The DJIA fell 251 points, Nasdaq was down 128, the S&P 500 was down 37 and the 10 year treasury yield was up .08 to 4.99%. We should have started with Fed Chief Powell spoke today so you would know what to expect from the indexes. Lodging stocks were lower. SOHO and VCSA traded down to new all time lows. VCSA was down another -6%.
Truist said they expect international and group areas of strength showing up in 3Q lodging earnings reports but domestic leisure will be soft. Management commentary should remain positive especially on the group outlook. If HLT and MAR provide 2024 commentary, Truist expects about 200 basis points above consensus with unit growth in line. Hotel owners (REITs) should be touching on margin pressures. They do not expect an upbeat earnings season for vacation ownership companies. Truist’s favorite names remain Hyatt and Ryman Hospitality.
According to CoStar, the U.S. hotel industry reported higher September 2023 performance results than the previous month. September 2023 (percentage change from September 2022): Occupancy: 66.2% (-05%); ADR: $160.18 (+3.5%); and RevPAR: $106.07 (+29%). Among the Top 25 Markets, New York City experienced the highest occupancy level (87.6%), up 1.6% year over year. Markets with the lowest occupancy for the month included New Orleans (53.0%) and Houston (59.5%). The Top 25 Markets showed higher occupancy and ADR than all other markets.
A joint venture tied to a Pacific Investment Mortgage Co. (PIMCO) fund surrendered a portfolio of 20 hotels with a $240 million mortgage. The properties, located in cities including San Antonio and Carmel, Indiana, were forfeited in a deal that closed in September. The Pimco portfolio, valued at $326 million when the debt was originated in 2017, was cut 16% to $272.8 million in a December appraisal. The hotels were owned by a Pimco real estate fund that had a 99% stake in a joint venture with a limited liability company linked to Fulcrum Hospitality.
NewcrestImage is acquiring three Courtyard by Marriott hotels from W.P. Carey. Two properties, at Albuquerque International Sunport and at Indianapolis International Airport, have already closed, while the third property at Chicago O’Hare International Airport is expected to close in early November. The acquired hotels have a total of 481 rooms: 180 rooms at the Courtyard Chicago O’Hare; 151 rooms at the Courtyard Albuquerque Airport; and 150 rooms at the Courtyard Indianapolis Airport. The transaction was handled by JLL Hotels & Hospitality Group.
Developers are proposing to build a TownePlace Suites by Marriott hotel in Duluth, Minnesota. The project partners include Northridge Hospitality Management and Kinseth Hospitality Companies. North Shore Bank is providing financing for the project.
The Margaritaville Resort Times Square hotel sold at a foreclosure auction. It probably is a good thing Jimmy Buffett was not alive to see this as Arden Group submitted a $1,000 credit bid and there were no competing bids. SoHo Properties, the developer of the 560 Seventh Avenue property, filed for Chapter 11 protection in July to prevent the foreclosure. Arden and another lender sued the developer and other guarantors to hold them personally liable. Arden lent $57 million to SoHo in September 2021 before selling half its interest in the debt to another party in July 2022.
Set to open in Summer 2026, Omni Hotels & Resorts has broken ground on Omni Pontoque Resort at Punta de Mita, the brand’s first luxury resort in Mexico. The beachfront resort will feature 244 guestrooms and suites as well as two 4-bedroom villas. The resort will offer three original restaurant and bar concepts, as well as casual dining options. Omni Pontoque will offer a destination spa with 14 treatment rooms, over 27,000 square feet of meeting and event space, two retail shops, multiple pools throughout the property, an indoor and outdoor fitness center, and a kids club.
IHG Hotels & Resorts announced the opening of the Holiday Inn Express & Suites Ormond Beach – North Daytona, in Ormond Beach, Florida. The 71-room property operates under the ownership of Flintstone Hospitality LLC.
Sonesta International Hotels Corporation announced the grand openings of four new Sonesta Simply Suites locations this week. The four properties are: the 104-room Sonesta Simply Suites Lafayette, located in Louisiana; Sonesta Simply Suites Memphis, a 72-room hotel located in Tennessee; the 82-room Sonesta Simply Suites Stafford, located in Texas; and Sonesta Simply Suites Lansing, a 122-room hotel in Illinois.
Office Properties Income Trust unveiled the redeveloped 20 Mass in Washington, D.C. Formerly a government office building, the mixed-use tower now features a combination of office, retail, and amenity spaces as well as a hotel. Amenities include conference centers with private decks, meeting rooms, EV charging stations, and a bike storage room, as well as a fitness center and yoga studio. The 10-story property is 54% leased to Sonesta International Hotels Corp., which opened The Royal Sonesta Washington, D.C., Capitol Hill at the building’s floors two through six. The luxury hotel includes a Bistro Du Jour on the main level, together with a bar, lounge, and outdoor café.
Germain Hotels announced the official opening of its 19th property in Canada: Alt Hotel Calgary University District, the group’s third establishment in Calgary. The hotel offers 155 guestrooms and more than 4,000 square feet of meeting and event space across four meeting rooms, two boardrooms, and one creative lounge. Additional amenities include a gym and underground parking. Germain Hotels also announced the Alt Hotel Ottawa Airport will start construction in a few weeks. The new scaled-down version of the hotel will consist of 178 guestrooms, meeting rooms, a gym, and a restaurant. A pedway will connect the hotel directly to the airport terminal. The hotel will be Germain Hotels’ third establishment in Ottawa and the third airport property for the chain. The $55 million hotel is expected to open in 2025.
In Georgia, the Savannah Historic District Board approved plans for alterations at 2 and 14 E Bryan Street. The adjoining properties are planned to be transformed into a Ritz-Carlton hotel and residences. Documents submitted to the board for approval call for a pool deck at 14 E Bryan Street.
A hotel to be built on Lookout Mountain, in Rising Fawn, Georgia, will begin taking guests at the end of February. The Cloudland Lookout Mountain that is part of the Curio Collection by Hilton is at the McLemore development. The 245-room hotel includes a 20,000 square foot conference center and a spa and fitness center. Developer Duane Horton is counting on two adjacent 18-hole golf courses to fill up many of the rooms.
Best Western Hotels & Resorts announced the opening of the Best Western Plus Mobile Inn & Suites in Mobile, Alabama. The hotel is owned by Hiral Patel and features 65 rooms and 17 suites. The property recently completed a top-to-bottom renovation and rebrand that includes a re-imagined design as well as several hotel amenity upgrades and new features. The Best Western Plus Mobile Inn & Suites features 7,000 square feet of newly built public spaces including an outdoor pool, tennis court and fitness center. The hotel also has 450 square feet of meeting space and a business center.
Kerzner International Holdings Limited announced One&Only Resorts has promoted Sergio Pereira as Regional Managing Director of Americas, overseeing strategic development for the brand’s portfolio in North America. Sergio joined Kerzner International in 2017 as Resort Manager at Mazagan Beach & Golf Resort in Morocco.
Melia Hotels International’s Gran Melia brand is finalizing all the details of its latest project in Barcelona, which will be ready to open in early 2024: Torre Melina, A Gran Melia Hotel. Following a comprehensive refurbishment, the hotel will open in January 2024 with 391 rooms and suites, 18 indoor and outdoor meeting spaces, various pools, the very best wellness experiences, and multiple food and beverage venues. Alongside the upcoming Gran Melia Torre Melina hotel, the Palau de Congressos de Catalunya, opened by Melia just a few weeks ago, is now fully up and running. With improvements to its facilities and brand-new technological equipment, the Palau offers 39 adaptable spaces, an auditorium that can host up to 2,000 people, numerous multifunctional indoor and outdoor spaces, and an exhibition space of over 4,000 square meters.