Canada’s Hotels Add Up the Impact of Taylor Swift

The DJIA was up 340 points on Friday while Nasdaq rose 341, the S&P 500 was up 74 points and the 10-year treasury yield jumped 0.05 to 4.60%. Lodging stocks were higher. SOND was the mover of note, up 10%.

In November 2024, Canada’s hotel industry saw a significant boost, primarily attributed to Taylor Swift’s Eras Tour and a favorable calendar shift, based on data from CoStar. The occupancy rate increased by 1.0% to 62.4%, while the ADR and RevPAR rose by 9.7% and 10.8%, respectively. The tour had a particularly notable impact in downtown Toronto, which averaged room rates of $779 over the six-night period, contributing to national transient and weekend rate growth of 11.5% and 12.1%, respectively. Luxury hotels saw the highest increase, with rates rising by 19.3%. Ontario recorded the highest occupancy level at 67.4%. Toronto held the highest occupancy rate among major markets at 76.4%. On the other hand, the lowest occupancy rates were reported in Prince Edward Island and Calgary, recording 42.8% and 56.6%, respectively. Taylor Swift’s Vancouver shows are also expected to significantly impact the December data, with room rates reaching a record-breaking $1,319, resulting in Downtown Vancouver’s highest-ever RevPAR level.

Acapulco closed 2024 with a hotel occupancy rate of 92.2%, averaging the Golden, Traditional and Diamond zones, during the December holiday season. The Pyrotechnics Gala, an event to welcome the arrival of the New Year, had a significant impact on the port, implying an increase of 57% over the previous year, according to the National Chamber of Commerce, Services and Tourism of Acapulco. The Ministry of Tourism estimated that Acapulco would receive an influx of 221,855 visitors, with a hotel occupancy rate of 70.47% for this season, which will end on January 5. Boosting tourism as of December 31, hotel occupancy in Guerrero was 90.2%, Ixtapa reached a hotel occupancy rate of 92.6%, Zihuatanejo 90.1%, while Taxco reported an occupancy rate of 56.1%, according to data from the state Tourism Department.

STR reported U.S. hotel data for the week ended December 28. US RevPAR was down -6.5%, impacted by the shift with both Christmas and Chanukah in the same week. Group RevPAR was down -29.8%.

Investors in the San Francisco Proper Hotel filed a lawsuit against Kor Group. (In Thursday’s email edition of this report, we incorrectly called this the Santa Monica Proper, but it is in San Francisco). The lawsuit seeks certification as a class action, filed back in May on behalf of 84 Chinese investors who provided $42 million in financing for Kor Group in 2012 to acquire and renovate what was the Renoir Hotel back then. They had warned of the hotel’s risk of foreclosure way before the hotel was served with a notice of default on a $28 million loan from a different lender in November. The investors allege Kor Group CEO Brad Korzen and development partners treated the hotel as an “ATM machine, or play money, to boost the profiles of the individuals.” They included celebrity interior designer Kelly Wearstler who is Korzen’s spouse. There are a whole bunch of allegations in there but we think you get the point. One of the main things is that the hotel was supposed to be managed by Marriott but Korzen formed Proper Hospitality. Some of the investors claimed that as recently as 2023 they had still not been informed that Marriott was not involved. The investors are seeking damages and the removal of the defendants from the EB-5 fund vehicle and hotel-owning LLC as well as a permanent injunction against the defendants from violating securities laws. If there is a foreclosure, the investors could lose all or substantially all of their original investment, which is probably the impetus behind the suit. The defendants have until January 21 to respond to the latest amended complaint from December 10.

The Hotel Group, an affiliate of Hotel Equities, and TE Miller Development, LLC announced the topping-off milestone for the Home2 Suites by Hilton Kalispell, Montana. The 107-room hotel is slated to open in late spring 2025. Amenities include an indoor pool, outdoor fire pit, grilling area, fitness and laundry space, and a market.

Hilton is opening up its second location in Walnut Creek, California, according to city planning documents. The Hilton Garden Inn is set to open this spring, as Hilton’s website is accepting reservations as early as May 13. The hotel will consist of 124 guestrooms across three floors, 113 onsite parking spaces, and an outside pool area.

IHG Hotels & Resorts, in collaboration with owner Oak Creek Hotel Associates, LLC and management company Kinseth Hospitality Companies, announced the opening of a new avid hotel in Oak Creek, Wisconsin. The new-build hotel offers 92 guestrooms, a gym, and a heated indoor pool.

A historic 110-unit hotel in Downtown El Paso, Texas is set for a complete renovation and rebranding. The Gateway Hotel will be transformed into a La Quinta Inn & Suites by Wyndham, according to Patel Capital Groups, the building’s new owner.

Miami International Airport is embarking on a $9 billion modernization project aimed at improving infrastructure and enhancing passenger experience. The modernization effort features the construction of a 2,200-space parking garage and plans for a 550-room airport hotel, with groundbreaking for the hotel expected soon.

On Thursday, the City of Frederick, Maryland commenced demolition at the site earmarked for the much-awaited Downtown Hotel and Conference Center. The $100 million project is a result of a public-private collaboration to enhance local tourism and metamorphose downtown Frederick into a leading location for conferences and events.

McKinney, Texas officials announced plans to build a surfing and beach-themed adventure park and resort. The city is partnering with Cannon Beach to build the attraction, featuring a four-acre surf lagoon, a full-service resort-style hotel, dining, entertainment, and business spaces. The $200 million multi-use development is expected to begin construction in 2025.

Vacatia, Inc. announced its acquisition of The Berkley Group, Inc., along with Daily Management, Inc. This strategic acquisition unites Vacatia’s expertise in technology, product innovation, and rental solutions with Berkley and Daily Management’s deep experience in resort sales, development, and management. Both Berkley and Daily Management will continue their existing operations and locations. Together, their combined workforce will serve more than 460,000 owners and oversee management of over 11,000 units across 13 states, including Berkley’s Vacation Village Resorts properties. The transaction was financed in partnership with certain affiliates of Fairfax Financial Holdings Limited.

Todd and Linda Joseph, owners of Conneaut Lake Park, in Conneaut Lake, Pennsylvania, held a New Year’s Eve party offering the public a taste of an ongoing renovation project. The 120-year-old waterfront hotel was part of the deal when Todd and Linda Joseph bought the park property out of bankruptcy for $1.2 million in March of 2021.

Paramount Lodging Advisors has announced the sale of the 121-key Sonesta Simply Suites Detroit Southfield, Michigan.

Marcus & Millichap Capital Corporation arranged $5.6 million in financing for the acquisition of the 94-key Dulles Suites Extended Stay, a boutique hotel located in Sterling, Virginia. MMCC’s Washington, DC office secured the loan with a regional bank, who not only provided a new senior loan, but allowed the borrower to assume an existing SBA 504 loan with a rate below 3%. Terms of the 10-year conventional loan include a 6.5% interest rate with 25-years amortization.

Grupo Mirgor and Melia Hotels International announced their alliance to develop a five-star hotel project in the city of Ushuaia, in Argentina, which will operate under the Gran Melia luxury brand. With the signing of this new agreement, Melia Hotels International will contribute its management experience and the Gran Melia brand to the project being developed by Grupo Mirgor, which will subsequently be managed by the hotel company. With an estimated investment of more than $50 million, the hotel is expected to begin operations in 2028. Among its features, the hotel will offer 200 rooms, two restaurants plus a bar and lobby bar, an auditorium, indoor and outdoor pools, a spa, gym, a gazebo, and winter garden.

Sandals Dunn’s River in Ocho Rios was reclaimed by Sandals in 2020 and they reopened it last year after a total transformation. The $230 million redo isn’t finished yet, as the adjacent oceanfront land will become Sandals Royal Dunn’s River. The resort features 260 rooms, more than a dozen eateries, multiple pools, the Red Lane Spa, and a fitness center.

Europe Highlights

In England, Cheshire’s Carden Park Hotel has been given the go-ahead to build 67 luxury holiday lodges at its 1,000-acre estate grounds. The Broxton Road Hotel will operate the lodges on an owner-occupied basis rather than renting them out to holidaymakers.

Hotel transaction volume in the United Kingdom this past year more than doubled the 2023 figure, according to Savills, which said acquisition sales reached £5.75 billion in 2024, the highest level of activity since 2018. Regional hotel deal volume totaled £3.34 billion in 2024, representing 58% of total volumes, marking a 217% year-on-year increase and 24% above the 10-year annual average. Savills said the resurgence in activity was largely driven by portfolio transactions, such as Blackstone’s acquisition of Village Hotel and KKR & Co. and Baupost Group’s purchase of 33 Marriott International hotels, which accounted for 55% of total investment volumes. In year-on-year terms, portfolio volumes grew by 582%, reflecting subdued levels of activity seen in 2023. Even compared to the 10-year annual average, portfolio volumes in 2024 were 61% higher, highlighting the hotel market’s continued recovery. In mainland Europe, in 2024, the notable transactions mostly involved single-asset hotels. London also saw significant growth, with transaction volumes rising by 105% year-on-year to £2.40 billion in 2024.