Hotel Transactions in the U.S. Are Projected to Increase

The DJIA fell 344 points while Nasdaq was up 50, the S&P 500 fell 11 points but the 10-year treasury yield jumped .11 to 4.18%. Lodging stocks were lower but we did have new highs in IHG and CHH. SVC traded down to another new low but then bounced for the first time since they announced their dividend cut and planned hotel sales. SOND plunged -14%, SOHO was down -8% and VCSA and AHT both fell -5% on the day.

Evercore ISI Group raised price targets on some names in their lodging coverage. They upped Hyatt's price target to $155 from $145; Hilton to $240 from $210 and Marriott to $270 from $245. They maintained In-Line ratings for all three.

Hilton was downgraded to Hold from Buy by Melius Research.

Powell & Aucello gave a summary of what they learned at the recent 2024 Lodging Conference. They are expecting a significant increase in hotel transactions, with approximately $5.8 billion of U.S. hotel-securitized loans maturing later this year. This is likely to drive substantial activity in the market. They see an abundance of "dry powder" waiting for opportunities. The current hotel construction pipeline is the largest it has ever been, with about 93% of the hotels having 200 rooms or less. Extended-stay hotels comprise 39% of the new hotel construction pipeline. At the same time, renovations and conversions are also at the highest point in history, with renovations postponed since the pandemic now happening. Labor challenges continue, both with trying to find and retain employees and with the increase in labor costs. Powell & Aucello noted the softening RevPAR trends, with RevPAR growth now not keeping pace with inflation. The Fed's interest rate cut has yet to significantly impact hotel values.

MGM Resorts International and Marriott International, Inc. announced plans to convert an iconic property on the Las Vegas Strip to the W Hotels brand. Located on the Mandalay Bay Campus, the property is slated to officially join the W Hotels portfolio later this year, with additional plans for the property to be announced in the future. With the addition of W Las Vegas, MGM Collection with Marriott Bonvoy will encompass 12 destinations on the Las Vegas Strip.

Community members celebrated the grand opening of DoubleTree by Hilton hotel, in Battle Creek, Michigan, following a 3-year, $75 million investment renovation project. The renovated, 16-story building now offers: 239 upgraded hotel rooms; an indoor pool and hot tub; newly remodeled banquet center; meeting and conference rooms; multiple onsite food and beverage venues; and an outdoor green space.

Following a 12-month transformation process, Outrigger Hospitality Group has unveiled the Outrigger Waikiki Paradise Hotel, formerly known as the Ohana Waikiki East by Outrigger. According to Pacific Business News, the company spent $55 million on enhancements to the 50,940 square foot property and its 4,200 square feet of new meeting space. Along with the 443 newly renovated guestrooms and suites, the hotel has a fully remodeled pool, a fitness center, and two conference rooms.

IHG Hotels & Resorts announced the opening of a new-build Holiday Inn Express & Suites hotel in Greensboro, Georgia. Owned by Surihaan LLC, the Holiday Inn Express & Suites Greensboro - Lake Oconee offers 84 rooms, nearly 3,360 square feet of meeting space, an outdoor pool, and a fitness center.

Earlier this month, the Los Angeles Department of Building and Safety issued a construction permit for a nearly $98 million renovation of the 17-story InterContinental Century City hotel. In addition to upgrades to building infrastructure, permits describe makeovers of all public areas, guestrooms, and back-of-house areas, including modifications to existing restaurant spaces, the hotel lobby and bar, its reception areas, meeting rooms, and offices. On the second floor, plans call for a new pool bar, restrooms, and boardroom. The 375-room hotel has previously operated as a J.W. Marriott and a Park Hyatt. Shortly after its completion in 1988, the property was owned by Sumitomo Realty & Development Inc.

The Caesars New Orleans' $435 million transformation will be revealed tomorrow. The former Harrah's has seen their gaming business plunge in recent months as they got deeper into the renovations. This is being completed just months before New Orleans hosts the 2025 Super Bowl. The renovations include rolling upgrades to its 115,000-square-foot gaming area, including a World Series of Poker Room and a new Caesars Sportsbook area. They also built a new 340-room hotel annex that rises 15 floors above Convention Center Boulevard and includes a "valet porte cochere" or covered carport at the entrance. The lower two floors are now a 'hotel within a hotel' carrying the exclusive Nobu brand. The 54 Nobu rooms include 12 suites. There is also a Nobu restaurant on the casino level.

The Terra Luna Resort at Universal Orlando has delayed its opening date. Originally scheduled to open on February 25, 2025, rumors now indicate that Universal Terra Luna Resort will open a month later than expected.

BD Hotels secured a $75 million construction loan to build a hotel in the emerging NORA District of West Palm Beach. Metropolitan Commercial Bank granted the mortgage to BD Hotels, in partnership with NORA District master developers NDT Development, Place Projects and Wheelock Street Capital. JLL arranged the financing. The 201-room, five-story Nora Hotel is under development and should be completed in late 2026. The property will offer a ground floor restaurant and a rooftop restaurant and lounge.

Europe Highlights

IHG Hotels & Resorts announced the signing of four new Garner hotels, further expanding the brand's footprint across the UK and Europe. With its emphasis on simplicity and convenience, the brand has experienced swift global expansion, with 76 properties signed during the first half of 2024, 58 of which are in IHG's European market. The Garner properties to open in the coming months include: In the UK and Ireland, the 53-room Garner Hotel Reading Centre, opening in late 2024 in collaboration with Nilvip Hotels. Garner Hotel Preston Samlesbury is set to open in late 2024, offering 80 guestrooms in collaboration with KRO Hospitality. In Northern Europe, Garner's expansion continues with the addition of over 50 hotels in Germany, following a long-term partnership agreement with NOVUM Hospitalityestablished in April 2024. These hotels, converted from NOVUM Hospitality's Yggotel, Select Hotels, and Novum brands, are set to start opening later this year. Key locations will include Hamburg - Garner Hotel Hamburg Nord; Mannheim - Garner Hotel Mannheim City; and Berlin - Garner Hotel Berlin - Mitte. Under the same agreement, Garner will also make its debut in Vienna, Austria, with a 106-room hotel, and in Maastricht, Netherlands, with a 165-room property. Since the April agreement, another Garner hotel has been signed in Germany with NOVUM Hospitality, a newly built 245-room property slated for Hamburg's Usedomstrasse. In Southern Europe, Garnet is set to make its debut in Turkiye with a 126-room hotel in Istanbul, scheduled to open in 2025. This signing is in partnership with FRT Turizm and supported by AB Consulting.

Six Senses has agreed to manage two new hotels in Italy in partnership with Gruppo Statuto. These new locations, Six Senses Milan and Six Senses Lake Como, will follow the opening of Six Senses Rome and the expected launch of Six Senses Antognolla in Umbria. The latest additions bring the number of Six Senses properties in Europe under IHG Hotels & Resorts to nearly 100, with eight located in Italy, Switzerland, France, Israel, Portugal, Spain, and Turkey. Six Senses Milan is set to open in 2025, featuring 68 guestrooms including 15 suites, a spa, a rooftop bar, and a sky pool. Set to open in 2028 following a complete restoration of the Grand Hotel Cadenabbia, Six Senses Lake Como will offer 102 rooms and suites, a spa and wellness area, an outdoor pool and sun deck, and a floating pool on the lake.

A new 200-bedroom hotel is coming to the heart of Middlesbrough in the UK. A Fairfield by Marriott hotel project is expected to start in early summer of next year as one of the chain's first in the UK.

Knight Frank has been instructed in the sale of the 4-star Leonard Hotel at London Heathrow Airport. The 230-room hotel was refurbished in 2020 and comprises 14 meeting & conference rooms, a bar, restaurant, fitness area, two spa treatment rooms, and a 94-space car park, all set on a 2.4-acre site. The hotel has been advertised with a guide price of £30 million.

Travelodge is purchasing six hotels from the Louvre Hotels Group in Spain. The acquired hotels, totaling 773 rooms, operate under the Hotel Campanile brand. Five of the hotels are freehold properties, while the remaining one is a long leasehold. The properties are located in Alicante, Barcelona, Madrid, Malaga, and Murcia and will be managed by the Spanish subsidiaries of the Travelodge OpCo Group.