IHG Reports Slowdown in Revenue Growth

B of A Securities upped their price target on Hyatt Hotels to $175 from $165, Hilton to $265 from $230, and Marriott International to $300 from $275. They maintained Buy ratings on all three. BofA also cut their price target on Park Hotels & Resorts to $16.50 a share from $17. They maintained their Neutral rating on PK.

Wells Fargo upped its price target on Marriott to $261 from $238, and Hilton's price was upped to $237 from $200 while it maintained its equal weight ratings. Hyatt's PT was upped to $178 from $167, and their Overweight rating was maintained.

BMO upped their price target on Marriott to $255 from $240. They maintained their Market Perform rating.

IHG Hotels & Resorts reported results, and if you take out China, it was a good report. China's RevPAR was down over -10%, while RevPAR in Europe, the Middle East, Africa, and Asia was up 4.9%. IHG believes China is on the brink of a turnaround. Overall, RevPAR on a global basis was up 1.5%, down from 3.2% growth last quarter. IHG said their licensing agreement with The Venetian Resort and The Palazzo in Las Vegas will end on January 1, 2025. IHG said that while it would remove 7,092 rooms from its portfolio – it was never a real money maker for them anyway.

A total of 519 deals (comprising mergers and acquisitions, private equity, and venture financing deals) were announced in the travel and tourism sector globally from January to September 2024, which was a YoY decline of 11% over 583 deals announced during the same period the previous year, according to GlobalData. An analysis of GlobalData's Deals Database also revealed the volume of M&A deals decreased by 6.8% during Q1-Q3 2024 compared to the same period in 2023, while the number of venture financing deals was down by 25.2% YoY. Meanwhile, the volume of private equity deals remained unchanged. North America, Asia-Pacific, and South and Central American regions experienced a decline in deal volume by 35%, 7.7%, and 20% during Q1-Q3 2024 compared to Q1-A3 2023. In contrast, Europe registered a 10.3% YoY improvement in deal activity. Meanwhile, deal volume for the Middle East and African region mostly remained at the same level. The U.S., China, and France witnessed a YoY decline in deal volume by 36.3%, 38.5%, and 42.9%, respectively, during Q1-Q3 2024, whereas India and Japanexperienced respective deal volumes improved by 24.3% and 38.1% YoY. Meanwhile, deal volume for the U.K., South Korea, and Australia mostly remained at the same level.

The U.S. hotel industry reported mixed performance results from the previous month, according to September 2024 data from CoStar. September 2024 (percentage change from September 2023): Occupancy: 64.6% (-2.5%) ADR: $162.63 (+1.2%) RevPAR: 105.04 (-1.3%). Among the Top 25 Markets, New York City experienced the highest occupancy level (-0.8% to 87.0%). Markets with the lowest occupancy for the month included New Orleans (53.6%) and Tampa (61.4%). The Top 25 Markets showed higher occupancy and ADR than all other markets.

McNeill Hotel Company celebrated the grand opening of the TownePlace Suites by Marriott Memphis Germantown, a new addition to the Thornwood mixed-use development in Germantown, Tennessee. The five-story, 111-room hotel offers a restaurant and rooftop bar, a fitness center, indoor pool and 6,000 square feet of ground floor retail. The TownePlace Suites by Marriott Memphis Germantown was developed for McNeill Commercial Real Estate and is managed by McNeill Hotel Company.

Palm Holdings announced the grand re-opening of the newly renovated TownePlace Suites by Marriott London, located in London, Ontario. The hotel's 126 suites, spanning three floors, have undergone a complete transformation. In addition to the guestroom upgrades, TownePlace Suites by Marriott London now boasts a newly renovated lobby and an expanded fitness center. The hotel also features flexible meeting spaces.

Sonesta International Hotels Corporation announced the opening of Sonesta Essential Beaumont, a 54-room, upper-midscale hotel located in Beaumont, Texas. The hotel marks the 100th Sonesta-branded franchise opening since Sonesta franchising was introduced in late 2021.

Arlo Hotels announced the Arlo Washington DC will officially open on November 18, 2024. The new 445-room hotel will feature multiple food and beverage venues, an expansive fitness center, a rooftop resort-style pool, and 4,287 square feet of event space, including five private meeting rooms.

Auberge Resorts Collection has been appointed by Transwestern Development Company to manage The Birdsall, Auberge Resorts Collection, set to open in 2027 in Houston's newest River Oaks enclave, The RO. The 34-story property boasts a 105-room boutique hotel, 44 private residences, a members' club, a destination Auberge restaurant, a spa, magnificent event spaces, a 70-foot pool, lawns, gardens, and alfresco dining venues. The spa will offer 11 spa treatment rooms, a Vitality Pool, a cold plunge pool, relaxation rooms, locker rooms with steam and sauna facilities, and an extensive fitness center.

The owner of a South Oneida Street property in Ashwaubenon, Wisconsin, wants to revive a stalled hotel project first proposed a year ago. Acts 1:8 Ministry asked the Village Board to approve an extension of that approval, which otherwise would expire a year after the approval, in November. Acts 1:8 Ministry hopes to revive the hotel project with a new partner, Lighthouse Hotel Group, a company connected to Lighthouse Hospitality Group, which operates or manages several Wisconsin hotels.

Sunray Group of Hotels and the Town of Wasaga Beach, Ontario, have announced a letter of intent on a new development in Wasaga Beach. The project, set on 4 acres, is planned to include a full-service hotel with 120 to 150 units, a restaurant, event spaces, and retail. The redevelopment also includes a joint venture between Sunray Group and the Town on a mixed-use residential component and public square. Sunray Group plans to start construction as early as summer 2025. The hotel will be owned and operated by Sunray Group of Hotels.

Aimbridge Hospitality is getting advice from Evercore Inc. as the third-party hotel manager looks to shore up its cash reserves, according to Bloomberg. The company, backed by Advent International, is seeing a decline in room count, which is impacting its revenue. S&P Global Ratings slashed Aimbridge's credit rating to CCC from CCC+ this month, citing a heightened refinancing risk, "unsustainable debt levels," and an expectation the company will see limited cash flow through 2025. According to S&P's report, Aimbridge needs to tackle a loan of debt maturities over the next couple of years, including a revolver that matures in February 2025. It also has a roughly $1 billion first-lien term loan due in 2026 and a $160 million second-lien term loan due the year after.

The JW Marriott Essex House is getting a fresh infusion of cash thanks to a refinance secured by parent company Strategic Hotels & Resorts. According to public records, the $85 million loan for the building, at 160 Central Park South in New York City, is part of a $1.58 billion CMBS transaction for nine of Strategic'shotels, per Bloomberg data, led by Bank of America and Deutsche Bank.

JLL Capital Markets has closed the sale and arranged financing for the Hilton Garden Inn Devens and the SpringHill Suites Devens in Devens, Massachusetts. JLL represented the seller, RA Ventures, in the transaction. Working on behalf of the new owner, the JLL team also secured acquisition financing through BankProv for the Hilton Garden Inn and Avidia Bank for the SpringHill Suites. The Hilton Garden Inn Devens features 118 guestrooms, an onsite restaurant, an indoor pool, a fitness center, a business center, and 4,575 square feet of meeting space across five event rooms. The SpringHill Suites Devens offers 120 suites, an indoor pool, a fitness center, and a business center. The hotel is connected to the Devens Common Conference Center, which provides over 14,000 square feet of flexible meeting and event space across 13 rooms.

Marcus & Millichap announced the sale of an 11-property Courtyard Hotels portfolio in Illinois, Ohio, Alabama, Arkansas, Virginia, Kentucky and Oklahoma. The portfolio sold for $101 million. In Illinois, the properties are Courtyard Chicago Arlington Heights South, Courtyard Chicago Deerfield, and Courtyard Rockford. The two hotels in Ohio are Courtyard Toledo Airport Holland and Courtyard Dayton South. The two in Alabama are Courtyard Birmingham Hoover and Courtyard Huntsville University Drive. Courtyard Manassas Battlefield Park in Virginia, Courtyard by Marriott Lexington North in Kentucky, Courtyard Little Rock West in Arkansas, and Courtyard Oklahoma City Airport complete the portfolio.