Marriott Drops Sonder a Lifeline

The DJIA rose 237 points while Nasdaq was up another 245, the S&P 500 rose 54 points and the 10 year treasury yield was down .-.03 to 3.87%. It is all up to Jerome Powell and the Fed to whether this rally continues or not. Either way we could get a sell on news but it will be what happens after the knee jerk reaction that matters. Lodging stocks were higher. SOND surged 131% on the Marriott news while VCSArode their coattails, up 26%.

According to the Ministry of Tourism (Sectur), in the first six months of the year, a total of 41,100,000 tourists have arrived at hotels in Mexico, implying an average occupancy rate of 60%, similar to that report in the same period last year. According to the agency's figures, in the 70 centers that are monitored by the Datatur systems, of the total number of tourists that have arrived at hotel rooms in Mexico, 71.5 % are nationals, while 28.5 percent are foreigners. Cities registered the arrival of 23,300,000 tourists, while beach resorts received 17,800,000 tourists. The average hotel occupancy rate in the cities was 52.4% and 68.5% in beach resorts. Sectur detailed that in Integrally Planned Centers, such as Cancun, Quintana Roo; Ixtapa Zihuatanejo, Guerrero; Los Cabos, Baja California Sur; Huatulco, in Oaxaca, the average occupancy rate was 75.1%, in contrast to inland cities, where the average was 47.5%. Thus, Sectur emphasized that the resorts with the highest percentage of hotel occupancy in the first half of the year were Playacar at 89.8%, Akumal at 82.8%, Nuevo Nayarit at 80.8%, Cabo San Lucas at 80%, Cancun with 77.7% and Playa del Carmen with 75.1%.

Marriott International, Inc. announced a long-term licensing agreement with Sonder Holdings Inc., which is expected to add over 9,000 rooms to Marriott's portfolio by year-end and approximately 1,500 rooms to its pipeline. Under this agreement, Sonder's open and pipeline portfolio, which primarily consists of apartment-style accommodations in urban markets, is expected to be added to the Marriott system under a new collection called Sonder by Marriott Bonvoy. With over 9,000 rooms expected to be added to its portfolio later this year, Marriott now expects a full year of 2024 net room growth of 6 to 6.5 percent. The Sonder pipeline rooms are anticipated to be added to Marriott's system over the next few years. Under the agreement, Marriott will receive a royalty fee based on a percentage of Sonder's gross room revenues. Read more at Skift (free read for DLR subscribers). 

As for SOND, this is a lifeline, no matter which way you look at it. The company had been floundering with a stock price that had gone below $1. Clearly, as a result of this transaction, SOND secured $146 million of additional liquidity. A new Investor Consortium and existing noteholders purchased $14.7 million of Preferred Equity with a commitment for another $28.6 million. Existing noteholders agreed to provide $83 million of additional liquidity with $4 million in financing and $79 million in the form of a 30-month extension of the PIK feature of the Note Purchase Agreement. There are other sources of liquidity that were not detailed, totaling $20 million.

Marriott International, Inc. announced its 9,000th property with the opening of The St. Regis Longboat Key Resort in Longboat Key, Florida. Developed by Unicorp National Developments, the luxury beachfront property features 168 guestrooms, including 26 suites, outstanding culinary experiences, and world-class amenities. The resort will also feature 69 private branded residences. Moelis & Co is SOND'sfinancial advisor, while Kirkland & Ellis is SOND's legal counsel.

Hamilton Hospitality Inc. is planning to invest at least $21.6 million into a development in Hamilton, Ohio. The plan is for a Home2 Suites and Hampton Inn & Suites. Collectively, they will have 160 rooms and a yet-to-be-identified restaurant. Once construction begins, it would take about 18 months to complete.

The Pennyweight Hotel Boston, Curio Collection by Hilton, owned by Boylston Properties, will open in the city's West End this September. Housed in the former Onyx Boston Downtown hotel, it features 112 bedrooms and a restaurant and bar concept with an outdoor patio space.

Hyatt Hotels Corporation finalized the sale of the 1,641-room Hyatt Regency Orlando and an adjoining 45-acre tract to entities linked with RIDA Development Corporation and a real estate fund managed by Ares Management. The transaction, valued at roughly $1.07 billion, also sees Hyatt maintain a long-term management role under its Hyatt Regency brand. Additionally, Hyatt has preserved $265 million in non-controlling preferred equity and extended $50 million in seller financing for the land parcel. The Hyatt Regency Orlando ranks as the company's fourth largest hotel worldwide and boasts 315,000 square feet of adaptable event space, six dining options, a fitness center, tennis courts, a spa and an outdoor pool.

JLL Hotels & Hospitality Group secured $620 million in acquisition financing for the property. JLL represented affiliates of RIDA Development Corporation and Ares Management Real Estate fund to secure the floating-rate, five-year loan through Wells Fargo, Bank of America and Deutsche Bank on behalf of the borrowers.

Rockbridge announced the acquisition of the 200-room Hyatt House Chicago West Loop / Fulton Market, located in Chicago's Fulton Market. The 14-story hotel includes flexible meeting space, a rooftop activity center, an indoor pool, a fitness center, a marketplace, and a bar.

IHG Hotels & Resorts celebrated the opening of a newly converted and rebranded Holiday Inn hotel in Galveston, Texas. Owned by Galveston Motel Management LLC and managed by Harshida BP Hospitality, Holiday Inn Galveston Island features 83 guestrooms, 960 square feet of meeting space, an onsite restaurant, an outdoor pool, and a fitness center.

citizenM has opened its third Miami hotel in South Beach. Located at 1200 Lincoln Road, citizenM South Beach features 168 guestrooms, workspaces and meeting rooms, an infinity pool, outdoor terrace and a restaurant.

The 25-acre, eight-room Hamakua Hotel celebrated its grand opening on the Big Island of Hawaii. Eric and Lori Lochtefeld purchased the property, formerly the Palms Cliff House, in 2020 and spent $1.5 million renovating it. The Hamakua Hotel features body and wellness spa services, and work is underway on an oceanfront infinity pool scheduled to open this fall.

Wylder Windham Resort is the first Small Luxury Hotels member in New York's Catskills. The resort offers seven historic lodges on the property, each accommodating between 12 and 28 rooms. With 20 acres of sublime land in the heart of Windham, Wylder Windham features an onsite restaurant and bakery, a heated pool, wood-fired barrel saunas, fire pits, and e-bikes.

A new apartment-style hotel, The Mayfair, is opening this fall on Canal Street in downtown New Orleans. Owned by Hammy Halum and his father, Damin, The Mayfair is located on the upper floors of four historic buildings. The Halums have combined the buildings and converted them into 32 units with a total of 72 bedrooms, four rooftop patios, an upscale lobby and ground floor retail space. The project has cost more than $20 million, including the purchase price of the buildings.

The American Hotel & Lodging Association has stated that after the General Services Administration announced its fiscal year 2025 per diem rates for federal workers. Starting October 1, 2024, the standard daily lodging allowance for most of the continental United States will increase by $3 to $110 per day, an increase estimated to be worth approximately $100 million to the hotel industry. The standard meals and incidental expenses allowance will increase by $9 to $68 per day. Each year, GSA sets per diem rates to reimburse federal employees' lodging and meal expenses for official travel within the continental U.S. And each year, AHLA works closely with GSA to ensure per diem rates are fair to both hoteliers and the government. Typically, GSA calculates per diems based on the ADR for lodging and meals from a trailing 12-month period minus 5%.

Michael Loeb bought a 15.9% stake in the Crowne Plaza hotel in Times Square in a deal that values the property at $334.9 million. Loeb paid Argent Venture $53.3 million to become a minority owner of the 46-story hotel at 1601 Broadway. The deal comes two years after a Manhattan Supreme Court judge ordered SL Green Realty to hand over its stake in the hotel to mezzanine lender Argent after defaulting on its $330 million mortgage.

International Highlight

OYO has acquired Paris-based premium rental homes company Checkmyguest for INR 230 CR ($27.4 Mn) in a cash and stock deal. As reported by The Arc, OYOhas said that it will issue 72.9 Mn shares for the buyout. However, the size of the cash payout was not disclosed. As per the report, the buyout also included the housing renovation business HMG, formerly known as Helpmyguest and luxury rental apartments management company Studio Prestige.