Puerto Rico Tops U.S. Hotel Demand Growth Rankings

Key Points

• Hotel REITs are outperforming the broader REIT sector, leading upward FFO/share revisions (led by Pebblebrook, Xenia, and Sunstone), with six hotel REITs—PEB, RLJ, HST, XHR, DRH, and APLE—ranking in the top 10 for 12-month returns.
• Puerto Rico is one of the fastest-growing U.S. destinations, with 7.6% year-to-date hotel demand growth (highest of any state, versus a 2% U.S. average) and a record $163 million in May lodging revenue.
• Deal flow remains active across acquisitions (Atlanta Airport Marriott, Hyatt Regency Savannah, Goodtime Hotel foreclosure by CIM Group) and developments (Doral Tribute hotel, Winnipeg's delayed Sutton Place, ANI Shoal Bay), while PPHE ended its strategic review with no takeover offers.

Summary

This edition of the Daily Lodging Report blends market data, transactions, and personnel moves across the global hotel sector. Equity markets were mixed, with lodging stocks modestly higher and BHR up 6%; Baird highlighted that hotel REITs are seeing the strongest upward FFO/share revisions of any REIT category, with Pebblebrook, Xenia, and Sunstone leading and six hotel REITs ranking in the top 10 for trailing 12-month returns. Puerto Rico emerged as a standout destination, posting record tourism and 7.6% year-to-date hotel demand growth—the highest of any U.S. state—and $163 million in May lodging revenue. Transaction activity was brisk, including the acquisition of the 641-room Atlanta Airport Marriott by Machine Investment Group and Lionshead, the Hyatt Regency Savannah by Certares and Clearview, and CIM Group's foreclosure win on Miami's Goodtime Hotel. New developments span a Tribute-branded hotel in Doral, Winnipeg's long-delayed Sutton Place Hotel, and luxury openings from ANI Private Resorts in Anguilla. In Europe, RAD Hotel Group added its first five-star property, The Dean opened its largest hotel in Munich, and PPHE Hotel Group ended its strategic review with no active takeover discussions.