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North America

Lodging Stocks Lower Despite Strong Earnings

Alan Woinski and Kim Woinski

November 3rd, 2022


Skift Take

  • Lodging stocks were lower again. SLNA looks like it is going to go down to penny stock status, down another -28% to another new low.
  • The last 24 hours had a barrage of earnings reports and not many of them were taken well. Hyatt was picked as the best of the group even with results some deemed as weaker than expected which says a lot about the other reports.
  • Marriott’s 3Q was in line but net rooms growth was trimmed for the full year with China blamed.

The DJIA fell another 147 points, Nasdaq dropped another 182, the S&P 500 fell 40 points and the 10 year treasury yield was up another .07 to 4.12%. Lodging stocks were lower again. SLNA looks like it is going to go down to penny stock status, down another -28% to another new low. BHR was down another -14%, also to a new low. AHT was down another -7% while XHR was down another -5%.

The last 24 hours had a barrage of earnings reports and not many of them were taken well. Hyatt was picked as the best of the group even with results some deemed as weaker than expected which says a lot about the other reports. Others called it an EBITDA beat led by very strong ALG results. H repurchased 162 million Class A shares in 3Q, an acceleration from 2Q.

Marriott’s 3Q was in line but net rooms growth was trimmed for the full year with China blamed. MAR repurchased $950 million of stock during 3Q, totaling $1.9 billion through October 31. They expect full year 2022 capital returns to total $2.7 billion.

RLJ Lodging Trust also modestly beat expectations. RLJ said September was very strong with RevPAR the highest for them since the pandemic hit. They said strength increased in October and said they are not seeing a slow down. While RLJ did not buy back stock in 3Q, they said they already bought back $7.1 million worth of stock in 4Q. RLJ also upped their quarterly dividend to $0.05 per common share.

Summit Hotels missed expectations with a good part of their business (31 non-same store hotels) blamed for the underperformance. The 71 same store hotels exceeded expectations. INN also announced they are entering the glamping segment with the acquisition of Onera Fredericksburg in Texas.

Host Hotels reported an in-line quarter and continues to be the REIT most likely to be active in the M&A segment (see their purchase of Four Seasons Jackson Hole further below). Even with some of their hotels impacted by Hurricane Ian, HST increased full year guidance.

Park Hotels reported mixed results but 4Q guidance was lower than expected. PK is going to do a catch-up dividend in 4Q, with $0.21-$0.26 expected to be declared with $0.14 of it attributable to gains from hotel sales YTD.

Bluegreen Vacations Holding Corp said they will commence a cash tender offer to purchase up to 4.5 million common shares of its Class A Common Stock at $22.17 per share, a 30% premium to their closing price of $17.05 on November 2, 2022.

According to STR’s September 2022 data, Canada’s hotel performance was seasonally lower from the month prior but higher than the pre-pandemic comparable. September 2022 (percentage change from September 2019: Occupancy: 74.3% (+1.0%); ADR: CAD205.17 (+14.3%); and RevPAR: CAD 152.49 (+15.5%). Among the provinces and territories, Nova Scotia record the highest September occupancy level (82.1%), which was 1.6% below there-pandemic comparable. Among the major markets, Vancouver saw the highest occupancy (86.0%), which was a 4.2% decrease from 2019. The lowest occupancy among the provinces was reported in Saskatchewan (62.4%), up 11.3% against 2019. At the market-level, the lowest occupancy was reports in Edmonton (+10.0% to 58.7%).

Marriott announced the opening of the new Moxy Lower East Side. Located where the Lower East Side meets SoHo, Moxy Lower East Side is the fourth Moxy hotel in New York City developed by Lightstone. The new 303-bedroom property boasts five drinking and dining establishments developed by Tao Group Hospitality in partnership with Lightstone. 

R.D. Olson Construction announced that construction is underway on SpringHill Suites by Marriott in Chula Vista, CA. The five-story, 179-key hotel is expected to reach completion by December 2023. The $38 million project will include a lounge, bar, buffet, meeting room, rim flow pool, Jacuzzi, cabanas, firepits, activity area, pavilion, event law, barbecues, and a fitness room. 

Charlestowne Hotels announced the addition of three new properties to its management portfolio. In Memphis, TNThe Memphian is a Tribute Portfolio hotel located in the city’s vibrant Overton Square. The property features 106 rooms and suites, two eclectic dining outlets, and two event spaces. The Darling, in Visalia, CA, is an adaptive reuse boutique hotel of the former Tulare County Courthouse. The Darling offers 32 guest rooms and suites, four distinct spaces for meetings and special occasions and a rooftop restaurant and lounge. For the first time, Charlestowne brings its management expertise to Aspen, CO. The only hotel at Buttermilk Mountain, the Inn at Aspen is a quintessential gateway to the Rockies. The ski-in/ski-out, condo-hotel retreat offers 122 rustic rooms, an outdoor hot tub and pool, fire pits, a fitness center, on-site restaurant, and a 5,000 square foot event space. In addition to the full management of the three hotels, Charlestowne will also oversee the food and beverage programs for The Memphian and The Darling, adding three restaurants to its rapidly growing portfolio.

Host Hotels & Resorts, Inc. acquired the Four Seasons Resort and Residences Jackson Hole in Jackson Hole, WY for approximately $315 million in cash. The ski-in/ski-out Resort underwent a comprehensive guestroom renovation in 2022. The Resort has 125 rooms and suites, 9,000 square feet of indoor meeting space, three upscale food and beverage outlets plus a pool café, two retail outlets and an alpine spa with 16 treatment rooms. In addition, the property offers an on-site ski concierge, a private ski club, a kids club, and a fitness center. It also features an additional 44 private residences, which are not owned by Host. Of the 44 residences, 30 currently participate in a rental program through the resort.

The Hilton Garden Inn Arlington/Courthouse Plaza unveiled a six-month renovation of its 193 guest rooms and suites, its lobby, restaurants, corridors and 2,628 square feet of meeting space. The property is located in Arlington, VA and is operated by Davidson Hotels.

The Beverly Wilshire, A Four Seasons Hotel has completed the multi-million dollar renovation of all guest rooms, suites and specialty suites including the Penthouse Suite; Beverly Presidential Suite; Wilshire Presidential Suite; Governor Suite; and Ambassador Suite. 

A new 13-story, 114-key boutique hotel with a significant food and beverage focus has been proposed for the EDGE District of downtown St. Petersburg, Florida. The development is being spearheaded by local St. Pete developer Jonathan Daou, President of Eastman Equity. The project will consist of the main hotel tower plus approximately six food and beverage concepts scattered throughout, including a lobby bar, a pool bar on the 2nd floor, and a rooftop bar on the 13th floor. Daou hopes to break ground on the hotel by early 2023 with an opening in the first half of 2024.

San Diego developer Doug Manchester is unveiling details about a new Embarcadero mega-hotel he’s proposing for the Navy-owned site facing the waterfront at the corner of Pacific Highway and Broadway. The plan calls for a 36-story, 1,150-room hotel featuring several dining options, a pool deck and meeting space. He plans to close a deal and name a hotel management partner in January, with construction slated to begin by the end of 2023. The timeline would see a grand opening by the end of 2025. 

Hogan Hospitality Group has added sought-after properties in Washington and California to its growing portfolio. Expanding the Company’s presence in Washington state, the 45-room Soap Lake Natural Spa & Resort features the natural healing power of Soap Lake. An additional 40 rooms are scheduled for completion in the Fall of 2023. A management contract was also secured for the 42-room Comfort Inn & Suites Venture Beach

A new hotel has been approved for downtown Fayetteville, AK. The planned hotel by Reindl Properties is for a seven-story, 134-room hotel next to the Upper Ramble where a civic plaza is planned across from the Walton Arts Center. 

Rockbridge has completed the final closing of its most recent value-add flagship fund, Rockbridge Hospitality Fund VIII L.P. at $431 million of investor commitments, surpassing its target of $425 million. Similar to Rockbridge’s seven flagship funds, Fund VIII makes hospitality-focused real estate investments in the United States and built an attractive pool of investments since the beginning of 2021. To date, Fund VIII has made investments in 29 hotels, committing nearly $300 million of fund capital in both opportunistic debt and equity investments. Rockbridge expects to deploy Fund VIII’s remaining capital in the next 12 months and then be back in the market with its next flagship fund.

Sierra Nevada Resortan Outbound Hotel, in Mammoth Lakes, CA, debuted a complete reexamination encompassing 179 accommodations including deluxe rooms, fireplace suites and chalets with an inviting lobby, contemporary dining concept and wine bar. A collection of 10 free-standing cabins, a heated pool and an outdoor food garden will join the property in Spring 2023. 

A new hotel on the west side of Bloomington, IL may be on the horizon after the city’s planning commission recommended a site plan without opposition. Jayrajsinh Patel is requesting to construct a four-story, dual-brand, 140-room hotel with 166 parking spaces at Wylie Drive.

BWH Hotel Group announced the newest addition to its BW Premier Collection of boutique hotels with the opening of the Inn at Fox Chase in Bensalem, PA. The 167-room Inn at Fox Chase, BW Premier Collection offers world class accommodations and an American Gastro Pub.

CorpHousing Group Inc. has changed its name to LuxUrban Hotels Inc. Reflecting this change, the Company’s common stock will commence trading under the new NASDAQ ticker symbol “LUXH” on or about November 3, 2022.

Hershler Hospitality closed escrow on the 44-room Emerald Dolphin Inn, an independent hotel located in Fort Bragg, CA. 

HREC Investment Advisors arranged the sale of the 112-room Aloft Sugarloaf/Lawrenceville, located in Lawrenceville, GA. The hotel was acquired by an affiliate of The RADCO Companies. HREC Investment Advisors exclusively represented the seller, a joint venture between Emerge Hospitality Group and RevPAR Development LLC, on this transaction.

Alan Woinski and Kim Woinski

November 3rd, 2022

Companies: Aloft Hotels, Best Western Hotels & Resorts, Bluegreen Vacations Holding Corp, BW Premier Collection, Choice Hotels International, Comfort, CorpHousing Group Inc., Four Seasons, Hilton Garden Inn, Hilton Hotels & Resorts, Hogan Hospitality Group, Host Hotels & Resorts, Inc., HREC Investment Advisors, Hyatt Hotels Corporation, Marriott International, Moxy Hotels, SpringHill Suites, Summit Hotels, The Park Hotels, Tribute Portfolio

Locations: California, Canada, China, Georgia, Illinois, Jackson Hole, Los Angeles, Memphis, New York City, Pennsylvania, San Diego, Tennessee, Virginia

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