Stable Hotel Supply Growth Through 2026

The DJIA ended Friday up 51 points while Nasdaq was up 85, the S&P 500 was up 25 points and the 10-year treasury yield fell back -.06 to 3.94%. Lodging stocks were mostly higher but those new age names, the ones with the SPACs, just plain disasters for the most part. SOND was down another -10% to another new all time low while VCSA plunged 40%, also to another all-time low.

The Vacasa plunge was brought on by their earnings report, also discussing softening demand for domestic, non-urban vacation rentals. For some reason some of their shareholders thought they could escape the pressure Airbnb said their hosts were feeling. VCSA said they are seeing weakness in both price and nights sold per home and they have no visibility into near term stabilization. VCSA also announced a note purchase agreement with an affiliate of Davidson Kempner Capital Management LP. The end result is VCSA can get up to $75 million of first lien senior secured convertible notes financing. As part of the overall transaction, two more board members were added, Luis Sosa and Alan Liu.

Soho House beat estimates, with their results driven by a higher membership count and lower expenses. Soho House membership grew by 15.7% along with a rise in their wait list. SHCO said they opened locations in Sao Paolo and Bodrum in June.

With earnings season coming to a close, Deutsche Bank updated some Hotel REIT target prices. They lowered Ashford Hospitality Trust's price target to $3 from $4; Braemar to $6 from $8, DiamondRock to $10 from $11 and RLJ to $13 from $14.

B. Riley Securities lowered their price target on Service Properties Trust to $8 from $9. They maintained their Buy rating.

JP Morgan cut their rating on Hilton Grand Vacations to Neutral from Overweight. They slashed their target price to $36 from $55. Jefferies downgraded HGV to Hold from Buy. They cut their target price to $35 from $55.

Truist reported on a conference call they held with JP Ford of Lodging Econometrics with the topic being the future hotel supply expectations. Truist said the bottom line is LE believes the organic net unit/room growth rates seen for hotel C-Corps this year looks to be at similar growth rates for 2025 and 2026 with 1.3% this year, 1.5% in 2025 and 1.8% in 2026. Truist says this strongly supports the new supply component of the multi-year tailwind of the compounding earnings driver of modest RevPAR growth + mid-single digit net rooms growth + share repurchases. With minimal new supply coming on for 1,000+ room convention hotels, they see this as positive for Ryman Hospitality as they expect them to see little new competition in their hotel size segment.

STR and Tourism Economics made slight adjustments to their 2024-2025 US hotel forecast at the 16th Annual Hotel Data Conference. For 2024, projected gains in ADR were downgraded 0.1 percentage points while RevPAR held steady at 2%. Occupancy was upped by 0.2 percentage points. For 2025 the occupancy growth projection was also upped by 0.2 ppts while the forecast for ADR and RevPAR increases were kept at 2% and 2.6% respectively.

LBA Hospitality announced the grand opening of its newest hotel, the TownePlace Suites by Marriott Brunswick, Georgia on June 25th. The hotel is owned by BPR Properties and is located next to BPR's Residence Inn Brunswick, which LBS also manages. The TownePlace Suites opening marks the 113th in LBA's portfolio and 17th with owners BPR Properties.

The new St. Regis Longboat Key Resort on the west coast of Florida in Longboat Key on Sarasota's barrier island, is slated for a grand opening in late summer. The oceanfront resort is located on the grounds of the former Colony Beach and Tennis Resort and aims to be the first five star hotel on Florida's west coast. Unicorp National Developments said the property includes a 166 room luxury hotel and three six story residential buildings making up the Residences at the St. Regis Longboat Key Resort.

MHG Hotels announced the acquisition of the Homewood Suites Bloomington in Bloomington, IN. MHG said the hotel offers spacious suites with fully equipped kitchens, complimentary breakfast and evening social receptions.

Sonesta International Hotels Corporation announced the grand opening of Sonesta Essential Augusta, located in Augusta, GA. The recently renovated 57 room hotel had a soft launch earlier this year.

The Sonesta-Baltimore Inner Harbor Hotel will have its grand opening on Monday, August 12th. Sonesta International Hotels took over the property that was previously a Delta Hotel by Marriott. The hotel closed its doors in November 2023 with the 150 room now about to reopen as a Sonesta.

The adults-only Secrets Tulum Resort & Beach Club from Hyatt debuted a 21 room luxury addition with tropical or ocean views at the Zamna Beach Club, part of Secrets Tulum Resort & Beach Club in Hyatt's Inclusive Collection. The Casa Zamna at Secrets Tulum & Resort Beach Club is located 15 minutes from Secrets Tulum Resort & Beach Club's main property and combined modern amenities with unlimited all-inclusive luxury, steps from the Caribbean coast of Mexico. The Casa Zamna offers the private five-bedroom Villa Zamna that includes a private chef and butler service along with all the amenities of the Zamna Beach Club and Secrets Tulum Resort & Beach Club. In total there are six room categories at Casa Zamna including a Presidential Suite with a wraparound terrace, outdoor shower and private pool.

Ennismore announced the signing of SLS Playa Mujeres Cancun, the SLS brand's first step into the all-inclusive resort experience. The resort is expected to open in November 1st. The signing also marks the first all-inclusive destination for Ennismore in the Americas. SLS Playa Mujeres Cancun is situated amidst the natural coastline of Mexico's Yucatan Peninsula on 400 meters of exclusive seafront. The resort will feature 498 guest rooms and suites in 16 categories ranging from the 50 square meter Delight guestroom to the 560 square meter 3 bedroom suite, The Envy. The opening will also mark the debut of the all new Elite category, giving guests access to VIP dining and entertainment experience and bespoke amenities and benefits. SLS Playa Mujeres Cancun will have 18 restaurant and bar concepts along with a SLS wonderland featuring a cinema, outdoor theater, kids' zone and playroom, along with state of the art wellness facilities including a spa, gym and workout studies. There will be 2,217 square meters of event space.

The Holiday Inn Express Nashville/Hendersonville in Tennessee reopened its doors the week of August 3rd after undergoing a full property renovation. The hotel features 93 guest rooms and 1,200 square feet of meeting space. The hotel was closed after a tornado ripped a portion of the roof off in December 2023 and hit the area's electrical substation. The reopening includes updates to every aspect of the property including a complete makeover of the lobby and front desk area.

A Margaritaville Resort is coming to Orange Beach, Alabama. The property will include different room styles such as single family resort cottages, luxury waterfront condominiums and hotel-style resort units. There will be diverse dining options, entertainment and a resort pool, among other features. The groundbreaking of the Margaritaville, Resort Orange Beach is set for this fall. Construction is set to begin on the Waterfront District at The Wharf beginning summer of 2025. The first phase of the resort is expected to be open in 2027 with the full resort set to be complete by spring 2029.

The Hilton Aruba Caribbean Resort & Casino is undergoing a progressive resort enhancement project to further elevate the resort experience. The $100 million property-wide re-imagination is set to debut in the fall of 2025 and includes an expansion with a new sophisticated beachfront tower, new culinary concepts and upgrades to the existing towers' guest rooms. The resort will stay open during the construction. Groundbreaking on the new oceanfront tower took place in May 2023 and will add 161 high-end accommodations, including 18 oceanfront suites. The new tower will operate as an exclusive "hotel within a hotel" experience. The tower will feature an exclusive adults-only rooftop club concept with spanning views of the Caribbean Sea. Guest rooms and suites in the resort's existing Aruba, Bonaire and Curacao towers will receive a refresh, set to be complete in the fall of 2024. New dining concepts will be introduced over the next two years with some existing ones, such as the resort's classic breakfast restaurant, Laguna, being fully re-imagined into a new concept serving both breakfast and dinne.