U.S. Hotel Performance May Be Down But RevPAR Is Still Up

The DJIA jumped 555 points while Nasdaq was up 402 (2.35), the S&P 500 rose 88 points and the 10-year treasury yield was up .11 to 3.93%. Lodging stocks were higher. The biggest mover was VCSA with a rise of 10%.  

CBRE is reducing its forecast for U.S. hotel performance this year as lodging demand softens due to weaker-than-expected leisure travel and slowing corporate profit growth. CBRE now projects a 1.2% increase in RevPAR growth for 2024, down from the 2.0% estimated in May 2024. Nevertheless, CBRE anticipates 2% year-over-year growth in RevPAR in the second half of 2024, up from 0.5% year-over-year growth in the first half, driven by international tourism and election-related events. CBRE forecasts GDP growth of 2.3% and average inflation of 3.2% in 2024. They remain optimistic that RevPAR will achieve a nominal record of $100.54 this year, representing 114.5% of pre-pandemic levels in 2019. This outlook is based on projected ADR growth of 1.1% and a 10-basis point increase in occupancy.

Hilton News

Driftwood Hospitality Management announced the completion of an extensive multi-million dollar renovation for the Hilton Cocoa Beach Oceanfront, a 295-key flagship property in the heart of Florida’s Space Coast. The renovations encompassed seven floors and more than 10,000 square feet of flexible meeting space. In addition to the aesthetic updates, the hotel has introduced new amenities and experiences. The beachfront dining venues have been refreshed with new menus. The pool area has also been redesigned, including fire pits and a surf-inspired lounge.  

Graduate by Hilton and AJ Capital Partners announced the opening of Graduate Princeton in Princeton, New Jersey. Located directly opposite campus, Graduate Princeton boasts 180 guestrooms, a signature restaurant and bar, and 6,000 square feet of public space.  

Purpose Lodging is looking to invest $20 million in the city of Manassas, Virginia to establish a Home2 Suites hotel by Hilton. The hotel will be built at The Landing at Cannon Branch. The city’s master-planned, mixed-use development, called The Landing, includes 275 luxury residential units, 20,000 square feet of office space and a 98-room Tru by Hilton hotel. The new Home2 Suites will be developed as a 100+ room, extended-stay property with an onsite convenience store and community meeting space.  

InterMountain Management LLC plans to build a new 165-room Home2 Suites hotel at the Springfield Town entrance in Springfield, Virginia.  

DoubleTree Suites Salt Lake City in Utah has been transformed under a project that has seen its central atrium, lobby, 241 suites, and kitchens upgraded. The food and beverage concepts have also seen upgrades. Other public areas such as the expanded fitness center, the indoor pool, and public restrooms have also been renovated and the hotel’s elevators have been modernized. HRI Hospitality is the management company. 

CGI Merchant Group has lost control of its downtown Miami hotel, The Gabriel, this month through a foreclosure auction. The firm’s hotel was acquired by an affiliate of Madison Realty Capital. Located within the Marquis Residencesskyscraper, The Gabriel Miami Downtown is a 15-floor lifestyle-focused hotel with 129 rooms and is a Curio Collection by Hilton property. CGI said it aims to reach an amicable financial settlement with Madison Realty Capital to repurchase the outstanding loan balance and regain the title to The Gabriel. CGI’s other Miami-Dade hotel, The Gabriel South Beach, is under threat of foreclosure in connection with a $71.1 million loan fulfilled by Deutsche Bank. An auction date is set for September 12.  

Marriott News

Sina Hospitality is building a new 96-room SpringHill Suites hotel next to a Fairfield Inn & Suites on Airport Square Lane in Sandston, Virginia. The $17 million hotel is expected to be completed by next summer. Sina also continues to pursue several more hotel projects across the river in Chesterfield. On deck is a 95-room TownePlace Suites by Marriott. The goal is to secure the project’s financing early next year amid this challenging lending environment. Sina has more than 30 hotels that are either operational or planned to open in six states.  

The former Banyan Cay Resort in West Palm Beach, Florida is now The Belgrove, a luxury hotel that will be part of the Marriott Autograph Hotel Collection, the second Marriott Autograph-branded property in the city. Under its new ownership, The Belgrove Hotel will be an upscale enclave with an emphasis on both luxury golf facilities and gatherings. The hotel boasts 194 guestrooms, 25,000 square feet of meeting space, three dining venues, a day spa, and a golf course. The new owners temporarily closed the course and began redoing it. A fall reopening is expected. Details of the Banyan Cay sale are not available, but the new ownership group did obtain a $75 million loan from Calmwater Capital.  

Vital Vegas reported on a rumor that W Hotels, the brand owned by Marriott International, appears to be set to take over the Delano Tower at the Mandalay Bay Resort Casino. If W Hotels follows its previous pattern, Delano would be called W Las Vegas, with its own distinct amenities, vibe, and marketing database. Vital Vegas has not been given a specific timeline for the rebrand.  

Dune Drifter, a new hospitality firm with ties to the Marriott family, has bought the Pacific Edge Hotel in Laguna Beach for $80 million. The 125-room beachfront hotel was sold by Highgate Hotels and Morgan Stanley. Eastdil Secured held the listing. Approved plans by the City of Laguna Beach and the California Coastal Commission call for adding 25 more rooms, a café, office and conference areas and a porte cochere entrance, in addition to unified architectural facades. The pool and spa would be relocated. The new owners aim to carry out the hotel makeover, which could cost more than $125 million. A construction timeline was not disclosed.

Cronheim Hotel Capital has secured $14,600,000 for the construction of the 128-key TownePlace Suites in Lyndhurst, New Jersey, which is being developed by BDG Hotels. The loan was placed with a local bank.  

Independent Hotel News

The Drifter Hotel in New Orleans, Louisiana, has been sold to a group of investors with big plans to expand in the city. The hotel had been owned for the past seven years by developer Zach Kupperman and his partners. The sale price wasn’t disclosed by the buyer or seller. The buyer group has plans to not only upgrade the 20-room Drifter but also buy other New Orleans hotel properties, with a target of having a total of 100 rooms in the city over the next year or so.  

Hershler Hospitality arranged the sale of the Sonoma Coast Villa located in Bodega, California. The 18-room hotel was sold to Oceanic Sonoma LP.  

Driftwood Capital has originated a $12.1 million mezzanine loan for the refinancing of a five-property, 714-key portfolio. Through its lending fund, Driftwood Lending Partners, LP, the firm provided financing to a joint venture between affiliates of a prestigious hotel investment and management firm and a global investment management firm. Driftwood originated a 3-year loan with two 1-year extension options at a competitive interest rate. The loan collateral is comprised of a 189-key property in Salt Lake City, Utah; a 139-key property in Norwood, Massachusetts; a 113-key property and a 146-key property in Bloomington, Minnesota; and a 127-key property in Arlington, Texas.  

Personnel News

Christian Clerc has been named President and CEO of Auberge Resorts Collection. Clerc succeeds former President and CEO Craig Reid, who is retiring after 10 years at the helm of the company. Clerc’s appointment is effective September 1, 2024. Clerc previously served as Global President at Four Seasons Hotels and Resorts.  

JLL announced that Tony Muscio will be joining as a Senior Managing Director for its JLL Hotels & Hospitality group, leading the Western region. With over 20 years of experience in the real estate industry, including 18 years at JLL, Muscio brings a wealth of knowledge and expertise to his new role.