U.S. Hotel Room Construction Sees Another Increase

The DJIA fell 141 points but Nasdaq was up 139, the S&P 500 rose 12 points, and the 10-year treasury yield was down .04 to 4.2%. Lodging stocks were higher, with Wyndham's earnings report generating the most buzz.

The response Wyndham got from Wall Street on their earnings report is what every public company should strive for. They reported in-line results with a -1% decline in U.S. RevPAR offset by a 7% rise internationally. What got Wall Street all jazzed up is that despite all the talk about softness in leisure travel, WH said they really are not seeing that. There has been a lot of commentary that companies like WH and CHH are benefiting from the hurricanes due to people being removed from their homes as well as insurance, construction, and rescue workers, and that appears to be correct as WH gave 4Q guidance ahead of consensus. They bought back $97 million worth of stock in 3Q, and their pipeline was up 1.2% or 3,000 rooms. WH jumped 11% today to a new high and, in an ironic twist, brought CHH up to a new high as well, with CHH rising 7% on the day.

Sonder Holdings will trade on Nasdaq for longer as they received notice from the exchange that the Hearings Panel granted their request to stay the suspension of trading and delisting pending a hearing on their merits, which will take place November 14th. SOND has been late with their SEC filings, and this gives them time to regain compliance. SOND shares were down -7% today.

The latest STR global update revealed that 77% of international markets have seen year-on-year growth in hotel RevPAR, marking a significant 14-point increase from the previous month. The top five countries for RevPAR were Greece, Singapore, Italy, France, and Switzerland. Despite positive growth in Singapore, most Asia Pacific markets reported lower RevPAR due to reduced ADR. On a global scale, Egypt emerged as the leader in annualized RevPAR growth (+42%), followed by Turkey (+36%). Of 45 reported nations, 15 recorded double-digit RevPAR growth in the last four weeks. The Red Sea Resorts, Turkish Riviera, Istanbul, Mexico City, and Tokyo saw top market-level RevPAR growth. Conversely, China and New Zealand markets are grappling with long-term economic challenges.

According to data from CoStar, the volume of hotel rooms under construction in the U.S. has increased for the seventh straight month. The growth rate has reportedly accelerated over these months, with 157,253 rooms currently under construction, marking a 7.0% increase from the previous year. Of all the rooms in the final phase of construction, about half are in upscale and upper midscale segments. The luxury and midscale categories show the most significant growth in construction volumes, with increases of 48.5% and 34.5%, respectively, suggesting a strong and consistent expansion in the U.S. hotel industry, particularly emphasizing higher-end accommodations.

Homewood Suites by Hilton North Las Vegas Speedway is slated to open the last week of October in North Las Vegas, Nevada. The hotel is managed by National Hospitality Management and features 123 guest suites, a fitness center, heated pool and hot tub, and The Backyard with outdoor kitchens and fire pits.

The Hyatt Regency Greenwich in Connecticut announced its reopening following a nearly $40 million renovation. The transformation included updates to the pool and fitness center, a renovated atrium, the introduction of Glenna's Cafe and Market and Townsend Bar, and improvements to all 374 guestrooms and suites.

The owner of the 910-room Hyatt Regency St. Louis is seeking to rework loans as it faces imminent default on a $93 million debt stack set to mature in the first week of November. The $93.4 million in debt, secured by Arch Hotel Project Owner LLC, was transferred earlier this month to a process for troubled loans, known as special servicing. Ownership of the hotel is tied to Clearview Capital, according to the company's website. Arch Hotel Project Owner LLC acquired the hotel property for $133.5 million in 2014, according to the city.

Atwell Suites announced the expansion of its U.S. presence with the upcoming openings of three hotels. These properties include the 104-room Atwell Suites - Kansas City Airport, owned by Hotel KCI LLC, which is now open in Kansas City, Missouri. Set to open in November is the 90-room Atwell Suites - Henderson at the Pass, operating under the ownership of DeSimone Companies and located in Henderson, Nevada. Also set to open in November is the 94-room Atwell Suites Fort Worth - Alliance Area, located in Fort Worth, Texas, owned by Sequoia Hospitality. The latest openings are part of a growing pipeline that will see Atwell Suites open more than 50 properties across the U.S. in the coming years in destinations such as Las Vegas, Nevada, Colorado Springs, Colorado, and Cheyenne, Wyoming.

IHG Hotels & Resorts, in collaboration with owner Freedom Tech Center HEXS LLC, announced the opening of the newly built Holiday Inn Express & Suites Fort Walton Beach - Englin Area. Conveniently located on Northwest Florida's Emerald Coast, the hotel features 115 guestrooms, 364 square feet of meeting space, and a fitness center.

Choice Hotels International, Inc. announced the opening of its 500th extended-stay property, an Everhome Suites in Glendale, Arizona. Everhome Suites Glendale Sports Entertainment District was developed in collaboration with Highside Companies and is managed by Superhost Hospitality. The property offers 122 rooms, guest laundry facilities, a fitness center, communal outdoor areas featuring BBQ grills, firepits, and green spaces, and the Homebase Market. As of the end of Q2 2024, Choice had over 350 hotels in the pipeline across four extended-stay brands: Everhome Suites, WoodSpring Suites, Suburban Studios, and MainStay Suites. Its 500th property, the newly opened Everhome Suites in Glendale, Arizona, marks the brand's entry into one of the southwest's high-growth regions. With the addition of Glendale, Choice has six Everhome Suites open across the country and over 65 in the pipeline, including over 20 under construction, with more than 15 expected to open within the next 12 months.

Developers are planning to build a 100-guestroom Cambria Suites Hotel in Ashwaubenon, Wisconsin. Acts 1:8 Ministry is partnering with Lighthouse Hospitality Group to develop and manage the hotel.

Hershey Entertainment & Resorts announced a new select-service hotel in Derry Township called the Hershey Inn & Suites. The new four-story property will feature 130 rooms and seven suites, and an indoor pool. Currently under construction, the new hotel is expected to open in Spring 2026. Once open, the Hershey Inn & Suites will become part of The Official Resorts of Hersheypark.

Toro Development Company has been granted approval to build a 175-room boutique hotel in suburban Atlanta, Georgia. TDC is identifying potential development and brand partners for the hotel. According to hotelprojectleads.com, guests will have access to 5,000 square feet of meeting space, outdoor gathering space, and resort-quality amenities. An onsite restaurant will engage both the lobby and a plaza. The hotel's mixed-use project will include 180,000 square feet of retail, restaurant, and entertainment space. The first phase also includes 110,000 square feet of office space, 340 apartments, 133 townhomes, and a plaza. Future phases would bring the total count of residential units to approximately 900, with additional commercial space planned as well. TDC is expected to break ground later this year, followed by an opening in the third quarter of 2026.

A luxury hotel in Sauble Beach, Ontario has opened. The four-story, 21-room Sand Hotel was originally referred to as the Lakeshore Inn. The hotel's restaurant is scheduled to open in late November. Maison Canada Design & Build is the developer of the $12.8 million hotel project.

Arthroto announced a partnership with Riva Signature Hotels and Resorts. The collaboration is set to revolutionize the North American hospitality scene by developing eco-friendly boutique hotels and resorts in the United States and Canada. In addition to developing hotels, the partnership also intends to develop boutique condominiums and residences, broadening the scope of its sustainable vision. The projects already in the pipeline in major cities such as Chicago, San Francisco, New York City, and Calgary are strategically chosen for their historical value and potential to attract modern travelers looking for unique and immersive experiences. The collaboration promises to deliver a new breed of sustainable, luxurious hotels that cater to the evolving preferences of today's travelers, setting a benchmark for future developments in the industry.

Hunter Hotel Advisors announced the closing of $34.55 million in financing for five hotel properties. The financing consists of a series of SBA 7(a), 504, and 504 Green loans for the following properties: Extended Stay America Las Vegas Midtown, Extended Stay America Greensboro North, Country Inn & Suites Alpharetta, HomeBridge Extended Stay, and Baymont Inn Jessup. The transactions involved loans ranging from $4.5 million to $12.75 million, financing between 77% and 93% of the total purchase price and renovation costs.

Vantage Capital is exiting its investment in Egyptian company Pickalbatros Hotels & Resorts, HNN reported. Vantage provided $18.4 million in debt to the resort firm in late 2020 to maintain operations through the depths of the pandemic. Pickalbatros assessed the funding it needed in a difficult period, and it was then able to repay Vantage Capital in an orderly manner once the hospitality sector recovered.

Personnel Moves

JLL's Hotels & Hospitality Group announced that Matt Riley has re-joined JLL as Senior Director, specializing in hotel investment sales and advisory. Prior to joining JLL, Riley partnered with a successful family-owned business in the Los Angeles area to help lead sales operations while continuing to consult on hotel real estate transactions. Before this role, Riley was a vice president at JLL's Hotels & Hospitality Group and spent over six years with the firm.

Europe Highlights

The Dean Group, a joint venture between Lifestyle Hospitality Capital and funds advised by Elliott Investment Management, has acquired Roomer's Munich hotel in Germany. To be managed by The Dean Group, the 280-room lifestyle hotel has multiple dining options, event spaces that can accommodate up to 300 guests, a gym, and a spa with a sauna, steam bath, and an infinity Jacuzzi.

A new luxury hotel near London's Bond Street station is going up for sale after attempts to refinance the project so far have been unsuccessful. Jones Lang LaSalle Inc. has been appointed to market the five-star Bo Tree hotel on Marylebone Lane. The 199-room property was developed by Shiva Hotels Group and cost £375 million to build. Shiva has since re-branded to Place III Hotels. Place III has been attempting to refinance the hotel since it opened in September 2023. It has about £275 million of debt secured against it, with a senior loan from Cale Street Partners and a junior facility from Crosstree Real Estate Partners. There is no formal guide price for the sale, but those involved in the consensual process are targeting a price above the outstanding value of the debt.