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North America

Marriott and Hilton Embrace Dividends and Stock Buybacks

Alan Woinski and Kim Woinski

November 12th, 2023


Skift Take

  • DJIA rose 391 points, Nasdaq up 277, and S&P 500 rose 68, with notable movements in lodging stocks, Hilton, and Marriott. PwC predicts economic challenges for hotels through 2024.
  • CBRE reports mixed trends in the U.S. hotel industry, with RevPAR contraction, short-term rentals gaining market share, and outbound U.S. travelers surpassing inbound. Several hotel developments and expansions are underway, including in Banff, Nashville, and Park City.
  • Hilton expands to Monaco, Marriott brings The Luxury Collection to Greece, and Minor Hotels debuts in Paris. Various hotel acquisitions, developments, and renovations are announced across the United States, reflecting a dynamic and evolving hospitality landscape.

The DJIA rose 391 points on Friday while Nasdaq was up 277, the S&P 500 rose 68 points and the 10-year treasury yield was flat at 4.63%. Lodging stocks were higher although the biggest mover was a disaster for SHCO shareholders, down -21% after reporting weaker than expected 3Q results. HLT traded up to a new high while VAC fell to another new low. SOND was down -5% on the day.

Even with their stock at a new all-time high, Hilton is continuing to return capital to shareholders with stock buybacks. They announced their board of directors authorized the repurchase of an additional $3 billion of common stock bringing the total amount currently authorized for future repurchases to approximately $4.2 billion.

Not to be outdone, Marriott International announced a quarterly cash dividend of $0.52 per share and an increase in the share buyback authorization from their board of directors. MAR said their board increased the authorization to repurchase Class A common stock by an additional 25 million shares. That will add onto the remaining 7.3 million shares under their prior authorizations. MAR said year to date through October 31, they have bought back 18.3 million shares for $3.3 billion.

According to the latest data recently released by the National Travel and Tourism Office, international visitors spent $18.8 billion on travel to, and tourism-related activities within, the United States in September 2023, an increase of 24% compared to September 2022. Conversely, Americans spent $18.3 billion traveling abroad during September, yielding a balance of trade surplus of $494 million. International visitors have spent more than $156.0 billion on U.S. travel and tourism-related goods and services year to date, an increase of nearly 32% when compared to 2022. Purchase of travel and tourism-related goods and services by international visitors traveling in the U.S. totaled $10.87 billion during September 2023, also an increase of 32% when compared to the previous year. Fares received by U.S. carriers from international visitors totaled $3.0 billion, up 11% compared to last year.

PwC reports economic headwinds and geopolitical tension will likely impact hotel performance through 2024. Leisure demand, while still strong, began to soften in the back half of this year for U.S. hotels. As a result, occupancy levels have declined in each of the past seven months, relative to comparable 2022 levels, and are expected to continue to be down during the remainder of this year and through at least the first quarter of 2024. Room rate growth played a significant role in the initial recovery for U.S. hotels but softened significantly in Q2 before falling to below inflationary growth levels in Q3. That said, ADR growth is expected to begin to increase and slightly exceed a declining inflation level beginning in Q4 and into next year. With declines in occupancies for the balance of this year, PwC expects average daily room rates to increase 4.5% for the year, with resultant RevPAR up 5.2%, approximately 114% of pre-pandemic levels, on a nominal dollar basis.

CBRE released their U.S. Hotels State of the Union November 2023 Edition. Key takeaways of the report include: TSA throughput continues to be above 2019 levels, up 11.9% in October MTD but has not translated into a full recovery in lodging demand. Short-term rentals continue to gain market share and outbound U.S. travelers outpaced inbound international visitors. September was the third month in a row of RevPAR contraction, -0.1%. Margins declined for the sixth month in a row in August. Q3 Brand.com demand was 11.8% above 2019, outperforming OTAs. CBRE feels that consumers continue to show strength and expects the Fed to begin to cut rates in 2024. Higher interest rates are impacting loan origination and size. Hotel CMBS spreads were 40 bps wider than a year ago at 288 bps, and rates were 7.7%.

Banff’s newest hotel, Moxy Banff, is slated to open in January 2024 in the Canadian Rockies. Developed in partnership with Canalta Hotels, Moxy Banff is the result of a $30 million dollar renovation of Banff’s first commercial motor hotel, The Voyager Inn. Moxy Banff will feature Bar Moxy along with its fully restored ‘66 VW food truck, and the courtyard, a fun social space perfect for lounging by the fire or taking a dip in the hot pools.

RevPAR Companies and Emerge Hospitality Group are planning a Residence Inn by Marriott in the East Bank neighborhood in Nashville, Tennessee. Via PBS EB Nashville LLC, the two affiliated entities paid $4.2 million for the property. The hotel will rise 11 stories and offer both a ground-level food and beverage component and a rooftop bar.

Hyatt Hotels Corporate and Extell Development Company announced the planned expansion of the Grand Hyatt brand in Park City, Utah. Expected to open in time for the 2024/2025 ski season, Grand Hyatt Deer Valley will mark the debut of the Grand Hyatt brand in Utah and will be located at the famed Deer Valley Resort. The property will offer 387 expansive guestrooms, 55 private residences, 38,900 square feet of indoor event space, world-class dining options, expansive outdoor event terrace, a heated year-round pool and whirlpool, fitness center and more.

Sonesta International Hotel Corporation announced the grand opening of the Hotel RL Cleveland Airport, a 140-key hotel located in Olmsted, Ohio. The hotel is expected to undergo an extensive renovation and will be rebranded under Sonesta Hotels & Resorts by mid-year 2024. The property will remain in operation throughout the renovation. The nearly $3 million renovation includes a new vibrant food and beverage concept.

Jon and Lauren Cotton, who purchased the Hotel Iroquois on Mackinac Island in 2020, are purchasing a collection of hotels and waterfront restaurants, in Northern Michigan, from Stafford Hospitality. The transaction includes The Bay View Inn in Bay View, The Perry Hotel in Petoskey, The Crooked River Lodge in Alanson, The Pier Restaurant in Harbor Springs, The Weathervane in Charlevoix and The Noggin Room Pub in Petoskey. The portfolio of properties will now be managed by Hotel Investment Services of Troy. The sale is expected to be completed in January 2024 and the purchase price is undisclosed.

A Clearwater, Florida hotel has sold for $6 million to an Orlando investor. The Roadway Inn Clearwater-Largo features 78 guestrooms, an outdoor pool, sundeck and picnic area. The sales price breaks down to approximately $73,170 per key.

Rockpoint announced it will develop an industrial site in the Pompano Beach submarket of Broward County, Florida, with The Cordish Companies and Caesars Entertainment. The site is part of a much larger 223-acre development called The Pomp which The Cordish Companies and Caesars Entertainment are developing as a transformative mixed-use destination. The Pomp features more than 10 million square feet of entertainment, hospitality, retail and residential uses Anchors such as TopGolf will be opening shortly and development of Live! At The Pomp is underway. Site work for the project is expected to start in May 2024, as phase one of a three-phase development timeline. Rockhill Management, Rockpoint’s dedicated property services affiliate, working with The Cordish Companies and Caesars Entertainment, will lead the development and management of the project.

Jacobs Entertainment, the developer of the Neon Line District in Reno, Nevada, announced plans to bid on the closed four-story, 58-unit, former Bonanza Inn. Details of the plans to add another parcel of land to the Neon District are expected to be shared at a Reno City Council meeting on November 15.

Developers have won approval for the new construction of the Silver Beach Condo Hotel in Daytona Beach, Florida. Proposed by Daytona Atlanta Development, the 25-story project needs approval by the city commission.

The city of Shelby, North Carolina is seeking an experienced development partner to revitalize the Hotel Charles as an upscale boutique hotel. The Hotel Charles is a three-story, historic building that can accommodate 3,000 square feet of retail space and 5,000 square feet of food/beverage space on the first floor and 35 to 38 rooms on the second and third floors. The city estimates that redevelopment of the building will cost $13.5 million.

Personnel Move

Soho House & Co Inc. announced Tom Collins, who was previously Soho House & Co.’s UK, Europe and Asia Managing Director, has been appointed to the role of Chief Operating Officer effective November 1, 2023. Prior to his current role, Tom has held a number of senior leadership roles at Soho House during his ten-year tenure.

Europe Highlights

Marriott International, Inc. signed an agreement to bring The Luxury Collection to the Dodecanese Islands in Greece, following an extensive renovation of Patmos Aktis Suites & Spa. Expected to open in summer 2024, Patmos Aktis, a Luxury Collection Resort & Spa, Greece will be the only luxury resort on the peaceful island of Patmos. Renovations are expected to include all 56 guestrooms, suites, and villas, with additional guestrooms to be added on in 2025, a signature restaurant, a bar and terrace, and a refreshed Spa.

Minor Hotels announced its debut in the French Capital with the upcoming addition of three hotels. The group will launch three NH Hotels in Q1 2024, with one of the properties to be rebranded as NH Collection in 2025 following a renovation. Swiss Life Asset Managers France has chosen Minor Hotels to manage the three hotels. The group will make its debut in Paris with the 208-key NH Paris Gare de l’Est and the 103-key NH Opera Paris Faubourg. The third property, with 90 keys, will open as NH Paris Champs-Elysees and will then relaunch in 2025 as NH Collection following its renovation. These three hotels, which will be refurbished, will offer 400 guestrooms as well as restaurant and bars. The hotels in Paris will join Minor Hotels’ current portfolio of six properties in the country.

Hilton announced a franchise agreement with Groupe Bertout to open the Columbus Hotel Monte-Carlo, Curio Collection by Hilton. Marking Hilton’s debut in Monaco, the boutique lifestyle, 181-room hotel is expected to rebrand before the end of the year and will have a restaurant, modern fitness facilities and an outdoor pool.

Alan Woinski and Kim Woinski

November 12th, 2023

Companies: Caesars Entertainment, Curio Collection by Hilton, Emerge Hospitality Group, Grand Hyatt, Hilton Hotels & Resorts, Hotel RL, Hyatt Hotels Corporation, Marriott International, Minor Hotels, Moxy Hotels, NH Hotels, Residence Inn by Marriott, Rockhill Management, Rockpoint, Soho House and Co Inc., Sonder Holdings Inc., Sonesta International Hotels Corporation, The Luxury Collection Hotels & Resorts, Vacasa

Locations: Banff, Cleveland, Florida, Greece, Miami, Michigan, Monaco, Nashville, North Carolina, Paris, Park City, Reno, United States

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