The DJIA rose 55 points but Nasdaq was down 30, the S&P 500 was down 4 points and the 10 year treasury yield barely budged again, at 4.63%. Lodging stocks were mixed. HLT traded up to another new high but PEB, SVC and BHR hit new lows with the latter down another -5%. SHCO and SOND both also traded down -5% on the day.
The Baird/STR Hotel Stock Index declined by -2.4% in October when compared with September. Hotels stocks fell, according to the Index, for the third consecutive month with Baird pointing to interest rates remaining a key driver of performance with the high rates weighing on real estate stocks. The Hotel Brand sub-index was down -2.4% from September while the Hotel REIT sub-index was down by -2.5%.
Accommodations Sector Stock Index Performance Year-to-Date
What am I looking at? The performance of hotels and short-term rental sector stocks within the ST200. The index includes companies publicly traded across global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares.
The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more hotels and short-term rental sector performance.
Wells Fargo upped their price target on Apple Hospitality to $18 from $17 and Ryman Hospitality to $105 from $104, maintaining Overweight ratings on both. They kept their Overweight rating on DiamondRock Hospitality but cut their target price to $9.50 from $10. WF lowered their price target on Pebblebrook Hotel Trust to $13 from $16, maintaining their Equal Weight rating. Service Properties Trust’s price target was cut to $6.50 from $8. WF maintained their Underweight rating on the stock.
H. Keith Thompson, principal of Avison Young Hospitality Group, distributed what we are calling a mission statement. Thompson said that he has been a hotel broker for 33 years and all past cycles had the pendulum swinging from being either a seller’s market or a buyer’s market, only to swing back the other way after a correction. He said in today’s market, the pendulum has stopped swinging with new transactions in the hotel space down by -50% to -70% depending on the brand and the market. With debt interest rates more than double what they are mid-2022, hotel investors keep waiting for the rates to return to pre-cycle levels. Thompson believes they could be waiting for years and they may possibly never return. The era of cheap and free money could have a very long-term effect on the national commercial marketplace with Thompson feeling the hotel real estate market may be impacted a lot more. Thompson said that on average, hotel values nationally are down by 15%-25% due solely to the cost of the debt stack. Many hotel loans are coming to term in 2024 and owners must decide to refinance at today’s rates or sell. He feels the problem with waiting is it could be a 3-5 year decision or possibly longer.
Trump Hotels and Irongate have come to a mutual agreement for a buyout of the hotel management and license agreements for the Trump International Hotel, Waikiki. The 462-residence property will continue to be managed by Trump Hotels through February 6, 2024 when The Trump International Hotel, Waikiki will be reborn as Wakea Waikiki Beach under the management of Hilton’s LXR Hotels & Resorts. The 38-story property will embark on a custom design renovation scheduled to start in early 2025, slated to take place over several months. The renovation will be phased to minimize disruption to daily operations and will encompass upgrades to public areas including lobbies, pool areas, spa, fitness center, residence corridors, landscaping and residence interiors. In addition, Wai olu and In-Yo Café will be reconceptualized, and the destination restaurant on the ground floor will soon be home to an internationally acclaimed restaurateur and chef.
Coconut Estero Investment Partners LLC is proposing a five-story, 115-room Hilton Garden Inn hotel in Estero, Florida. The company adjusted its plans to meet 2021 Village of Estero Land Development Code and reduced the number of off-site parking, to 15 from 50, in order to satisfy village planners. Amenities will include a fitness center, meeting rooms, pool with patio, casual dining, bar with outdoor lounge, port cochere and public bike racks.
Springwood Hospitality is planning to debut a SpringHill Suites by Marriott hotel in Lower Nazareth Township and a Fairfield Inn & Suites by Marriott hotel in Bethlehem Township in summer of 2024. Both properties will be in Pennsylvania’s Lehigh Valley. The four-story, 113-suite SpringHill Suites will be adjacent to a Home2 Suites by Hilton and Tru by Hilton dual-branded hotel location. Tentatively set to open in July, the hotel will include a fitness center, fire pit area with sofas and table seating, a business center and lobby market. In Bethlehem Township, Springwood’s new Fairfield Inn & Suites will be adjacent to the Madison Farms apartment complex. Plans call for a four-story, 107-room hotel with 118 parking spaces.
IHG’s voco hotels announced the signing of its twenty fifth Americas property in Missoula, Montana. Scheduled to open in mid-2025 under the ownership of McDermid Management, voco Missoula Downtown will be the brand’s first Montana property. The soon-to-be renovated hotel will feature 193 guestrooms, more than 12,000 square feet of meeting and event space, a fitness center and an indoor pool. voco Missoula Downtown is the latest in a series of new-build and conversion signings that have expanded the brand’s reach and accelerated growth pace in the Americas. The list of planned region properties includes: the 59-room voco Montreal, the brand’s first Canadian property. The nine-story, 241-room voco Myrtle Beach, marking the brand’s South Carolina debut. The brand’s fourth open or in-pipeline property in Mexico, voco Royalty Puebla Downtown will feature 42 guestrooms, and the 51-room voco Ardez Hotel Sunnyvale in the heart of California’s Silicon Valley. The brand also anticipates opening new hotels in Mexico City, Cincinnati, and Sarasota and Destin, Florida, among others, in the coming months.
Aligned Hospitality Management has added the Comfort Suites Denver Tech Center to its portfolio. Owned by Colorado Hotel Group LLC, the hotel is Aligned’s first property outside of the Arizona market and the 21st in the company’s portfolio. The 73-suite property offers a fitness center, heated indoor pool, sundry shop and ample meeting space.
A plan to bring a Margaritaville Resort to the Bay Area is one step closer. It would be called Camp Margaritaville and be located at Lake Berryessa in Napa County, California. The Napa County Board of Supervisors approved a move to enter into exclusive negotiations with WhiTim Napa LLC who represents Camp Margaritaville Resorts. This would be a $95 million investment by the Margaritaville group. The resort will have a 50 slip marina, gas docks, restaurants, RV parking and cabins. The approval is for a two-year negotiation so during that time the developer will work on a design, the environmental impact and more. The plan would then have to be approved so there is still a ways to go.
After a year-long renovation, The Ryder, formerly the King Charles Inn, has converted its former entrance into a public coffee shop. The Charleston, South Carolina hotel also moved its guest check-in site to the side of the building to offer a more seamless experience. The biggest addition to the 91-room hotel is a “backyard” created in the center of the property’s U-shaped layout and atop the parking structure. Its home to a new tiki-inspired casual bar and restaurant. At the center is a large fireplace, surrounded by seating and tropical flora. The current owner is an affiliate of Rockbridge Capital. Makeready handles the management.
The Sandman Hotel, in Santa Rosa, California, is undergoing a $4 million renovation that includes manor upgrades to its 135 guestrooms and accommodations. Owned by Stephen Yang, the renovation also includes the hotel’s fitness center, and an outdoor canvas dome will be added to house yoga sessions and meditation activities, later this year. Yang anticipates the renovations to be complete by the end of the year.
Tim Harrington has acquired The Dunes on the Waterfront with his Batson River Partner Kevin Lord. Set to open for the summer 2024 season, The Dunes is set upon 12 acres of oceanfront lawns in the seaside town of Ogunquit, Maine. The property features a variety of cozy vintage whitewashed cottages, a heated pool and a dock.
Best Western Hotels & Resorts announced the opening of the Best Western Columbia River Waterfront Hotel Astoria in Astoria, Oregon. The hotel is owned by Columbia River Hotel Operations, Inc. and is managed by Hospitality Associates. The recently renovated, 75-room property features a spacious lobby with a cozy fireplace, an indoor pool, a fitness center and business services.
RLJ Lodging Trust provided an update to its embedded value creation initiatives. These initiatives include two new conversions in 2024, bringing the total completed and announced brand conversions and repositionings to eight hotels.