Insights from Deutsche Bank's Lodging Conference

The DJIA was down 55 points while Nasdaq was up 112, the S&P 500 was up 23 points and the 10-year treasury yield was down .01 to 4.41%. Lodging stocks were mixed. SOND was up 7% but SVC traded down to another new low, VCSA was down -9% and AHT fell -8% on the day.

Deutsche Bank held their Gaming, Lodging, Leisure & Restaurant Conference last week. DB said the Election issue was prominent with discussions about the impact on business leading up to the voting, potential tax cuts for consumers or corporations, and the potential impact on inflation. Hotel REIT management teams feel leisure RevPAR is close to stabilizing if it has not already. DB said the buy-side consensus is that leisure demand and/or pricing could take a leg down. Both Host Hotels and Park Hotels believe there is a reason for optimism regarding the potential for a more meaningful recovery in visitation to Hawaii in 2025. The hotel REITs believe corporate travel remains solid, with demand still growing at a low single-digit clip. The tone of the conference regarding M&A is that the number of quality hotels coming to market would pick up as additional refinancing deadlines loom and interest rates potentially come down. Hotel REITs remain bullish on the lack of new full-service and resort supply, which provides a strong foundation for underwriting an elongated cycle. DB views potential acquisitions of resorts as an area of controversy amongst investors as many continue to worry about a possible backsliding in room rates. On the C-Corp side, DB characterized the tone from management teams as upbeat, with optimism around unit growth, most notably around conversion activity, a steady RevPAR trajectory, and operational disciplines underpinning the discussion. Timeshare operators are confident in their respective longer-term growth algorithms.

Truist upped their price target on Ryman Hospitality Properties to $136 from $130. They maintained their Buy rating.

Peachtree Group broke ground on the new 171-room Residence Inn by Marriott in downtown San Antonio, Texas, near the Riverwalk, set to open in the second quarter of 2026. Merritt Development Group will be responsible for constructing the Residence Inn.

Ameet Patel announced the grand re-opening of Spark by Hilton Shepherdsville Louisville South located in Shepherdsville, Kentucky. Changes were made to both the hotel’s interior and exterior. Formerly a Sleep Inn and Suites, the hotel features an updated lobby, dining hall, new beds and showers.

KFM Hospitality celebrated the arrival of its latest property, Tru by Hilton, located in Lodi, California. The hotel features 81 rooms, a fitness center, meeting space, a lobby with private workstations, and a lounge area with a pool table and large-screen television.

The City Council of East Peoria, Illinois, is considering building a nearly $20 million Hampton Inn. Frontier Hospitality Group was chosen for the project. The East Peoria City Council is expected to vote on the development agreement for the hotel on November 19.

The Westin Maui Resort & Spa, Kaanapali, in Lahaina, Hawaii, opened The Valley Alley, a 10,000-square-foot entertainment center featuring Topgolf Swing Suites, duckpin bowling, virtual reality, arcade games, and a keiki club, as well as a bar and lounge.

Mama Shelter has provided an update on the development of its Los Angeles site, Mama Shelter Downtown LA. The hotel is targeting a 2026 opening and will mark the group’s second LA-based property. The Mama Shelter Downtown LA will be located in the Fashion District and will offer 140 modern rooms and four suites, as well as two restaurants and a rooftop site.

Stantec celebrated the groundbreaking of the Nora Hotel in West Palm Beach, Florida. Developed in partnership with Wheelock Street Capital, Nora Hotel is the first vertical development in the Nora District. This district is transforming a railroad warehouse area into a mixed-use development, complete with hospitality, retail, and office space. The hotel will rise five stories with 201 guestrooms and a spacious parking garage. Amenities will include a rooftop pool deck complete with a restaurant, two bars, a lounge area, and poolside cabanas. The ground level will feature a spa and fitness center, a lobby bar, and an outdoor garden. The hotel will also be home to a restaurant with a private dining room and pre-function space. The project is expected to open in the fall of 2026.

Loto-Quebec announced that Germain Hotels has been chosen to manage the hotel near the Casino de Montreal. The hotel, under the Le Germain Hotels brand, features approximately 200 rooms and will be solely owned by Loto-Quebec. Construction will commence once all plans receive the necessary approvals. The hotel is expected to open within the next two to three years.

Dolly Parton landed a permit valued at $45 million to convert her offices into a hotel. She paid $75 million for the 211 Commerce office building, where she plans to build her Songteller Hotel. The hotel will include a museum filled with Parton’s fashion pieces and artifacts from her career. D&S Builders is handling the renovation of the seven-story property, which will be Parton’s first Nashville hospitality project.

According to bizjournals.com, a jury has weighed in on a long-running lawsuit related to the construction of the $2 billion Ritz-Carlton Hotel and Villas in Paradise Valley, Arizona. The 10-member jury found in favor of Five Star Development on eight of 12 claims related to the construction of the luxury property. The legal dispute has been ongoing since 2021, when PWI Construction Inc. was named by Five Star Development as the general contractor for the Ritz-Carlton project. The honeymoon didn’t last very long; however, PWI filed more than $7 million in liens against the property, alleging it had not been paid by Five Star. In turn, Five Star filed a breach of contract lawsuit against the contractor, which had stopped work on the project in August-September of 2021. The jury largely found in favor of Five Star, saying Five Star only owed the PWI entities $428,869 of the $7 million in lien claims. The hotel is projected to open in fall 2025.

Oaktree-backed Formida Capital has entered the market to bridge gaps in middle-market real estate financing. Formida offers flexible solutions across the entire capital stack, providing debt, mezzanine financing, and equity for real estate projects throughout the U.S. The company is led by President Wade Hundley, formerly CEO of Starwood/TPG-backed venture ST Realty. Hundley is joined by Jeffrey Giudice, Managing Partner and Head of Lending, who leads the firm’s direct lending business. Giudice brings extensive experience from his recent role as marketing director and head of the West Coast office for Ladder Capital. Additionally, Formidahas brought Jordan Kirkbride on as Managing Director of the Loan Originations team, who joined from CBRE and Hodges Ward Elliott, where he spent six years advising on hospitality debt.

Curtain Bluff, on the island of Antigua, announced new ownership. Long-time admirers and frequent guests Tim and Pat Scott acquired the 72-key beachfront property. As part of the transition, Curtain Bluff will undergo a multi-million dollar renovation of its accommodations, destination restaurants, and spa and wellness spaces, which will take place over a three-year period starting Q2 2025. The change in ownership maintains Curtain Bluff’s family-owned heritage and follows the property’s acceptance to the prestigious Relais & Chateaux portfolio. The all-inclusive boutique property features 72 accommodations, two beaches, two restaurants, a wine cellar, four tennis courts, an adults-only wellness area complete with an infinity pool and yoga pavilion, and a luxury water’s edge spa.

Europe Highlights

A partnership between Trinity Investments, funds managed by Oaktree Capital Management, L.P., and Partners Group, acting on behalf of its clients, has acquired The Standard, London, a luxury lifestyle hotel situated in the heart of London. The Standard, London, a flagship of the Standard brand, features 266 guestrooms and suites and six food and beverage offerings.

Palladium Hotel Group announced its arrival in Barcelona with the opening of 45 Times Barcelona Hotel, featuring 119 rooms distributed across 11 different categories. The property will operate temporarily under the ephemeral brand 45 Times Hotels for a limited period of time, prior to its redevelopment. 45 Times Barcelona Hotel will maintain the services and facilities of the current establishment, including its iconic rooftop with a pool and bar. The hotel will become part of the BLESS Collection Hotels portfolio.

Stoneweg Hospitality and joint-venture partner, Lopesan Hotel Group, have acquired the 241-room Hotel Miguel Angel in Madrid for €210 million, according to costar.com. The seller is Iraqi-British businessman Nadhmi Auchi. The Hotel Miguel Angel is an independent, upper-upscale hotel which has been closed for four years and is undergoing a renovation that is scheduled to be completed in May 2025.