Asia Is the Beating Heart of Future Hotel Growth

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.

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, July 3

Baird added Apple Hospitality REIT as a Bullish Fresh Pick. Baird said slowing growth and recession fears are getting priced into Hotel REIT share prices. While actual and perceived risks are higher today, Baird believes stock prices are much lower to better reflect the uncertainties. They believe Hotel REIT stocks are approaching valuation levels where they have bottomed historically. They did reduce price targets on their coverage. The rank order of their Outperform rated names for 2H22 is APLE, XHR, RLJ, INN, and DRH.

The Points Guy reported that Witkoff Group and Access Industries’ One High Line project hotel will now be a Faena hotel instead of a Six Senses brand. The founder of Access Industries, Len Blavatnik, is also a founding partner of the Faena brand. The new owners took over the stalled mixed-use development in Manhattan’s West Chelsea neighborhood some months ago.

Watermark Capital sold the 226-room Holiday Inn, in New York City’s Chelsea neighborhood, to Two Kings Real Estate for $70.3 million. Watermark Capital reportedly has been marketing the property for sale all year. It fell behind on its mortgage payments in October 2020, and the loan was transferred to a special servicer in January 2021. Watermark was said to have paid $111 million for the hotel in 2013 and invested $8 million in renovations and improvements, according to Crain’s New York.

San Antonio’s Historic Design and Review Commission granted White Lodging final approval to develop a 10-story hotel along South Alamo Street. Originally a nine-story boutique hotel, the revised scope of the project will include a nearly 360-room hotel with a rooftop bar and pool and a street-level restaurant.

Skift Note: The Faena deal is interesting. IHG (InterContinental Hotels Group) lost the deal and won’t be able to open its first U.S. outpost of the Six Senses brand as soon as hoped.

Monday, July 4

CapitaLand Investment Limited’s unit, The Ascott Limited, announced it is acquiring Oakwood Worldwide from Mapletree Investments Pte Ltd. The acquisition of the premier global serviced apartment provider will increase Ascott’s global portfolio by 81 properties and about 15,000 units, leapfrogging Ascott to more than 150,000 units in about 900 properties across over 200 cities in 39 countries. It will add new markets for Ascott’s portfolio, including Cheongju in South Korea; Zhangjiakou and Qingdao in China; Dhaka in Bangladesh; as well as Washington, D.C..

Skift Note: Oakwood has the most inventory of serviced apartments worldwide through its network. Perhaps Ascott will help juice its growth.

Tuesday, July 5

Hyatt Hotels Corporation announced a Hyatt affiliate entered into a management agreement with NTT Urban Development Corporation for Hyatt Centric Sapporo. The 216-room hotel is slated to open in 2024 and will be the third Hyatt Centric property in Japan and the first Hyatt Centric in Hokkaido in northern Japan. The hotel will be part of a new 26-story building complex that is currently under construction.

Fort Partners Puerto Rico LLC announced the acquisition of the Palazzo Marini (3-4), in Rome, for €165 million with plans to develop the property into a luxury hotel that will be managed by Four Seasons Hotels and Resorts. 

Rex LLC is planning a $100M+ renovation and expansion of the historic Hotel Ella, in Central Austin, TX, that will quadruple the number of guest rooms and add a flurry of amenities. Plans include the addition of a fine dining restaurant, a cigar and scotch bar, and a basement wine bar. A rooftop garden and substantial underground parking could also be added. The 47-room Hotel Ella is anchored by the historic Goodall-Wooten Mansion. Rex’s expansion would boost Hotel Ella to 213 rooms with 172 parking spaces. The Goodall-Wooten Mansion will remain as is and become home to the new restaurant, cigar lounge, and wine bar, but the rest of the hotel will be razed to make room for the expansion. 

Hilton announced the opening of Hilton Maldives Amingiri Resort & Spa, marking the expansion of Hilton’s flagship brand into the Maldives. The all-villa resort is the fourth resort under the company’s portfolio of brands in the country.

Marcus & Millichap announced it negotiated the $7.5 million sale of Beach House Inn located in Daytona Beach, FL. The two-story, 50-room beachfront hotel has direct beach access. The buyer is an opportunistic investor out of Georgia.

Skift Note: We’ve been noticing a growing flurry of hotel deals and development news for Japan, though recent currency fluctuations have complicated things.

Wednesday, July 6

Sotherly Hotels (SOHO) gave an update on 2Q22, saying overall occupancy was 69.5% in the quarter, up 17.3% from a year ago. That was still down -10% from 2Q19. RevPAR was $125.05, up 43.2% from 2Q21 but still down -2.7% from 2019. SOHO also said occupancy fell to 67.8% in June from 68.4% in May and 72.4% in April. June RevPAR also dropped to $116.10 from $124.72 in May and $134.33 in April. SOHO tried to make it sound like they were very pleased with the results, but given the uncertainty on how inflation, gas prices, and the airline situation is impacting what was supposed to be another solid summer of leisure, SOHO shareholders may take some solace given the stock is trading like they are heading into trouble. But those caring about the rest of the industry will not like this. 

ARA US Hospitality Trust entered into a partnership and sale agreement to sell a four-property portfolio of Hyatt Place hotels for $32.5 million to Three Wall Capital. The four hotels are: Hyatt Place Pittsburgh Cranberry in Pennsylvania; Hyatt Place Birmingham Inverness located in Alabama; Hyatt Place Cincinnati Northeast in Ohio; and Hyatt Place Cleveland Independence in Ohio. The sale is expected to be completed in Q3 2022. Proceeds from the sale will be used to lower the bank debt or might be redeployed to acquire new assets. 

The Dorian, Autograph Collection and Courtyard by Marriott Calgary Downtown, is getting ready to open on July 21. Located in the heart of Calgary, Alberta’s business district, Marriott’s dual-brand Autograph Collection and Courtyard by Marriott will feature 306 guestrooms and be the city’s first “stacked” hotel.

Stonehill originated a $79.8 million, three-year, floating-rate bridge loan for Churchwick Partners to support the recapitalization and acquisition of a 12-property, extended-stay hotel portfolio consisting of 1,432 rooms. 

Skift Note: We continue to see the “stacked hotel” concept spread worldwide because of the various efficiencies it can bring.

Thursday, July 7

The World Travel & Tourism Council said the travel & tourism sector in Japan will provide a significant boost to the nation’s economic recovery next year, with its GDP contribution set to reach near pre-pandemic levels. The forecast shows the sector’s contribution to Japan’s GDP could reach nearly 40 trillion yen by the end of 2023, just -2.2% below 2019 levels. The data also reveals employment will surpass pre-pandemic levels. Over the next decade, the council expects Japan’s travel & tourism GDP to grow at an average of 2.6% annually.

Over in Indonesia, WTTC expects the travel & tourism sector to create more than five million new jobs over the next decade and will be a driving force behind the country’s economic recovery. Over the next ten years, Indonesia’s travel & tourism sector is expected to grow at an average annual rate of 10%, twice the rate of the overall economy, which is forecasted to grow by 5.1%.

The first Fusion Originals property, the Fusion Original Saigon Centre, will welcome guests this month. Located in Saigon Centre, atop the Takashimaya Shopping Mall, the 99 bespoke accommodation units occupy 10 floors in one of Ho Chi Minh City’s largest and most fashionable mixed-use developments. Fusion is considered Vietnam’s most recognized hotel group. The company has big plans for the Fusion Originals brand and is exploring multiple locations around the country. Like the Saigon Centre facility, these Fusion Originals will be designed to capture local fashion & culture. The Original branding is because Fusion will make sure no two properties are alike, each with its own distinct personality. Fusion Original is one of eight brands that come under the Fusion umbrella. With the new Saigon opening and the recent acquisition of Glow Hotels & Resorts from Thailand, Fusion has more than 4,000 rooms in Vietnam and Thailand.

Skift Note: Japan has surprised some observers by having higher coronavirus vaccine adoption rates than the historical trend for vaccines. The country is eager for tourism to rebound. Meanwhile, Indonesia is often overlooked by Westerners as a growing powerhouse for hotel growth.