Choice Hotels Misses its Earnings Mark

The DJIA rebounded 683 points while the Nasdaq was up 464, the S&P 500 rose 120 points, and the 10-year treasury yield was up another .03, back up to 4%. This has become a very volatile and violent market. HGV took the big hit on their earnings report, down -8%, but that pales in comparison to SOND, which plunged 46% to a new all-time low. Also setting new 52-week lows today were SVC and VAC. On the positive side, VCSA was up 9%, while SHCO and BHR both rose 7% on the day.

Earnings season wrapped up with weakness, with Choice Hotels reporting one of the few missed earnings of the season. Nearly every hotel company has met or beat estimates but lowered guidance for 2H, either RevPAR, EBITDA, or both. CHH missed higher SG&A expectations, but while they lowered RevPAR by 350 basis points, they maintained their EBITDA guidance. CHH is back to buying back a lot of stock, saying they have repurchased $100 million worth of stock since May 1. CHH also said they sold $15.6 million of Wyndham shares in 2Q24.

Hilton Grand Vacations missed EBITDA and cut 2024 guidance by 10%. Given the terrible earnings report from Marriott Vacations, we can’t understand why the Street reacted so violently on the stock. HGV’s contract sales were -5% below consensus.

PTM Partners and DoveHill announced the opening of Moxy St. Pete, which is under management from the Wurzak Hotel Group. Located in St. Petersburg, Florida, the hotel offers 163 guestrooms and suites; the Edge District’s first rooftop pool deck, as well as a poolside bar; a dynamic lobby featuring a coffee bar and a large lobby bar; a podcast studio; 1,000 square feet of flexible meeting space; work areas; and a fitness center. Additionally, the hotel will open the new Sparrow location this fall, marking the latest destination for a Florida-favorite rooftop dining and nightlife experience. The hotel is a central face of the EDGE Collective, a new 500,000-square-foot mixed-use destination.

A Residence Inn by Marriott hotel planned for 100 N. Main Avenue in San Antonio, Texas, estimated to cost $58 million, received a certificate of appropriateness from the Historic and Design Review Commission. The key approval allows Merritt Development Group and Peachtree Group to build a 10-story, 171-key hotel. The project team is expected to break ground in the third quarter of this year, aiming to finish in 2026.

Hard Rock International, with the Dawson Company, announced development plans for Reverb by Hard Rock Pensacola to break ground in 2026 and open in Pensacola, Florida in 2029. This will mark the company’s sixth Reverb property joining the portfolio, with Atlanta and Hamburg, as well as Kalamazoo, Tampa, and Scottsdale, also being developed. Reverb by Hard Rock Pensacola will feature more than 125 rooms, a full-service restaurant, a rooftop bar, a lobby bar and lounge, a quick-service restaurant, a fitness center, and a podcast recording studio, as well as a meeting space for conferences.

Sonesta Resort Hilton Head Island, in South Carolina, completed phase one of a comprehensive resort renovation program, unveiling its 340 redesigned guestrooms. The next phase of the resort’s multimillion-dollar transformation is a focus on enhancing the resort’s ballrooms and meeting spaces, dining and retail facilities, outdoor areas, spa, and more. Planned upgrades during phase two, which is anticipated to be complete by May 2025, include the addition of a new hot tub and adult pool with private cabanas, a refreshed lobby bar, an expanded pool bar, a new poolside retail area, and other exciting improvements.

Sonesta International Hotels Corporation also announced the opening of the 125-room Signature Inn Indio located in Indio, California.

The $93 million redevelopment of the historic Traction Building in downtown Cincinnati, Ohio will break ground in a matter of weeks. Parkes Development Group, the firm behind the 121-year-old building’s transformation into a 152-unit Kimpton Hotel, has secured a construction loan from a large regional bank. The forthcoming Kimpton Hotel is expected to feature three food and beverage venues, a grand ballroom and meeting rooms. The building will be operated by Kimpton Hotels & Restaurants. Construction is expected to start this fall, and the hotel is expected to open in spring 2026 to complement the reopening of the Duke Energy Convention Center following its $209 million renovation.

Three years and more than $200 million later, Great Wolf Lodge held a grand opening for its Webster, Texas location. The all-inclusive resort spans 92,000 square feet, including 61,000 square feet for a new Adventure Park, more than 500 rooms, over a dozen water slides, and multiple vendors. The resort is the 22nd one Great Wolf Resorts has opened in the U.S. and the second one in Texas. The first Texas location, in Grapevine, is about to undergo $40 million in upgrades. The opening had quite a bit of attention they really did not want as prior to the doors opening, more than a dozen workers were hospitalized after the chemicals for the pools were mixed incorrectly. Obviously, they fixed that before opening the doors to the general public.

Developer Amar Patel is planning to build a new hotel in Redlands, California. The four-story hotel will include 52 guestrooms, a breakfast room with an indoor dining area and a small balcony, a snack market, a fitness room, and an outdoor spa with a seating area.

The Docent’s Collection, a collection of private, luxury lofts designed for short- and long-term stays in Portland, Maine, announced the extension of its brand with the addition of new luxury units. The new lofts were converted from class B vacant office space and showcased the Thompson Block’s historic design features. Alongside the new additions, East Brown Cow led renovations throughout the building’s second and third floors to further enhance the hospitality offering, including renovations and improvements to the building’s stairwells and corridors. This latest expansion comes off the heels of The Docent’s Collection’s rebrand from “121 Middle”, led by Commonwealth Hotels and East Brown Cow. This latest addition reflects the success of The Docent’s Collection’s unique model under the strategic guidance of East Brown Cow and Commonwealth Hotels, with plans for additional growth in the years to come.

Braemar Hotels & Resorts, Inc. closed on a refinancing involving five hotels. The new loan totals $407 million and has a two-year initial term with three one-year extension options, taking the final maturity to 2029. The loan is interest-only and provides for a floating interest rate of SOFR + 3.24%. As part of this financing, the Company acquired $42.2 million of the most junior tranche of the loan, which lowered its net spread on the $364.8 million remaining loan to about SOFR + 3.01%. The loan is secured by five hotels: Pier House Resort & Spa, Bardessono Hotel & Spa, Hotel Yountville, The Ritz-Carlton Sarasota, and The Ritz-Carlton St. Thomas.

Rosewood Hotels & Resorts announced its expansion in the Caribbean with Rosewood Exuma. In partnership with Yntegra Group, Rosewood Exuma will open in 2028 to unveil the brand’s elevated approach to experiential travel. Exumais a pristine archipelago of 365 islands in the Bahamas. Situated on a 124-acre private island referred to as East Sampson Cay within the Exumas, Rosewood Exuma will comprise just 33 suites; six unique food and beverage outlets; and Rosewood’s signature Asaya with six treatment rooms, a hydrotherapy facility, outdoor tranquil pool, and fitness center. It will be complemented by an outdoor sports center featuring tennis, padel, and pickleball courts, as well as watersports equipment. Rosewood Exuma will be home to a fully serviced beach club with a grill restaurant, beach and pool bars, and a private dining room. Two marinas with slips are planned to accommodate yachts up to 150 feet. In addition to the beach club pool, the resort will offer two other pools exclusively for overnight guests, including one dedicated to families. The resort also features the brand’s signature children’s club concept.

Personnel Move

Hilton Grand Vacations Inc. announced the appointment of Christine Cahill to its Board of Directors. Cahill will assume the seat vacated by the departure of Alex Van Hoek. Cahill currently serves as principal at Apollo Global Management, having joined the firm in 2018. She will continue her role at Apollo. As a member of HGV’s Board of Directors, Cahill will leverage her knowledge and expertise in investment banking, as well as her financial and board experience, to help guide the strategic direction of the Company.

Europe Highlights 

Marriott International ended its collaboration with a landmark hotel located in the heart of Warsaw, Poland. The hotel building is owned by LIM Center, which has been involved in legal disputes with Marriott International for several years, primarily concerning payments due for the time during the COVID-19 pandemic when hotel operations were severely restricted. The hotel will no longer operate under the Marriott brand.