Global Hotel Pipeline Slows in Q3

The DJIA surged 749 points on Friday while Nasdaq was up 245, the S&P 500 rose 87 points and the 10 year treasury yield was down .01 to 4.21%. Lodging stocks were modestly higher. The biggest mover was to the downside with SOND down -6%.

According to September 2022 data from STR, Middle East & Africa was the only world region to show an increase in overall hotel pipeline activity at the end of the third quarter. In Europe, Germany (38,676) and the U.K. (29,471) lead Europe in total rooms in construction. Among the countries in Asia-Pacific, China has the most rooms in construction (311,859), followed distantly by Vietnam (28,692). Most of the Middle East & Afirca's pipeline activity is focused in the Middle East. Saudi Arabia (39,070) and UAE (32,272) lead in construction activity. The U.S. holds the majority of rooms in construction in the region, followed by Mexico (14,077) and Canada (7,126). 

End of Q3 2022 Room Pipeline

IHG Hotels & Resorts reported a good 3Q, with RevPAR up 28% year over year and up 2.7% from 3Q19. The problem is they also announced Paul Edgecliffe-Johnson is leaving his CFO position, taking the same job at online gaming/sports betting company Flutter Entertainment. While this was viewed negatively by the Street, Edgecliffe-Johnson must need a challenge or something, leaving the stability of IHG for such a volatile situation/company/industry with Flutter Entertainment.

DiamondRock Hospitality Company provided an update on September 2022 operations, showing continued strong RevPAR growth both for the month and the third quarter. September RevPAR grew 43.5% and 9.8% compared to 2021 and 2019, respectively. Comparable total revenues for September were $93.4 million, an increase of 12.5% compared to 2019. For the third quarter, RevPAR grew 8.7% and total revenues increased 11.7% compared to 2019. 

Also giving an update was Pebblebrook Hotel Trust, also citing improving fundamentals. PEB said business travel is picking up with occupancy at its urban portfolio exceeding its resort portfolio during 3Q, the first time this has happened since the pandemic. Post-3Q they have seen pricing power at their urban hotels picking up. PEB is expected 3Q revenue and RevPAR to beat 3Q19.

The Tremont House, Galveston, a Tribute Portfolio Hotel, in downtown Galveston, TX, has completed its renovation, transforming all areas of the historic property. The updates include redesigning all 135 guest rooms and suites, lobby and public spaces, meeting and event spaces, and food and beverage outlets. The property will officially reopen on November 1 as part of Marriott Bonvoy’s Tribute Portfolio.

JW Marriott Orlando, Grand Lakes has revealed its multimillion-dollar renovations. The transformative project across the entire Grande Lakes Orlando resort, which also includes The Ritz-Carlton Orlando, Grand Lakes, offers continued hospitality, enhancement of on-property, and world-class experiences, hidden in the heart of Orlando, FL. JW Marriott Orlando’s new amenities and offerings include an expansive waterpark, opening on November 20, 2022; an original culinary venue from chef John Tesar; 1,010 refreshed rooms and suites; the introduction of inspired executive family suites; and a redesigned and upgraded lobby lounge.

The iconic 218-room Mills House, located in the heart of downtown Charleston’s historic French Quarter neighborhood, was officially re-launched following a complete renovation and conversion to a lifestyle hotel under the ownership of RLJ Lodging Trust. With the re-launch, Mills House transitions to Mills House Charleston, Curio Collection by Hilton as the portfolio’s first property in South Carolina. The transformation of this landmark hotel includes a complete re-imagination of all original guest rooms and the addition of premium suites. Guests enter through a lush hidden garden, one of the hotel’s many new bespoke spaces, which also includes a new rooftop bar and terrace and a renovated rooftop pool. Mills House now offers multiple new food and beverage concepts. The hotel offers more than 15,000 square feet of flexible, multi-use meeting and function space. 

KHP Capital Partners purchased the Pan Pacific Hotel, in the South Lake Union neighborhood of Seattle, WA, for $70 million. The sale price includes $51.3 million for the building and $18.7 million for the hotel’s furniture and operating systems. The 153-room hotel was purchased from Hersha Hospitality Trust.

JRK Property Holding has acquired the 179-room Ace Hotel & Swim Club Palm Springs in Palm Springs, CA from an affiliate of GFI Capital. JRK acquired the resort through its $350 million Hospitality Fund. This Ace Hotel comprises seven buildings across a 5.04-acre campus, including three food and beverage venues, a spa and 7,500 square feet of event space. Eastdil Secured brokered the transaction on behalf of the seller. 

The Loren at Lady Bird Lake in Austin is now open and is the first U.S. hotel for The Loren Hotels and Residences brand. Featuring 108 guest rooms and suites, The Loren at Lady Bird welcomes guests to a greenhouse in the park, complete with a destination restaurant, milk + honey spa, a fitness center, rooftop terrace with infinity pool, and signature event space. 

The Patriots Point Development Authority Board and Bennett Hospitality broke ground on a five-phase, 15-year development project in Mount Pleasant, SC. The Patriots Annex project is a $300 million development that will include three hotels, restaurants, entertainment, shops, three office buildings, parks and an amphitheater. Developers estimate initial construction and submitting of remaining plans will start in fall 2023. The largest hotel, the Grand Patriot, will offer 250 rooms. The other two hotels will have 100 to 150 rooms.

Construction work is starting on one of the largest mixed-use projects planned north of downtown Dallas. The Central project is planned to include multiple high-rise buildings surrounding a central park. The 27-acre development is a project of De La Vega Development, and it is estimated to cost almost $2.5 billion. Site crews are clearing the site for the first phase of The Central, a 351-unit apartment tower. The more than $100 million high-rise includes retail and will open in 2025. The Central development is also planned to have high-rise office space, a hotel, retail and restaurants.

A city agency is giving Augustine Development Group LLC more time to complete its estimated $17.6 million renovation of the historic Ambassador Hotel downtown because of supply chain-related slowdowns. The Downtown Investment Authority Board voted to allow Augustine Development subsidiary Axis Hotels LLC, until at least the end of March 2023 to complete renovations on what the company says will be a Tryp by Wyndham hotel and restaurant. 

Cushman & Wakefield Global Hospitality, as exclusive advisor to Executive Hotels & Resorts, has arranged the refinancing of the 162-room Executive Hotel le Soleil in New York City and the 106-room Executive Hotel Vintage Court, a former Kimpton hotel, in San Francisco. 

Marcus & Millichap announced the sale of a former Crowne Plaza with 293 rooms in Austin, TX. The hotel was originally purchased in 2021 by Lockwood Development as part of a ten-property portfolio sale. ASAP Holdings, Inc. has development plans to convert the asset to a Delta Marriott. 

Hilton announced Curio Collection by Hilton’s debut in Brazil with three new hotels, including the recently opened Qoya Hotel Curitiba, Curio Collection by Hilton and two additional hotels expected to join Hilton’s growing portfolio in the country by the end of the year; Suryaa Hotel Pinhais, Curio Collection by Hilton and Qoya Hotel Sao Paulo, Curio Collection by Hilton. All the properties are managed by HCC Hotels. Qoya Hotel Curitiba, Curio Collection by Hilton features 168 rooms and suites, a fitness center, indoor pool, a Tereza Zanchi Spa and 690 square meters of flexible meeting space. Suryaa Hotel Pinhais, Curio Collection by Hilton will offer 25 guestrooms and loft-style suites, an onsite fitness center, indoor and outdoor pools, restaurant and two meeting rooms. The newly build Qoya Hotel Sao Paulo, Curio Collection by Hilton will offer 166 rooms, including 14 suites; a rooftop pool, onsite restaurant, lobby bar, fitness center and 300 square meters of flexible meeting space. 

Margaritaville is opening a boutique beach resort in Belize in early 2023. The new Margaritaville Beach Resort Ambergris Caye will only be accessible by boat, set just north of San Pedro Town in Belize’s Ambergris Caye. The resort will offer 55 suites, three food and beverage concepts, two pools and a signature St. Somewhere Spa. Notably, the Belize property will be a residential resort; meaning it will also include options for real estate buyers. The resort is the latest product of Margaritaville’s alliance with Karisma Hotels and Resorts.

Europe Highlights

IHG Hotels & Resorts announced recent signings and openings in Turkey across its Crowne Plaza, Holiday Inn and Holiday Inn Express brands. New openings include the 110-room Holiday Inn Trabzon East; the new-build 191-room Crowne Plaza Ankara; and the 259-room Crown Plaza Istanbul Tuzla Viaport Marina. New hotel signings include the 122-room Holiday Inn Express Anakara Airport due to open in December 2022; Crowne Plaza Istanbul Ortakoy Bosphorus, due to open in summer 2023 with 140-rooms; and the Holiday Inn Erzurum opening at the end of 2023 with 115 rooms.