Marriott Vacations Beats First-Quarter Estimates

The DJIA rose 32 points while Nasdaq was down 17, the S&P 500 rose 7 points and the 10 year treasury yield was down .03 to 4.46%. Lodging stocks were mixed. PLYA traded up to a new high but SOND fell -6% on the day.

Apple Hospitality reported 1Q24 results that were modestly higher than EBITDA expectations. The most positive part of the report was their commentary that April 2024 had over 4% RevPAR growth which is stronger than the rest of the lodging group has been saying. APLE gave FY24 RevPAR guidance of 2%-4%.

Marriott Vacations beat 1Q24 expectations with Truist once again using dry humor, saying the best news is once again that there were no negative surprises. While EBITDA was well above expectations, VAC did not change their full year guidance and Truist pointed out that VAC’s core Vacation Ownership segment had disappointing results, most likely due to the lingering impact of the Maui fires. VAC bought back 280,000 shares in the quarter for $24 million.

Playa Hotels & Resorts had a big beat but also did not change guidance for the year. PLYA has already said they are seeing softness in Jamaica bookings for 2Q/3Q and are undergoing renovations in Los Cabos, hence the conservative view. PLYA repurchased 3.6 million shares in the quarter for $32.5 million.

Braemar Hotels & Resorts announced a shareholder value creation plan. They signed a definitive agreement to sell the 394 room Hilton La Jolla Torrey Pines in La Jolla, CA for $165 million. The transaction is expected to be completed by August 2024. BHR said they are evaluating the sale of two more hotels to be completed in 2024 and 2025, respectively. BHR also used cash on hand to fully repay the outstanding $30 million loan associated with the 143 room Cameo Beverly Hills. Subject to the pending sale of Hilton La Jolla Torrey Pines, BHRwill have refinanced or paid off all its 2024 debt maturities. BHR also said they will redeem $50 million of their non-traded preferred and/or public preferred stock this year, utilizing the proceeds of the sale of Hilton Torrey Pines. Finally BHR said their board of directors authorized a share repurchase of $50 million worth of stock.

We don’t believe there is much of a surprise that activist investor Blackwell called their plan too little and too late. Blackwell is trying to get their own board slate approved by shareholders. They demanded the Board of BHR halt the sale of the Hilton La Jolla Torrey Pines until all aspects of the transaction are disclosed to shareholders.

CBRE released its 2024 Global Hotel Investor Intentions Survey. A summary of the survey includes: Over half of the 300 hotel investors surveyed worldwide by CBRE Hotels Research intend to buy more in 2024 than in 2023, while only 14% expect to buy less. Plans for increased hotel investment across regions are based on expectations of higher returns, price adjustments, distressed opportunities and a lower cost of capital. Nearly 75% of respondents are most attracted to opportunistic and value-add hotel assets in 2024. In the U.S., upper-upscale and upscale/upper-midscale are the most popular chain-scale targets in 2024. Canadian investors favor lower- and middle-price tier chain scales, while higher-price tier properties are preferred in Europe, Mexico, Central America and the Caribbean. Upper-upscale properties are the most popular investment chain scale among Asia-Pacific investors. Resorts are the most attractive hotel property type for investors in the U.S., Mexico, Central America and the Caribbean. Central business districts are the most attractive submarkets for European and Canadian investors, while Asia-Pacific and European investors favor those in gateway cities. In the U.S., gateway markets like New York and Washington, D.C. topped the list of cities expected to outperform in 2024, along with leisure-focused markets such as Miami, Charleston and Austin. In Europe, investors favor gateway markets like London and Madrid. Among Mexican markets, Los Cabos, Cancun and Mexico City are expected to have the strongest performance in 2024. CBRE Hotels Research is cautiously optimistic about hotel market fundamentals this year. Following a 33% drop last year, they expect investment activity to pick up in the second half of 2024 due to highly anticipated Federal Reserve interest rate cuts.

TMGOC Ventures announced the topping out of the upcoming Moxy Charlotte Uptown. Construction is scheduled to be completed later this year with a grand opening scheduled for Q1 2025. Located in the heart of Uptown, the 13-story, 208-key hotel will feature 2,500 square feet of meeting space, a fitness center and a Starbucks. Moxy Charlotte Uptown will be managed by Lexima Lodging. Additional upcoming TMGOC developments include a 162-key Tapestry Collection by Hilton and a 233-unit multi-family mixed-use development in Macon, Georgia; a 191-key Thompson by Hyatt in Charleston, South Carolina; and a 150-key and 20 residences by Autograph Collection Hotels in Charleston, South Carolina.

Marriott International, Inc. announced the completion of its recent redesign and renovation to the 176-room Courtyard by Marriott Fort Lauderdale Weston. The makeover includes transformations to the guestrooms, exterior, lobby, meeting rooms and Bistro. Amenities at the six-story property include a heated outdoor swimming pool, a fitness center, business center, three meeting rooms with 1,378 square feet of functional meeting space and a dedicated outdoor patio, a courtyard area and the Bistro restaurant.

Driftwood Capital announced the grand opening of Hotel Rumbao, a 245 key hotel and Paseo Portuario, a parking and retail complex, in Old San Juan, Puerto Rico. The property was acquired by Driftwood Capital in 2021 and repositioned to Marriott’s Tribute portfolio of independent boutique hotels following a $21.8 million renovation of the property and its surroundings. Driftwood Hospitality Management manages the hotel, the only Tribute Portfolio property in Puerto Rico.

The St. Regis Punta Mita Resort in Mexico announced the culmination of its $45 million property-wide transformation. The scope of the resort’s renovation spans all common areas and public spaces, the introduction of five beachfront villas, redesigned suites and guest rooms, enhancements to The St. Regis Spa, the launch of new restaurants and bar concepts, updates to the resort’s outdoor wedding venues and the introduction of the Marietas Pool, featuring expansive vistas to Islas Marietas National Park. The resort has 120 guest rooms, expansive beachfront villas and ocean and garden view suites.

Pacifica Hotels, owner and operator of Jamaica Bay Inn, Tapestry Collection by Hilton, recently completed the total renovation of all guest rooms and suites at the waterfront property in Marina del Rey, California. The refreshed property transports guests to the tropics with fresh island-inspired décor and an unbeatable waterfront location. The hotel offers a heated pool with beachfront views, daily beach cruiser rentals, ample event space for meetings or oceanfront social gatherings and cuisine at the on-site restaurant, Beachside.

Frame Ventures’ Hotel Stratford in San Francisco will be the first in the United States for one of Accor’s newest brands, Handwritten Collection. Frame Ventures owns and operates the European-style boutique property, set against the backdrop of Union Square on then Powell Street cable car line. The property is Accor’s third hotel in San Francisco. The Hotel Stratford San Francisco, Handwritten Collection was built in 1910 and recently underwent a multi-million dollar refurbishment. The hotel offers 94 rooms, has an elegant lobby with self check-in technology, a European style lively café/bar called Nave that will debut this summer.

Sonesta International Hotels Corporation announced the opening of Sonesta Essential Des Moines. The 150 room, upper-midscale property in Des Moines, Iowa is near the Iowa State Capital and the Des Moines International Airport.

IHG Hotels & Resorts announced the opening of a new-build Holiday Inn Express hotel in Conyers, GA. The hotel offers 89 rooms, a fitness center and a business center, located east of Atlanta.

NexGen Hotels announced the acquisition of the Hotel Versey in Chicago, IL. The 137 room hotel will be managed by Genuine Hospitality Group. The boutique hotel is housed within the 1920s Diversey Arms building, at one time known as the Rock and Roll Days Inn due to its popularity with many rock stars of the 1990s.

Ashburton Hospitality announced the addition of 10 hotels to its portfolio. The Marriott, Hilton and IHG-branded hotels are located throughout the Midwest, Eastern seaboard and southeastern US.

Spanish hotel company NH Hotel Group has put its 288 room Murray Hill hotel at 22 East 38th Street in Manhattan up for sale with an asking price of $140 million. The Real Deal said they had closed the hotel before the pandemic for a $72 million gut renovation before reopening in 2021.