U.S. Hotels State of the Union Reveals Surge in Short-Term Rental Demand

The DJIA jumped 409 points while the Nasdaq was up 2.4% or 407 points. The S&P 500 was up 90 points and the 10-year treasury yield fell -.05 to 3.85%. Lodging stocks were higher. APLE traded down to a new low but VCSA touched the low, didn’t set a new one, and then bounced 22%. SOND was up 19% and SHCO rose 14% on the day.  

Evercore ISI cut their price target on Park Hotels to $19 from $20. They maintained their Outperform rating.  

Oppenheimer cut their price target on Host Hotels to $22 from $24 and on Apple Hospitality to $17 from $19. They maintained their Outperform ratings on both.

CBRE released its U.S. Hotels State of the Union August 2024 Edition. A snapshot of this report includes the following: GDP growth is expected to slow following 2Q’s upside surprise. Consumer risks remain as wages moderate, and unemployment ticks up. CMBS borrowing rates continued to decline in June to 7.7%. June RevPAR growth slowed to 0.6% as occupancy declined 1.0%. Brand.com continued to take share from other distribution channels. GDP growth of 6.0% in May was the first increase in several months. Short-term rentals posted 9.8% demand growth in June. Inbound international travel is range-bound at between 80-90% of 2019. TSA throughput increased 5.2% year-over-year in July.

Regional News

The Pittsburgh Airport Marriott Hotel in Coraopolis, Pennsylvania, announced its renovations are finally complete. The three-year, $18 million renovation of the 317-room hotel started in July 2021 and was completed in June 2024.   

One of the cornerstones of the massive 407: Gateway to Adventure project in Sevierville, Tennessee, is set to open this October. A Courtyard by Marriott Hotelwill welcome guests this fall as developers anticipate more announcements in the coming months for attractions that will transform the Interstate 40 exit to the Great Smoky Mountains. Kituwah LLC, the development arm of the Eastern Band of Cherokee Indians, is behind a new unnamed resort, theme park, hotel, Buc-ee’s, and other projects. Kituwah LLC is in the planning process of one resort and another is under discussion with a possible partner.   

Oracle software billionaire Larry Ellison has purchased the beachfront Eau Palm Beach Resort & Spa in Manalapan, Florida. The purchase price and terms of the Eau Palm Beach sale were not disclosed. Ellison bought the 300+ room resort from the Lewis Trust Group. The 8-acre resort and hotel features seaside swimming pools, a spa, 32,000 square feet of meeting space, and several restaurants.  

IHG Hotels & Resorts announced the opening of a newly converted and renovated Holiday Inn Express in Corpus Christi, Texas. Located on the beach of Corpus Christi Bay, the hotel features 143 guestrooms, a fitness center, and jet-skis for rent. The Holiday Inn Express Corpus Christi – Beachfront is owned by Monarch Resorts, LLC and managed by Monarch Group Hotels.   

A historic beachfront resort in St. Simons Island, Georgia, has sold for the first time in more than 40 years. A joint venture of South Street Partners and TPG has acquired The King and Prince Beach and Golf Resort from MMI Hospitality Group. MMI Hotel Group will continue to operate the resort. South Street and TPG plan to renovate the rooms and common spaces at the nearly 90-year-old resort. The resort spans nearly 6 acres with direct beach access. It has 142 hotel rooms, bars and restaurants, and pools. The resort also has an 18-hole golf course, along with 10,000 square feet of meeting space. The property includes developable land and beachfront condos.   

Hotel Anna & Bel, a new 50-room, full-service boutique hotel by Foyer Project, will debut in Philadelphia, Pennsylvania in August. The design team worked closely with the Preservation Society of Philadelphia to restore the building’s original features, like the grand staircase in the entry, exposed brick walls, fireplaces in select rooms, and wood beams lining the ceilings. Amenities include an interior courtyard, a heated outdoor pool, lounge space, a private treatment room, a fitness center featuring an infrared sauna, a yoga and meditation deck, and a restaurant with a lounge.   

A grand opening was held for Hotel Klaus in Washington, Louisiana. The building, dating back to 1870, was once the Klaus General Store. It was purchased by Stephen Ortego in 2022, and he spent the last two years renovating the building into a boutique hotel.   

On the heels of the blockbuster announcement that Saks’ parent HBC inked a $2.65 billion deal to acquire rival Neiman Marcus, HBC is developing a hotel and 56 private residences in Beverly Hills and posh townhomes in Westfield, New Jersey in the parking lot of a long-shuttered Lord & Taylor department store. As retail sales sputter this year, on top of a long decline in department store sales, HBC is leaning into real estate deals to drive growth.   

Outbound Stowe, part of the Outbound Hotels Collection, debuted last month on a 9-acre property near Mount Mansfield in Vermont. The 73-room hotel features a mix of accommodations, from suites and cabins to an 8-guest cottage and a loft suite in a converted event barn. Outbound Stowe is also partnering with TheGoodLife! to offer Camp Nice programs, a series of adult activity and adventure camps. In late August, a new onsite restaurant will open at the hotel.   

The San Francisco Baking Institute, led by Michel Suas, has bought nearly an acre of dirt beneath the Phoenix Hotel in San Francisco, California for $9.1 million, nearly $6 million less than its asking price. The seller was an undisclosed family office. Newmark represented the seller while Colliers represented Michel Suas. The Phoenix Hotel wasn’t part of the deal. The two-story, 44-room hotel, which has a separate restaurant and lounge, has a ground lease set to expire in September 2025.   

Mumford Company represented Shree Ji Mahant, LLC in the sale of the Rodeway Inn in Altoona, Pennsylvania. The purchasers, Rajgad, LLC, plan to complete renovations and continue to operate the property as a Rodeway Inn.   

Kennedy Funding announced the closing of a $1.28 million loan on 17.3 acres of raw land in Moses Lake, Washington. The proceeds will be used for working capital and to pay off an existing seller note. The borrower, Mbrar Investments, plans to construct a hotel on the property.   

Davidson Hospitality Group has been selected to operate the two distinctive yet interconnected resorts situated in Frenchman’s Reef on St. Thomas, U.S. Virgin Islands: The Westin Beach Resort & Spa at Frenchman’s Reef and Morningstar Buoy Haus Beach at Frenchman’s Reef, Autograph Collection. The properties, which reopened in 2023 following a multi-year, transformational renovation, feature 486 guestrooms and suites; 85,000 square feet of meeting space; 10 restaurants and bars; a Heavenly Spa by Westin; four resort pools; a fitness studio, pickleball courts; a private catamaran and a fleet of Speedboats; a kids club; and boutique retail shopping. 

Personnel Moves

Aperture Hotels announced Patrick Short has been named chief operating officer. In his new role, Short will provide cross-disciplinary leadership and direct operational execution and commercial strategy for Aperture’s expanding portfolio of 27 managed hotels. Prior to joining Aperture, Short was president of Peachtree Hospitality Management.   

Mumford Company announced its continued growth with the addition of talented new executives and key promotions within the firm. Lillian Walker has been promoted to the sales team and will continue to operate out of the firm’s Philadelphia office. At the same time, Nick McCardel joined the full-service hospitality brokerage firm as a Sales Analyst in the Dallas office.   

Access Point Financial announced the appointment of Daniel Zagoria as Managing Director, Business Development. In his new role, Zagoria will concentrate on growing the company’s capabilities as a Capital Solutions provider with a focus on preferred equity and mezzanine debt, as well as being able to provide its clients with creative financial solutions.  

European Highlights  

citizenM celebrated the topping out of its first Dublin property, with the hotel set to open in 2025. The 245-room citizenM Dublin St Patrick’s will be situated on the site of the former Molyneux House opposite St Patrick’s Cathedral. The new-build property will feature a ground-floor Living Room with a canteen bar, a self-check-in area, and four society meeting spaces.   

Ibis York Centre, in the UK, closed its doors in May for a multi-million-pound refurbishment to transform the York hotel into the Ibis Styles York Centre. Owned by Splendid Hospitality Group, the building, which dates back to 1835, will reopen in early 2025 with a fresh look, rear extension, and brand experience, inspired by the building’s heritage as a brewery. The 94-bedroom hotel will see a full refurbishment of all rooms and public areas, including the installation of a new bar and restaurant and an extension to allow for a further 16 rooms, growing the number of bedrooms to 110. New family suites and a designated kids’ play area will also be introduced for family stays, with renovations made to the exterior of the building to give a fresh look ahead of its reopening.