Wells Fargo Expects Hotels Exposed to Group and Leisure to Thrive in 2024

The DJIA ended Friday up 26 points, Nasdaq was up 14, the S&P 500 was up 9 points and the 10 year treasury yield was up .05 to 4.04%. Lodging stocks were mixed. The biggest movers were to the downside with VCSA down -6% and SOND down -5% on the day.

Wells Fargo said they expect macro uncertainty to ease in 2024 and interest rates to stabilize, something they expect should held new construction/unit growth and asset sales in the hotel sector. They are expecting US RevPAR to grow 3%-4% and prefer operators with exposure to group, high-end leisure and Asia Pacific. They are cautious on those with greater exposure to midscale/economy and mid/low-end leisure. WF said Hilton and Marriott’s premium valuations reflect the high quality business models and scarcity of compelling alternatives. They think Hyatt is the most interesting of the stocks.

Oppenheimer upped their target price on Host Hotels to $23 from $22. They maintained their Outperform rating.

The Epicurean Hotel, an Autograph Collection hotel, in Tampa, Florida, has completed a $21 million expansion. The 137-room hotel has added 51 new guest rooms and suites, a private lobby, meeting space and rooftop terrace. The new four-story structure also adds two floors of parking with an additional 91 spaces. The project also incorporates two fully restored apartment buildings which are scheduled to open later this spring. Guests at Epicurean Hotel will have access to amenities in both buildings including a culinary classroom, multiple restaurants and a cocktail lounge, a wine shop, Evangeline spa, scoop shop, and 5,200 square feet of flexible event space.

Rosewood Hotel Georgia, in downtown Vancouver, announced the property closed on January 1, 2024 to undergo an extensive renovation and will re-open early April 2024. The refurbishment will encompass signature spaces throughout the hotel including the lobby and 1927 Lobby Lounge, its 156 guestrooms, and the beloved Reflections Terrace. During the renovation period, HawksworthRestaurant and Bel Café will remain open.

Witkoff has taken over ownership of the troubled Banyan Cay Resort & Golf Club project in West Palm Beach, Florida, and landed a $75 million loan from the seller, Calmwater Capital.

S8 Hospitality purchased the Super 8 by Wyndham Smithfield/Selma hotel, in Smithfield, North Carolina, for $5.85 million from Amba Mata LLC.

A new Holiday Inn Express Hotel is being planned for Downtown Maryville, Tennessee. The $16 million, 98-guestroom hotel will be four floors with a two-floor parking garage underneath. Construction is set to begin in the 2nd quarter of 2024.

Best Western Hotels & Resorts announced the opening of the Best Western Ottumwa Inn & Suites in Ottumwa, Iowa. The recently renovated hotel is owned by Anil Chaudhari. The Best Western Ottumwa Inn & Suites offers 41 guestrooms and 20 suites, indoor pool, fitness center, business center, and laundry facilities.

On December 15, 2023, Trestle Studio, Sopris Capital and The Town Lake Company closed on the acquisition of the 308-room El Tropicano Hotel in downtown San Antonio, Texas.

According to YIMBY, 740 Eighth Avenue in Midtown, Manhattan is being developed by Extell. The 52-story structure will feature an 825-room hotel on the lower half and a public observatory with a drop ride attraction above. The property will also feature lower-level retail space, a restaurant on two of the upper floors, and a pool deck for hotel guests.

Sometime this month, construction crews are expected to begin staging equipment on property in Sand City, California, to prepare for a February groundbreaking. EKN Development is building a four-story, 215-room hotel in partnership with Gam Development. Construction is expected to be complete by early 2026. The hotel will be a Marriott-branded Courtyard and Residences in, and its restaurant and bar will be centered around a courtyard with a pool area.

The authority that runs Detroit’s Huntington Place convention center unveiled plans to build a tunnel and Sky Bridge to connect the facility to a future hotel, along with a multi-level parking facility and pedestrian pathways. The $65-70 million project by the Detroit Regional Convention Facility Authority. The conceptual site plan also includes building a parking structure that would include 1,000 spaces. The proposed tunnel would connect the lowest ground floor of Huntington Place to a planned 600-room hotel near the convention center. Construction is expected to begin later this year on the 25-story Hotel at Water Square. The hotel’s developer is Atwater and Second Associates LLC.

The Old Sea Pines Inn, in Brewster, Massachusetts, has been sold to Ocean Edge Resort and Golf Club for $2.6 million. The inn has a main inn, a cottage, a function room and a wedding garden. Located on 3.6 private acres in the heart of Cape Code, the inn offers 24 rooms with fireplaces, suites with fireplaces and family suites.

Driftwood Capital secured a $60 million refinancing loan for Hilton Cocoa Beach Oceanfront Hotel in Florida. The loan, secured through a national bank, will support an extensive renovation of the 295-key hotel. Berkadia arranged a three-year, floating-rate loan with two extension options and full-term interest only payments.

The Bahamas continues its rise in tourism as air and sea arrivals reach unprecedented heights, marking sustained growth that has surpassed previous years’ benchmarks. As of the end of November 2023, the cumulative count of foreign air and sea arrivals soured to a staggering 8,645,374, showcasing an astounding 41.8% surge compared to the corresponding period in 2022. Highlighting the hotel industry’s flourishing performance, major New Providence/Paradise Island hotels witnessed a notable surge in November 2023. These hotels recorded a substantial 70.6% occupancy rate, surpassing the 68.8 percent rate observed in November 2022. ADR surged by 16.7%, while RevPAR soared by 20%, propelling overall room revenue to an 16.8% increase during the month.

Personnel Moves

Concord Hospitality announced the promotion of Crystal Thrasher to the position of Vice President of HR Services. Crystal will lead and shape on boarding processes for new teams during hotel openings and acquisitions, implement compliance guidelines, foster positive associate relations, promote an inclusive workplace culture, facilitate learning and development initiatives and maintain an effective safety program. Crystal joined Concord in 2015 and has been an indispensable member of the HR team.

McNeill Hotel Company named current Vice President of Sales & Marketing Kim Knop as its new Director of Business Development, where she will work with investor and ownership groups as MHC expands its third-party property management portfolio. Knop joined McNeill Hotel Company in 2015.

Jonas Hospitality announced Jeff Kessinger as the new Vice President of Sales on the Property Systems team. Kessinger will provide leadership and vision to Jonas Hospitality sales teams, further unifying the family of brands. Jeff spent the last six years working with SALTO Systems.

Great Wolf Resorts, Inc. appointed triple-board certified physician and noted neurologist, Dr. Romie Mushtaq, as the company’s first Chief Wellness Officer. Dr. Mushtaq will help establish a wellness-focused foundation for Great Wolf that includes training materials, educational tools and specific programs to assist the company’s 10,000 Pack Members achieve their wellness pursuits and a better sense of mindfulness. Prior to Great Wolf, Dr. Mushtaq was the Chief Wellness Officer for Evolution Hospitality.

CooperWynn Capital announced Marc Sallette has joined the team as a Principal. Sallette will focus primarily on arranging debt and equity financing for owners and investors of hospitality properties. Sallette comes to CooperWynn Capital from CBRE Hotels Debt & Structured Finance.

Europe Highlights

Maybourne Hotel Group has set an April opening date for its latest London property, The Emory. Housed within a new building in the capital’s Knightsbridge district, The Emory features 60 suites over nine floors, a private guest-only rooftop space with access to Bar 33 and The Emory Cigar Merchants. Other facilities will include Surrenne wellness club, housed within four floors below ground featuring a 22-meter pool, and a restaurant with a glass façade.