OYO to Buy Motel 6 from Blackstone for $525 Million

The DJIA Friday with a gain of 38 points while Nasdaq was down 66, the S&P 500 fell 11 points, and the 10-year treasury yield was down .01 to 3.73%. INN traded up to a new high, SOHO was up 6% but VCSA fell -7% on the day.

The big news came late Friday as Oravel Stays, the parent company of OYO, announced it agreed to acquire G6 Hospitality from Blackstone Real Estate for $525 million in cash. OYO will keep the Motel 6 and Studio 6 brands independent from OYO hotels. With the acquisition, OYO adds about 1,500 locations across the U.S. and Canada, assuming they keep them all. Motel 6’s franchise network generated gross room revenues of $1.7 billion a year. For Blackstone, they exit this after holding onto G6 for longer than is typical. They purchased it in 2012 for $1.9 billion from Accor. Blackstone sold off the hotels, converting them to a franchise model. That is a sale of more than 550 properties. Blackstone said the transaction is a terrific outcome for investors.

The U.S. hotel industry reported lower performance results from the previous month but positive comparisons year over year, according to August 2024 data from CoStar. August 2024 (percentage change from August 2023): Occupancy: 66.9% (+1.5%) ADR: $157.84 (+2.3%) and RevPAR: $105.67 (+3.9). Among the Top 25 Markets, New York City experienced the highest occupancy level (+5.25% to 87.3%). Markets with the lowest occupancy for the month included New Orleans (54.1%) and Phoenix (58.4%). The Top Markets showed higher occupancy and ADR than all other markets.

Canada’s hotel industry recorded its highest occupancy level for any month since August 2018, according to CoStar’s August 2024 data. August 2024 (percentage change from 2023): Occupancy: 79.7% (+3.1%) ADR: CAD235.85 (+3.6%) and RevPAR: CAD187.93 (+6.8%). Among the provinces and territories, Nova Scotiar ecorded the highest occupancy level (89.6%). Among the major markets, Vancouver saw the highest occupancy (87.6%). The lowest occupancy among provinces was reported in Saskatchewan (66.6%). At the market level, the lowest occupancy was reported in Edmonton (71.6%).

The St. Regis New York celebrates its 120th year this fall with the debut of an extensive redesign and renovation, including the lobby, King Cole Bar, and two lobby-level dining outlets.

A site along Third Street and the South Bethlehem Greenway in Bethlehem, Pennsylvania, previously approved for an eight-story residential building, could instead become the future home of a 141-room hotel. Plans call for a Tempo by Hilton hotel with a ground-level restaurant and bar, rooftop bar and expanded fitness center, with improvements to come late for the Greenway nearby. The land, targeted by High Hotels Limited, has five parcels and comes with an abandoned apartment building and paved parking lot. The developer plans to consolidate that space once the land deal closes, or even before, according to the plans.

Crescent Hotels & Resorts announced it will manage Hotel Indigo Austin Downtown – University and Holiday Inn Express Austin Downtown University, located in the Red River Cultural District of Austin, Texas. The 149-room Hotel Indigo Austin Downtown – University features a lobby restaurant and bar and over 5,000 square feet of meeting and event spaces across six versatile venues. The modern Holiday Inn Express offers meeting space and a fitness center. Guests also have access to the Skyline Pool Deck + Bar, which is shared with the adjacent Hotel Indigo.

Shopoff Realty Investments is planning to develop a mixed-use project in Huntington Beach, California. The project will include a 215-room hotel, 200 single-family homes, 50 apartment units and 19,000 square feet of retail. Shopoff Realty plans to break ground on the project in the 4th quarter of 2025.

The Hamak Hotels chain is set to unveil its latest gem, Casona Roma Norte, on October 1, 2024. Located in Mexico City’s Colonia Roma neighborhood, the meticulously restored 1920s mansion features 32 elegantly designed rooms and six exceptional dining concepts.

A nine-room hotel, developed by longtime local property owner Tony Choueke, will replace a real estate office on Highland Avenue in Manhattan Beach, California. The unnamed hotel will not include a bar or restaurant, just in-room alcohol services.

Hotel and real estate industry veterans Adam Montufar, Bennett Webster, Brent Clemens, and Joe Cuomo have launched Alchemy Real Estate Advisors, a hospitality brokerage firm focusing on institutional clientele. The team brings 70 years of collective experience and over $7 billion in aggregate transaction volume across more than 500 hotel property and non-performing loan transactions. Alchemy Real Estate Advisors will deliver a client-first experience focusing on hotel investment sales, capital markets, consulting and market commentary. Webster, Clemens and Montufar were Senior Managing Directors at Paramount Lodging Advisors before founding Alchemy Real Estate Advisors. Before joining the group, Cuomo oversaw institutional sales for the Ten-X auction platform. Alchemy Real Estate Advisors launches with a strong national presence in the northeast, southeast, and Midwest, including primary offices in New York, Miami, Chicago and Des Moines.

Berkadia announced the sale of the Chase Suite Hotel, a 160-key extended-stay hotel in Tampa, Florida. Berkadia led the transaction on behalf of the seller, an affiliate of Hardage Hospitality. The property sold for an undisclosed price. Chase Suite Hotel consists of 12 two-story residential buildings and a clubhouse on a waterfront location. The hotel features 120 studio suites and 40 two-bedroom suites.

Harborview Capital Partners closed on a $24.5 million loan for the acquisition and renovation of two hotels in Ocala, Florida, the 169-room Courtyard by Marriott Ocala and the 87-room Residence Inn by Marriott Ocala. BridgeInvest negotiated the refinancing for the new owner. Harborview Capital picked up the portfolio from American Hotel Income Properties for $26.5 million and plans to renovate the hotels by next year.

JLL’s Hotels & Hospitality ground secured $153 million in senior financing for five full-service hotel properties consisting of 1,140 keys located in California, Arizona, Colorado and Georgia. JLL worked on behalf of the borrower to secure the three-year, floating-rate loan through a debt fund. The portfolio consists of the Embassy Suites San Rafael Marin County in San Rafael, California; Embassy Suites Phoenix Downtown North in Phoenix, Arizona; Embassy Suites Atlanta Perimeter Center in Atlanta, Georgia; Marriott Atlanta Northeast Emory Area in Atlanta, Georgia; and Highline Vail DoubleTree by Hilton in Vail, Colorado.

Hotel owner Ajay Shingal faces a financial pickle as a $22 million mortgage is set to mature on a 206-room hotel in San Jose that, in a decade, has lost 65% of its value. His 360 Global Venture Group, owner of the Wyndham Garden Valley San Jose Silicon Valley, must pay off the loan next month, the Silicon Valley Business Journal reported. It’s unclear how Shingal will address the looming maturity date.

Personnel Moves

Omni Hotels & Resorts announced the appointment of Annette Bales as the new Vice President of Sales. In her new role, Bales will spearhead the development and execution of strategic sales plans, driving Omni’s mission to create and maintain a highly energized selling culture across its vast portfolio. Prior to joining Omni, Bales served as Executive Director of Sales, Service & Experience at Sunseeker Resort in Charlotte Harbor, Florida.

Hospitality Sales and Marketing Association International Americas, HSMAI Foundation and HSMAI Global announced that President and CEO Bob Gilbert passed away on September 19, 2024. In July 2024, the organization announced that Gilbert had accelerated his retirement plan as a result of a serious health issue following 30 years of executive leadership for HSMAI. Mr. Gilbert will be missed by the industry a large, and the association will benefit from his leadership for many years to come.

Europe Highlights

According to the latest World Tourism Barometer by UN Tourism, around 790 million tourists traveled internationally in the first seven months of 2024, about 11% more than in 2023 and only 4% less that in 2019. With increased air connectivity and visa facilitation supporting the recovery in international travel, the data shows all world regions have recorded a strong year so far. The Middle East remained the strongest-growing region in relative terms, with international arrivals climbing 26% above 2019 levels in the first seven months of 2024. Africa welcomed 7% more tourists than in the same months of 2019. Europe and the Americas recovered 99% and 97% of their pre-pandemic arrivals, respectively, during these seven months.

Asia and the Pacific recorded 82% of its pre-pandemic tourist numbers. A total of 67 out of 120 destinations around the world had recovered 2019 arrival numbers in the first half of 2024, based on countries reporting monthly or quarterly data. Some of the strongest performers in January – July 2024 were Qatar (+147% vs. 2019), where arrivals more than doubled, Albania (+93%), El Salvador (+81%), Saudi Arabia (+73%), the Republic of Moldova (+50% through June) and Tanzania (+49% through June). Regarding international tourism receipts, 47 out of 63 countries with available data had recovered pre-pandemic values in the first six months of 2024, many reporting strong double-digit growth compared to 2019. Among the best performers through June or July 2024 were Albania (+128%) and Serbia (+126%) where receipts more than doubled compared to the same period of 2019, followed by Tajikistan (+85%), Pakistan (+76%), Montenegro (+70%), North Macedonia (+60%) and Portugal (+57%). Strong results were also reported by Turkiye +55%) and Colombia (+54%). Worth noting based on first quarter data, are Saudi Arabia (+207%) and El Salvador (+168%) which enjoyed extraordinary growth compared to Q1 2019.

Investment platform BC Partners Real Estate and property management company Hova Hospitality have acquired 30 hotels in Germany from AccorInvest. The 30 hotels included in the deal have a total of 2,308 rooms across various German cities. B&B HOTELS will manage these hotels under long-term, consumer price index-linked leases. The acquired hotels will be subject to a comprehensive refurbishment program, focusing on energy efficiency improvements. The acquisition was facilitated by legal and financial advisers, including Greenberg Traurig, Ernst & Young, and Gleeds for C Partners Real Estate and Hova Hospitality. Financial details of the transaction remain undisclosed.