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North America

Truist Has Its Own Ideas About Choice’s Designs on Wyndham

Alan Woinski and Kim Woinski
January 30th, 2024 at 5:00 PM EST

Skift Take

Truist met with Wyndham and Choice franchisees who had strong opinions about the merger and broad frustrations about brand costs and property valuation in limited service today.

The DJIA was up 134 points but Nasdaq dropped 118 while the S&P 500 was down 3 points and the 10-year treasury yield was down .03 to 4.06%. Lodging stocks were modestly higher. HLT, MAR, and IHG traded up to new highs. SLNA was up another 31% while VCSA rose another 10% on the day.

Morgan Stanley tweaked estimates to account for recent RevPAR data. While lodging valuations are more elevated than their sister gaming group, lodging stocks have generally underperformed the market year to date, outside of the quality names like HLT and MAR and deal-related names like CHH. MS sees outlook expectations and room growth as key themes. They remain Overweight HLT, MAR, H, and WH.

Truist had some interesting comments regarding their discussions at ALIS concerning the Wyndham/Choice situation. They met with a few CHH and WH franchisees/hotel owners separately. They had strong opinions about the merger and broad frustrations about brand costs and property valuation in limited service today. Truist said while it may eventually be up to the government to determine if the merger goes through, Truist is anticipating considerable industry efforts to STOP the merger. They view CHH and WH far apart in terms of offer conditions but with WH stock rising and CHH stock falling since the offer, the gap of fundamental valuation has Truist anticipating CHH raising the offer as their original one seems stale. As of right now, we really don’t know anyone besides the people at CHH who think this deal is going forward as it stands right now. Interestingly enough, Truist said they met with Sonesta, considered a competitor to CHH and WHSonesta believes the merger battle is good business for them and that the uncertainty is drawing hotels to Sonesta. This confirms what WH had been saying to Truist and others about a development pipeline impact from CHHnot understanding that No is No. Truist said they came away from their meeting with Sonesta with the view that this brand will have a transformative 2024 and is a hotel company worth watching.

Ryman Hospitality’s Investor Day included more guidance. Their 2024 consolidated adjusted EBITDA guidance is slightly above consensus at mid-point and they gave a 2027 outlook. Truist said that outlook justifies a $160+ share price and dividends rising to $5.70 a year. They are also assuming RHP is continuing with their usual conservative guidance.

Las Vegas hotel ADR is forecasted to reach $573 for February 9-11, 2024, which would be the highest level for any Super Bowl weekend on record, according to STR. The market is projected for a Friday through Sunday night occupancy of 87.9%. That level combined with an ADR of $573 would result in RevPAR of $504 which is higher than the recent Formula 1 race weekend on the Strip.

Hotels are projected to pay a record amount of wages and generate a record level of tax revenue in 2024, according to the American Hotel & Lodging Association’s 2024 State of the Hotel Industry report. Top findings include: Hotels are projected to pay employees a record of more than $123 billion in wages, salaries, and other compensation in 2024. Hotels are projected to generate a record of nearly $54.4 billion in state and local tax revenue in 2024 and are also expected to generate a record of $29 billion in federal tax revenue in 2024. This year, hotels are projected to employ nearly 45,000 more employees, while still employing nearly 225,000 fewer people than in 2019. Nominal hotel guest spending on lodging, transportation, food and beverage, retail and other expenses is expected to reach $758.6 billion in 2024. Average hotel occupancy is expected to reach nearly 63.6% in 2024 while nominal RevPAR is expected to reach $101.82.

The Nichols Partnership and BMC Investments, in collaboration with Vision Hospitality Group, announced the early second quarter of 2024 opening of the Moxy Boulder located in Boulder, Colorado. The Moxy Boulder will offer 189 guestrooms, over 5,300 square feet of indoor and outdoor function space, a fitness center, an active lobby including a Moxy Bar and lounge area, 10,000 square feet of ground-floor retail space, and outdoor lounge spaces. The hotel will be managed by Vision Hospitality Group.

Continental Assets Management, together with Highgate, announced the grand opening of AC Hotel by Marriott Honolulu, marking the brand’s first property on the island of Oahu and the first business-traveler-driven concept in the area. The five-story property offers 112-guestrooms, over 2,500 square feet of dedicated indoor and outdoor executive space, AC Lobby, AC Library, AC Lounge, a hidden speakeasy, and a fitness center.

Sheraton Stonebriar Hotel, located at the Stonebriar Commons is Frisco, Texas, announced the completion of a multi-million dollar renovation. The comprehensive renovation touched all areas of the hotel including 168 guestrooms, 6,374 square feet of meeting space across seven customizable event spaces, The Marriott Bonvoy Club Lounge, public spaces and the fitness center.

Downright Austin is opening in spring 2024, bringing its unique take on the Renaissance Hotels brand from Marriott. Located in downtown Austin, TexasDownright Austin will feature a bold lobby experience, 367 guestrooms and suites, 31,000 square feet of indoor and outdoor event spaces, new culinary concepts, and a new pool. FBR Management is set to unveil two distinctive dining and cocktail experiences within the property this spring.

IHG Hotels & Resorts opened a new Candlewood Suites property in McPherson, Kansas. The Candlewood Suites McPherson features 92 suites, a business center, fitness center, outdoor gazebo grill, and picnic tables. The hotel is owned by McPherson Hotels and managed by True North Hotels.

Peachtree Group’s hospitality management group has been selected to operate the Merrill Hotel, Muscatine, a Tribute Portfolio Hotel in downtown Muscatine, Iowa. The property comprises 122 guestrooms, a full-service restaurant, nearly 13,000 square feet of flexible meeting and event space, an outdoor terrace, a heated indoor saltwater pool, and a fitness center. The property is owned by the Howe Family.

Work on The SwiftwaterPocono’s newest boutique hotel, is expected to wrap up at the end of April. Located in Monroe County, Pennsylvania, the hotel features 100 rooms, a breakfast and cocktail lounge, heated indoor and outdoor pool, and specialized concierge service. Bookings are now being accepted for May 1 and beyond.

Joining The Equestrian Hotel on the World Equestrian Center campus in Ocala, FloridaThe Riding Academy Hotel, set to open April 1, will offer 390 additional rooms and suites to the campus. The hotel will offer a large pool with a splash pad, sundeck, dual fitness centers, and a lobby marketplace, all just a golf cart-ride away from the complex center which boasts seven restaurants, a resort spa, more than two dozen shops, boutiques and expansive equestrian competition arenas.

The Ocean Sky Hotel & Resort, in Fort Lauderdale, Florida, unveiled refurbishments on levels 5 and 6. This update is part of a comprehensive remodeling project under the hotel ownership of Tidan Hotel and Real Estate Group. The newly remodeled rooms are available now as the remodeling project continues, which includes all remaining floors and rooms.

Disney is seeking a major $2.5 billion upgrade of its Anaheim, California theme parks including hotels and street privatizations. The plan, presented to the Anaheim City Council, would turn the theme park into an even more “immersive” experience by building new areas that would combine theme park attractions, hotels, restaurants, and stores in the same spaces. Disneyland’s footprint is not expected to expand, but Disney is also seeking the city to hand over some adjacent streets to the company. The move would give Disneyland control over Magic Way, Hotel Way, and part of Clementine Street near the resort. In exchange, Disney is proposing to pay $40 million for the roads. The payment would be part of a plan by Disney to spend $90 million on Anaheim street improvements near the theme park. In all, Disney expects to invest up to $2.5 billion over the next decade on the project and, in addition, pledges to give the city of Anaheim more than $100 million for street improvements, parks, and affordable housing.

Choice Hotels International, Inc. announced the closure of its last data center, making it the first hotel company to migrate its entire system infrastructure to the cloud. Now fully on Amazon Web Services, the move to the cloud enables Choice to respond to real-time market conditions and provides the company with a flexible, resilient, and scalable platform that benefits owners and operators within the Choice system. Now fully on the cloud, Choice will continue to innovate and leverage the power of AI to drive even more business value for franchisees.

HREC Investment Advisors arranged the sale of the 91-guestroom Candlewood Suites Houston located in The Woodlands, TexasK&K Hotel Group, LLC acquired the property. HREC Investment Advisors exclusively represented The Odom Organization on this transaction.

Slate Real Estate Capital, the private credit arm of Slate Asset Management, has closed a $59 million senior loan facility for Ohana Real Estate Investors. The funds will be used to refinance The Tillary Hotel and Residences, a 12-story property featuring a 174-room hotel and a 64-unit multi-family residential component located in Brooklyn, New YorkJLL represented the borrower for the transaction.

International News

According to the Q4 2023 Latin America Construction Pipeline Trend Report from Lodging Econometrics, projects and room counts in the region’s total construction pipeline stand at 594 projects and 97,679 rooms at the close of the quarter.

Latin American Pipeline by Status 2023 Q4

Under Construction23842,644
Scheduled to Start in Next 12 Months17227,625
Early Planning18427,410
New Projects Announced in Q4579,303

Latin American Pipeline by Class 2023 Q4

Hotel ClassProjectsRooms
Luxury10622,400
Upper Upscale10821,414
Upscale12918,358

Latin American Pipeline by Countries 2023 Q4

CountryProjectsRooms
Mexico22635,670
Brazil8613,516
Dominican Republic4812,911
Peru253,336
Argentina222,448

Latin American Pipeline by Cities 2023 Q4

Mexico CityMexico222,531
LimaPeru142,169
GeorgetownGuyana131,678
Riviera MayaMexico131,536
Sao PauloBrazil122,787

Latin American Pipeline Forecast 2023-2025

YearNew HotelsRooms
20236210,690
202411419,464
202510918,502

Personnel News

Ultima Collection announced the appointment of a new leadership team to spearhead the brand’s expansion. Effective January 2024, newly appointed Chief Executive Officer Petar Krstic and Chief Commercial Officer Sven Flory are set to bring Ultima Collection into a new era of brilliance and sustained success. Before taking on the role of CEO at Ultima Collection, Krstic held diverse leadership positions over the past 20 years, the most recent with Aman in Africa, Asia, Europe and the U.S. Flory brings a high level of expertise to the role, having held positions as Director of Sales and Marketing, Director of Business Development, and Vice President of Sales and partnership within renowned luxury hotel establishments over the last 10 years. Ultima Collection’s ultra-luxury portfolio includes 48 residences, chalets, private villas, and luxury hotels spread across Switzerland, France, and Greece. The brand also announced the addition of three new properties across Switzerland set to open in 2024 and 2025, Ultima Geneva Quai Wilson, Ultima Gstaad Promenade, and Ultima Cologny.

Alan Woinski and Kim Woinski
January 30th, 2024 at 5:00 PM EST

Companies: Wyndham Hotels & Resorts, AC Hotels by Marriott, Candlewood Suites, Choice Hotels International, Disney Parks, Highgate, Hilton Hotels & Resorts, HREC Investment Advisors, Hyatt Hotels Corporation, IHG Hotels & Resorts, Marriott International, Moxy Hotels, Ohana Real Estate Investors, Peachtree Group, Renaissance Hotels, Ryman Hospitality Properties, Selina, Sheraton Hotels & Resorts, Sonesta International Hotels Corporation, Ultima Collection, Vacasa, Vision Hospitality Group

Locations: Argentina, Austin, Brazil, Colorado, Dominican Republic, Florida, Honolulu, Houston, Iowa, Kansas, Las Vegas, Lima, Los Angeles, Mexico, New York City, Pennsylvania, Peru, Sao Paulo, Texas

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