Baird Expresses Concerns About a Softening in Demand

The DJIA rose 598 points, the Nasdaq surged 2.27%, or 405 points, the S&P 500 was up 100 points, and the 10-year treasury yield was up .08 to 4.33%. Lodging stocks were mostly all higher today in a nice rebound. SOHO traded down to a new all-time low.

Redburn Atlantic upgraded its rating on Wyndham Hotels to Buy from Neutral with a $115 price target. It also upped its rating on Choice Hotels, becoming less bearish with a new Neutral rating, up from its prior Sell rating. Redburn’s price target on CHH is $132.

Keybanc cut their Xenia Hotels & Resorts price target to $16 from $17. They maintained their Overweight rating.

Baird gave their takeaways from the Hunter Hotel Investment Conference. They came away with the view that the tone included signs of caution, murky views, and uncertainty. They heard recession said the most, and they believe the fundamental backdrop is changing quickly and weighing on confidence and outlooks. Demand trends definitely softened in March, and Baird expects the near-term outlook to weaken further, as discussed with industry contacts. Negative impacts from government spending cuts were what Baird heard most often as the driver of the softer fundamental backdrop. One industry contact told them the government-related demand had disappeared. Baird had estimated last week that US RevPAR was tracking 50-100 basis points below their prior expectations. They gave an updated view that RevPAR growth is now tracking 200+ bps below initial expectations. On the M&A side, the overall cost of capital is still viewed as elevated, and many industry participants remain patient and underwrite better risk-adjusted returns for credit. That being said, Baird remarked that debt capital is aplenty, meaning with spreads compressing, owners have an alternative to a sale. Banks are seen as more aggressive, CMBS is white hot, and Baird said debt funds remain active.

Leisure Investment Properties Group announced the release of its 2025 RV & MHP Investment Report and 2025 Hospitality Investment Report, offering critical insights into two of the fastest-growing real estate sectors. The RV & MHP sector continues to thrive, with 2024 sales totaling $346.7 million across 106 deals, marking a 12% year-over-year increase. Mid-market properties ($1M - $10M) remain the most active, driven by private investors and syndication groups seeking stabilized, cash-flowing assets. Key trends from the 2025 RV & MHP Investment Report include Operational Efficiencies, AI-powered Underwriting, and Creative Financing. The hospitality sector, particularly boutique hotels, is outperforming traditional hotels in RevPAR and ADR. Investors are increasingly drawn to boutique properties for their higher profit margins and appeal to experience-driven travelers. Key insights from the 2025 Hospitality Investment Report include Higher Returns, Market Expansion, and Resilient Asset Class.

Delta Hotels by Marriott Riviera Nayarit, An All-Inclusive Resort, unveiled the addition of a new tower to its resort inventory. The new tower, called Zafiro, features an additional 100 rooms and suites, adding to the existing 212 rooms. The new building offers five additional dining venues and a new Delta Kids Club. Delta Riviera Nayarit now boasts additional facilities such as a rooftop for pop-up adult-focused events, an infinity adults-only pool, and inviting lounge areas. Highlighting these offerings is the new Zafiro ballroom, featuring 1,205.56 square feet of space.

Vision Hospitality Group expects to grow exponentially in 2025 and is on track to announce the ground-breaking on a dual-branded Hilton family product in the coming weeks, as well as another dual-branded Hilton family hotel, a stand-alone Marriott-branded hotel, and stand-alone Hilton-branded hotel in the second half of the year. Vision Hospitality Group also plans to announce five grand openings totaling 713 rooms across Tennessee, Georgia, and North Carolina throughout the summer and fall and look to complete nearly $8 million in renovations across four of its Hampton Inns and one of its Fairfield Inn & Suites properties. Additionally, the company announced it has begun selectively seeking strategic partnerships with other hotel ownership groups.

IHG Hotels & Resorts, in collaboration with owner SNP Management, LLC, announced the opening of an avid hotel in Harrisburg NE - Hershey Area in Harrisburg, PA. The new-build property features 80 rooms, a gym, and a heated indoor pool.

Jeff Greene, the owner of the Tideline Palm Beach Ocean Resort and Spa, may sell the Palm Beach, Florida oceanfront hotel. According to The Palm Beach Post, Greene is exploring a sale of the 134-room hotel and will only consider offers in excess of $150 million for the property which include a private beach, a spa, private-event facilities, restaurant and sushi bar.

A new luxury boutique hotel has opened on Coronado Island in California. The new Bower Coronado features just 39 guestrooms and boasts Coronado’s first and only rooftop bar and restaurant.

The City of Albany is looking to find a development partner to transform the former Water Gas & Light and Rosenberg Brothers Department Store/Albany Herald buildings into a central hospitality destination near the riverfront. The commission will vote on the recommendation to engage Woodmont Lodging at its meeting next week. The vision for the building on Pine Avenue is for 30 rooms as well as a restaurant, event space, and conference/meeting space. At the North Washington Street location, the plans call for an additional 30 rooms as well as retail space on the first floor.

Mumford Company represented Friestad Properties, LLC in the sale of the AmericInn of McAlester, Oklahoma. Paratpar LLC plans to renovate and reposition the 3-story, 67-room property.

Spanning 17 acres just minutes from Marbella Beach, Velara at Playa Azul is the only high-rise residential development permitted along this protected coastline. As the flagship destination of Velara’s expanding global portfolio, key development features of this Costa Rican enclave include the 52-key Wellbeing Resort; a limited collection of 44 ocean-view condominiums and 32 private villas; 25,000 square foot Raiz Wellbeing Center & Spa; Private Marea Beach Club and two signature restaurants. Phase 1, including the resort expansion and residences, is scheduled for completion in Q2 2025, with full project delivery by early 2027.

Personnel News

Stonebridge announced the appointment of David Wahba as Vice President of Sales - Luxury, Lifestyle, and Resort. Prior to this role, he held senior leadership positions in luxury, lifestyle and resort properties across the industry.

Europe Highlights

Zedwell Hotels has secured approval to redevelop a property in Edinburgh, marking its first expansion outside London and a significant step into the Scottish market. Criterion Capital has acquired the former Debenhams site for its fifth Zedwell property. The space will be transformed into a hotel with 652 beds across three distinct room types. With plans to open eight more hotels by 2026, Criterion Capital aims to bring the total number of properties in its portfolio to 12.

PGIM Real Estate purchased the Adina Apartment Hotel Hamburg Speicherstadt located in Hamburg, Germany. The property features a bar, restaurant and fitness facilities including a sauna, pool and gym. The 202-key property was purchased for around €67.5 million. Adina’s lease runs until 2045, following a 10-year extension during the pandemic. PGIM’s hotel portfolio now comprises 25 assets across the UK, China, Austria, Germany, Paris and New York.

George Procopiou has secured full ownership of the Astir Palace Vouliagmenihotel in southern Athens. Located on the Lemos Peninsula, the acquired assets comprise two Four Seasons hotels, including the Four Seasons Astir Palace in Vouliagmeni, with the combined number of rooms totaling 303. Thirteen ultra-luxury villas are also being developed on the site. In October 2024, Procopiou acquired 33% of the resort from Turkish Dogus Group for €150 million and has now acquired the remainder stake from Jermyn Street Real Estate Fund.

The Dolphin Hotel in Cleethorpes, UK, a historic landmark built nearly 250 years ago, is set to undergo an extensive makeover that promises to restore its former glory. This restoration effort is being significantly supported by the National Lottery Heritage Fund. The refurbishment will involve critical renovations, including roof repairs, the demolition of non-original and harmful extensions that have marred the building’s façade, and the restoration of original windows and doors. Additional improvements such as stone detailing, leadwork, and a complete exterior redecoration in authentic Victorian colors will help return the hotel to its 19th-century roots.