Hotel Investors Beam With Optimism

The DJIA fell 137 points while Nasdaq was down 101, the S&P 500 was down 28 points, and the 10-year treasury yield barely budged after the Fed officially adopted a ‘wait and see’ attitude, something most already knew. Lodging stocks were lower, but the star of the day was SHCO, which jumped 12% on a new high on the Dan Loeb news. IHG also traded up to a new high.

The tone at the ALIS Conference is what was to be expected: some optimism about a new administration in Washington, positive on the higher-than-expected RevPAR in 4Q, and hope that the transaction market and a more business-friendly regulatory environment will cause a more active 2025. Analysts said there was more of a focus on unit growth than RevPAR. That is not surprising since nobody is expecting more than low single-digit RevPAR growth this year. Also, it was not surprising that hoteliers noted ICE raids were taking place in some hotels as well, and there was concern that it could cut into staffing. Getting back to optimism on the transaction market, it does not seem like it is unanimous; it is more like hotel brokers trying to get everyone interested and excited. Truist said the private hotel owners they spoke with suggested deal books were underwhelming in size and quantity, and bid-ask spreads remain high. Truist even described some of the big hotel brokers as turning into the “boy who cried wolf” and said their credibility was waning. We chuckled at First Hospitality Group’s CEO, who asked if Taylor Swift could be motivated to go on another tour. If RevPAR needs a boost, just clone Taylor Swift and have her in multiple cities each week.

Dan Loeb’s Third Point LLC disclosed a 9.89% stake in Soho House & Co., but it does not seem to be because he is happy with the going-private proposal they received. Loeb doesn’t think they are getting enough and accused Ron Burkle of orchestrating a sweetheart deal for himself and his buddies but that the board should ensure a fair sales process that achieves maximum value for all shareholders. We have a feeling that those who bought the stock well before the offer was made public would not see this the same way since the $9 offer is such a premium to where the stock had been trading.

STR reported a -.02% decline in RevPAR for the week ended January 25. D.C. RevPAR was up 86.8% on the inauguration, but Group RevPAR was down -4.1%. The end result was the week was able to overcome the tough MLK Holiday timing comp.

JLL’s Hotels & Hospitality Group released its annual Global Hotel Investment Outlook, projecting a 15% to 25% increase in global hotel investment volume compared to 2024. This growth will be catalyzed by impending loan maturities, deferred capital expenditures, private equity fund-life expirations, and moderating RevPAR in some markets, with the Americas expected to see the largest growth, followed by EMEA and APAC. Other key highlights of the report include decelerating supply growth and debt market clarity, which are expected to drive investment. Luxury and select-service sectors will likely be most favored and liquid in 2025. Urban gateway markets like London, New York, and Tokyo are likely to attract the most investor interest in the coming year. Emerging trends: blending live-work-play spaces, rising influence of emerging markets, and transformative AI adoption in hospitality.

Investors are preparing to allocate additional capital to the U.S. hotel sector in 2025, driven by expectations of higher returns, distressed asset opportunities, and favorable pricing, according to the findings of CBRE’s latest U.S. Hotels Investor Intentions Survey. The survey highlights a growing sense of optimism among investors, with 94% intending to maintain or expand their hotel portfolios this year, up from 85% in 2024. At the same time, only 6% of investors anticipate reducing their allocations, marking a significant improvement from 16% last year. Top Markets for Hotel Investment include New York City, San Francisco, and Dallas. Investors continue to prioritize value-add and opportunistic strategies, with over 75% seeking opportunities to reposition assets through renovations, adding rooms, redesigning spaces, or incorporating new amenities to enhance returns. Resorts and central business districts are the most favored location types for hotel investments. By chain scale, upper-upscale (52%) and luxury hotels (30%) are the most sought-after segments in 2025. Full-service hotels are the top asset choice favored by 58% of investors, followed by limited-service hotels (21%). Despite the heightened interest in extended-stay hotels, only 14% of investors plan to prioritize them in 2025, indicating a shift back to traditional hotel types. The high cost of both capital and labor remains the most significant challenge to hotel investors in 2025, followed by rising renovation costs.

Marriott International, Inc. announced another year of strong global growth, with a record 123,000 gross room openings, net room growth of 6.8% for the full year 2024, and over 577,000 rooms in the company’s development pipeline at year-end. In 2024, the company signed a record of over 1,200 deals with owners, franchisees, and developers, representing nearly 162,000 rooms globally. Marriott’s luxury portfolio of seven brands now comprises 658 hotels, resorts, and branded residential properties, spanning 74 countries and territories. In 2024, the company signed 61 deals for luxury hotels and resorts, closing the year with 266 in the pipeline. Following its entry into the segment, Marriott strengthened its presence in affordable midscale in 2024, focusing on offering regionally relevant lodging options for event trip purposes. City Express by Marriott currently has 153 open properties, with 53 in the pipeline. StudioRes closed 2024 with 35 properties in the pipeline, anticipating its first opening later this year. Four Points Flex by Sheraton closed the year with 28 open properties and 33 in the pipeline. As the largest branded residences company globally, Marriott closed 2024 with 142 open residential locations and a pipeline of 138 locations across 16 distinct brands. In the past year, Marriott continued to enhance its offerings by exploring segments outside of traditional hospitality offerings. In December 2024, Marriott announced two founding deals with key players in the outdoor lodging segment. The deals include the acquisition of the Postcard Cabins brand, formerly known as Getaway Outposts, and the execution of a long-term agreement with Trailborn. Separately, as owner and consumer interest in apartment-style accommodations continues to grow, Marriott announced a long-term licensing agreement with Sonder Holdings in August 2024, adding over 9,000 rooms to Marriott’s open portfolio and approximately 1,700 rooms to its development pipeline at year-end.

In its largest region, the U.S. and Canada, Marriott’s portfolio at year-end 2024 totaled 6,307 properties with 2,161 properties in the pipeline. In 2024, Marriott signed 109 deals in the APEC region, growing the company’s pipeline in the region to 363 properties. Marriott saw growth in Greater China, with 463 properties in the region’s pipeline at year-end. In 2024, the company signed 161 deals. In the Caribbean and Latin America, the company closed the year with 183 properties in the pipeline and 67 deal signings in 2024. Marriott continued to strengthen its footprint across the EMEA region, growing its pipeline to 596 properties, following annual signings in the region of 291 deals. Conversions drove growth across segments and chain scales, representing 45% of the region’s room signings in the year.

Century Development Group announced that Flushing, Queens, will soon welcome The Westin Flushing LaGuardia Airport. Set to debut in spring 2025 in Queens, New York, the 13-story, 246-room hotel will feature over 6,000 square feet of versatile meeting and event spaces, a signature dining concept, a fitness center, an indoor pool, a steam room, and a dry sauna.

The Cleveland Browns mixed-use development next to its training complex in Berea, Ohio will be anchored in part by The Barker Hotel, part of Marriott’s Tribute Portfolio collection. Construction on the five-story hotel will begin later this year, with completion in 2027. The Barker Hotel will include a bar, restaurant, fitness center, and meeting spaces. It will be operated by the Shaner Hotel owned jointly by the Haslam Sports Group and the DiGeronimo Companies. Called the District 46 at CrossCountry Mortgage Campus, the development will also include sports-centered features like a community field for multiple youth, high school, and adult sports, a community field house, and a sports medicine facility operated by University Hospitals.

Hyatt Hotels Corporation and the Scenic Rivers Development Alliance announced the planned debut of Okhissa Lake Lodge as the first Destination by Hyatt brand hotel in Mississippi. Expected to open in 2027 on Okhissa Lake in Franklin County, the hotel will provide a 200-room lodge including cabin suites, a conference center, pool with hot tub, relaxing spa, restaurants, as well as a boardwalk overlooking the marina.

The upscale Waterfront Hotel in Oakland’s Jack London Square will close on Friday. In a statement to ABC7 News, the hotel did not give details about why it is closing, only to say that effective January 31, 2025, Hyatt will no longer be operating the Waterfront Hotel, and the property will no longer be operated as a hotel at that time.

AvantStay announced its entrance into the hotel industry with the forthcoming opening of The Gilmore, an AvantStay Hotel in Tennessee. Located in Nashville’s 12 South neighborhood, The Gilmore will open in April 2025 with 99 units as well as private event and luxury retail spaces.

AVANA Companies announced a new co-lending construction program with IHG Hotels & Resorts. This collaborative initiative aims to accelerate U.S. hotel development within the IHG brand family. Hotel owners and developers seeking to build or convert properties under select IHG brands can apply for these loans, providing a crucial lifeline in a challenging lending environment. The program offers a borrower-friendly alternative to standard financing through a competitively priced blended rate. AVANA and IHG will commit $250 million in construction loans for U.S.-based projects primarily across the EVEN Hotels, avid hotels, Atwell Suites, and Holiday Inn brands.

Hotel Royer in Urbana, Illinois, looks to be delayed again and could be facing a second financial penalty. It needed to open by April 1, but the website now says guests can start booking rooms on May 31. Hotel Royer developers faced a $150,000 penalty for missing its fourth deadline on January 1. According to Yahoo, they’ll lose the same amount of money from the $5.5 million the city put up as an incentive every quarter that the hotel isn’t open. The next deadline that comes with a financial penalty is April 1. Even though Hotel Royer is not accepting stays, they are thinking ahead of when they do as they have partnered with Urbana-based Strictly Wicks Candle Company to create signature scents to share with guests.

Hotel RL Cleveland Airport West, in North Olmsted, Ohio, was sold for $3.5 million to SIGMM LLC, according to county records. The 140-room hotel will become a Holiday Inn, Marcus & Millichap said in a news release. The firm said the property will undergo a full renovation in the coming months.

The Mix, a $3 billion, 112-acre mixed-experience community in Frisco, Texas, has broken ground. The first phase encompasses 28 acres and is being completed by AECOM Hunt. The Mix is planned to have over 2 million square feet of office space, 375,000 square feet of retail including a grocery store, a 400-450-key business hotel and a 200-key boutique hotel, and 3 million square feet of residential.

Cronheim Hotel Capital secured a $10,500,000 permanent loan on behalf of PEG Companies to refinance the existing debt on the 130-room Residence Inn Atlanta Cumberland Galleria hotel.

Cronheim Hotel Capital secured a $40,000,000 permanent loan on behalf of the Lam Group to refinance the existing debt and capitalize on a modernization refresh of the 158-room Chelsea New York Hotel.

HQ Hotels & Residences announced its newest strategic partnership with powerhouse couple Super Bowl Champion Russell Wilson and singer-songwriter Ciara. As the newest members of the advisory board for HQ Hotels & Residences, this partnership announcement marks yet another major milestone in the continued growth of the brand ahead of its first property opening in 2025, with 50 hotels set to open by 2030. Russell Wilson and Ciara join a lineup of strategic partners for HQ Hotels, including actress Sofía Vergara, allowing the brand to further connect with Millennials, Gen-Z, and Latin communities.

Meliá Hotels International closed the year with 19 new hotel openings and expects to open at least 25 more in 2025. Currently, 64% of its portfolio consists of premium and luxury hotels, and 81% of its project pipeline is focused on these segments. The hotel group will strengthen its portfolio in Palma, Spain, with the addition of a new INNSiDE by Meliá Hotel. Meliá expands its presence in the Indian Ocean with the signing of its first hotel in the Maldives. In Asia, the company will reposition its iconic hotel in Bali, transforming it into a new Paradisus by Meliá. Meliá also continues to focus on Caribbean destinations and Mexico, accelerating its growth and plans to increase its presence from 7 to 13 hotels in two years. In LATAM, in 2024, the company announced a strong expansion in Argentina with new openings in Buenos Aires. Meliá is also focused on expanding its leisure presence in Brazil, Peru, Costa Rica, and Colombia. The Middle East will be a new growth hub, and in Asia-Pacific, Meliá is consolidating its leadership in Vietnam with 22 hotels open and another 5 in the pipeline while reaffirming its interest in growing in Thailand and Malaysia. Meliá Hotels International is committed to the repositioning and rebranding of its most important hotels as a central pillar for strengthening its brand strategy, differentiating projects, improving profitability, and enhancing customer satisfaction. Over the past two years, the company has repositioned 40 hotels in its portfolio.

Hyatt Hotels Corporation and RLH Properties announced the planned transformation and rebranding of Andaz Mayakoba Resort Riviera Maya in Mexico to Alila Mayakoba, marking the Alila brand’s entry into Latin America and the Caribbean. Andaz Mayakoba Resort Riviera Maya is expected to suspend operations on March 2, 2025, and debut as Alila Mayakoba later this year. As part of the transition, the property will reduce the number of guestrooms and increase the suite count to 40% of the total inventory. Alila Mayakoba will offer elaborate indoor and outdoor wellness spaces, a new Temazcal, multiple food and beverage offerings, and refreshed indoor and outdoor meeting and event spaces.

Personnel Moves

Mike Deitemeyer has joined Rockbridge as the Executive Vice President of Rockbridge Holdings and President of its development company. He will lead strategic affiliates, beginning with the company’s newest acquisition, ZaZa Hotels and Resorts. Deitemeyer previously served as President and CEO of Aimbridge Hospitality, leaving there in 2023. Before going to Aimbridge originally as Global President, he had been President and CEO at Omni Hotels & Resorts.

CoralTree Hospitality named Jenni Gaherty as Vice President of Sales and Marketing for the western United States. Gaherty assumes the role following the recent retirement of Chris Kenny. Prior to joining CoralTree, Gaherty was a Regional Director of Sales and Marketing for Hersha Hospitality Management.

Foley Entertainment announced the appointment of Shane Green as Chief Executive Officer of Foley Entertainment Group. In this role, Green will oversee business operations for FEG’s global portfolio of sports and hospitality entities, including FEG’s luxury hotel collection, including MacArthur Place and Farmhouse Inn in Sonoma County, Hotel Les Mars in Healdsburg, California, and the iconic Hotel Californian in Santa Barbara, alongside an array of sports teams, resorts, restaurants, and vineyards across the globe.