Skift Take

Chinese hotels are now performing as well as they had been before the wave of coronavirus re-infection. Plus, news on Accor's expansion in India, Taiwan's tourism stimulus package, and more.

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Daily Lodging Report

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Here are some excerpts from Daily Lodging Report from the past week. If you’re not a subscriber, you should be. Get news on hotel deals, development, stocks, and career moves. Sign up here, now.

Sunday, June 19

The Baird/STR Hotel Stock Index was down -5.8 percent in May from April. Year to date the stock index was down -2.8 percent in the first five months. In May the Hotel Brand sub-index was down -6 percent while the Hotel REIT sub-index was down -4.9 percent.

Pebblebrook Hotel Trust said demand for business travel picked up in May and is continuing to accelerate at the beginning of June. They reported for the week ended June 12, urban hotel occupancy was 80%, the highest level since the pandemic started. Portfolio-wide average daily room rate was up 20 percent above pre-pandemic levels.

While everyone is concerned about inflation and a recession hurting the momentum we are seeing in business travel, what could really screw things up is the state of air travel. The Skift Retreat just ended with at least 30 percent of employees having their flights either delayed for over three hours to being canceled over and over again. It is really going to be hard to have a serious rebound if it takes extra time to get where you are going. Add to that the certainty of Covid outbreaks at any gatherings and it is time the U.S. makes available antivirals so they can be handed out at every convention. The latter was tongue in cheek — or was it?

Summit Hotel Properties, Inc. completed the previously announced acquisition of the dual-branded 264-guest room AC Hotel by Marriott & Element Miami Brickell. The company’s initial purchase option was based on a gross hotel valuation of $89 million and the company funded its 90 percent equity interest totaling $38 million with the conversion of the previously funded $30 million mezzanine construction loan and $8 million in cash. The transaction was financed with the assumption of a $47 million mortgage loan. The project was developed by an affiliate of Robert Finvarb Companies, LLC, who will remain the company’s joint venture partner with a 10% equity interest in the Brickell Hotels. 

Skift Note: The hotel and hospitality sectors have been relatively insulated from the bearishness in the markets at large. That steadiness speaks to how strongly hotels are performing post-pandemic.

Monday, June 20

The 2022 China Hospitality Development Report was jointly released by the China Hospitality Association, School of Tourism Sciences at Beijing International Studies University, and a Shanghai-based consultancy and showed the pandemic deal a blow to domestic hospitality in 2021 as the number of hotels declined by 9.7 percent to 252,000. Chain hotels maintained momentum with their total number of outlets reaching 57,000 at the end of 2021, up 5,000 hotels from the end of 2019. The top 50 Chinese hotel groups combined had nearly 4 million guest rooms, covering 85 percent of the domestic chain hotel market. Jin Jiang International opened more than 3,500 new hotels over the past two years and is planning about 1,500 new openings this year. Of the 13.47 million guest rooms across China, 35 percent were owned by chain hotels in 2021, up 4 percentage points from 2020.  Four first-tier cities – Beijing, Shanghai, Guangzhou and Shenzhen registered a chain guest room ratio of 49.6 percent. In other urban areas except provincial capitals and those at sub-provincial levels, only about 30 percent of guest rooms belonged to hotel chains.

Accor expects to have over 100 hotels in India by 2027, aiming to almost double its network there.  They currently have 55 hotels and this year will open new Ibis hotels in Hebbal and Thane, new Novotel hotels in Mumbai and Jodhpur, and will open a new Raffles property in Jaipur next year. Novotel and Ibis are their most popular brands in India with 21 and 20 properties respectively. All Ibis hotels are owned by the joint venture of Accor and InterGlobe Enterprises. Accor manages the hotels for the JV.

Meanwhile Choice Hotels International is shutting down Choice Hotels India. The Economic Times reported that Mumbai-based Suba Group of Hotels could take over as the master franchise for Choice in India. Choice is shutting its corporate office in Gurugram.

Skift Note: It’s remarkable how chain-dominated China is. The pandemic may have weakened the position of independents relative to chains even further.

Tuesday, June 21

Propst Development and Chartwell Hospitality have finalized the development of Conrad Nashville, Hilton’s first luxury branded hotel in Nashville, TN. Additionally, the co-developers have completed the sale of the 234-room property to Northwood Investors, LLC. Scheduled to open on June 29, The Conrad Nashville is part of Broadwest, a $540 million mixed-use project master developed by Propst Development consisting of Class A office space, 196 luxury condominiums, and the Conrad Hotel.

The Beverly Hills, California Planning Commission unanimously approved LVMH’s plans to build a 115-key Cheval Blanc hotel on Rodeo Drive. The nine-story hotel will include a wellness center, spa, conference rooms, restaurants, and about 25,000 square feet of street-level retail space.

Sandals Resorts International announced the appointment of Rachel McLarty to Corporate Director of Communications & Public Relations, overseeing the company’s corporate communications efforts and public relations initiatives for the brands throughout the Caribbean.

Skift Note: Nashville is one of the hottest U.S. hotel markets, but even over-built places like Beverly Hills are finding room for new properties.

Wednesday, June 22

According to a study by CBRENew York City’s pandemic-ravaged hotel scene is going to be just fine. And it will be fine a lot sooner than many analysts have forecasted. CBRE says the hotel sector has begun to rebound. CBRE projects a nearly 30% jump in ADR [average daily rate] and annual occupancy rising to 77.2% next year. CBRE also predicted that a key metric of hotel performance, RevPAR, will rise by 75% this year over last in NYC.

IHG Hotels & Resorts announced that more than 26 Holiday Inn Express properties showcasing Formula Blue 2.0 have now opened across the United States and Canada, bringing the total to more than 1,200 hotels in North America. Guests will see noticeable design changes.

The Ritz-Carlton Maui, Kapalua, announced the final phase of a $100 million resort-wide transformation, including new guestrooms, dining experiences, and public spaces that are set to be unveiled by the end of 2022. The resort will open The Ritz-Carlton Club Lounge at the Anuenue Room this July and the new Fire Lanai Collection of rooms in November.

Noble Investment Group announced the acquisition of the Hilton Garden Inn Boise Downtown in Boise, ID, capping more than $1 billion of investment activity over the past year. 

Nobu Hospitality, in partnership with RCD Hotels, announced two new hotels and residences in Punta Cana and Orlando, marking the fifth successful collaboration between the companies.

Skift Note: It’s reassuring that New York City is recovering faster than expected, given its importance as a gateway city for international tourism and business travel.

Thursday, June 23

Yesterday we reviewed a positive report on the New York City hotel industry by CBRE, and today the NY Post had a rebuttal from the Hotel Association of New York City. In fact, the headline said that the association slammed the report. The association is trying to get a big cut in the city’s hotel occupancy tax from 5.875% to 2.875% and a reduction in property taxes, so that report was not good timing for them. The association CEO, Vijay Dandapani, said CBRE’s survey was off base in predicting a return to pre-pandemic occupancy and revenue by 2024, saying there is a gap between expectations and hope. He said CBRE’s prediction RevPAR would leapfrog back to 2019 numbers this year was very unlikely. The association’s data for the first five months of the year has RevPAR at $155 compared with $184 before the pandemic. They also warned that in 2019 there were 122,000 rooms, and there are only around 100,000 now.

STR reported that China hotel RevPAR [revenue per available room] for the week ended June 18 was down -14.3% year over year. That is one of the best comp performances since the re-infection of Covid began to hit parts of China. As for RevPAR versus that week in 2019, it was down -38.3%. Absolute occupancy for the week was 55.3%, getting close to the year-ago level, which was 58.4%.

Taiwan will roll out a five-month-long hotel stay subsidy program on July 15 to give a boost to the country’s tourism industry. Hotel stay subsidies are part of the ministry’s tourism stimulus package to benefit travel agencies, hotels, and amusement parks. Each tour group consisting of at least 15 members going on a trip lasting at least two days and one night will be given a NT$20,000 subsidy, which will go up to NT$30,000 if the tour meets certain criteria. Individual tourists will be given a subsidy of NT$800 per room per night for staying at a hotel or bed and breakfast on weekdays, and the subsidy will go up to NT$1,300 per night if they stay at a bike-friendly hotel, a star-rated hotel, or a Taiwan Host B&B.

Radisson Hotel Group is looking to expand its APAC footprint by targeting 400% growth by 2025. The group will add 1,700 hotels and resorts through organic growth, mergers and acquisitions, master license agreements, and leases in key locations in India, Thailand, Vietnam, Australia, and New Zealand.

Marriott International announced a strategic agreement with Vinpearl, Vietnam’s largest hospitality and leisure chain. The agreement is to convert and develop close to 2,200 rooms across eight hotels in Vietnam, significantly expanding its portfolio of hotels and resorts in the country. The collaboration will result in the debut of the Autograph Collection Hotels brand in the country.

Skift Note: Mainland Chinese hotels appear to be returning to the performance they had enjoyed before the wave of re-infection. Meanwhile, we’ve heard analysts are wondering aloud whether Vinpearl in Vietnam will sell more parts of its network soon.

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