Truist gave their findings from the first day of the ALIS Lodging Conference. They described the industry sentiment as positive but generally reasoned. We should note that typically this conference and then the NYU one in early summer have different sentiments. Truist said they found greater confidence on the setup for the upcoming year. The industry seems to have more top line demand visibility, particularly convention and association groups but also overall normal booking trends. Industry participants also seem to have a better grasp on lower labor cost growth and staffing needs as well as the new build US supply growth dynamic being so low. Truist said some industry executives are describing 2024 as a transition year, in particular for asset price discovery and the increased normalization of demand patterns. Truist said they believe there is greater potential for more of the hotel REITs to provide full year guidance and perhaps more robust overall guidance for both C-Corps and REITs relative to the post-2020 years.
STR and Tourism Economics made minor adjustments to their US hotel forecast for 2024. They upped ADR by 0.1% while both occupancy and RevPAR projections remained unchanged. They downgraded 2025 growth projections because long term average trends have begun to stabilize. For 2025, they lowered occupancy by -0.01 percentage points, ADR was down -0.3 percentage points and RevPAR was down by 0.5 ppts.
Canada’s ADR and RevPAR were the highest for any year on record, according to CoStar’s 2023 data . 2023 (percentage change from 2022): Occupancy: 65.7% (+7.7%), ADR: CAD200.08 (+9.7%), and RevPAR: CAD131.48 (+18.3%). Among the provinces and territories, Manitoba recorded the highest 2023 occupancy level (72.2%), which was 10.8% above 2022. Among the major markets, Vancouver saw the highest occupancy (78.5%), up 7.8% over 2022. The lowest occupancy among provinces was reported in Saskatchewan (58.0%), up 4.8% against 2022. At the market level, the lowest occupancy was reported in Edmonton (+9.4% to 56.6%).
According to the 2023 year-end U.S. Construction Pipeline Trend Report from Lodging Econometrics, the pipeline stands at 5,964 projects/693,963 rooms. The pipeline hit record project counts at Q4, with the addition of 260 projects/21,287 rooms over last quarter.
U.S. Hotel Pipeline by Status Q4 2023
| Quarter | Change Type | Projects | Rooms |
|---|---|---|---|
| Q4 2023 | Addition Over Last Quarter | 260 | 21,287 |
| Q4 2023 | Under Construction | 1,118 | 141,768 |
| Q4 2023 | Scheduled to Start Next 12 Months | 2,259 | 261,582 |
| Q4 2023 | Early Planning Stage | 2,587 | 290,613 |
Notably, the number of combined hotel renovations and brand conversion projects in the U.S. closed the year with record project and room counts of 2,028 projects/303,330 rooms.
U.S. Hotel Pipeline by Chain Scale Segments Q4 2023
| Segment | Projects | Rooms |
|---|---|---|
| Upper Midscale | 2,245 | 218,112 |
| Upscale | 1,445 | 177,999 |
U.S. Hotel Historical and Forecasted Hotel Openings
| Year | Type | Hotels | Rooms |
|---|---|---|---|
| 2023 | New Hotels Opened | 474 | 60,436 |
| 2024 | Forecasted New Hotels | 677 | 79,518 |
| 2025 | Forecasted New Hotels | 799 | 85,654 |
Hotel Equities has formed a strategic partnership with private equity firm PPC Enterprises. The partnership looks to invest in future M&A, Strategic Alliances, JV opportunities and acquisitions. The partnership will enable HE to accelerate its development pipeline and strengthen its position as an industry leading partner for hotel owners and developers seeking unparalleled performance and returns. Both HE and PPC see immense potential growth through nurturing talent and fostering career advancement opportunities for HE’s people. Moelis & Company LLC served as financial advisor and Latham & Watkins LLP acted as legal counsel to Hotel Equities. Jones Lang LaSalle Securities, LLC served as financial advisor and Covington & Burling LLP acted as legal counsel to PPC.
As 2024 begins to unfold, Accor is continuing to expand the brands within its Luxury & Lifestyle division to meet the world’s accelerating demand for high-end and culturally relevant travel experiences. With estimates showing global luxury travel spend will reach $2.32 trillion by 2030, Accor is perfectly positioned with a portfolio of 370+ luxury hotels and 150+ lifestyle hotels worldwide as well as a robust development pipeline. Accor will open another 100 luxury and lifestyle hotels over the next two years, with expectations of at least 50 new luxury lifestyle project signings per year. Beyond luxury and lifestyle, Accor’s Premium, Midscale & Economy divisions are also preparing for an ambitious period of growth in 2024. Across The Americas region specifically, the group aims to increase its current portfolio of 450 hotels to more than 700 over the next three years. One of the Group’s top markets of strength in The Americas is Brazil, where Accor is number one in the hotel sector with 340 hotels.
Sonesta International Hotels Corporation announced the execution of 65 new franchise agreements in 2023, spanning 12 of the company’s 17 brands. The new agreements call for the addition of 5,697 new guestrooms. Sonesta Franchising provides franchisees with a range of options across the upper upscale, lifestyle, upscale, midscale, extended-stay and economy segments.
First Hospitality witnessed significant growth in 2023, increasing its hotels and restaurants under management by nearly 40%. In addition, First Hospitality continued to focus on upscale, soft brand and lifestyle properties which is now approaching 40% of its portfolio. Last year, the company entered five new markets, bringing its diverse portfolio to more than 70 independent and branded properties, with over 10,000 keys and 3,500 associates.
Merete Hotel Management is committed to third-party contract growth in 2024 and kicked off the new year with its 20th hotel – the Hampton Inn & Suites Grants Pass in Grants Pass, Oregon. Merete recently named Liz Dahlager, formerly the company’s Executive Vice President, Chief Operating Officer. In addition to overall portfolio performance, Dahlager is responsible for leading all aspects of Merete’s strategic growth plans including new hotel development and 3rd party management agreements.
Morguard Corporation announced the completion of its previously announced sale of a portfolio of 14 high-quality hotels, totaling 2,248 rooms, for gross proceeds of $410.0 million. The portfolio, comprising 14 hotels including Marriott, Hilton, IHG and independent hotels across Canada, specifically in the Greater Toronto Area (Toronto, Mississauga, Markham, and Vaughan), Ottawa, Halifax and Sudbury, was sold to an institutional purchaser. Morguard will retain ownership of two hotels: the dual-brand Hilton Garden Inn and Homewood Suites Ottawa, Ontario and the Inn at the Quay in New Westminster, British Columbia.
DKN Hotels debuted a multi-million dollar renovation of its Cardiff by the Sea Lodge located in Cardiff by the Sea, California. The three-story, 17-room hotel has a new look following a comprehensive revitalization to its exterior, rooftop deck, public spaces and all guestrooms.
In Southbridge, Massachusetts, the Southbridge Hotel & Conference Center has completed a name change and rebranding to the Wellsworth Hotel. The property has more than 200 guestrooms, 24,000 square feet of flexible meeting and conference space, a fitness center with indoor pool and basketball court, lounge, restaurant and indoor courtyard.
Lodging Dynamics Hospitality Group has been appointed to manage the Homestead Resort in Midway, Utah. The resort currently has 125 recently renovated guestrooms, Golf Club, unique crater hot springs, a collection of restaurants and other unique amenities.
Bosa Properties and Listel Hospitality Group announced the Listel Hotel in the West End of Vancouver is set for redevelopment. Through a 50/50 joint venture, the six-story Listel Hotel will be transformed into a 28-story mixed-use tower. Following the redevelopment, the building will consist of 174 hotel rooms occupying the lower portion of the tower and 126 rental units in the upper portion. The redeveloped space will add a pool, fitness facility, spa, games room and several meeting spaces to the property. As part of the redevelopment, the Listel Hotel will close down in November, with demolition to begin immediately after. Construction on the new tower is then expected to commence in September 2025, with the new tower expected to be completed sometime in 2028.
VICI Properties is entering into the Youth Sports arena, announcing they entered into a loan construction agreement for up to $105 million in financing to Homefield Kansas City. The money will go to help fund the development of a Margaritaville Resort in Kansas City, KS. The resort is expected to open in summer of 2025 and will serve as the anchor to the Homefield Development which will serve as the hub for Homefield’s new youth sports training facility and baseball center, both of which are under development within the Homefield Resort campus. VICI received a call right agreement that gives them a call option on the Margaritaville Resort, new Homefield youth sports training facility, new Homefield baseball center and the existing Homefield youth sports complex in Olathe, KS. VICI also received right of first refusal to acquire the real estate of any future Homefield property in a sale leaseback transaction should Homefield elect to monetize such assets.
Last week in Norwich, Connecticut, Hotel Callista received city approval to open following a renovation project. The hotel, which is located in the former Norwich Elks Club, will host a ribbon-cutting ceremony for the hotel on February 1. Ganesha Hospitality LLC purchased the property in May 2019 for $400,000 from RCN Capital LLC.
My Place Hotels of America has officially opened My Place Hotels – Idaho Falls, ID, marking the 70th opening and operating My Place property nationally. The property was developed by Legacy Builders and Guard Hospitality manages it. The 64-key hotel offers an onsite laundry, a grilling station and a grab-and-go store.
Best Western Hotels & Resorts announced the opening of the Best Western Kernersville, in Kernersville, North Carolina. The hotel is owned by Pranav Patel and features 56 recently refreshed guestrooms, including 3 suites, a fitness center, outdoor pool, discounted laundry services and an electric vehicle charging station.
Yonder Escalante, a 20-acre boutique hotel located amidst Southern Utah’s Grand Staircase-Escalante National Monument, announced a significant rebrand to Ofland Escalante. The name change will take effect when it reopens for the 2024 season on March 13. The hospitality group will launch future properties under the name of Ofland Hotels. This past season, the hotel launched its new deluxe cabins, offering guests a more spacious and family-friendly lodging option. In 2024, Ofland Escalante is launching 10 additional deluxe cabins, bringing the property’s total accommodation offerings to 52 rooms, including 20 deluxe cabins, 22 custom-designed cabins and 10 vintage renovated Airstreams. Guests can enjoy the onsite amenities and food and beverage program including the outdoor lodge, general store, pool and hot tub, outdoor movie theater and a food truck.
Cushman & Wakefield arranged the $11,750,000 sale of Four Points by Sheraton Greensboro Airport hotel in Greensboro, North Carolina. The hotel offers 112 guestrooms, an onsite restaurant, a fitness center, business meeting space, and an outdoor pool. Cushman & Wakefield represented the seller, Jai Amba Maa Hospitality Gso Airport, LLC, in the transaction. The hotel was acquired by Banks Rock, LLC.
Personnel Moves
Lafrance Hospitality announced the promotion of Tim Burkhardt to the position of President of Hotels. Burkhardt, who previously served as Vice President of Lodging and Development, will assume his new role effective immediately. As President of Hotels, Burkhardt will oversee the strategic direction and operations of Lafrance Hospitality’s portfolio of hotels, ensuring exceptional guest experiences and driving continued growth and success in the hospitality industry. He will continue to spearhead acquisition and new construction projects for the hotel group.
Target Hospitality Group announced Jason Vlacich, the Company’s Chief Accounting Officer, has been promoted to the expanded role of Chief Financial Officer. Additionally, Troy Schrenk has been promoted to the expanded role of Senior Executive Vice President of Operations in addition to his position of Chief Commercial Officer. Both promotions are effective as of January 23, 2024. Schrenk will lead the Company’s business and commercial operations, construction, business development, and government relations. Vlacich will lead the finance, accounting, treasury, tax, IT business applications and investor relations functions. Vlacich succeeds Eric Kalamaras, who has departed from the Company to pursue other interests. The Company also reaffirmed its full year 2023 and preliminary 2024 financial outlook, which it provided in connection with the announcement of the $3.3 billion contract award for the Pecos Humanitarian Community in December 2023.
