites operate as one property, sharing 26,000 square feet of meeting space and 1,300 parking spaces. The properties will be managed by The Wurzak Hotel Group.

Marcus & Millichap Capital Corporation arranged $10,500,000 for the refinancing of the 102-key DoubleTree by Hilton Hotel Olympia located in Olympia, Washington. 

HREC Investment Advisors arranged the sale of the 126-room Hyatt Place OKC Airport, in Oklahoma City, Oklahoma, to Champion Hotels. HREC Investment Advisors exclusively represented ARA US Hospitality Trust in the transaction. 

The Manoah Boutique Hotel, located on Anguilla’s Shoal Bay is slated to open on November 1, in time for the 2023-2024 Winter Season. The hotel features an onsite restaurant, a spa and fitness center with an oversized pool and sauna. 

Personnel Move

Noble Investment Group announced the addition of Kamara Batchelor as Director of Fund & Corporate Accounting. Batchelor joins Noble from One10, a CFO and transaction services consulting organization. 

Europe Highlights

As Lisbon, Portugal continues to grow in popularity for international travel and tourism, Hilton announced plans to open three new properties with Feuring Asset Management GmbH. The Canopy by Hilton Lisbon Praca Sao Paulo will offer 84 guestrooms, a café and bar, 120 square meters of meeting space, a fitness center and parking facilities. The hotel will open in 2026 and will be the first Canopy by Hilton branded property in Portugal. Set to open in Spring 2024, Duo Hotel Lisbon, Curio Collection by Hilton will feature 75 guestrooms, an all-day dining outlet, café, bar, meeting space and a Portuguese pasteleria. Also marking the brand debut in Lisbon, Hilton Lisbon Baiza is set to open in 2025 with 157 guestrooms, a rooftop space with an outdoor pool, a fitness center, parking facilities and 250 square meters of social spaces. 

Novotel is entering Valencia, Spain with a new flagship hotel in the Turia Garden. Following an complete renovation, the former 12-story Expo Hotel Valencia will include 370 rooms, a coffee shop, restaurant, rooftop terrace with an outdoor pool and bar, gym, breakfast rooms, a large meeting and coworking area, and an adjacent parking space. This flagship hotel by Pictet Alternative Advisors and Accor will be the brand’s thirteenth hotel in the Iberia region. The hotel will be managed by Hesperia Group and is scheduled to open in the second half of 2024.

Alan Woinski and Kim Woinski
October 10th, 2023 at 4:45 PM EDT

Companies: Accor, Aloft Hotels, Ashford Hospitality Trust, Braemar Hotels & Resorts Inc., Curator Hotel & Resort Collection, Curio Collection by Hilton, DoubleTree by Hilton, DoveHill Capital Management, Hilton, Hilton Hotels & Resorts, Homewood Suites by Hilton, HREC Investment Advisors, Hyatt Hotels Corporation, Hyatt Place, IHG Hotels & Resorts, InterContinental, Marcus & Millichap, Marriott International, Minute Suites, Noble Investment Group, Novotel, Tapestry Collection by Hilton

Locations: Anguilla, Atlanta, Austin, California, Chicago, Florida, Lisbon, Miami, Naples, New York City, Oklahoma City, Philadelphia, San Francisco, Spain, Washington State

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