U.S. Hotel Construction Increased in December

North America
8 minutes

The DJIA fell 252 points, Nasdaq was down 105, the S&P 500 fell 30 points and the 10-year treasury yield was up .02 to 3.40%. It seemed like there were more lodging stocks in the green than the red despite the overall market. The two biggest movers were to the downside with SLNA down -7% and VCSA falling -6% on the day.

Wells Fargo cut their price target on Airbnb to $130 from $165. They maintained their Overweight rating.

Truist held a conference call with corporate travel data company TRIPBAM. Takeaways included that volume in early January is down 30% in the US for the trailing 30 days compared to the same period of early 2020. The gap is anticipated to close to 20% in 1Q 2023. Truist believes the strength of volume recovery in early 2023 may provide a read-through on permanent versus temporary Covid-related corporate travel demand loss. Corporate room rates are said to be down 2% lower than in January 2020. Corporate buyers expect hoteliers to raise room rates due to rising operating costs. Large markets that have seen a slower recovery like NYC, Chicago and LA, have rebounded of late but San Francisco’s recovery is still relatively weaker.

After 25 consecutive months of year-over-year declines, U.S. hotel construction increased slightly in December, according to pipeline data from STR. December 2022 (percentage change in comparison with December 2021): in construction: 159,344 rooms (+0.3%); final planning: 213,066 rooms (+15%); and planning: 240,092 rooms (-15.6%). When looking at the in-construction phase of the pipeline, luxury chains show the highest number of rooms as a percentage of existing supply: Luxury (5.3%, 7,241 rooms); Upscale (4.6%, 41,111); Upper Midscale (3.7%, 43,946); Upper Upscale (3.0% 20,140); Midscale (2.5%, 10,766); and Economy (0.9%, 6,482 rooms). NYC leads the major markets in rooms in construction as a percentage of existing supply: New York City (8.5%, 10,944 rooms); Phoenix (7.1%, 4,968); Phoenix (7.1%, 4,968); Dallas (5.0%, 4,877); Nashville (4.8%, 2,746); and Detroit (4.7%, 2,192 rooms). 

STR said US hotel RevPAR the week ended 1/14 was up 33.1%. RevPAR was up 9.4% versus the same week in 2019. 

IHG Hotels & Resorts is celebrating recent successes and upward momentum for voco hotels. With 10 new openings in 2022, bringing its global total to 41 hotels, and an additional 34 in the pipeline, voco hotels continues to extend its presence with more growth planned in 2023. New properties in development across the U.S. include: Destin, FL; Laguna Hills, CA; College Station, TX; and Flushing, NY and in Mexico in Queretaro and Saltillo. 

Sonesta International Hotels Corporation announced the debut of Sonesta Essential, a new Upper-Midscale Select-Service segment brand that is now available to franchise in the U.S. The first two Sonesta Essential hotels will be Sonesta Essential Vacaville, CA, a franchise, which is set to open in late spring 2023 and Sonesta Essential Chattanooga, TN, a managed property that will be converted from Sonesta Select in the fall of 2023. 

Virgin Hotels, the luxury lifestyle hospitality brand of the Virgin Group and Virgin Limited Edition, announced they will come together under the new parent brand named Virgin Hotels Collection. They will also be joined under the Virgin Hotels Collection brand by Virgin Residences and collectively they have a significant growth strategy to add more city locations, resorts and residences. James Bermingham, current CEO of Virgin Hotels will take up the realm of CEO for the new Virgin Hotels Collection brand on April 1 as long-serving Jon Brown, CEO of Virgin Limited Edition, steps down at the end of March, having spent more than 24 years leading Virgin Limited Edition. 

Accor announced a new edition to the Group’s network of brands: Handwritten Collection, a global portfolio of charming bespoke hotels offering an intimate and stylish hospitality experience. Accor already has over 110 Handwritten leads globally totaling more than 11,500 rooms, including 12 secured signings, with five properties expected to debut throughout the first trimester of 2023. With a current conversion rate of 80%, the bulk of properties joining Handwritten Collection will be conversion projects rather than new builds, requiring a simpler transition and ramp up process and a more sustainable growth and development model.

Valor Hospitality Partners announced the addition of the DoubleTree Hilton Hotel St. Augustine in St. Augustine, Florida and Hilton College Station and Conference Center in College Station, Texas, to its growing property management portfolio. The DoubleTree Hilton Hotel St. Augustine houses 97-rooms, a ballroom, outdoor pool and onsite restaurant and will undergo a full property refresh later this year. The property is in partnership with RADCO. The 303-room Hilton College Station and Conference Center houses more than 27,000 square feet of meeting and event space, multiple food and beverage venues and an outdoor pool with a waterfall and whirlpool. In partnership with property ownership, Valor will support the property’s forthcoming renovation, which will introduce addition food and beverage outlets, including a rooftop bar. 

Plans to bring a new hotel in Novi, Michigan are moving forward. The plan is for a new Home2 Suites by Hilton in the Adell Center. The project will stand 5 stories and contain 141 rooms. 

The Uptown neighborhood of Dallas, Texas is getting another hotel. Phoenix Development Partners plans for the $48.8 million project is set to start this spring. The 19-story hotel will include a seven-level parking garage and will open in 2025. It will be operated under the Moxy and AC flags

Hyatt Hotels Corporation announced the opening of Andaz Mexico City Condesa, marking the first urban Andaz property in Mexico and the second Andaz-branded hotel in the country. The hotel offers 213 guestrooms including 20 suites, a rooftop restaurant, all-day café, Wooftop Beer Garden and Canine Club, rooftop pool, Pasana Spa & Wellness and more than 12, 674 square feet of meeting and event spaces. 

A five-story, 201-key Caption by Hyatt hotel has been proposed for the south end of the Township Nine urban infill project in Sacramento’s River District. The project, by 29th street Capital and Presidio Cos., includes a full-service bar, food service, coffee shop, mid-size meeting spaces, fitness center, rooftop terrace/deck including a bar with a kitchen, a lobby lounge, and a small market.

Fairmont Hotels & Resorts and Manchester Financial Group announced the signing of definitive agreements for the development and management of a Fairmont hotel in downtown San Diego, California. Scheduled to open in 2027, the 36-story Fairmont Manchester San Diego will feature 1,160 rooms, including 69 suites and Fairmont Gold; more than 120,000 square feet of indoor and outdoor meeting space, including two 20,000 square foot ballrooms; six dining venues; a spa and fitness facilities; and a rooftop pool. 

The shuttered Hotel @ Times Square, in New York City, defaulted on a $4 million mortgage and is headed to the auction block. Premier Hotels has owned the 213-key property for less than a year, after purchasing it from Apple Core Holdings in February for $59.5 million. At the time of sale, Apple Core had already defaulted on loan payments to its lender. Premier’s acquisition was financed with $37.4 million from Benefit Street Partners, which originated $4.8 million in construction and gap loans. Benefit Street also assumed the remaining debt from CMBS investors following Apple Core’s delinquency. The Hotel @ Times Square is not open to the public and is currently being used as a migrant shelter. It’s not clear how the auction process will effect those in shelter at the hotel.

LuxUrban Hotels Inc. reiterated full year 2022 net rental revenue and EBITDA guidance of $42-$46 million and $7-$9 million, respectively. The Company also announced it expects to commence operations at the 124-room The Tuscany in New York City and the 70-unit Townhouse Hotel in Miami Beach the week of January 23, 2023. Each of these properties will be powered by the Company’s consumer-facing LuxUrban brand. 

Singing Hills Golf Resort at Sycuan, in El Cajon, California, has completed its hotel room remodel. Each of the hotel’s 82 guestrooms, 14 suites, and four hospitality suites have been completely updated. In addition to the room remodel, Singing Hills has recently made several upgrades to the golf courses, driving range and bar area at Red Tail Bar & Grill. 

HREC Capital Markets Group arranged the $30.9 million refinancing of the eight Midwest properties, 1,084-key Stoney Creek Hotel Portfolio on behalf of Stoney Creek Hospitality Corporation. The non-recourse loan was provided by BMO Capital Markets, served to pay off various maturing debts, and features a 10-year term, a fixed rate of 6.44%, a three-year interest only period and thirty-year amortization thereafter.

JLL’s Hotels & Hospitality Group closed the sale of Mr. C Seaport, a 66-key boutique luxury hotel in downtown Manhattan’s Seaport District. JLL represented the seller, Atlantic Pearl Investments, Inc., in the sale.

IPA Capital Markets, a division of Marcus & Millichap, arranged the financing for the acquisition of The Blockade Runner Beach Resort on behalf of Castle Peak Holdings. The financing package was provided by Benefit Street Partners and Driftwood Capital. Located in Wrightsville Beach, North Carolina, the 151-key beach resort will undergo a phased renovation. Terms for the loan were not disclosed.

RAM Hotels announced the addition of hotel veteran Jonathan D. Bogatay, CHA,as president of the company effective February 1. Bogatay will oversee RAM Hotels’ strategic, operational, tactical, financial, and cultural expectations. 

Hospitality Ventures Management Group announced that Cory Chambers has been promoted to the newly created role of chief commercial officer and senior vice president, business intelligence. In his new position, Chambers will be responsible for leading the HVMG Revenue Excellence team in maximizing market share growth and bottom-line profitability. Chambers joined the company nearly a decade ago and prior to that was vice president of revenue generation at White Lodging.

DEI Advisors announced that Dorothy Dowling joined the organization as Principal. Dowling is one of the most accomplished and respected female executives in the hospitality industry and brings extensive experience to the non-profit organization. Dowling’s hospitality industry experience spans over 40 years. She was most recently the Chief Marketing Officer of Best Western Hotels & Resorts for 18 years.

Marriott is set to open its pair of US Virgin Island resorts this spring. The new Westin Beach Resort and Spa at Frenchman’s Reef and Morningstar Buoy Haus Beach Resort, Autograph Collection are taking reservations for stays beginning May 15. The dual-resort property is the result of a $350 million transformation of the former Marriott Frenchman’s Reef and Morningstar Beach Resort, both of which were destroyed by Hurricane Irma in 2017. The Westin will have 392 rooms, 28 of which will be suites; a pool deck; a pool bar; and 85,000 square feet of combined indoor and outdoor meeting space. The newly-rebranded Buoy Haus Beach Resort offers several dining concepts and will be the direct beachfront resort of the two, with beach butlers and an unmatched beach experience. Owner Fortress Investment Group has tapped Aimbridge Hospitality to manage both resorts.