Marriott’s Earnings Were Good but the Reactions Were Bad

The Down Jones Industrial Average was down 525 points and that was a big improvement over the worst of it today. Nasdaq ended the day down 287, the S&P 500 was down 69 and the 10-year treasury yield was up .14 to 4.32%. That is an over 3% rise in the yield, all on the CPI report. Lodging stocks took it hard. MAR was the biggest point decliner, down nearly -14 points which is -6%. SLNA and SHCO were the biggest percentage losers, down -10% and -8% respectively. SVC, BHR, VAC and AHT were each down -6% on the day.

The reaction to Marriott’s earnings report probably had a lot more to do with the overall market today than the actual report. Both Hilton and MAR had stock prices that were primed to perfection and the slow drop after the earnings report for HLT was done by MAR in one day today. MAR beat for 4Q, something that the stock price was clearly showing was going to happen. Worldwide RevPAR was right around consensus at 7.2% and they spent nearly $1 billion on share repurchases in 4Q23. MAR also said they already bought back $300 million worth of stock in 2024. If you want to point to a reason for the decline, other than deserved profit taking, it was their 1Q and full year 2024 guidance. It ticked down to the lower end from their Analyst Day guidance in September. 1Q guidance was on the very low end of consensus. The stock market being as ugly as NJ and NY weather this morning probably had a lot more to do with the outsized decline than the earnings report. Later on, when things calm down, more will be discussed about Anthony Capuano’s reference about the company working on a new US transient midscale brand for new builds and conversions.

Read more about Marriott’s earnings on Skift.

JMP Securities may have wanted to wait a few days before launching coverage on the timeshare names. They gave Market Outperform ratings on Marriott Vacations, Travel & Leisure and Hilton Grand Vacations. The price targets are $105, $50 and $55 respectively.

CBRE raised its 2024 GDP growth outlook from 1.2% to 1.6%, according to its U.S. Hotels State of the Union February 2024 Edition. Other key takeaways include: wage growth continued to outpace inflation in December. December hotel CMBS borrowing rates hit 9%, up from 6.9% a year ago, and spreads were just over 500 bps, up from 327 bps in 2022. Hotel demand fell 1.6% in December, while short-term rental demand rose 4.3%. Outbound international travel was 114% of 2019’s level in December. This compares to inbound at just 88%. Full-year 2023 TSA throughput was 101% of 2019, increasing 12.4% y/y. In January, TSA throughput increased an additional 9.9% y/y, reaching 104% of 2019. December RevPAR declined 1.1% for all chain scales. Demand for Brand.com improved by 2.2% during the quarter, while OTA demand fell by 2.0%. Corporate demand growth outpaced group, rising 4.6% compared with a 0.1% decrease. Demand in both channels is within 5 p.p. of 2019. November’s total revenue growth of 2.4% more than offset the 0.5 percentage point contraction in margins, resulting in a 0.9% increase in profit dollars.

Peachtree Group acquired the 180-room Hilton Garden Inn Denver Tech Center, its second hotel in Denver, Colorado. Peachtree’s hospitality management team will operate the seven-story property which is located in the heart of the Denver Tech Center. Peachtree will make substantial investments in the property, with comprehensive upgrades and enhancements to the entire property including the exterior, lobby area, bar and lounge, meeting rooms, guestroom, guest baths, corridors, elevators and stairwells.

HRI Hospitality and C.B. Ragland Company announced the construction “topping out” of its latest hotel project, Caption by Hyatt Nashville. Located in the Gulch neighborhood, the 210-room hotel is scheduled to open in early 2025. The hotel’s ownership group consists of HRIH, CB Ragland, Peachtree Hotel Group and two local family offices. The property will be operated by HRI Lodging. The Caption by Hyatt Nashville will offer 2,200 square feet of indoor and outdoor meeting space, a fitness center, and culinary common space at the heart of the hotel, Talk Shop. The project also includes a 7,000 square foot restaurant space for lease and a 150-stall parking garage that will service the hotel and neighboring office buildings.

Extended Stay America announced the groundbreaking of the first new construction Extended Stay America Select Suites prototype in Wildwood, Florida. The franchised property is being developed by Southern Hospitality. The four-story, 124-room hotel will feature apartment-like suites with full kitchens and onsite laundry. The Extended Stay America Select Suites in Wildwood is expected to open in early 2025.

Loews Hotels & Co opened Loews Arlington Hotel and Convention Center in Arlington, TX. The 21-story resort features 888 guest rooms and luxury suites and is connected to the new Arlington Convention Center, also operated by Loews, and the existing 300 room Live! by Loews Hotel. The full Loews complex in Arlington totals 1,188 rooms and close to 300,000 square feet of best-in-class meeting space.

An Everhome Suites by Choice Hotels is planned for the Southside of Jacksonville, Florida. Rimrock Development LLC applied for an $8.5 million permit for the construction of a four-story, 114 guestroom hotel with laundry rooms.

Basecamp Resorts is opening a new boutique hotel on Second Street East in downtown Revelstoke, B.C. Basecamp Suites Revelstoke will have 31 suites and outdoor rooftop hot tubs. The hotel opens to guests on May 17. Basecamp Resorts will also be reopening another hotel, Northwinds Hotel Revelstoke, this summer, after conducting extensive renovations.

Freed Developments announced the first-ever Freed Hotel and Residences tower located at Adelaide and Duncan in Toronto, Canada. This $800M skyscraper will feature 100 hotel rooms and 400 luxury condominiums with a world-class Skybar/restaurant on the 63rd floor, boutique spa, terrace and outdoor garden, private spaces for entertaining and dining, fitness and yoga studio, private theater room, and valet parking. sbe will be opening the very first Katsuya restaurant in Canada on the second floor, of the Freed Hotel and Residences, expected to launch in Fall 2028.

Shannon Maldonado announced the opening of the new Hotel Yowie in Philadelphia, Pennsylvania. The property features 13 suites and an onsite café.

Sotherly Hotels Inc. executed a $35 million secured loan with Citi Real Estate Funding Inc., collateralized by a first mortgage on Hotel Alba, Tapestry Collection by Hilton in Tampa, Florida. The interest-only loan, which has a principal balance of $35 million, matures on March 6, 2029, and carries a fixed interest rate of 8.49%. Proceeds from the loan were used to repay the existing first mortgage and for general corporate purposes.

Riu Hotels and Resorts is adding another new resort in Jamaica this year, with the planned debut of the Riu Palace Aquarelle resort near Montego Bay. The 753-room, family-friendly property will be set on White Bay in the town of Falmouth. The all-inclusive resort will have four pools, Splash Water World water park, multiple dining concepts, several bars and lounges, and a wellness and fitness center. The hotel will open in 2024 and will be the seventh Riu-branded resort in Jamaica

Personnel Moves

Western States Lodging and Management announced new changes to its executive leadership team including the additions and promotions of Chad Griffiths to Chief Financial Officer; Jennifer S. Knecht to Chief Revenue Officer; Marshall Paepke to Chief Strategy & Human Resource Officer; Cole Smith to Chief Development officer; and David Webster, Jr. to Chief Operating Officer.

Highgate appointed Tony Machado to Head of Design. In this new role, Machado will join LUCID, Highgate’s in-house Design & Construction Studio, to oversee all aspects of design innovation and execution for the company’s growing portfolio as well as Viceroy Hotels & Resorts. Prior to joining Highgate, Machado served as Senior Vice President and Head of Design at Starwood Capital Group/SH Hotels & Resorts.

Design Hotels announced the appointment of Stijn Oyen as Managing Director. Stijn will lead Design Hotels into its fourth decade of operations, shaping the future vision of the brand. Most recently, Stijn held the role of Complex General Manager for three properties in Mallorca.

Europe Highlights

Hilton announced a franchise agreement to open two resort properties under the Curio Collection by Hilton brand, managed and operated by Brown Hotels in Greece, the 148-room Isla Brown Chania Resort, Curio Collection by Hilton and the 166-room Isla Brown Corinthia Resort & Spa, Curio Collection by Hilton. Both hotels will feature multiple pools, several dining and drinking outlets, gyms, spas, and striking design elements.

Deka Immobilien purchased the 173-room Ruby Zoe Hotel & Bar in London’s Notting Hill district for €62 million from Frogmore’s Frogmore Real Estate Partners III fund. The Ruby Zoe is in the Deka-ImmobilienMetropolen fund portfolio, and will remain under operation by Ruby Hospitality under a long lease. The property is Ruby Hotels’ brand second London hotel, and a third is in the pipeline.