Business Travel Sentiment Still Lags

The positive start to the day deteriorated quickly with the DJIA ending the day down 308 points, while Nasdaq was down 135 and the S&P 500 fell 44 points. The 10-year Treasury yield ended the day flat at 3.11%. VCSA was the only major mover, down -9% on the day.

STR’s consumer research in July 2022 produced telling insights into the state of business travel worldwide. Roughly 400 global business travelers were asked to thank about their likelihood to travel for business both now and when the pandemic is over, the results, remained in negative territory. 55% of respondents are less likely to travel overnight for business now compared with pre-pandemic time, while 40% are more likely to travel for overnight business when the pandemic ends. Business travel sentiment in July 2022 dropped after showing an increase in May 2022. Recession fears and recent air travel delays are likely adding to further disincentive to travel. The good news is just under half of business travelers do plan to travel in the next 12 months. 

A recently released Global Travel Association report cites global business travel coming back albeit against significant headwinds. Booking trends tracked by Tripbam showed corporate bookings trending up over the past couple of months, although still well below 2019 levels. Travel for group events has already made significant strides in recovery as evidenced by the rise in U.S. group demand over the last six months. June 2022 group demand was at 95% of the 2019 comparable. Almost two-thirds of consumers plan to travel the same or more for group gatherings. The increase in remote workers could be influencing the need for teams to gather and may become a more significant business travel segment in the future. The types of travel perceived less positively were individual, face-to-face interactions. Travel to meet with customers and visits to company HQs ranked after the group travel types with over half planning to travel at the same or greater levels. The lowest ranked types of business travel were for individual meetings with colleagues and supplier/vendors with around half planning this type of travel. Worker adaption and use of video technology makes conducting these types of meetings an attractive alternative. Business travel will not go extinct and, given that the future of work is changing, the future of travel for work is going to change as well.

Wolfgramm Capital acquired the 78-room Residence Inn by Marriott in Shreveport, LA. Located near Shreveport regional airport, the hotel offers amenities including an outdoor pool and whirlpool, a fitness center, outdoor sports court, guest laundry facilities and a sundries mart.

According to documents on file with the City of San Jose, CA, the DoubleTree by Hilton San Jose is in line for a major upgrade. The 505-room hotel is operated and managed by a unit of Hilton Worldwide and the owner of the hotel property is an affiliate of Park Hotels & Resorts. Public areas of the hotel, including registration, lobby, restaurant, bar, meeting space, fitness center and concierge lounge are slated to be part of the upgrade. The number of guest rooms would increase to 515 via multiple changes in existing spaces such as: three existing meeting rooms and one boardroom would be converted to five guest rooms. The second-floor fitness center would be converted into three guest rooms. The 9^th-floor presidential suites would be converted into 2 suites and a first-floor office would be converted to a guest room.

Pyramid Global Hospitality has taken over the management of the Holiday Inn Express Blowing Rock South in North Carolina. Amenities at the recently renovated, 118-room hotel include an outdoor pool, fitness center, and on-site business center.

The Landmark Resort, in Myrtle Beach, SC, announced the opening of its new $3 million waterpark. The new H2oasis Waterpark is located next to the 500+-room resort. Along with the new waterpark, the resort also has an indoor pool, two lazy rivers, an outdoor pool and six hot tubs.

Zeppelin Development sold The Source Hotel + Market Hall, located in the RiNo neighborhood of Denver, CO, to Stockdale Capital Partners for $70 million. The eight-story hotel offers 100 rooms, the adjacent food hall, an attached parking garage with 300 spaces, and a combined 45,000 square feet of retail space. Under Zeppelin’s ownership, the Source Hotel was run by Union Hospitality. Sage Hospitality Group will operate the hotel moving forward for Stockdale. 

In Charleston, SC, the former Harbour Club/Colony House has been vacant for close to three years. AJ Capital Partners is mulling over the idea of converting the three-story property into a boutique inn. But first, the developer must clear a key zoning hurdle before it decides to move forward with the estimated $35 million project. 

There has been some recent activity regarding a pair of resort-style projects in southern Tuolumne County, CA. The Community Development director is working on processing permits for the Yonder Yosemite Projects, a recently approved hotel project on the Highway 120 corridor in Groveland. Yonder Yosemite will consist of 175 guest suites, a lodge, market, pool, bar, event area, and on-site employee housing. Just down the road, east of Groveland, is a significant project now under construction. Referred to as the Firefall Lodge, the project has approximately 55 overnight accommodations units, as well as an events center, and associated lodges.

Lake Shadroe Resort, a vacation resort, is planned for the northwest part of Cape Coral, FL. White Stone Developments LLC, is looking to build a 48-units multi-use development consisting of a four-story resort and two-story commercial building. Amenities would include retail stores, a café, marina, spa, pool with a Jacuzzi, a beach, a bait and tackle shop, restaurant and a tiki bar. The company submitted permit applications to the city of Cape Coral to begin construction of the site. The resort could open by early 2025.

A half-built hotel in Saline, MI, has changed hands. Bacall Group affiliate, Saline Hospitality, LLC, purchased the property for $2.8 million on August 18. Saline Lodging Group developed the hotel before a lack of financial resources brought construction to a standstill in late 2019. The company filed or bankruptcy in September 2021, navigating an extensive set of legal proceedings before the court approved the liquidation plan on July 22. The unfinished, three-story, 63-room property is a Best Western Premier hotel with a restaurant and banquet space.

JLL’s Hotels & Hospitality Group closed the sale of two Marriott-branded, select-service hotels in New England. The hotels include the 126-key Fairfield Inn Boston Woburn/Burlington in Woburn, MA, and the 102-key Fairfield Inn Portsmouth Seacoast in Portsmouth, NH. Both hotels offer a business center. Fitness center, seasonal outdoor pool, sundry store, and on-site parking. JLL marketed the property on behalf of the seller, a joint venture of funds managed by Contrarian Capital Management and Waramaug Hospitality. The hotels were offered unencumbered by management. 

Paramount Lodging Advisors executed the sale of the La Quinta Inn & Suites located in the northwest submarket of Lubbock, TX. Paramount represented the owner in the transaction. The 109-room hotel was purchased by Diya Lubbock Hotels LLC.

Lodging Econometrics released its bi-annual Global Construction Pipeline Trend Report. In the Q2 2022 report, LE analysts state that the total global construction pipeline stands at 14,117 projects/2,293,131 rooms.

The first half of 2022 saw a total of 803 new hotels/121,029 rooms open around the world with an additional 1,653 hotels/244,956 rooms scheduled to open by year-end. In 2023, 2,658 new hotel openings accounting for 416,640 rooms are expected to open. For 2024, LE is forecasting 2,786 new hotels accounting for 435,870 rooms to open around the world. Below we break down the numbers by project phase, country, market, and brand.

Hotel Pipeline by Project Phase

Hotel Pipeline by Country

Hotel Pipeline by Market

Hotel Pipeline by Company

Hotel Pipeline by Brand