Hotel Rates in Top U.S. Markets Outpace Inflation

The DJIA was up 17 points while Nasdaq was up 70, the S&P 500 rose 24 points, and the 10-year treasury yield was up .05 to 3.80%. Lodging stocks did not get the memo that they were supposed to rise today. With the exception of the 8% rise for SOND, it was pretty much red all over our lodging stock screen today. Out of the biggest movers, SVC was down -6% while SHCO fell -5% on the day.

Truist reported on a webinar they held with corporate travel data company TRIPBAM/Emburse, a company with forward-looking business travel booking & pricing “big data” from over 50 million hotel bookings and more than $45 billion of spend. The highlights include that they see booking volumes strong in the individual/transient segment they follow. The company sees double-digit growth, which is expected to continue into next year. U.S. business transient room nights as of mid-September were up 21% year over year for the trailing 30 days compared to the same period in 2023. TRIPBAM is very bullish on volume increases in 2025 of around +10% year over year. U.S. corporate room rates at the moment are moderately higher compared to the same period last year, up about 3%. For 2025 corporate negotiated rates, TRIPBAM is anticipating +4 to +5% annual increases. In terms of industries, TRIPBAM sees IT companies coming back, currently up 15% in bookings, which has San Francisco room night growth, which looks like 35% year over year but with lower rates.

Speaking of rates, the Wall Street Journal published an article that said CoStar is reporting over 20% of hotels in the top 25 U.S. markets are charging average daily rates over $200. In 2019, it was only 13%. The WSJ article said leisure travelers are reacting to the higher rates, not by canceling trips just yet but by saying the higher room rates affect where they go and how long they stay. While the article is about raising rates, seemingly happening across the country, the article also said that the increases have not necessarily matched the rate of inflation, and the price hikes are not equal across all types of hotels either. Lower-tier hotels have actually dropped prices slightly compared with last year in terms of trying to fill rooms. Four- and five-star hotels are the ones that increase their room rates the most.

Equus Capital Partners held a grand opening for the AC Hotel by Marriott in Newtown Square, Pennsylvania. The first AC Hotel in the region features 140 guestrooms, 2,200 square feet of meeting and event space, a daytime café/nighttime lounge, and a fitness center. The hotel is managed by Gulph Creek Hotels and is part of the final development phase at Ellis Preserve, a 218-acre master-planned community that includes nearly 2 million square feet of office space, 364,000 square feet of retail, dining, and event space, The Harrison and Madison Ellis Preserve luxury apartments as well as “for sale” residential opportunities.

It has been nearly 20 years since the city of Sherman, Texas, opened a new hotel, but now several projects are nearing completion. The Courtyard by Marriott, located in Sherman Town Center, is a project people have wondered about for more than ten years. It has been a long time coming, but the building is nearly complete, and based on the latest information that the city has, the hotel is expected to be open by the end of the year. Around the same time, a Hampton Inn & Suites should also open, and construction of a SpringHill Suites by Marriott in south Sherman is expected to begin.

Paramount Lodging Advisors announced the sale of two institutionally-owned DoubleTree hotels in the Chicago suburbs, the 160-key DoubleTree Chicago Wood Dale and the 189-key DoubleTree Chicago Schaumburg. PLA facilitated the transactions on behalf of the seller.

HREC Investment Advisors arranged the sale of the 151-room SpringHill Suites Omaha East/Council Bluffs located in Council Bluffs, Iowa. The buyer is a regional owner/operator and the seller is a private real estate investor. HREC Investment Advisors exclusively represented the seller on this transaction.

Cronheim Hotels Capital arranged financing for the Motel 6 Lawrence Township, a 104-key economy-class motel located in Lawrenceville, New Jersey. CHC secured the financing from a local bank lender. In addition to the Motel 6, the subject collateral also included the sixth location of PJ’s Pancake House, a thriving local restaurant chain that recently signed a long-term lease at the property.

Accor’s Mercure Hotels celebrated a remarkable achievement with the inauguration of its 1,000th hotel. Following its 50th anniversary in 2023, the brand enjoys unprecedented popularity among hotel owners, demonstrating strong growth momentum across the globe. The milestone of 1,000 hotels was reached in 2024, marked by several notable openings, including Mercure London Earls Court, UK; Mercure Chandigarh Tribune Chowk, India; Mercure Fukuoka Munakata Resort & Spa, Japan; Mercure Marival Emotions Resort, Mexico; Mercure Nantong Renmin Road, China; and Mercure Dubai Deira, UAE. This year alone, nearly 30 Mercure hotels have opened in Greater China, expanding the brand’s presence to over 180 establishments in the region. Additionally, Mercure has doubled its footprint in Japan, recently launching 11 hotels nationwide. With the largest development pipeline within Accor’s portfolio, Mercure is poised for continued growth, with over 200 more hotels slated to open by 2028. Additional recent additions to the Mercure portfolio include Mercure Bangkok Surawong, which opened in May 2024 with 219 rooms. Mercure ICON Singapore City Centeropened in April 2024 with 989 rooms. Mercure Tirana opened in March 2024 with 64 guestrooms, marking Mercure’s first venture in Albania. Additional Japanopenings included Mercure Miyagi Zao Resort & Spa, Mercure Urabandai Resort & Spa, and Mercure Kyoto Miyazu Resort & Spa.

Personnel Moves

Peachtree Group announced that Brent LeBlanc is now leading the firm’s business development efforts across its investment platforms. In his new role as executive vice president of business development, Brent will support Peachtree’s efforts to grow and expand its vertically integrated investment platforms. His responsibilities include focusing on cross-marketing strategies, fostering business development, and collaborating closely with the investment teams to drive innovation and capture new opportunities. LeBlanc joined Peachtree in 2012. He most recently served as executive vice president of capital markets, building and expanding the leadership team for Peachtree’s broker-dealer affiliate, Peachtree PC Investors.

The chief executive of the company that operated Braemar luxury hotel The Fife Arms is stepping down from the role to pursue new opportunities. Ewan Venters will leave hospitality company Artfarm by the end of January after nearly four years. Artfarm, owned by Manuela and Iwan Wirth, acquired The Fife Arms in 2016.

Europe Highlights 

IHG Hotels & Resorts announced the addition of InterContinental Chantilly Chateau Mont Royal to its expanding luxury and lifestyle collection. This unique property is conveniently located just 30 minutes by train from Paris and is the first countryside destination for the InterContinental Hotels & Resorts brand. The hotel features 109 guestrooms, multiple restaurants, and Spa Biologique Recherche. The property marks IHG’s third luxury opening in France within the last five year.