The DJIA fell 367 points on Friday while the Nasdaq was up 47, the S&P 500 fell 20 points, and the 10-year treasury yield was flat at 4.85%. Lodging REITs took it on the chin following Pebblebrook Hotel Trust’s earnings report. PEB took the worst of it, down -10%, but RLJ, CLDT, INN, and AHT all hit new lows while quite a few of the lodging REITs – RLJ, CLDT, INN, PK, DRH, and XHR, were down -5% on the day. BHR was down -7%.
PEB’s 3Q results were better than expected, but it was their forecast and commentary that scared REIT investors. PEB confirmed US leisure demand for hotel rooms is cooling off. They said ‘Revenge Travel’ related to outbound international and cruising this year has overwhelmed improving demand, business travel, and international outbound travelers. They see a lot of uncertainty going into 2024 regarding leisure demand and recovery in key markets like San Francisco. They also did not repurchase any shares in 3Q as they did not sell any hotels. PEB’s 4Q guidance was well below already lowered expectations.
Accor expects full-year RevPAR growth to exceed 20%. 3Q RevPAR was up 15%, and they expect this momentum to continue. Its Middle East, Africa, and Asia Pacific segment RevPAR was up 36% in 3Q.
Ashford Hospitality Trust, Inc. entered into a new franchise agreement with Marriott International to convert its 226-room Le Pavillon Hotel in New Orleans, Louisiana, to a Tribute Portfolio property. The agreement with Marriott calls for the hotel to be converted to a Tribute Portfolio property in the first quarter of 2024 following an upgrade to the restaurant, guestrooms, guest bathrooms, and corridors, as well as re-imagining the hotel lobby bar.
Le Meridien Tampa, The Courthouse unveiled its extensive renovation, which completely transformed all 130 guestrooms, lobby area, fitness center, ballroom, and redesigned onsite dining options. Le Meridien Tampa, The Courthouse is managed by Evolution Hospitality.
The Delta Hotel by Marriott in Wichita Falls, Texas, officially opened over a month ago. The property celebrated two ribbon-cutting ceremonies this past Thursday.
Hilton announced the groundbreaking of the first ProjectH3 by Hilton hotel in Kokomo, Indiana, signifying the start of construction on its new studio apartment-style, extended-stay hotel brand. Operating under the ownership of Sun Management & Development Corporation, the 137-room hotel is expected to open by the summer of 2024. The brand’s properties feature outdoor patios outfitted with grills, a communal fire pit and comfortable seating, fitness and guest laundry areas, and a simple retail market.
The San Francisco Superior Court tapped Hotel Asset Value Enhancement (HotelAVE) as receiver of two of San Francisco’s largest hotels following Park Hotels & Resorts’ decision to surrender the hotels. The receiver will have until Sept. 1, 2024, to find an adequate buyer for the 1,921-room Hilton San Francisco Union Square and the 1,024-room Parc 55 San Francisco, or they will go into foreclosure. HotelAVE will oversee operations and create a budget plan, subject to lender approval, for the hotel complex, as well as find a broker to assist with the sale process. Hilton will remain as the operator. The hotel pairing was valued at a combined $1.56 billion in 2016 when JP Morgan originated a $725 million loan secured by the properties.
Indus Hospitality Group announced the opening of the new Hampton Inn & Suites by Hilton Hotel in Rochester, New York.
New York Governor Kathy Hochul announced the grand opening of the James Newbury Hotel and the Wire event center in Coxsackie, Green County, New York. The nearly $11 million redevelopment project transformed two former factory buildings into a 47-room boutique hotel and a 15,000-square-foot event space with a waterfront bar and multiple community rooms. Hotel amenities include a lobby bar and restaurant, an outdoor patio, extensive lawns, a meeting room, and a two-story library. The fifth-floor rooftop restaurant will open in early November, offering indoor and outdoor dining.
The Hyatt Regency Indian Wells Resort & Spa in Indian Wells, California, is undergoing renovations to be completed in time for the 2024 spring break season. The renovations include the resort’s lobby and bar and restaurant areas. The project comes a year after Trinity Real Estate Investments purchased the property. Recent innovations at the destination include the addition of a waterpark. The 530-key hotel will remain open during the renovation process.
Sunstone Hotel Investors, Inc. completed the sale of the 1,060-room Boston Park Plaza hotel, in Boston, Massachusetts, for a gross sale price of $370 million. Newmark Lodging Capital Markets was the broker on the sale, representing Sunstone. This was an all-cash transaction, the fourth-largest hotel sale this year. According to Baird, the hotel will be rebranded as Hilton Boston Park Plaza.
Pueblo Bonito Golf & Spa Resorts will unveil its new luxury brand with the opening of Pueblo Bonito Vantage San Miguel de Allende in Spring 2024. Located in San Miguel de Allende, Mexico, the hacienda-style buildings will comprise 111 guestrooms and suites in one wing, and 45 privately-owned villas and multi-bedroom condominiums in the other. The hotel will offer banquet space for groups, a terrace area for weddings and events, a rooftop bar and terrace, and a gourmet Mexican restaurant.
CWMD LLC plans to renovate a former Borden milk factory in Walden, New York, converting the property to a 50 guestroom boutique hotel, restaurant, spa, gym, winery, gallery, event venue, and co-working space adjacent to the Walden-Wallkill Rail Trail. The project is estimated at $35 million and is under planning and design review.
The owner of Milwaukee’s Iron Horse Hotel has settled a dispute that led the company to reorganize its finances under Chapter 11 bankruptcy protection. Rider Hotel LLC filed for bankruptcy in 2022 in response to a separate foreclosure suit brought against the 100-room boutique hotel. Rider Hotelstated the hotel was performing well, but Rialto Capital refused to allow Rider Hotel to use the proceeds from a U.S. Small Business Administration loan, triggering a foreclosure suit against Rider Hotel in 2021. The suit is still pending, but a sheriff’s auction scheduled for October has apparently been canceled. A status conference on the suite is scheduled for January.
Riu Hotels is looking to build its third New York City hotel at the site of a vacant office building along Broadway. The property was acquired for $172.8 million by Riu Hotels affiliate Broadway PT 1710 LLC from the previous owner, an affiliate of Extell Development Co. Currently, Riu is seeking approval from the city to demolish the building and build a 50-story hotel with more than 670 rooms, making it the company’s biggest hotel in the city.
In Sarasota, Florida, a new hotel is slated for construction downtown with the go-ahead from the city. The unnamed project will consist of 173 rooms and a parking lot. M2RE Partners LLC proposed the project as a mixed-use property in September 2022. The company resubmitted to development services twice before receiving approval on Oct. 16.
Personnel Moves
Kempinski Hotels appointed Stuart Dickie as Chief Financial Officer and Member of the Management Board. In his new role, he will oversee and lead the global financial team and be responsible for all aspects of the financial and risk management of the hotel group. Stuart previously worked at Mandarin Oriental Hotel Group and Jumeirah Hotels & Resorts.
Gulph Creek Hotels announced the appointment of Emily Johnson as the new Vice President of Development. Emily will be responsible for sourcing new third-party management contracts and supporting asset management and investor relations. Emily has held sales and marketing positions with Disney, The Breakers, Marriott and AVE by Korman Companies.
Europe Highlight
Hyatt is finalizing an agreement with Exacorp One to open a Thompson-branded property in Seville, Spain, the fourth establishment of this brand in Europe, in 2026. The chosen building is a former police station, which will be transformed into an establishment with 101 luxury rooms, a convention center, an interior courtyard, restaurant, rooftop bar and pool, a gym, and different spaces for meetings as well as others for coworking.
