The DJIA fell 498 points as investors did not like one of the members of the Fed’s comments about continuing to raise interest rates. Nasdaq was down 177, the S&P 500 fell 62 points and the 10-year treasury yield was up .01 to 3.70%. Lodging stocks were lower. SLNA fell -8% to a new low, VCSA was down -7%, also to a new low, SOND fell -6% and AHT was down -5% on the day.
Raymond James warned that inflation and a dimming economic outlook could begin to weigh on travel starting in the fourth quarter. Despite continued strong data in the STR reports each week, RJ and STR and PwC have both written down demand forecasts for 4Q. RJ believes lodging, despite short booking windows, is a lagging economic indicator, probably by 3-6 months, so it is not a surprise that building economic headwinds have not yet been reflected in the weekly lodging data.
STR and Tourism Economics adjusted occupancy slightly downward but maintained previous projections for ADR and RevPAR in their final U.S. hotel forecast revision of 2022. RevPAR remains on track for full recovery this year on a nominal basis but not until 2025 when adjusted for inflation. The updated forecast lowered occupancy by less than a percentage point for 2022. The updated forecasts are as follows:
| 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|
| Occupancy | 62.7% | 63.8% | 65.6% | 66.1% |
| ADR | $148 | $151 | $157 | $163 |
| RevPAR | $93 | $96 | $103 | $108 |
| RevPAR Vs. 2019 | +7.9% | +11.6% | +19.8% | +24.9% |
Following seasonal patterns, Canada’s hotel performance fell from the month prior but the ADR and RevPAR were higher than the pre-pandemic comparables, according to STR’s October 2022 data. October 2022 (percentage change from October 2019): Occupancy: 66.8% (-1.0%); ADR: AD 179.70 (+13.3%); and RevPAR: CAD120.05 (+12.3%). Among the provinces and territories, Nova Scotia record the highest October occupancy level (79.9%), surpassing the pre-pandemic comparable by 9.0%. Among the major markets, Vancouver recorded the highest occupancy (77.6%), which was 1.7% below October 2019. Alberta (56.3%) saw the lowest occupancy among provinces, up 3% against 2019. At the market-level, the lowest occupancy was reported in Edmonton (54.1%), which was 0.3% above the 2019 comparable.
Destination Canada published its Fall Tourism Outlook which forecasts that despite ongoing challenges, the recovery trajectory for Canada’s tourism sector is strengthening, bolstered by the lifting of COVID-19 restrictions and resilience in travel demand. Leisure travel is now expected to recover to 2019 levels by 2024, one year earlier than previously forecasted in Spring 2022. Domestic tourism will continue to lead the sector’s recovery with strong spending providing a foundation for brisk recovery to 2019 levels. Domestic travel market spending is expected to reach 92% of 2019 levels by the end of 2022 and fully recover in 2023. The recovery of the U.S. market, which is Canada’s biggest opportunity, is poised to accelerate in 2023, with spending reaching 91% of 2019 levels. In 2024, spending by U.S. travelers in Canada is expected to reach 112% of 2019 levels. Visits from the U.S. are projected to reach 82% of 2019 levels in 2023 and fully recover in 2024. International overnight arrivals reached 61% of 2019 levels over the summer months of 2022. Tourist expenditures and international arrivals are set to return to a long-term growth trend by 2026.
Baird said they analyzed TSA Thanksgiving checkpoint travel numbers to gauge the health of the leisure traveler during the holiday weekend. TSA checkpoint data suggest flexible travel patterns still exist and outsized demand relative to the weeks before the holiday did not materialize. Their data shows checkpoints were down -6% to -7% during the holiday versus 2019. The three busiest travel days of the 2019 holiday were Wednesday before and the Saturday and Sunday after Thanksgiving. In 2022 those days experienced double digit declines in demand versus 2019 but the days before and in between were relatively stronger. Baird said reduced airline capacity could be impacting demand and day-of-week travel patterns.
Marriott International, Inc. announced the opening of a new 274-room dual-branded Courtyard and Residence Inn by Marriott hotel in Montreal Midtown, Quebec, owned by TAV Educational and operated by iHotels by InnVest Hotels. The hotels include multiple gathering areas in the main lobby, a Bistro, evening Bar, Grab and Go option, over 2,500 square feet of meeting space, full Kosher kitchen, guest laundry facilities, indoor pool, fitness center, indoor parking and electric car charging stations.
Construction is complete and occupancy has begun at the dual-branded Marriott Hotel tower in the New York City’s Chelsea neighborhood. Developed by Sam Chang of the McSam Hotel Group, the property consists of 531 guest rooms split between a 284-room SpringHill Suites and a 247-room TownePlace Suites. The hotel includes a meeting room, laundry facilities and a fitness center.
The Mattoon Chamber of Commerce has scheduled a December 6 rribbon-cutting ceremony for a new hotel and its adjoining convention center in Mattoon, Illinois. Built by Yost Enterprises and its partners, the new four-story Hilton Garden Inn and McKenna-Yost Convention Center offers 102 guest rooms, a convention center than can seat up to 550 people and a full-service restaurant. The hotel also has fire pits and grills, a fitness center and a convenience store. An indoor pool is set to open later this year.
Peachtree Hotel Group is overseeing the construction of a 143-room Hampton Inn by Hilton in downtown Delray Beach, Florida. The four-story hotel will have 960 square feet of meeting space, a pool, and an underground garage with 107 parking spaces. Construction began in 2021 and is expected to be finished in February with reservations beginning in March.
In Beachwood, Ohio, the City Council approved a development agreement with local developer Chad Kertesz paving the way for the complete redevelopment of the former DoubleTree by Hilton hotel site. The agreement allows Kertesz’s My Place, LLC to go forward with a plan estimated at $200 million that will have the site cleared of the hotel, and redeveloped with construction of four new buildings. The new construction will include an apartment building featuring residential over retail space; an office building over retail; a two-story retail pavilion; and a boutique hotel. A large, central public space is also included.
Red Roof announced the opening of the Red Roof Inn Reading in Reading, Pennsylvania. The 80-room hotel offers two onsite restaurants, a seasonal outdoor pool and laundry facilities.
A $63 million South Yard development that is opening in stages will include 128 apartments, multiple restaurants and a seven-story hotel when completed in late 2024. Area business owners expect it to contribute to the revitalization of south Fayetteville, Arkansas. The mixed-use development is a project of Specialized Real Estate Group. The development will reuse four existing buildings formerly occupied by Farmers Cooperative. Other amenities on the 9-acre development include a dog park, community garden, private working pods and a 1.25-acre park. Construction on the 131-room hotel is expected to start in early 2023 and is slated to be completed in the third quarter o 2024. The hotel construction will take about 18 months to complete and will be the last phase of South Yard to open. The hotel brand, which is currently negotiating the lease agreement, is expected to be announced before construction starts early next year. South year opened to residents on August 15, and its existing 43 apartments are leased. Additional units will be available as construction nears completion.
Kimco Realty aims is looking to transform the Whittwood Town Center, in Whittier, California into an urban village with 1,200 homes, a hotel and retail. Kimco, owner of the mall since 2017, is seeking city approval to turn the property into five districts to make up a new Whittier destination for shopping, dining and home. The new complex would include 1,200 residential units, shops and restaurants, a 300-room hotel, and a new transit hub. A Whittier Boulevard District would incorporate existing stores and restaurants and make space for a new cinema, restaurant, parking and service uses, plus outdoor plazas and seating. A Villages Plaza District would include the proposed hotel, small stores and open space. A Villages Services District would feature unspecified buildings along private streets and walkways and a Residential Village District would include the already built condo community. Kimco Realty has not announced a timeline for construction.
Europe Headlines
Hilton announced plans to extend the Motto by Hilton brand to the UK with the Autumn 2024 opening of Motto by Hilton Glasgow on the banks of the River Clyde. The 196-room hotel is part of a franchise agreement with Cycas Hospitality and is under the ownership of Silk Property Group.
U.S. private equity firm Lone Star has reportedly purchased the company behind the landmark Hotel Metropole in Brussels, from the Bervoets family for an undisclosed sum. Centaurus Hospitality Management has been tapped to run the property.