Marriott Vacations Takes a Beating

The DJIA dropped 495 points, Nasdaq was down 405, the S&P 500 was down 76, the 10-year treasury yield was down .13 to 3.98% and suddenly investors are concerned that the reason there could be interest rate cuts is because of an economic slowdown. Lodging stocks were lower. SHCO was down -9, VAC and BHR both fell -8% and HGV was down -5% on the day.

After a slew of earnings reports after the close of trading yesterday, let’s start with the ugliest Marriott Vacations Worldwide. The stock took a beating, but one could say it has more downside following a miss and an even bigger guide lower for the year. Add in a loan loss provision that is the highest in company history at 27.7% of sales, and clearly, VAC has lost its edge in the timeshare business. The weakness is said to be in first-time buyers and a slower-than-expected recovery in Maui. If you get a chance, talk to some VAC timeshare owners and ask them how things have been going the past year. Social media is lit up with complaints about salespeople pressuring them and allegations of outright lies being told to them. Owners trying to book complain about the website not working, which has been the issue for more than a decade, and very poor customer service on calls.

Park Hotels reported lower-than-expected revenue but higher-than-expected EBITDA. They cited a slower-than-expected recovery of Japanese inbound travel as a result of weaker trends in RevPAR. Offsetting that is higher-than-expected margins.

Ryman Hospitality reported a higher-than-expected 2Q, with non-rooms revenue helping the beat along with a $9.1 million Tennessee franchise tax refund. RHP benefits when there is strong Group booking, and the weekly STRreports continue to show Group business outpacing everything else in U.S. lodging.

Host Hotels & Resorts cut guidance, which overshadowed their EBITDAre beat. HST repurchased $50 million of stock and said their near-term priorities are to integrate the recently acquired hotels and to repurchase shares.

Besides confirming what we already reported a couple of weeks ago, that HSTclosed on the purchase of 1 Hotel Central Park, the company said they closed on the previously announced acquisition of the fee simple interest in the 450-room Ritz-Carlton O’ahu, Turtle Bay for approximately $680 million. The Resort is located on the North Shore of Oahu, Hawaii, and includes a 49-acre land parcel entitled for development.

McNeill Hotel Company announced the opening of the TownePlace Suites by Marriott Memphis Germantown, a new addition to the Thornwood mixed-use development. Located in Germantown, Tennessee, the five-story, 111-room property includes a restaurant and rooftop bar, a fitness center, indoor pool, and 6,000 square feet of ground floor retail. The TownePlace Suites by Marriott Memphis Germantown was developed by McNeill Commercial Real Estate, with McNeill Hotel Company as the property manager.

Greater Philadelphia’s first AC Marriott Hotel will open on August 20 in Equus Capital Partners’ Ellis Preserve development in Newtown Square, Pennsylvania. The 140-key property includes the AC Kitchen, AC Lounge, a fitness center and 2,200 square feet of meeting and event space. The five-story hotel is part of a final development phase at Ellis Preserve. For further dining options, AC Hotel Newtown Square will connect to Ellis Preserve’s Ruth’s Chris Steakhouse, which is expected to open in the fourth quarter of 2024. The hotel is being managed by Gulf Creek Hotels.

Frontier Development & Hospitality Group LLC and its joint venture partner Basis Investment Group announced the acquisition of the Cambria Washington DC, Downtown/Convention Center in Washington D.C. The hotel has joined Hyatt’s portfolio as Hyatt Washington DC / Convention Center. The 182-key hotel has commenced a comprehensive property-wide renovation, and upon the completion of the renovation, slated for summer 2025, it will convert to the Hyatt House brand. The hotel features a range of amenities, including a fitness center, bar and lounge, meeting rooms and a rooftop terrace.

Sonesta International Hotels Corporation announced the addition of 23 franchised hotels to the company’s global portfolio during the first six months of 2024. Furthermore, Sonesta announced the execution of 19 franchise agreements in Q2 2024, spanning six of the company’s 13 brands. The brands of the 19 new franchise hotels include Sonesta Essential (5), Americas Best Value Inn by Sonesta (5), Knights Inn (5), Sonesta Hotels & Resorts (2), MOD Collection by Sonesta (1), and Sonesta Simply Suites (1).

Tenaya at Yosemite, in Fish Camp, California, announced the completion of a 244-room remodel of its main Lodge and lobby and the addition of new amenities. Each lodge room received new case good furnishings, and the lobby and concierge area were also fully remodeled. In addition to the hotel’s redesign, Tenaya at Yosemite also unveiled new amenities, including a new pickleball court played with grass rules, a new bocce ball court at the Explorer Clubhouse, a new 18-foot rock-climbing wall, and a new dedicated canine play area. The property is owned and operated by Delaware North Parks & Resorts and also features an array of signature restaurants, the Ascent Spa, and indoor and outdoor pools with cabanas.

Alexander Hotel, a new boutique hotel in the iconic Torre Virreyes skyscraper, is now open. Positioned in the heart of Mexico City’s financial hub, the five-star hotel features 26 suites and luxury amenities, including a spa, private restaurant, Technogym, and premium concierge services.

The current owner of the 360-room Jay Hotel has joined the list of property owners suing San Francisco over what it alleges were “illegal and erroneous” valuations of the property that led to larger tax payouts. In the lawsuit from an affiliate of KHP Capital Partners filed in San Francisco Superior Court, KHP alleged it was overcharged $2.6 million in property transfer taxes and subsequent penalties tied to its 2021 acquisition of the hotel, then known as the Le Meridien, from Park Hotels & Resorts for $221.5 million. The city has faced a raft of recent lawsuits from owners of large luxury hotels disputing valuations for tax purposes, including the Ritz-Carlton San Francisco and the Beacon Grand, and six lawsuits from Park Hotels & Resorts - including from when it acquired the Le Meridien in 2019. The latest lawsuit disputes the city’s valuation of Le Meridien’s real property of $205 million, compared with KHP’s valuation of $179.5 million. KHP argues San Francisco tax authorities “unlawfully and excessively” assessed taxes on the “non-taxable intangibles” that added to the price of the 2021 deal.

Archipelago International joined forces with Noval Properties in the Dominican Republic in November 2023. This alliance signed six comprehensive management agreements that will see the introduction of Archipelago International’s brands and property management solutions to the Dominican Republic’s flourishing hospitality and real estate markets. The collaboration is set to revolutionize the hospitality landscape in Punta Cana, featuring projects that include Bavaro and Reserva Real by Harper, with 87 units. In Cap Cana Marina, Harbor Bay by Aston has 186 units, and Juanillo Hills by Aston has 60 units. In Cana Bay, Poseidonia by Aston has 1,319 units, Coral Cove by Aston has 72 units, and Riviera Bay by Aston has 110 units.

Europe Highlights

DoubleTree by Hilton Rotterdam Centre has opened following an extensive re-brand from one of the city’s iconic landmark properties. The 265-room hotel is the latest addition to the growing DoubleTree by Hilton portfolio in Europe and marks a first for the hotel brand in the Dutch city. DoubleTree by Hilton Rotterdam Centreoffers nine meeting rooms, wellness facilities including an indoor heated pool and fitness center, and an onsite bar and restaurant. The property is owned by Annexum, operated by Orange Investment Managers, and managed by Cycas Hospitality