Skift Take

Marriott, Hilton, Choice Hotels, and Wyndham all swung to profitability last year, per earnings reports this week. Even if Hyatt didn't, the other reports mostly amounted to a strong sign of recovery well under way for hotel companies with a significant presence in the U.S.

Series: Daily Lodging Report

Daily Lodging Report

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. It covers North America and Asia Pacific with two separate regional editions.

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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, Feb. 13

Extended Stay America appointed Greg Juceam as President and Chief Executive Officer, effective immediately. Juceam most recently served as ESA Management’s Executive Vice President and Chief Operating Officer. He succeeds previous President and CEO Bruce Haase, who has stepped down to pursue other opportunities.

Skift Note: Turnover for the top job at Extended Stay America arrives on the heels of Blackstone and Starwood Capital jointly acquiring the company for $6 billion. Juceam’s task will be transforming ESA into its new owners’ vision.

Monday, Feb. 14

Crown Resorts Ltd. announced they agreed to the revised takeover offer from Blackstone Inc that values the company at A$8.9 billion. Shareholders will receive A$13.10 in cash per share. A shareholder vote will occur in the second quarter of 2022. The initial offer from Blackstone was A$11.85 nearly a year ago. Blackstone raised its offer multiple times but until this one the Crown board had continued to reject it.

Skift Note: Speaking of Blackstone, the investment group’s apparent deal for troubled Crown Results nets it yet another casino network outside its already active playground in Las Vegas.

J.W. Marriott, Jr. confirmed to the Board of Directors of Marriott International, Inc. that he plans to retire as Executive Chairman in May and will not stand for re-election to the Board at the upcoming Annual Meeting of Stockholders. The Board formally designated him Chairman Emeritus, effective immediately following the upcoming 2022 Annual Meeting. In addition, the Board has elected Mr. David S. Marriott to succeed Mr. J.W. Marriott Jr. as Chairman of the Board, also effective immediately following the Annual Meeting. David Marriott joined Marriott International in 1999 and was elected as a director in 2021. Prior to joining the Board, David held a number of operational roles during his tenure with the company, including most recently as the President, U.S. Full Service Managed by Marriott. The Board also announced it has elected Isabella D. Goren, former Chief Financial Officer, American Airlines, Inc. and its parent, AMR Corporation, as an independent director of the company, effective March 1, 2022. The Board also appointed Ms. Goren to the Board’s Audit Committee, effective on the same date. The Board of Directors also announced that Lawrence W. Kellner informed them that he will not stand for re-election at the 2022 Annual Meeting. Mr. Kellner has served on the Board for nearly 20 years and has served as the independent Lead Director and chair of the Nominating and Corporate Governance Committee since 2013. The independent directors of the Board selected Frederick A. Henderson to succeed Mr. Kellner as Lead Director of the Board, effective immediately following the 2022 Annual Meeting. Mr. Henderson has been a Marriott Board member since 2013. Upon Mr. J.W. Marriott Jr.’s and Mr. Kellner’s departure from the Board, the Board will reduce its size from 14 members to 12 members. 

Skift Note: It wasn’t always smooth sailing for J.W. “Bill” Marriott, Jr., but his planned retirement leaves a mammoth legacy for the man who played a crucial role in Marriott becoming a global hotel company.

Tuesday, Feb. 15

China’s total hotel construction pipeline at the end of the fourth quarter stands at 3,693 projects/700,567 rooms, according to Lodging Econometrics’ Q4 2021 China Construction Pipeline Trend Report. Projects presently under construction in China are at 2,574 projects/466,148 rooms. Projects scheduled to start construction in the next 12 months stands at 503 projects/95,057 rooms and, at the end of the quarter, projects in the early planning stage were at 616 projects/139,362 rooms. Chengdu leads China’s hotel construction pipeline with 144 projects/29,485 rooms, followed by Shanghai at 127 projects/24,279 rooms, Guangzhou with 119 projects/24,601 rooms, Hangzhou with 98 projects/20,906 rooms and, Xi’an with 94 projects/16,932 rooms. Franchise companies topping China’s construction pipeline at Q4’21 are Hilton Worldwide with 661 projects/122,650 rooms, InterContinental Hotels Group with 429 projects/88,486 rooms, Marriott International with 397 projects/105,893 rooms, Accor with 193 projects/35,463 rooms and JinJiang Holdings with 190 projects/18,789 rooms. Leading brands for each of the franchise companies, at the end of 2021, are Hilton’s Hampton by Hilton brand with 356 projects/53,724 rooms and Hilton Garden Inn with 91 projects/18,406 rooms. IHG’s leading brand is Holiday Inn Express with 197 projects/32,807 rooms and Holiday Inn at 70 projects/16,994 rooms. Marriott International’s top brands are Four Points Hotel with 67 projects/18,212 rooms and Marriott Hotel with 63 projects/18,909 rooms. Accor’s leading brands are the Ibis brands with 59 projects/6,223 rooms and Mercure Hotel with 51 projects/8,450 rooms. Leading brands for JinJiang Holdings are 7 Days Inn with 95 projects/7,450 rooms and Vienna Hotel with 39 projects/4,022 rooms. Throughout 2021, China opened a total of 566 new hotels with 96,472 rooms. In Q4’21, China saw 98 new hotels accounting for 21,378 rooms open. LE is forecasting another936 projects/142,913 rooms to open in 2022 and 932 projects/154,510 rooms to open in 2023.

Skift Note: Lockdowns aren’t slowing down developer interest in China, as evidenced by Marriott and Hilton’s earnings calls this week. 

If you were going to pick a day to report a solid earnings beat, the day the world heard that Russia was pulling back troops from the Ukraine was it. Marriott beat estimates on just about all line items. Some analysts said they expected a worse impact from Omicron with the only real negative being China results. As to how strong it was, JP Morgan said they were raising full year 2022 and full year 2023 estimates by $100 million each while keeping their RevPAR and net room growth forecasts the same. At the end of 2021, MAR’s development pipeline stock at 485,000 rooms, up 1.7% from 3Q21. More than 206,000 rooms were under construction at the end of last year. After seeing these results pre-market today, you had to be expecting a monster rally in lodging stocks and that did not disappoint either.

Skift Note: Hotel earnings season kicked off with a bang from Marriott, which managed a $1 billion profit for all of 2021.

Wednesday, Feb. 16

Solid earnings reports are the order of the day for the lodging group with the C-Corps starting the ball rolling. After Marriott was Wyndham Hotels, reporting a better-than-expected quarter that most likely was not a big surprise. They also repurchased $83 million worth of stock in 4Q21 and increased their share repurchase authorization by an additional $400 million. WH also said they are planning to launch a new extended stay brand in the economy segment this spring. Their development pipeline grew by 5% during the quarter and 80% are in the midscale segment and above. WH is also looking to sell two owned hotels in Orlando and Puerto Rico.

Hilton beat 4Q estimates while their development pipeline grew by 4,000 rooms quarter to quarter to 408,000 rooms. Their 2022 net unit growth guide of 5% was met with positive commentary by analysts. 

Choice Hotels also beat estimates and while there was a focus on their capital return plans, they did not repurchase any shares in 4Q, raising the dividend by 6% (announced today) but said they returned $17.6 million to shareholders in January 2022. As always, we remind you that the quarters CHH does not repurchase shares are more times than not followed by flat or lower share prices in the following months. The domestic room count being down -1.2% probably won’t help even if it is underperforming properties and the AMResorts-branded properties leaving the portfolio.

Skift Note: Strong earnings numbers continued the week for companies putting a lot of emphasis on courting travel from workers at small- and medium-sized businesses.

Thursday, Feb. 17

Hyatt Hotels had the most debated earnings report with many saying they missed estimates, Truist Securities being adamant that H actually beat estimates but now that they need to include timeshare accounting for ALG, buy and sell side needs to analyze net deferred income and net financed contracts when figuring out adjusted EBITDA.

Skift Note: Not everyone was a winner on earnings reports this week. Hyatt touted signs of improvement and optimistic booking patterns for later this year, but it still didn’t manage to taste profitability like its U.S.-based competitors.

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Tags: blackstone, choice hotels, coronavirus, daily lodging report, earnings, extended stay america, future of lodging, hilton, hotels, hyatt, marriott, wyndham