U.S. Hotel Industry Reports a Largely Flat July Performance

The DJIA was down 178 points, Nasdaq tumbled 300, the S&P 500 fell 50 points and the 10-year treasury yield was up .08 to 3.86%. If you were wondering why there was no sell off on news yesterday with the confirmation the Fed was moving to an easing stance, today probably made a lot of sense. Lodging stocks were modestly lower on the day.  

According to July 2024 data from CoStar, the U.S. hotel industry reported mostly flat performance comparisons year over year. July 2024 (percentage change from July 2023): Occupancy: 68.8% (-0.5%) ADR: $161.69 (+05%) and RevPAR: $111.18 (flat). Among the Top 25 Markets, Oahu Island experienced the highest levels in each of the three key performance metrics: Occupancy (+4.5% to 88.3%), ADR (+1.4% to $310.46) and RevPAR (+5.9% to $274.13). Markets with the lowest occupancy for the month included Phoenix (56.9%) and New Orleans (58.9%). The Top 25 Markets showed higher occupancy and ADR than all other markets.

Blueprint Hospitality and Remington Hospitality announced the opening of the Le Meridien Fort Worth Downtown on August 28, 2024. Located in the former Hotel Texas Annex building, the 14-story boutique hotel boasts 188 guestrooms and nearly 5,000 square feet of function space.  

Ascendant Capital Partners, together with Highgate and Centerbridge Partners, debuts Monterey Beach Hotel, a Marriott Tribute Portfolio hotel, following a significant renovation and rebranding. The only beachfront hotel along California’s Monterey Peninsula, the 192-room hotel boasts over 7,500 square feet of versatile meeting and event space and 32,500 square feet of private beach access, and three distinct culinary and cocktail venues.   

CDC Houston, a subsidiary of Coventry Development Corporation, announced that one of its managed entities has acquired the majority stake in the 337-room AAA Four Diamond Houston City Place Marriott. The property is located in the urban core of the City Place community, master developed by CDC Houston. The purchase of JV partner Affinius Capital’s entire 50% share brings the Coventry Development Corporation entity ownership stake to 95%. The remaining 5% was retained by JV partner and asset manager Woodbine Development Corporation, the developer of the property. Terms of the transaction were undisclosed, and Aimbridge Hospitality will continue to operate the hotel. The investment makes Coventry Development Corporation (and its affiliated entities) the majority owner of all hospitality assets in City Place, including the 128-key Residence Inn Houston City Place and 125-room Courtyard Houston City Place.   

In Alabama, the Birmingham Jefferson Convention Complex announced a $5 million renovation plan to the Sheraton Hotel lobby and public spaces. According to the BJCC, the entire lower lobby is being renovated. There will be a new café bar, community tables, and studios. Renovations should be complete by December 2024.   

A StudioRes by Marriott extended-stay hotel is planned for southwest Jacksonville, Florida in the Collins Town Center. Plans by Noble Investment Group call for a four-story, $9.9 million hotel with a fitness room, guest-paid laundry, covered patio and vending area.   

Blackstone is in talks to acquire the 286-key Hyatt Regency Clearwater Beach Resort and Spa on Florida’s Gulf Coast from Westmont Hospitality Group for around $200 million, according to a report in Bloomberg.  

Red Roof announced the opening of the Red Roof Inn La Marque, Texas. Owner Kenny Group LLC invested $700,000 into renovations at the property, which included updating bathrooms in the guestrooms, adding new bedding and refreshing the lobby and pool area. The 150-room Red Roof Inn La Marque offers meeting facilities, an outdoor pool, and an on-property bar and lounge.  

Universal Orlando Resort shared new details about Universal Helios Grand Hotel, a Loews Hotel, a 500-room resort located at the much-anticipated Universal Epic Universe theme park opening in 2025. Co-owned and operated by Loews Hotels & Co, Universal Helios Grand Hotel features the destination’s very first dedicated theme park entrance for the hotel’s guests. Amenities include multiple food and beverage offerings, a zero-entry resort-style pool, a fitness center, a game room, and a Universal Orlando Resort store.  

Hunter Hotel Advisors announced the $48.75 million recapitalization of the 212-key Cambria Hotel Austin Downtown. Stratus Development Partners, in collaboration with Choice Hotels International, secured bridge financing from Benefit Street Partners. Proceeds were used to pay off the construction lender and fund an upfront reserve. Hunter represented Stratus. The transaction marks one of the first closings for Hunter’s newly established capital markets team. The hotel includes a rooftop restaurant and bar, 15,000 square feet of meeting space, a fitness center, and a resort-style pool.   

AVANA Companies and funds managed by Oaktree Capital Management L.P.announced the formation of a new $250MM AVANA-Oaktree Private Credit Partnership for its direct private commercial real estate lending strategy. Through the Joint Venture, AVANA will use the capital to provide private debt financing in the United States over the next three years.  

The U.S. District Court for the Middle District of Florida has awarded Wyndham Vacation Ownership and its affiliated entities more than $16 million in a lawsuit against two individuals in control of an unlawful advertising scheme and related entities. The Court further issued an expansive injunction, stopping defendants from engaging in their unlawful conduct, ultimately protecting not only WVO but the consuming public. The lawsuit, brought by Shutts & Bowen LLP, appearing on behalf of WVO, alleged tortious interference, false advertising in violations of the Lanham Act, conspiracy, and violations of the Florida Deceptive and Unfair Trade Practices Act. The Honorable Judge Wendy Berger entered a judgment against Rich Folk, William Wilson, Pandora Servicing, LLC and Intermarketing Media, LLC for their part in a sophisticated advertising campaign wherein they falsely advertised that consumers could cancel or terminate WVO’s contracts, misleading customers and damaging WVO’s business and brands.

Personnel Moves

MGM Resorts International appointed Keith Barr, former CEO of IHG Hotels & Resorts, to the Company’s board of Directors. Barr becomes the 12th member of the board.  

Sonesta International Hotels Corporation announced the appointment of Christopher Trick as Chief Marketing & Performance Officer. Mr. Trick assumes this new role after four successful years as Sonesta SVP and Chief Marketing Officer.