Canadian Hotels Rebound in a Big Way

The DJIA was up 221 points, but Nasdaq fell 44, the S&P 500 was up 7 points, and the 10-year treasury yield was down .02 to just below 4.79%. Lodging stocks were modestly higher. AHT was up more than 5% today.

The Baird Hotel Stock Index fell by -2.9% in December from November, the fourth month-over-month decrease of 2024 but the first since July. For all of 2024, the global hotel brand stocks rose by nearly 29%, but hotel REITs were down by -9%. In December, the hotel brand sub-index was down by -2.5%, while the hotel REIT sub-index fell by -5%.

The Canadian hotel industry, steadily making its way back from the disastrous pandemic years in which revenues plummeted by an estimated 80% in 2020, was one obvious beneficiary of "the Swift effect," with Taylor Swift's record-shattering Eras Tour reverberating beyond the music world. According to the National Post, in Toronto, the pop star's six November shows sold out within minutes, caused a spike in hotel bookings months in advance, and drove an 83% surge in hotel revenue. Swift's Vancouver concerts in early December brought similar results. The influx of so-called Swifties added fuel to an ongoing debate about whether major Canadian cities have enough hotels to meet such peaks in demand, especially as demand in general is increasing. According to Colliers International Group, Inc., cultural megastars like Swift are catalysts, but the rebound is part of a broader trend of pent-up demand for experiences. Companies are reinvesting in in-person events, conferences, and retreats, creating a ripple effect across hotels, restaurants, and local attractions. In cities such as Vancouver, the challenge of meeting rising demand has become a hot topic. There is a lot of talk in Vancouver because it is such a destination cruise ship port. Cruise terminals like Canada Place in Vancouver are centrally located, but the spike in demand often leaves visitors struggling to find available rooms nearby. The limited availability of land in downtown Vancouver has made competition for prime real estate intense. Various governments are aiming to prevent short-term rentals from functioning as unregulated hotels, reducing alternative lodging options and potentially redirecting travelers to traditional accommodations, particularly during peak seasons and major events. Vancouver's new rules, introduced in January 2024, require permits for short-term rentals and enforce primary residence restrictions, building on earlier measures that include licensing fees. The city estimates it has 250 to 400 active rentals, many of which now face stricter enforcement through fines and partnerships with Airbnb Inc. to identify illegal listings Tighter regulations on short-term rental platforms such as those offered by Airbnb Inc. are also working in the hotel industry's favor, along with a weaker Canadian dollar. Industry optimism is evident in all the planned construction, with more than $1 billion in new investments projected for 2025. Several foreign hotel brands are entering the Canadian sector, while domestic chains are expanding. For example, Marriott International Inc. has dozens of new hotels in its Canadian pipeline, while Hyatt Hotels Corp is set to more than double its footprint with 23 new locations by the end of 2026. In all, approximately 6,000 new hotel rooms are expected to be built across the country in 2025, 60% of them in Ontario. Many projects are concentrated in suburban markets outside Toronto's downtown core, where demand has remained consistently strong.

Ashford Hospitality Trust, Inc. has completed the sale of the 315-room Courtyard Boston Downtown located in Boston, Massachusetts, for $123.0 million.

Island Hospitality Management announced its selection as the management company for the under-construction TownePlace Suites by Marriott located in downtown San Jose, California. The 176-suite new-build hotel will feature a rooftop lounge, an expansive gym, and onsite laundry.

The Hilton New Orleans Airport hotel has recently finished a transformation that included updates to over 22,000 square feet of event space, LaSalle Restaurant and lounge, the grand entrance, fitness center, outdoor pool, and courtyard. Additional amenities at the 319-room property include an outdoor courtyard and a grab-and-go shop. Event spaces include executive boardrooms, a 48-seat amphitheater, multiple meeting rooms, and a large ballroom.

InterContinental Hotels & Resorts will open a site in Indianapolis early this year, marking the first new luxury hotel to open in the state in almost two decades. InterContinental Indianapolis will come to fruition after a $110m restoration of an existing building. The 11-story hotel will feature 170 bedrooms plus two new dining concepts, including the first rooftop bar of its kind for the city, a fitness center, 5,000 square feet of meeting and event space, and the city's only Penthouse Suite on a private floor.

IHG Hotels & Resorts recently opened a newly-built Atwell Suites in Fort Worth, Texas. The hotel features more than 900 square feet of meeting space and a fitness studio. Atwell Suites Fort Worth - Alliance Area operates under the ownership of Alliance Lodging LLC.

Islander Resort in Islamorada, Florida, unveiled its full property transformation, including a complete interior and exterior renovation of its 114 bungalows and suites and 25 two-bedroom townhome villas; updated resort grounds; amenities and programming; five onsite dining outlets; and 129,000 square feet of versatile indoor and outdoor beachfront event spaces.

The Kassouf family purchased Erieview Tower in 2018 and has worked since then to secure the various capital sources needed for the significant investment required to reposition the asset. Brown Gibbons Lang & Company has closed financing for the $218 million redevelopment of the 38-story Erieview Tower and Galleria redevelopment in downtown Cleveland. Developer Kassouf Development said the Erieview Tower conversion will have 210 guestrooms as the first W Hotels offering in the state of Ohio. The development will also include 227 residential apartment units, a rooftop bar, restaurant, spa, fitness center, lobby lounge, office spaces, and a 15,000-square-foot ballroom. Construction will be phased by component, with residential construction commencing immediately, hotel construction beginning later in 2025, and the project expected to be completed in late 2026.

A four-story WoodSpring Suites is under development in the Town of Lancaster, New York. Indus Hospitality Group filed plans with the town for a 122-room, all-suites hotel. It will be the first WoodSpring Suites in the Buffalo region.

A proposed boutique hotel received approval from the town board of Cohasset, Massachusetts. The eight-room Eastwick Inn can move forward after the town's zoning board unanimously approved a site plan request from a private equity firm linked to Thomas D. Sullivan, the founder of Lumber Liquidators. One of the hotel rooms will be in a new building structure that will replace the existing boat storage building, and the remaining seven hotel rooms will be in the Main Inn and Eastwick Inn buildings. The hotel is pitched to be a self-sufficient lodging experience with self-parking, remote check-in, and a common kitchen. The site will be staffed with one front desk employee.

The state of Colorado is moving forward with its plans to purchase Estes Park landmark The Stanley Hotel and fund a substantial makeover of the property. The Colorado Educational and Cultural Facilities Authority (CECFA) approved issuing up to $475 million in bonds for the eventual purchase of the hotel. Since then, RBC Capital Markets has been working to finalize the financing structure, and CECFA will begin marketing the bonds this year. The CECFA project will also help fund a $61 million addition to the hotel with 65 new guestrooms, along with a new covered entryway and lobby, and a new $66 million events center, which will be built near the existing Concert Hall and Carriage House.

Cronheim Hotel Capital has secured $18.2M for the acquisition of the Aloft Hotel on the levee in Newport, Kentucky. The financing originated with a regional bank and provided attractive terms and flexibility for the sponsor, Rolling Hills Hospitality.

Avison Young arranged the sale of three hotels near the Mayo Clinic in Rochester, Minnesota, for affiliates of TPI Hospitality. The properties consist of a 225-room Homewood Suites by Hilton and Courtyard by Marriott dual-branded hotel facility, which traded for $29.5 million to Terratron, and an 86-room SpringHill Suites by Marriott, which traded for $7.8 million to Second Street Hotel Group LLC and Empire Hotels.

Personnel Moves

CoralTree Hospitality recently announced the reorganization and expansion of the company's global sales team to refocus its direct sales effort and lead generation as well as identify new team members with extensive experience in the luxury space. As part of the reorganization, Leslie Kaminski was promoted from Executive Global Director of Luxury and Leisure Sales to Vice President of Global Sales, where she will lead the team in its next chapter. Michael Shannon, Global Sales Director for the Northeast market, is joining Kaminski's team. Robin Kellett joins the team as Global Sales Director for the West Coast.

Stonebridge Companies, LLC announced the appointment of Lee Palaschak as Executive Vice President of Operations. In his new role, Palaschak will oversee all aspects of Stonebridge's operations and work closely with senior leadership to continue driving operational excellence. Prior to joining Stonebridge, Palaschakserved as Senior Vice President at Remington Hospitality.

Hospitable has announced the appointment of Nouran Smogluk as its new Director of Support. In her new role, Smogluk will focus on coaching and mentoring to develop the wider Hospitable support team as well as refining current processes to improve support consistency, response times, and resolution rates for customers.