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The DJIA closed up 0.48%, the Nasdaq was up 0.70%, and the S&P 500 was up 0.46%, while 10-year treasury yield was down 0.03%. Lodging stocks were mixed. Airbnb was down 1.65%. Soho House was up 3%.
Barclays lowered their rating on Airbnb to Underweight from Equal Weight. They slashed their target price to $100 from $135.
Choice Hotels International made it official, confirming they have commenced an unsolicited exchange offer to acquire all the outstanding shares of Wyndham Hotels & Resorts common stock. The hostile offer is the same as the previous one with some clarifications, mainly that CHH met with the FTC to address anti-trust concerns and are confident with the target timeline of one year to complete the transaction. There is a reverse termination fee of 6% or $435 million and a ticking fee of 0.5% per month if the deal takes longer than a year to close. WH holders can’t receive both because one is if the deal is terminated and one is if it takes longer than a year but still closes. While it doesn’t look like CHH is going to raise the offer as they have had many chances to, they do have something in there about how the exchange can be all cash, all shares or a combination. Clearly, the cash deal would be prorated since it currently is $4 a share less, with the cash and shares, than when the $90 a share deal was publicly proposed by CHH and before today’s further decline in CHH’s share price. As for WH, they need to find another way to say no since they have said it in just about every way possible. This time they said they don’t see any changes in the exchange offer so the issues they have are still there but their Board will carefully review and evaluate the offer. Our guess is they wanted to say, “before saying no”, but legally couldn’t. The real question now is with the stock below $80, how many WH shareholders will feel they have nothing to lose by saying yes to the Exchange Offer. We know 1.5 million shares will say yes since that is the approximate number of shares that CHH currently holds of WH stock. CHH said they will be announcing their slate of directors they are proposing for a WH board. The question we have is if WH does not go back to the table, if the WH franchisees tell CHH they don’t want any part of them and if the shareholders tell CHH this offer is not good enough, will they go away or will they keep trying? Will CHH shareholders get tired of being held hostage by this battle and the costs that will be associated with it?
The Baird/STR Hotel Stock Index was up 9.3% in November, month to month, breaking a three-month losing streak. Year to date the Hotel REIT sub-index turned positive, up 7.6% while the Hotel Brand sub-index is up 30.6% year over year. The Hotel Brand sub-index was up 8.6% in November from October while the Hotel REIT sub-index was up 12.1%.
According to BCD Travel’s Travel Market Report, average airfares are set to decrease globally in 2024 as the recovery loses “upward momentum”, and also projects global hotel rates to increase from 2023 levels. BCD projects average global hotel rates to increase by 6.8% year over year in 2024. Even as the pace of the recovery shows some signs of slowing, demand should continue to outpace available supply in many markets, and while hotel development and conversion pipelines have been robust across the globe, those will take time to come online. To that end, hotels have shifted their focus from pushing occupancy to raising RevPAR and ADR. BCD forecasts 2024 ADR in the U.S. to increase 4.3% year over year, while it increases 6.5% in Canada and 8% in Mexico. In Europe, BCD forecast ADR to increase 7% year over year, while it increases 8.2% in Latin America, 6.3% in Asia, 5.2% in Africa and 3.1% in the Southwest Pacific, including Australia. BCD projected 2024 ADR in the Middle East to rise 14.4% year over year. Expected gains in this region are primarily driven by high expectations in Turkey.
IHG Hotels & Resorts is gearing up to open a variety of new hotels and resorts in early 2024 in locations across the globe, from Thailand to France to Mexico. Upcoming openings include: Staybridge Suites Cannes Centre, France, December 2023. Hotel Indigo Kuala Lumpur on the park, Malaysia, December 2023. Intercontinental Bellevue at The Avenue, Washington, Q1 2024. Hotel Indigo La Paz Baja, Mexico, Q1 2024. The Halyard, Vignette Collection, UK, Q1 2024. Hotel Indigo Jabal Al-Akhdar, Oman, Q1 2024. InterContinental Auckland, New Zealand, Q1 2024. Dinso Resort & Villas Phuket, Vignette Collection, Thailand, Q1 2024. Holiday Inn Express Ajaccio, France, early 2024. voco Beaune, France, early 2024, and the Holiday Inn Resort Katmandu Budhanilkantha, Nepal, also in early 2024.
IHG Hotels & Resorts also announced the opening of a newly converted and rebranded dual-brand Holiday Inn and Staybridge Suites hotel adjacent to Dallas’ Love Field airport. Featuring 169 total rooms, 99 for Holiday Inn and 70 for Staybridge Suites, the hotel features more than 1,200 square feet of meeting space. The Holiday Inn/Staybridge Suites Dallas Market Ctr Love Field is owned by Sunstone Group Inc.
Marriott International’s Tribute Portfolio has expanded with the addition of The Goodtime Hotel, a Tribute Portfolio Hotel. Located in the heart of Miami Beach, Florida, the 266-room hotel, retail, and live music destination is the first collaborative lifestyle brand from Groot Hospitality and Pharrell Williams. The property opened in April 2021 and is managed by Highgate, and offers multiple food and beverage options, gym, and a sociable meeting ground called the Library.
A joint venture of Merritt Development Group and Peachtree Group aims to develop a 10-story, 171-room Residence Inn by Marriott at 100 North Main Avenue in San Antonio, Texas. The hotel, expected to cost $58 million, will feature a rooftop pool and terrace, fitness center, meeting rooms, and a bakery.
DoubleTree by Hilton Santa Ana – Orange County Airport is undergoing a comprehensive property renovation, set to be fully completed in March 2024. The renovation of the Santa Ana, California hotel includes a renewed exterior while the lobby, front desk, pre-function spa, restaurant and bar, as well as all 253 guest rooms will be refreshed with a sleek and modern feel. In addition, the hotel will upgrade its fitness center and introduce a brand new yoga studio. The hotel boasts over 12,000 square feet of flexible meeting space.
Holiday Inn Club Vacations Incorporated announced its newest resort, Holiday Inn Club Vacations Myrtle Beach Oceanfront Resort, is now available for future bookings. The resort is scheduled to open April 2024. Since acquiring the 11-acre beachfront property located in the heart of Myrtle Beach, South Carolina, in early 2022, Holiday Inn Club Vacation has been developing a brand-new, purpose-built resort for travelers. Located across the street from the company’s South Beach Resort, Myrtle Beach Oceanfront Resort will offer 152 villas including 60 villas that will be part of Signature Collection, the company’s luxury product. The resort also features direct beach access, a beachside activity lawn, multi-level pool with a children’s splash pad and sundeck, outdoor fire pits with lounge seating, poolside hot tubs, private cabanas, fitness center, multiple food and beverage venues, outdoor promenade with event space and so much more.
The owners of one of Dallas’ most treasured landmarks, the Magnolia Building, are preparing a major renovation for the historic downtown property. The building that houses the Magnolia Hotel is owned by NewcrestImage who is in the final planning stages of a complete renovation including a significant addition to the property. The redevelopment, which is expected to top $200 million, would add a three-level wing on the east side of the 19-story high-rise. A new glass entry canopy will be construction and the entire exterior of the Beaux-Arts style building will be renewed.
The newly reimagined Manasota Key Resort has officially opened in Manasota Key, Florida. The property boasts upgraded guest suites, top-line amenities, and a revitalized atmosphere. The five-acre, 83-key resort is a natural sanctuary featuring an array of luxurious cottages, private bungalows, and elegant suites, two pools, a mini putting green, outdoor kitchen, private dock, pickleball courts, an onsite market and a variety of recreational activities. The resort is newly managed by Gulf Creek Hotels.
PENN Entertainment, Inc. broke ground on a second hotel tower at M Resort in Henderson, Nevada. The project, with an estimated budget of $206 million, is expected to add 384 rooms to the property, bringing its total to 774 rooms and suites. There will also be expanded meeting space, updated amenities, and additional local partnerships that will be announced at a later date. The new hotel is part of a previously announced plan for four new growth projects that include new land-based casinos in Aurora and Joliet, Illinois, and a new hotel in Columbus, Ohio, The City of Aurora will be providing $50 million in funding for the project there, and Gaming and Leisure Properties, Inc. has committed up to $575 million towards the overall $850 million budget for all four growth projects.
The first three floors of a future My Place extended stay hotel in Randolph, Vermont, are up. When complete, the hotel will feature 64 kitchenette-style rooms with permits for 18 more on the 26-acre lot. Permits for a restaurant and conference center adjacent to the hotel have also been approved but that part of the project is still a couple of years out. The hotel alone is a $14 million project and developers say they hope to begin accepting guests by the fall of 2024.
Personnel Moves
Waramaug Hospitality announced that current partner and principal Ferit Ferhangil will become its Chief Executive Officer, effective January 1, 2024. Ferhangil will succeed Leslie Ng, who will assume the position of Co-Vice Chairman and will focus on the company’s acquisitions by leveraging his extensive contacts. In addition to Ng and Ferhangil, the company board will include Evren Unver as Co-Vice Chairman and Paul Nussbaum as Chairman.
Marriott Vacations Worldwide Corporation announced the appointment of Mary E. Galligan to its Board of Directors effective January 1, 2024. Galligan joins the MVW Board following a 36-year career in technology and cybersecurity, government relations, and risk management. The election of Galligan brings the MVW Board to 11 members.
International News
Marriott International signed an agreement with Enjoy Group to launch two additional Autograph Collection hotels in Costa Rica. Anticipated to open in the last quarter of 2025 are: Villa Lapas, Autograph Collection and Marina Bahia Golfito, Autograph Collection. Villa Lapas, Autograph Collection will feature 86 guestrooms, expansive meeting spaces, a re-imagined restaurant and bar, a new fitness center, outdoor pool, outdoor playgrounds, and various other facilities and amenities. Expected to debut in the exclusive Marina Bahia Golfito yacht bay, the new-build Marina Bahia Golfito, Autograph Collection is planned to offer 35 hotel rooms and 72 branded residences, meeting spaces, a restaurant, spa, fitness center, outdoor pool, and more.
Accor is anticipating opening its most diverse annual line-ups of new hotel openings to date, across all segments and categories. Openings in 2024 include: Orient Express Grand Hotel de la Minerve; Raffles Jaipur; Raffles Sentosa Resort & Spa; Fairmont Golden Prague; Fairmont The Breakers, Long Beach; Sofitel Shanghai North Bund; Gigiri Gem Forest Hotel Nairobi – MGallery; 25hours Hotel The Oddbird, Jakarta; Hyde London City; Hyde Perth, Australia; JO&JOE Budapest; Mama Shelter Dubai Business Bay; SLS Barcelona; The Hoxton, Vienna; Rixos Obhur Jeddah; Pullman Taizhou Xianju; Movenpick Wroclaw, Poland; Movenpick Hotel Jakarta City Centre; Swissotel Marianske Lazne Resort & Spa, Czech Republic; Hotel & Spa Fort Saint Laurent Lyon, France; Handwritten Collection, Paris France; Novotel Nara, Japan; Novel Valencia, Spain; Novotel Tbilisi Center, Georgia; Novotel & Ibis Styles Hamburg HafenCity, Germany; Mercure Portile de Fler Riviera, Romania; TRIBE Dusseldorf, Germany; TRIBE Milano Malpensa, Italy; Ibis Styles Resort Maragogi, Brazil.
