Skift Take

Hilton is a winner in the Trump D.C. hotel sale while China's hotel development pipeline isn't suffering like the country's occupancy rates amid new coronavirus mitigation efforts.

Skift’s Daily Lodging Report is a subscription-required, email-only newsletter read by anyone and everyone in the hotel investor, owner, and operator space, including CEOs of some of the industry’s top brands. With two separate regional versions, it covers everything from North America to Asia Pacific. The report itself, curated by founder Alan Woinski, boils industry news down to a quick, easy-to-read daily digest known for keeping readers up to date in an efficient, effective way.

Here’s a sampling of what the Daily Lodging Report provided to its readers this past week. If you’re not a subscriber, you should be. Don’t wait. Sign up now here.

Sunday, Nov. 14

Skift reported on commentary from Disney, Comcast, and analysts that a surge in international visitors to the U.S. may not benefit Disney and Universal theme parks until next year, since early arrivals will focus on family reunions and holiday trips will need planning. While domestic visitation rose in the parks operated by The Walt Disney Company and Comcast, capacity constraints, rising costs and fewer international travelers visits to its U.S. parks weighed on profits. Disney executives expect a recovery in international attendance only by the second half of next year and signaled a ramp-up in costs as well. Comcast CFO Brian Roberts is encouraged by the continued recovery but feels that getting back to and then exceeding pre-pandemic levels of EBITDA will likely require an improvement in international visitation. 

Skift Note: Slow and steady wins the race. International borders reopening to vaccinated travelers to the U.S. will fuel a major recovery in 2022 for theme parks, but don’t expect much before then.

Monday, Nov. 15

The Trump Organization has reached a deal to sell its Washington hotel lease for $375 million to CGI Merchant Group, who has struck an agreement with Hilton Worldwide Holdings to rebrand the hotel as a Waldorf Astoria. For the Trump Organization, getting $375 million will be a victory considering the negative press they have received for months, allowing Donald Trump to say he earned a profit on the sale. The reports on this suggest a closing next year which means things could still go wrong.

Skift Note: Sure, it’s a profit, but keep in mind: Trump spent more than $200 million renovating the hotel on top of the ground lease purchase. The real winner here is Hilton, which has long desired a Waldorf Astoria in D.C.

Tuesday, Nov. 16

Lodging Econometrics released China’s Construction Pipeline Trend Report stating at the end of the third quarter of 2021, China’s total construction pipeline stands at 3,571 projects/681,095 rooms, a mere three projects shy of the cyclical high of 3,574 projects set in the second quarter of 2020. At the end of the third quarter, new project announcements increased a substantial 52% over Q2’21. Additionally, brand conversion and renovation activity remains strong in the region. Presently, there are 2,453 project/444,439 rooms under construction in China. Projects scheduled to start construction in the next 12 months are at 546 projects/103,526 rooms. Project and room counts in the early planning stage stand at 572 projects/133,130 rooms at the end of Q3. China’s total construction pipeline is led by Chengdu with 140 projects/28,643 rooms, Shanghai with 127 projects/24,768 rooms, Guangzhou with 121 projects/24,791 rooms, Wuhan with 98 projects/13,533 rooms, and Xi’an with 94 projects/16,785 rooms. The top hotel franchise companies in China’s Construction Pipeline are Hilton Worldwide with 666 projects/124,602 rooms, InterContinental Hotels Group with 443 projects/91,077 rooms, Marriott International with 139 projects/104,674 rooms, JinJiang Holdings with 204 projects/20,195 rooms, and Accor with 178 projects/31,996 rooms. The largest brand in the Pipeline for each of these companies are Hampton by Hilton with 375 projects/56,798 rooms, Hilton Garden Inn with 85 projects/17,447 rooms, IHG’s Holiday Inn Express with 203 projects/33,636 rooms and Holiday Inn with 71 projects/17,284 rooms. The top brands for Marriott International are Four Points Hotel with 64 projects/17,443 rooms and its Marriott Hotel brand with 59 projects/17,948 rooms. Leading brands for JinJiang Holdings are 7 Days Inn with 101 projects/7,951 rooms, followed by Vienna Hotel with 44 projects/4,502 rooms. Accor’s leading brands are the Ibis brands with 60 projects/6,338 room and Mercure Hotel with 49 projects/7,922 rooms. Through the third quarter of 2021, China has opened 416 hotels/67,913 rooms. The LE forecast for new hotel openings expects another 345 hotels/45,050 rooms to open in the fourth quarter, bringing the expected new hotel openings to 761 new hotels with 112,963 rooms by year-end. In 2022, 920 new hotels with 150,899 rooms are forecasted to open. 


Skift Note: China’s hotel recovery hit a roadblock in recent months, but developers still want to elbow into the country and its seeming limitless appetite for branded hotels.

Wednesday, Nov. 17

Macau is continuing negotiations with Mainland China on group visas and e-visas but the Chief Executive acknowledged that a broader opening to international travel is not imminent. He does expect the border situation with Hong Kong and Mainland China to normalize next year as vaccination rates rise. Meanwhile in Hong Kong, 44 guests who were quarantined at Four Points by Sheraton Hong Kong, Tung Chung had to be transferred to Penny’s Bay quarantine center after 13 samples at the hotel tested positive for Covid-19. Hong Kong reported one more imported case, a 21-year-old woman who arrived from India on November 14. 


Skift Note: Macau gaming operators need some good news, and uncertain reopening timelines aren’t helping tanked revenues.

Related Group and SH Hotels & Resorts, alongside Baccarat crystal company, have launched sales of Baccarat Residences Miami in the heart of Brickell. The 75-story high-rise will feature 318 flow-through tower residences starting at the 15 level and culminate at the top four floors with 8 penthouses. An exclusive selection of 28 riverfront flats and duplexes anchor the tower to the waterfront promenade. Property amenities include a fitness and wellness center with spa facilities, including a hammam, steam room, and sauna; on-site spa shop; a Clubroom; on-demand beauty salon and barber; signature riverfront restaurant. Outdoors a pool deck features an infinity saltwater pool, spa and cabanas. The development is set for completion in 2025.

Skift Note: Analysts often caution against just anyone going into the business of hotel-branded residential developments. Baccarat as a hotel brand is pretty small, but its crystalware is a staple in the dining rooms of the wealthy customers it wants for a condo project. This can work.

Thursday, Nov. 18

According to the seventh annual Global Business Travel Forecast published by CWT and the Global Business Travel Association, global travel pricing across air, ground and hotels, is expected to increase in the next two years, driven by increasing demand, capacity constraints and travelers’ sustainability demands, plus increased labor and fuel costs. The global economy is expected to grow 5.9% in 2021, followed by 4.9% in 2022. Macroeconomic forces, government policy and COVID protocols, will continue to impact future pricing more than ever before. Even as macroeconomic challenges remain acute, global economy growth expectations across 2022 and 2023 will help accelerate the recovery of business travel. After rising 2.6% in 2019 air fares fell 3.1% in 2020 and a further 31% for business travelers, led by a 38% decline in premium class, followed by nearly a 19% decline in economy class tickets across 2021. However, air fares are expected to rise 3.3% in 2022 and 3.4% in 2023. Airline capacity remains tight and is unlikely to return to pre-pandemic levels until 2023 or 2024. Domestic leisure destinations will continue to lead recovery in 2022. After rising 3.5% in 2019, hotel prices fell 8.3% in 2020 and an additional 17.7% in 2021, with prices as of Q3 2021 down from 2019 levels by approximately 25%. In 3Q21, hotel prices are down 25% from 2019 levels. Although hotel prices are expected to rise 13% globally in 2022, followed by a further 10% in 2023, it will take time for a return to 2019 levels in many markets. Upscale hotels should see higher occupancy levels, and higher room rates, as business travel gains momentum. Corporate meetings & events will also help impact hotel pricing, and CWT Meetings & Events anticipates that the bulk of immediate meeting bookings will be small and regional.

Skift Note:  Will an expected 13 percent jump in hotel room rates next year be a further deterrent to corporations already closely tracking costs when it comes to the return of business travel? This report from a global business travel trade group is nothing if not sobering amid bullish projections that road warriors will be back in full force.

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Tags: coronavirus, coronavirus recovery, daily lodging report, hotels

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