Truist's Earnings Season Projections

The DJIA rose 201 points while Nasdaq was up 160, the S&P 500 was up 45 points, and the 10-year treasury yield was up .03 to 4.10%. Lodging stocks were mixed. WH traded up to another new high while the only mover of note was SHCO, with a gain of 5% on the day.

Truist gave a bit of a lodging update ahead of the soon-to-be earnings season. They believe the recent hurricanes could give the Midscale and Economy segment RevPARs a bump up for the next several quarters, highlighting both Wyndham and Choice as potential beneficiaries. On the other hand, hurricane damage will negatively affect future property insurance rates. They also warned of a negative impact on vacation ownership companies from the hurricanes, mostly those in Orlando from Hurricane Milton. Truist described C-Corps as being in the middle of a "brand grab" right now, with investors being focused on headline net rooms growth. Trust said the power of the big C-Corps loyalty programs makes M&A generally attractive/accretive over the long term, and that includes when branding, marketing, development, and/or operations are outsourced by third parties. On the hotel owners' and REIT's side, Truist said the unions are squeezing them, playing hardball. Even before the potential union contracts, the hotel owners will be forced to give in, and hotel-level profit trends will remain challenged even as hotel occupancy levels grind higher, staffing normalizes, and there is less labor outsourcing. Truist said they think labor cost growth expectations for 2025+ may be toward the mid-to-high single digits on a CAGR basis, even in markets with weak hotel demand/ADR fundamentals like San Francisco. Sunstone Hotels settled their strike in San Diego and gave an update on 3Q showing how September took a big hit when the strike at the 1,190-room Hilton San Diego Bayfront started.

In the Sunstone update, the company said they repurchased 2.3 million shares at an average price of $9.79, bringing total repurchased shares for the year to 2.7 million. SHO currently has $428.3 million remaining under its existing share repurchase program authorization. SHO lowered their full-year outlook, blaming the labor activity in San Diego.

With the Greenbrier Hotel from the Justice family said to be back on the road to an auction, a rumor was circulating that Omni Hotels was getting ready to take over. Both Governor Jim Justice and Omni Hotels & Resorts said there was no truth to the talk Omni might take over the operations of The Greenbrier. The rumors focused on whether Omni was interested as a buyer or operator of The Greenbrier. Justice continues to insist the property is not in trouble and that this is all a target of politics.

Baird reported on their findings at The Lodging Conference. They described the tone as balance, patience, and optimism in check, saying defensive is the best way to describe it. Baird was surprised that the overall tone was subdued. Industry participants seemed generally unenthusiastic about the near-term outlook, with "expect a lot of the same" for 2025 as the most common conversation phrase. The labor strikes and back-to-back hurricanes are not helping the sentiment of the industry. While there have not been any new M&A activities, Baird said there is a lot of equity on the sidelines. They said the challenges include sellers' pricing expectations with no urgency for a transaction and the limited amount of high-quality deals out there.

Set to break ground this month by KPC Development Co., Kali Hotel and Rooftop, Autograph Collection, will be the only hotel at Hollywood Park in Inglewood, California. With an expected wrap date of May 2026, the 13-story property will bring 300 guestrooms, including 34 suites, to Hollywood Park's mixed-use campus. Amenities at the Kali Hotel and Rooftop, Autograph Collection include a pool, yoga deck, spa, fitness center, nearly 20,000 square feet of meeting and event space, and three food and beverage concepts. Onsite parking will comprise 315 stalls on the hotel's ground and subterranean levels. A groundbreaking ceremony will take place on October 22.

Vision AWH LLC is several months away from completing the renovation of the latest hotel property within the city of Hamilton, Ohio. A lot of work has been done to transform what was formerly the Anthony Wayne Apartments into one of Hilton's Tapestry Collection. The Well House Hotel will feature 54 suites in seven stories and a 40-car parking lot. The Cafeo Hospitality is the restaurant operator for the yet-to-be-named restaurant at The Well House Hotel.

Hyatt House Raleigh Downtown at Seaboard Station celebrated its grand opening in Raleigh, North Carolina. The hotel offers 149 guestrooms and suites; the Commons, a comfy lounge with an open and welcoming space; the Outdoor Commons, which includes an outdoor fire pit and barbecue; a rooftop bar and restaurant; a lobby bar and restaurant; H Market; gym; and three gathering rooms of flexible meeting spaces.

IHG Hotels & Resorts recently reopened a newly built Staybridge Suites hotel in Sacramento, California. Staybridge Suites Sacramento - Woodland features 109 suites and 750 square feet of meeting space. The hotel is owned by Sah Investment LLC and managed by Pacific Inns.

Brittain Resorts & Hotels announced the company has partnered with Provident Hotels & Resorts to operate its prestigious portfolio of eight hotels and resorts located throughout Florida. The resorts include The Ocean Pointe Suites at Key Largo in Key Largo; The Provident Oceana Beachfront Suites in Treasure Island; The Sunset Vistas Beachfront Suites in Treasure Island; The Crystal Palms Suites in Treasure Island; The Sailport Waterfront Suites in Tampa; The Provident Grand Luxury Short-Term Residences in Downtown Doral; The Provident Doral at the Blue in Doral; and The Mutiny Hotel, Coconut Grove in Miami.

Mandarin Oriental Hotel Group has revealed a new branded, guest-centric vision and strategy for its next ten years of accelerated growth (logged in users read free on Skift). Under the leadership of CEO Laurent Kleitman, the group is focused on accelerating the development of its core proposition and investing in exceptional luxury experiences for its guests. A new app, due to be rolled out next year, is being designed to remove friction for guests on their journey to their hotel and throughout their stay. Mandarin Oriental will also be rolling out its cake shops to more of its hotels around the world. There will also be a new Wellness 2.0 concept that provides an enhanced holistic service combining physical, spiritual, and medical elements of health and wellbeing for guests. The rebrand will also focus on growing the group's resorts and capital city portfolio as well as expanding in key regions, including the Middle East, Japan, and North America while continuing to expand in key capital cities across Europe. Over the past 12 months, the group has announced a series of development projects to its portfolio, some of which will introduce new and exciting experiences to its guests, including a trio of distinctive boutique properties in Japan strategically located around the picturesque Seto Inland Sea in Setouchi. Others include the restoration and rebranding of the former Gellert Hotel, a grande dame in Budapest with its thermal baths; the creation of a unique villa experience in Rome, housed in ten 19th-century villas; and a luxury hideaway resort with private residences located on Bali's southern coast.

Europe Highlights

A seaside hotel in Weston-super-Mare, UK, has been bought by a new owner. The Sandringham Hotel, based in Victoria Square, has been purchased for an undisclosed sum by Daish's Holidays. The 92-bed hotel now joins the company's portfolio of hotels across England and Wales.

The Azur Selection announced that the company and the owner of Hotels Du Group Boucau decided not to pursue the proposed acquisition of shares of Hotels Du Groupe Boucau previously announced on February 1, 2024.