You can take your pick on whether today was an oversold or a relief rally. Either way, the DJIA was up 436 points, Nasdaq was up 247, the S&P 500 was up 72 points and the 10-year treasury yield was down .08 to 3.27%. Lodging stocks had a nice bounce led by HT with a 9% gain, MCG up 8%, RHP up 7% and BHR, AHT, DRH, XHR and PK rising 5% each.
Truist Securities published their RevPAR tracker, saying based on their analysis, they have yet to observe any “recession-driven” pullbacks and see the greatest degree of booking and pricing momentum coming from the corporate group segment. They quoted a senior executive of one of the world’s largest corporate travel agencies as saying, “We can’t keep up with the (corporate group) demand right now.” Truist sees RevPAR growth as the greatest opportunity for earnings upside over the net year led by the higher chain scales, most notably the group-centric upper upscale segment. Regarding individual corporate traveler, Truist reiterated their previous view that the demand recovery has stalled at down approximately -25% from pre-Covid levels. ADR is up 5% from pre-Covid. Leisure travel is still strong and well above 2019 levels but Truist said year-over-year comps are difficult and the demand for hotel rooms is being diluted by significantly greater short-term rental supply, the reopening of international locations combined with favorable FX, and the return of cruising as a value-priced vacation alternative. We should remind you that historically, Truist is usually one of the most skeptical/pessimistic firms out there with lodging but they said they believe the lodging bear case is too bearish. That bear case is for a slowdown in demand in 2023 with RevPAR down mid-single digits year over year driven by ADR down -10% and occupancy increasing by mid-single digits. They find the bear case too bearish and that with corporate group demand looking strong into 2023 and group room nights always being high spending, they don’t see this bearishness on the stocks should be this strong. Truist’s favorite name right now is Hyatt Hotels. Truist also raised their rating on Ryman Hospitality to Buy form Hold, upping their price target to $103 from $95.
Hotels in the top 25 markets across the U.S. were the hardest hit by the pandemic-induced demand downturn but have come back with a vengeance, fueled by outsized rate growth. According to STR, RevPAR growth is quickly rebounding in the top 25 markets, particularly those that play host to both business and leisure demand. Hotel performance has been improving at a significantly faster pace in leisure-driven markets outside of the top 25, but performance in the larger cities is starting to look more typical. Among the top 25, Miami has been the darling of the recovery. Other outperforming markets include Norfolk/Virginia Beach, Orlando, Phoenix and Nashville. While several key, large markets have been much slower to rebound, including Boston, Chicago, New York, and Washington, D.C., the clear laggard has been San Francisco, which is the only market among the top 26 where rates are not back to 2019 levels as of June. San Francisco is among 10 hotel markets where RevPAR is projected to grow more than 50% for the full-year 2022, and among five cities expected to surpass 10% growth in 2023.
Sam Moon Group announced the spring 2023 opening of the first JW Marriott Hotel in Dallas, JW Marriott Dallas Arts District. Located in the downtown Dallas’ Arts District, the 267-room property features a reception and Sky Lobby on the 11th floor, three restaurants, spacious lobby and cocktail lounge, meeting and conference areas, ballroom, and fitness center. The expected showstopper of the property is a mid-air pool and deck with terrace bar, cabanas, and outdoor event space.
Aman Group is exploring strategic options including a sale of Aman New York, Bloomberg reported. The property could fetch around $600 million in a transaction structured as a sale and manage-back, which would see Aman remain its operator. The Aman New York, better known as the Crown Building, features 83 hotel suites as well as 22 private residences. Its luxury spa has an indoor pool surrounded by fire pits. Aman Group confirms it is working with JLL and UBS on the potential sale of the Crown Building.
Wyndham Hotels & Resorts celebrated the first groundbreaking of its new extended-stay brand, in Plano, TX. The hotel is owned by Gulf Coast Hotel Management and is expected to open in the second half of 2023. The purpose-built Project ECHO prototype offers 124-rooms with kitchenettes as well as efficiently-designed public spaces: a lobby, fitness center and guest laundry, that help to limit labor needs. The all new-construction brand, operating under the working title Project ECHO, is seeing great momentum with 72 hotels in the development pipeline as of the end of the second quarter.
City and company officials have broken ground on the last piece of Browning Investment’s downtown development that is reshaping 116th Street in Fishers, IN. Hotel Nickel Plate, along the Nickel Plate Trail, follows Browning’s construction of the 6-story First Internet Bank headquarters next door and a 237-units apartment building, Nickel Plate Stations, across the street. Browning partnered with Dora Hotel Co. on the Hilton Tapestry Collection hotel, which was sidelined for two years due to Coronavirus pandemic-related supply and labor shortages. The hotel will have a first-floor restaurant with large floor-to-ceiling windows. The city’s investment in the $157 million three-part project is about $72 million.
Construction is underway on the Tangerine Hotel in Lowndes County. The 18-room hotel is being built next to the former East Oktibbeha County High School in Crawford, MS. When it is complete, the hotel will contain a bar, an outdoor kitchen and patio, and an event center. Parts of the old school building will be used to host events.
Owner satisfaction surveys and demographic trends are favorable for timeshares in the U.S., according to a new report form the American Resort Development Association. Skift, parent company of this publication, covered this topic today. The pandemic boosted the popularity of timeshare. A survey released by the ARDA found that 84% of owners would purchase a timeshare product again, an increase from 77% in 2020. Gen Z and Millennials now account for 57% of U.S. timeshare owners, more than half of new sale purchasers and nearly two-thirds of resale purchasers.
Crescent Hotels & Resorts announced the appointments of the company’s newest executive leadership position. Hospitality veteran and previous Marriott Vice President of Franchise Operations, Tom Gilliland, will join the brand effective September 12, 2022, as Crescent Hotels & Resorts’ Executive Vice President of Operations. In his new role with Crescent Hotels & Resorts, Tom will have direct day-to-day oversight of Crescent Operations and Culinary teams, driving operational excellence and accountability within the Crescent portfolio.
myDigitalOffice appointed Scott Ryan as President. Ryan most recently served as CRO at Wrike. He will leverage his experience to guide my DigitalOffice through its next phase of growth as it continues its mission to transform the hotel back office through innovation and green technology. Ali Moloo, MDR’s founder, will remain CEO of the company. In addition, MDO added several other senior executives, including Andrea DiMarco as CFO, Bill Carney as CMO, Niki Stone as VP Product, Adam Whaley as VP of Customer Operations, Chuck Jones as VP of Sales, and Liz Penning ad Director of People & Culture.
Nordic Choice Hotels & Resorts announced the grand opening of Sommerro, located in the Frogner, a borough in the West End of Oslo, Norway. The 231-key Art Deco hotel is complete with 56 branded residences, seven restaurants and bars, meeting and event spaces, a gilded theater, a wellness space with a fully equipped gym, and a year-round rooftop pool, sauna and terrace. During the second stage of its launch, Sommerro will open Villa Inkognito in March 2023. Housed in a former private residence, dating back to 1870, this 11-suite retreat is adjacent to the hotel with a private entrance. It will offer opulent living rooms, an open kitchen, an intimate bar, a fitness room in the basement and an outdoor area.
Bespoke Hotels announced Richard Grove as its new chief operating officer. For the past seven years, Grove has been a general manager at the group, running the 80-room Chester Grosvenor Hotel in the English city of Chester.