The DJIA fell 43 points but Nasdaq was up 16, the S&P 500 was up a point and the 10-year treasury yield was up .05 to 4.65%. Lodging stocks were higher. SOHO and VCSA were the biggest movers, up 6% and up 5% respectively.
Earnings season for the hotel group kicked off with Pebblebrook, Hilton and Travel + Leisure all reporting. All beat estimates but when you look at one of the key metrics of the hotel space, RevPAR, Hilton’s showed slowing RevPAR growth yet investors and analysts clearly had HLT as the most impressive report of the three. The reason simply is Net Unit Growth and EBITDA flow through, easily offsetting concerns about slowing RevPAR. HLT raised 2024 Adjusted EBITDA guidance, even though it was by less than the 1Q beat but with NUG being 5.7% in 1Q, up from 4Q2 and NUG guidance for the year raised by 50 basis points, it is clear HLT’s acquisition strategy is working. While HLT reiterated capital return guidance of $3 billion for the year, they also bought back less in 1Q at 3.4 million shares for $662 million versus 4.6 million shares for $746 million in 4Q23. HLTwas busier in 1Q with acquisitions including Graduate and NoMad.
Pebblebrook Hotel Trust gives regular updates so beating 1Q24 estimates and upping 2Q24 guidance is a good thing. It seems lower expenses are driving the higher results. While PEB’s adjusted EBITDA was higher in 1Q, they only maintained 2024 guidance but PEB is considered conservative.
Travel + Leisure reported another modest earnings beat, driven by Vacation Ownership Interest Sales. While they beat 1Q expectations, they only maintained full-year guidance. TNL bought back $25 million worth of stock in 1Q, also below previous quarters.
According to the Q1 2024 U.S. Hotel Construction Pipeline Trend Report from Lodging Econometrics, at the end of the first quarter, there are 6,065 projects with 702,990 rooms in the pipeline, representing a 9% year-over-year increase in projects and a 7% YOY increase in rooms compared to last year. Presently, there are 1,144 projects comprising 141,336 rooms under construction, marking a 9% increase in projects and a 1% increase in rooms YOY. Projects slated to start construction in the next 12 months total 2,259 projects with 260,968 rooms, reflecting a 10% rise in projects and an 8% increase in rooms YOY. Notably, both projects and room counts in the early planning stage increased by 9% YOY, with 2,662 projects and 300,686 rooms, respectively. Of all the projects in the pipeline, a little over half of them are concentrated within the upscale, upper-midscale, and midscale chain scales. The latest data from LE also highlights the dominance of extended-stay brands in the pipeline at Q1, now accounting for 37% of the total projects under construction, 41% of projects scheduled to begin within the next 12 months, and 39% of projects in the early planning stage. Renovation and brand conversion activities in the U.S. reached record-high combined totals of 2,041 projects and 266,405 rooms. Brand conversions have hit a new record-high of 1,235 projects with 114,680 rooms, growing 14% by projects YOY, while announced renovations at Q1 stand at 806 projects and 151,725 rooms. In terms of new hotel openings, the first quarter saw the opening of 114 new hotels with 15,506 rooms in the U.S. With a record number of projects in early planning and an increasing number of projects scheduled to start in the next 12 months, LE analysts project modest growth in the new hotel openings through 2024. The LE forecast for the remainder of 2024 includes the opening of another 547 projects with 60,483 rooms, totaling 661 new hotels with 75,989 rooms by year-end. Looking ahead of 2025, LE analysts anticipate an additional 790 new hotels with 85,561 rooms to open in the U.S.
STR reported US lodging data for the week ended April 20th. US hotel RevPAR was up 1.2% with rates up 1.5%. Group RevPAR rose 3.4%.
Related Companies won the bid to build West Palm Beach, Florida’s next convention center hotel. Related with build a $300 million, 20-story, 404-key Hilton Signia. The company estimates the hotel could be completed in three years. Related also owns the 12-story, 400-room Hilton West Palm Beach, which is adjacent and connected to the convention center.
Artemis Hotel Group announced the completion of a full-scale renovation for the Hilton Garden Inn Atlanta East/Stonecrest, located in Lithonia, Georgia. The 110-room property, managed by GF Hotels, underwent an extensive transformation encompassing the entire property, including the exterior, guestrooms, corridors, and public areas. The pool area was also updated, and the fitness center was equipped with new exercise machines. The property has 3,825 square feet of updated, flexible meeting space.
SAPA LLC is planning to open a new 106-room Homewood Suites by Hilton Hotel proposed for Crystal Run Crossing in the Town of Wallkill, New York, The project is slated for completion in the 2nd quarter of 2025.
The Mandarin Oriental Hotel and Residences in Boca Raton is expected to open in 2025 after an eight-year delay. Penn-Florida Companies was hired to develop the branded hotel and residence in Via Mizner, the city’s upscale mixed-use development. The company reports the cost of the hotel and residence has shot up to $1.5 billion, from an estimated $367 million when the project was first announced in November 2015. Madison Realty Capital refinanced Penn-Florida’s senior loan in August 2023. The Mandarin Oriental, Boca Raton will contain 163 guestrooms while its residential towers will contain 85 private residences. The hotel and residence will have luxury amenities, including an athletic club, spa, golf course, and two rooftop pools.
CMC Group and Fort Partners, together with Four Seasons, announced the highly anticipated Four Seasons Private Residences Coconut Grove. Set within one of Miami’s most historic neighborhoods, this ground-breaking development will be the first Four Seasons standalone offering in Florida. Four Seasons Private Residences Coconut Grove will offer 70 homes, a restaurant, library, gym and yoga room, spa with cold plunge and hammam, children’s area and private event room, as well as an expansive pool deck and bar lounge serviced by Four Seasons.
stayAPT Suites announced a significant expansion initiative in partnership with Powerhouse Hotels, a joint venture between JCap Realty Group and Cullinan Holdings. The collaboration involves signing a multi-unit development agreement, adding 30 new locations to stayAPT Suites’ portfolio, and expanding the brand footprint to 25 states over the next five years, with six locations that will break ground in 2024.
A 192-year-old hotel will reopen in just a few weeks, as long as nothing else breaks or springs a leak. The Society Hill Hotel, in Philadelphia, Pennsylvania, is aiming to relaunch on the weekend of May 10, marking the end of nearly a year of renovations, surprises, and snags, all in the service of transforming the charred old building into a boutique destination. When Mike Cangi and Brian Linton bought the property last year, the hotel was shuttered and still damaged from a 2021 fire. The pair envisioned a high-end 15-guestroom hotel with a café and whiskey bar. Though it is not yet taking bookings, its waitlist is now open.
Personnel Moves
Red Roof named Zack Gharib as President, effective immediately. Gharib brings more than two decades of senior management experience in franchising, operations, and brand management with companies such as Marriott, Vacasa, LaQuinta by Wyndham and Highgate Homes. Red Roof also announced the promotion of Fouad Malouf to the newly created position of Chief Operating Officer. He most recently served as Senior Vice President for Franchise Operations.
Concord Hospitality appointed Will Loughran as its new Chief Operating Officer. He succeeds Nick Kellock, who will retire in May after more than 15 years of dedicated service with Concord Hospitality. Loughran joins Concord Hospitality from Evolution Hospitality where he most recently served as President & CEO. Loughran will ensure that all properties under Concord Hospitality management are operating efficiently and effectively, ensuring alignment of all parties’ mutual interest and goals, while simultaneously working to develop and implement strategic plans for the brand’s growth and expansion.
Europe Highlights
Cycas Hospitality’s growth momentum continues into the second quarter of 2024, following the hotel operator’s appointment to manage the UK’s first Fairfield by Marriott hotel in Warwickshire. The 142-room new-build property is set to open in early 2026. Positioned within the British Motor Museum complex, the new Fairfield by Marriott hotel will offer guests access to the museum’s exhibits and attractions, alongside unique conference, wedding, and event facilities.
IHG Hotels & Resorts and Hotel Collection Internacional have joined forces with Europa-Center for the construction of a new hotel located in Sabadell, Barcelona. The hotel will operate under the Holiday Inn Express & Suites brand and will have 130 rooms. The new project will involve an investment of around EUR15 million and is slated to be up and running within the next year.
Extendam has acquired the Mercure Den Haag Central in the center of The Hague, in the Netherlands. Situated over 11 floors, the building comprises 159 guestrooms, 1,200 square meters of common areas and meeting rooms, a bar, restaurant, and breakfast area as well as a terrace. Extendam will renovate the hotel. The hotel will be operated by Capital Hospitality Europe, which will oversee the repositioning of the hotel through a change of brand and a new F&B offering.