Travel Volume Surge Masks Property Performance Gaps

The DJIA was up 426 points on Friday while Nasdaq was up only 31, the S&P 500 was up 21 points and the 10 year treasury yield was down .02 to 4.41%. Lodging stocks were higher. TNL traded up to a new high.

Stifel upgraded Pebblebrook Hotel Trust to a Buy from Hold while downgrading DiamondRock Hospitality to Hold from Buy. They upped PEB's price target to $15 from $14.50, lowered DRH's PT to $10.25 from $10.75 and also lowered Host Hotels' target price to $20.50 from $21 while maintaining their Buy rating.

The U.S. hotel industry reported higher performance results from the previous month, according to October 2024 data from CoStar. October 2024 (percentage change from October 2023): Occupancy: 67.3% (+2.3%) ADR: $164.86 (+1.8%) and RevPAR: $110.94 (+4.1%). Among the Top 25 Markets, New York City experienced the highest occupancy level (+4.6% to 91.0%). Markets with the lowest occupancy for the month included St. Louis (61.7%) and Minneapolis (63.1%). The Top 25 Markets showed higher occupancy and ADR than all other markets.

According to analysis by STR, the upcoming holiday season will bring mixed results for the U.S. hotel industry due to changes in the calendar. With Thanksgiving arriving a week later, there are fewer days between Christmas, compressing travel during that period. Furthermore, Christmas and New Year's Day falling on a Wednesday instead of a Monday will likely suppress hotel stays.

Colliers U.S. Capital Markets' latest insights on the travel and hospitality industry focuses on the 10 trends driving the hospitality markets in 2025. The key trends being monitored by Colliers include: Record travel volumes not trickling down to market- and asset-level performance. In 2023, U.S. travel abroad nearly matched the record levels seen in in 2019. ADR and RevPAR growth has not kept pace with inflation over the past year through Q3. After some recent softness, airline tickets are on the rise, outpacing the rate of inflation. Recent and ongoing labor disputes are driving up operating expenses as unions win concessions. New brands, such as AC and Moxy by Marriott, Home2 Suites and Tru by Hilton, and TRYP by Wyndham, are outperforming previous-generation brands within the same chain scales. Capital is shifting. The top markets for sales volume year-to-date through Q3 were Phoenix, Orlando, and Honolulu.

Retro Hospitality announced the December 5 opening of Hotel Petersburg, a Tapestry Collection by Hilton property located in the heart of Old Towne Petersburg in Virginia. The newly restored, seven-story, upscale boutique hotel offers 64 guestrooms, unique dining and entertainment options, an outdoor courtyard, and four versatile indoor and outdoor venues providing 2,200 square feet of meeting space.

A four-story Home2 Suites hotel by Hilton broke ground in College Township, Pennsylvania. The hotel will be the first addition in the new Shiloh Road Commercial Park.

On their Instagram page, Grace Life Church said they have closed on the DoubleTree hotel property next to the Monroeville Convention Center and Monroeville Mall in Monroeville, Pennsylvania.

Ashford Hospitality Trust, Inc. announced the conversion of its 226-room Le Pavillon Hotel in New Orleans, Louisiana to a Tribute Portfolio property.

The newly re-imagined Rio Hotel & Casino has officially joining the Destination by Hyatt brand, following the completion of the resort's first phase of its $340 million property-wide transformation. Located in Las Vegas, Nevada, Rio is owned and managed by Dreamscape Companies and is the largest property within Hyatt's global hotel portfolio.

Staypineapple Hotels Inc. announced that Sohal Hotels has purchased Watertown Hotel. The hotel, located in Seattle, Washington, will undergo a significant transition that marks a new chapter for both companies.

The Great Wolf Lodge, located next to Foxwoods Resort Casino in Mashantucket, Connecticut, will open Friday, May 23, three weeks earlier than projected.

A new hotel is planning to open next summer in Wisconsin Dells, Wisconsin. Aptly named The Wisconsin Hotel, the hotel will replace the current Wintergreen Hotel. The Wisconsin Hotel will open in phases after that, with the entire hotel opening in summer 2025.

Weekender Hotels plans to spend $3.5 million to purchase and revitalize the former Phoenix Inn Hotel in North Creek, New York. The 30-room resort is located about 3 miles from the Gore Mountain ski resort and a stone's throw from another weekend property, Alpine Lodge. Weekend is borrowing $2.29 million from the National Bank of Coxsackie in support of the project.

My Place Hotels of America has opened My Place Hotel-Tucson North Marana/Cortaro in Tucson, Arizona. The 74th open and operation My Place property in the United States is owned by Opwest Partners and managed by Legacy Management.

EPC Real Estate Group's $110 million, mixed-use project next to the Riverfront Stadium, in Wichita, Kansas, is on track to start construction by year's end and be complete in late 2026. The Ballpark District development will include a hotel, luxury apartments, retail space and parking garage and is going through the permitting process with the city. Dream Hotel Group will be the hotel brand and manager.

The city of Kyle, Texas is actively searching for experienced developers to help construct a hotel and convention facility.

Heady Investments is planning to build The Railhead, a mixed-use development in Frisco, Texas that would include a hotel, restaurants, retail, office and residential.

Leaders of the town of Vinton, Virginia are working to bring a hotel to the heart of town, according to the Town Manager Pete Peters. After 10 years of planning, KARA Hospitality LLC is the company the town will be working with.

After accruing about $41.7 million in debt and filing for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the middle District of Florida, Primeland Real Estate Development LLC is seeking Judge Lori Vaughn's approval to sell its main asset: a nearly 10-acre parcel in Kissimmee that's home to a stalled condo-hotel project, according to court filings. The proposed bid procedures call for a 50-day marketing period, during which Fisher Auction Co. and HREC Investment Advisors will solicit bids for the property.

Personnel Move

HVS announced the expansion of its North America Brokerage & Advisory division with the addition of Matthew Omansky as Senior Vice President. Matt assists investors with acquisition and disposition services of hotel properties of all classes and sizes, with a specialized focus in Central/West Texas and New Mexico. Previously, Matt held positions as Senior Associate at Marcus & Millichap, and, earlier, as Senior Associate, Hotel Commercial Sales at Ten-X.

Europe Highlights

Ennismore, along with joint venture partners Zanklon Capital and Extendam, announced the signing of Mama Shelter Lake Como. Arriving in the city center of Como, Italy in mid-2026.

Palladium Hotel Group, through its brand Grand Palladium Hotel & Resorts, announced the launch of Grand Palladium Select Collection. The first hotel to join this collection will be Grand Palladium Costa Mujeres Resort & Spa, rebranded as Grand Palladium Select Costa Mujeres in January 2025, followed by Grand Palladium Select Palace Ibiza in the Balearic Islands, and finally Grand Palladium Select Bavaro in Punta Cana in December 2025.