Global Hotel Transactions Reach $42 Billion Q3

The DJIA rose 260 points on Friday while Nasdaq was up 17, the S&P 500 rose 22 points and the 10 year treasury yield was down .04 to 4.31%. Lodging stocks had an interesting day. We had new highs set by IHG, WH, PLYA, MAR and TNL. The Sonder Holdings news below was not exactly earth shattering but perhaps investors blamed their now departed CFO for all their problems as the stock surged 62%. AHT was up 21% and BHR rose 9% on the day.

Airbnb reported 3Q results which were mostly in-line but their mixed 4Q guidance did not sit well with the Street, as the stock fell -9% on the day. The 4Q guide was more concerning about margins than revenue as it looks like they are going to ramp up marketing and product development even more.

DiamondRock Hospitality reported a modest 3Q beat while giving slightly higher than expected 4Q AFFO guidance while slightly lowering 4Q RevPAR guidance. DRH repurchased 0.7 million shares for $5.4 million in 3Q. Pebblebrook Hotel Trust reported a good 3Q after backing out hurricane impacts, boosted even further by business interruption income they received from the insurance company. PEB repurchased $10 million of their common stock in 3Q.

JLL released its Q3 Global Hotel Investment Trends report, and here are a few trends that are driving the global hotel landscape YTD: Global hotel RevPAR surged 13% compared to 2019, fueled by major events and limited supply growth. Cross-border investment reached a 3-year high, with 18% of deals from foreign investors. Total transaction volume climbed 14% year-to-date, hitting $42.1B. Luxury and select-service hotels emerged as the most appealing segments for investors.

A hotel REIT in the middle of a selling streak sold one of its four remaining Bay Area hotels. Summit Hotel Properties Inc. sold the Four Points by Sheraton Hotel & Suites San Francisco Airport to Piramco Inc. for a gross sales price of $17.7 million. Located in South San Francisco, California, the 101-room select-service hotel features an on-site restaurant, fitness center and business center.

According to St. Johns County records, the Courtyard by Marriott at 2075 State Road 16 was sold on October 29 for $9.75 million. Fifth Hospitality, LLC purchased the Florida hotel from Shaner Select Services Hotel IV LLC. Berkadia brokered the sale on behalf of Shaner Hotels.

The Signia by Hilton San Jose Hotel in California has entered into Chapter 11 bankruptcy proceedings for the second time in three years. The move comes as the hotel's owner, Sam Hirbod, seeks to secure new financing and avoid a scheduled auction of the property due to financial disputes with its lender, BrightSpire Capital. The hotel is currently behind on a junior loan of around $15m, which has triggered a notice of default and the potential auction of the property. The unpaid debt stands at $139m, according to BrightSpire's auction documents. Despite the bankruptcy filing, the hotel remains operational.

New details have emerged from Omni Hotels & Resorts regarding plans for a hotel in Downtown Raleigh, North Carolina. The company will build a 27-story, 550-room hotel with restaurants, bars, a rooftop pool, a fitness room, relaxation room and spa, and just over 61,000 square feet of meeting and conference space. The city is willing to commit up to $75 million toward public-serving elements of the hotel, such as infrastructure work. The total development cost is expected to be more than $300 million. The hotel plans to open in 2027.

DoubleDragon Corp. is targeting to conquer the entire United States with its homegrown Filipino hotel chain, according to the Philippine Star. The company told The Star that Hotel101 is envisioned to be in all 50 states in the U.S. over the long term. Hotel101 Global Pte. Ltd., the Singapore-headquartered subsidiary of DoubleDragon, is currently building the first Hotel101 in the U.S. in Los Angeles. Hotel101 Los Angeles is expected to be completed in time for the 2028 Olympics. On top of its expansion, Hotel101 Global is currently in the process of its U.S. listing, which is expected to take place this fourth quarter, and will become the first Filipino company to list in the U.S. via a SPAC.

Paramount Lodging Advisors announced the sale of the 83-key Fairfield Inn & Suites Melbourne/West Palm Bay, Florida.

Paramount Lodging Advisors also announced the sale of the 119-key Hampton Inn Houston/Hobby, Texas.

Sunset World Group announced Hacienda Tres Rios, located in Quintana Roo, Mexico, will reopen on November 22, 2024 following a total renovation. New facilities and amenities include a new spa cabin area, the lobby with lobby bar, a sports bar, multiple restaurants and a kids club. The pools have been renovated along with the bridges that connect the pool area with the lobby and La Herencia. Sunset World Group also announced that on March 19, 2025, the hotel will open its doors with the inauguration of two new buildings that will add 85 rooms and an exclusive area for adults, two additional pools, a rooftop gym, a spa, and additional new restaurants and lounge areas. From this date, the hotel's name will change to Kimpton Tres Rios.

Personnel Moves

Sonder Holdings announced progress on its convertible preferred equity transaction, with $27.5 million of the total $43 million already purchased and the remainder expected soon. Combined with previous balance sheet actions, this will enhance liquidity by approximately $146 million. The company also announced key executive departures: CFO Dominique Bourgault, effective Dec. 2; Chief Accounting Officer Adam Bowen, effective Dec. 31; and Chief Legal Officer Katherine Potter, effective Nov. 22. A search for a new CFO is underway, while Vanessa Barmack will serve as interim General Counsel. Sonder has completed the first phase of its Marriott International integration and is now current on all financial reporting, regaining full Nasdaq compliance.

CoralTree Residence Collection announced John D'Angelo has been hired as area managing director in Colorado. D'Angelo will oversee operations for the CoralTree Residence Collection throughout Vail and Snowmass including two boutique hotels and 459 individually owned condominium units ranging from studios to nine bedrooms. The Residence Collection also manages 18 different homeowner associations in Colorado.

International News

Mercure announced the opening of Mercure Sofia City, the brand's first hotel in Bulgaria. Located in the Manastirski Livadi district, the hotel features 111 modern rooms, multiple food and beverage options, a wine shop, fitness center, sauna, salt room, a comfortable co-working space, five spacious rooms for private meetings, onsite car parking and charging spots for electric vehicles.

Accor has begun construction of the Sofitel Dublin Airport Hotel. Directly connected to Dublin Airport's Terminal 2, the hotel will comprise 412 rooms & suites, a restaurant, tea salon and a sky bar on the 11th floor. It will also feature a fitness center, as well as meeting and event spaces including a ballroom and eight meeting rooms. Arora Group was selected to develop the hotel following a bidding process by Dublin Airport Authority. The full-service luxury hotel is valued at over €100m and is set to open by late 2026.

A popular south coast hotel has gone up for sale for £6.25m. La Barbarie Hotel is a 4-star hotel, above Saints Bay in Guernsey, with 38 bedrooms. Business partners and owners, Andrew Wright and Andy Coleman have owned the property for nearly 40 years. It is being sold by Colliers and local agent Swoffers.

Miiro, a new lifestyle hotel brand, announced that reservations are now live for its Templeton Garden hotel in London, for stays beginning June 1, 2025. Templeton Garden will be the third launch from the brand and will open in Earl's Court, comprising 156 rooms, as well as a café-meets-deli, restaurant, bar and a standout garden. Miiro is a venture from InterGlobe Enterprises.