The DJIA was up 10 points while Nasdaq rose 47, the S&P 500 was also up 10 points and the 10-year treasury yield was up .01 to 3.70%. Lodging stocks were higher. AHT rose 8% to lead the group while SVC was up 6%. SLNA gave back their big gains, down -12% to close below $1 again.
Truist described the tone of the NY Lodging Conference as Less Caution, More Optimism. The various segments along with side meetings and analyst conferences seemed more like optimism over business, a whole lot of caution on development due to financing. As Truist put it, the news on PK giving back two San Francisco hotels to lenders could influence other public hotel owners to consider divesting some of their assets. Besides lending concerns, the other chorus we have seen is the long-awaited distressed sale bonanza that has been predicted since the industry finally realized Covid was serious may finally be near.
The NYU School of Professional Studies Jonathan M. Tisch Center of Hospitality and Boston Consulting Group collaborated on a survey of hotel owners, management companies, and other industry stakeholders to gauge their sentiment and prospects for the hospitality industry. The survey found while occupancy rates, ADRs, and revenues are up, new construction is down to 2015 levels. More than 70% of survey respondents anticipate demand will at least somewhat increase by end of 2023 and 42% expect significant increases in 2024. Hoteliers are looking for nominal revenue increase of 4.6% to 5.1% in 2023 and revenues to rise by about 12%. Real growth rates seem likely to exceed the rate of inflation. Hoteliers expect room rates to rise by 8.3% to 8.8% over the next 18 months. High-interest rates are spooking investors in hotels as in other commercial property sectors. 89% of hoteliers consider rates above 8% unacceptable for taking out a loan. Prolonged staffing shortages are adding to investors’ concerns; 70% of hotel owners view the hotel industry less attractive if labor problems persist. 60% of respondents reported that they are somewhat or severely short-staffed, which NYU SPS/BCG estimate costs hoteliers about 7 percentage points of revenue and two points of operating margin. 75% of respondents experienced modest or better labor productivity gains in the last three years and are optimistic about improving employment going forward. More than 60% expect continued improvements in 2023 and 100% expect significant improvements in 2024. Two challenges still need to be solved in this area: the number of job openings and decreases in real earning potential for industry workers.
STR and Tourism Economics upgraded their 2023 U.S. hotel forecast they presented at the forty-fifth Annual NYU International Hospitality Industry Investment Conference. The occupancy projection for this year was lowered 0.2% from the previous forecast, but projections for ADR and RevPAR were lifted 1.5% and 1.3%, respectively. They now expect 2023 RevPAR to be up 3.7%. For 2024, a 1.4% downgrade in occupancy coupled with a 0.7% lift in ADR meant a RevPAR downgrade of 0.6% from their previous forecast to 6.6%.
As over 80% of hotels experience staffing shortages, hoteliers are offering potential hires a host of incentives to fill vacancies, according to a new survey of hoteliers conducted by the American Hotel & Lodging Association. 75% of respondents are increasing wages, 64% are offering great flexibility with hours, and 36% are expanding benefits – but 87% say they are still unable to fill open positions. 82% of survey respondents indicate they are experiencing a staffing shortages, 25% severely so, meaning the shortage is impacting the hotel’s ability to operate. The most critical staffing need is housekeeping, with 40% ranking it as their top hiring need. These numbers have increased slightly from January 2023 when 79% of survey respondents indicated their were experiencing a staffing shortage. Respondents to the most recent survey are attempting to fill almost 9 positions per property, up from7 position in January but still down from 12 vacancies per property in May 2022.
Data recently released by the National Travel and Tourism Office show that in February: the total non-U.S. resident international visitor volume to the United States of 4,116,450, increased 82.6% compared to February 2022, down from the prior month’s 82.2%. Overseas visitor volume to the U.S. of 1,791,183 increased 71% from February 2022. February 2023 was the 23rd consecutive month that total non-U.S. resident international arrivals to the U.S. increased on a year-over-year basis. Of the top 20 tourist generating countries to the U.S., Colombia (with 42,074 visitors), was the only country reporting a decrease in visitor volume in February 2023 compared to February 2022. The largest number of international visitor arrivals was from Canada (1,476,370), Mexico (848,897), the U.K. (251,750), South Korea (116,425), and France (114,659), accounting for 68.2% of total international arrivals. Total U.S. citizen international visitor departures from the U.S. of 6,169,371 increased 45.9% compared to February 2022. February 2023 was the 23rdconsecutive month that total U.S. citizen international visitor departures from the U.S. increased on a YOY basis. February 2023 YTD total U.S. citizen international visitor departures from the U.S. totaled 12,562,975, a 52.8% YOY increase. The YTD market share for North America (Mexico & Canada) as 53.6% and overseas was 46.4%. Mexico recorded the largest outbound visitor volume of 2,696,107 – 43.7% of total departures for February and 45.2% YTD. Canada recorded a YOY increase of 166.1%. Combined YTD, Mexico (5,675,530) and the Caribbean (1,638,729) accounted for 58.2% of total U.S. citizen international visitor departures, down 0.9 percentage points from January 2023. The Caribbean was the second largest market for outbound U.S. visitors during the month of February (840,228 departures) and accounted for 13.6% of all departures. Outbound visitation to the Caribbean increased 32.8% compared to February 2022. This is the second consecutive month that U.S. outbound visitor volume to the Caribbean outpaced that to Europe. February outbound visitation to European total 746,169 and was up 101.7% compared to February 2022.
Ryman Hospitality Properties and Blackstone Real Estate Income Trust, Inc.announced a definitive agreement under which RHP will purchase the JW Marriott San Antonio Hill Country Resort & Spa in San Antonio, Texas for $800 million from BREIT. Located on approximately 640 acres in the Texas Hill country, the resort offers 1,002 rooms and 268,000 square feet of indoor and outdoor meeting and event space. Resort amenities include the Lantana Spa; eight food and beverage outlets; the 9-acre River Bluff water experience; and TPC San Antonio feature two 18-hole golf courses. RHP plans for the resort to continue to operate under the JW Marriott flag. RHP and BREIT expect to close the JW Marriott Hill Country acquisition during the second or third quarter of 2023. RHP commenced a public offering of 3.5 million shares of its common stock with a 525,000 overallotment option for the underwriters. The proceeds will be used to fund a portion of the purchase price of the JW San Antonio Hill Country.
The St. Joe Company and Hilton announced the opening of the 107-suite Home2 Suites by Hilton Santa Rosa Beach in Florida. The property features a business center, fitness center, pool, and outdoor lounge with a fire pit.
The Indianapolis City-County Council approved a plan for the city to publicly finance and own a new downtown convention center hotel. The vote was a crucial step in advancing the development of an 814-room Signia by Hilton hotel on Pan Am Plaza, which now carries a $510 million price tag. The measure allows the city to take out up to $625 million in municipal bonds for the project.
IHG Hotels & Resorts announced the opening of the new Candlewood Suites Detroit – Auburn Hills hotel in Auburn Hills, Michigan. The 96-suite hotel offers a heated indoor pool, Candlewood Gym and outdoor gazebo grill. The Candlewood Suites Detroit – Auburn Hills is owned by Lapeer Hospitality Group, LLC.
Hyatt Hotels Corporation announced that a Hyatt affiliate has entered into a management agreement with Grupo Murano for the 400-room Hyatt Vivid Grand Island, an adults-only resort and Dreams Grand Island, a 616-room family-friendly resort. Both properties are expected to open in Cancun, Mexico in early 2024 within the Inclusive Collection. Hyatt Vivid Grand Island marks the first Hyatt Vivid property in the Inclusive Collection portfolio. Together, the resorts will offer 19 culinary concepts, a spa with 25 treatment rooms, a fitness center, multiple pools, a beach club and more.
RL Hospitality celebrated the groundbreaking ceremony for a five-story, 113-key Hyatt Place in downtown Waco, Texas. The $20 million project, which will take approximately 1 year to 18 months to build, will include a pool and spa, restaurant, in-house catering, board rooms and a conference room.
Rockbridge and Makeready announced the grand opening of The Junto, an independent lifestyle hotel in Columbus, Ohio. The 198-room property boasts 13,000 square feet of inventive meeting space, a library and a fitness center. Several new culinary experiences will be unveiled in the summer months.
A new seven-story, 149-room hotel may be coming to West Lafayette, Indiana. An attorney with RTS Law Firm presented the proposed hotel to the board. The Courtyard by Marriott hotel will have a four-story parking garage with 147 parking space, a bar and café/bistro. It is projected to take about 18 months to complete.
Weyland Ventures LLC is partnering with Elizabethtown Renaissance Associates to transform the old Hardin County Courthouse, in Elizabethtown, Kentucky, into a boutique hotel. The $8.18 million transformation will turn the 1933 courthouse into a 24-room hotel with a restaurant, bar, lounge and event space. The hotel is expected to be open sometime in 2024.
Kasey Carpenter expects the hotel he is building in downtown Dalton, Georgia will be open sometime in early fall. The Carpentry is under construction at the site of a former bank building. The boutique hotel will have 41 rooms. Carpenter is partnering on the project with Steve Herndon, a Dalton businessman who owns and operates hotels across the Southeast.
The SureStay Plus by Best Western Calgary South East hotel is now open in Calgary, Alberta, Canada. The recently renovated hotel features 111 guestrooms and 28 suites, a heated indoor pool with a waterslide, hot tub, two meeting rooms, a fitness facility, business center and in-room spa services.
Interval International said they are adding UNICO 20° 87° HOTEL RIVIERA MAYA, one of RCD Hotels’ luxury Mexico properties, to its growing network of elite resorts. The adults-only resort has 448 guestrooms, five restaurants, six bars, a coffee shop and a spa.
The Harraseeket Inn, in Freeport, Maine, has been sold to Giri Hotels. Nancy Dyer Gray sold the 94-room inn.
WaterWalk debuted its newest property under the brand’s Gen2.0 model, WaterWalk Boise-Meridian in Meridian, Idaho. The property has 126 rooms, 76 fully furnished STAY units and 50 ready-to-furnish LIVE units, a lobby Living Room, fitness center, as well as a spacious back patio with lounging furniture, firepits, lawn games and a grilling area.
Personnel Moves
Belmond appointed Dan Ruff as its new CEO. Ruff, who had been serving as chief operating officer for the company since 2018, will succeed Roeland Vos, who will retain his role as chairman of the board of Belmond.
Castle Hospitality Group announced that President & CEO Alan Mattson will retire by the end of the year. To ensure a seamless transition, the company has appointed Matt Bailey as Chief Operating Officer. Bailey most recently served as General Manager of the Montage Kapalua Bay. He has more than 40 years of experience.
