U.S. Hotel Construction Declines for 7 Straight Months

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 24

W Hotels Worldwide announced the opening of W Toronto. The 11-story property features 254 guest rooms, including 30 suites; five event spaces encompassing 4,679 square feet; a 6th floor Welcome Desk and Living Rooms, 5,000 square foot space including a communal “fire” pit, a circular bar, and access to The Yard and a FIT gym.

According to STR, U.S. hotel construction has declined for seven consecutive months. Rooms under construction in both New York City and Nashville represent a significant percentage of those markets’ existing supply. Additionally, planning activity continues to rise nationally, albeit at a slower pace, with markets such as Miami, Nashville, and Phoenix showing increased interest from developers.

Skift Note: On the bright side, current hotel owners won’t face much fresh competition from new U.S. hotels for the rest of this year. Experts said that headwinds include rising debt costs because of hikes in interest rates combined with supply chain issues.

Monday, July 25

Selina announced the opening of Selina Serenity Rawai Phuket in Thailand. This is the first Selina property to be fully operational in Southeast Asia. They currently have a global portfolio of 155 open and secured properties designed for digital nomads and modern travelers.

Virgin Hotels announced reservations are live for Virgin Hotels Glasgow for bookings starting December 1. Situated on the banks of River Clyde in Glasgow, U.K., the hotel will feature 240 Chambers spanning 15 floors. It will hosts four dining and drinking options. The hotel has been developed and is owned by Silk Property Group and managed by Virgin Hotels.

With the year’s first half now in the books, 2022 has provided an unexpected and tumultuous ride. The LWHA Q2 2022 Major U.S. Hotel Sales Survey includes 133 single asset sale transactions over $10 million, which totaled roughly $5.3 billion and included approximately 21,000 hotel rooms with an average sale price of $248,000 per room.

STR reported China hotel RevPAR fell -18.3% year over year for the week ended July 16. Compared to the same week in 2019, hotel RevPAR was down -22%. China has roughly a fifth of its population under full or partial lockdowns, according to one count, as another rise in coronavirus cases prolongs the uncertainty hanging over the country’s economy, Nikkei reported.

Skift Note: Selina’s expansion to Asia Pacific is notable given its close ties to Gen Z and Millennial travelers and remote workers. It may be able to tap into the “gringo trail” of ex-pats and gap year students once international travel picks up.

Tuesday, July 26

Singapore’s hotel room rates surged last month to the highest in almost six years. The Singapore Tourism Board reported that the average rate in June was S$238.32, the highest since September 2016 and up 63% from a year earlier. Singapore is expecting between 4 million and 6 million visitors in 2022.

Marriott International, Inc, announced the opening of The Ritz-Carlton New York, NoMad in the heart of Manhattan.  The newly constructed 50-story hotel and residences were developed by Flag Luxury Group. The project offers 250 guestrooms, including 19 suites, with an additional 16 one-and two-bedroom penthouse residences.  The property boasts four food and beverage concepts, The Ritz-Carlton Sap and Fitness Center, Ritz-Carlton Club Lounge and 10,000 square feet of meeting space, including a vast, private outdoor terrace.

Skift Note: It’s a surprise to see Singapore’s rebound given the lack of Chinese outbound travelers.

Wednesday, July 27

Hotel Equities has been selected as the new management company for seven full and select service hotels owned by Sejwad Hospitality. The properties, which expand Hotel Equities’ reach in the South Carolina market, include the 180-room Delta Columbia Northeast; 134-room Sheraton Columbia Downtown; 129-room Moxy-Columbia, under construction; 104-room SpringHill Suites-Columbia, under construction; 100-room Holiday Inn Express-Garners Ferry; 83-room Holiday Inn Express-Two Notch; and the 83-room Fairfield Inn & Suites Columbia Downtown.

The team behind the Two Bit Circus micro amusement park in downtown Los Angeles, CA, plans to take the Star Wars hotel concept pioneered by Wall Disney Parks add a virtual reality video arcade twist with a pair of new interactive storytelling hotels, according to the Los Angeles Daily News. Two Bit Entertainment has acquired two former conference hotels in Denver, CO, and the New York City area, where they plan to open the world’s first Revelers Resorts interactive gameplay hotels. The new Star Wars: Galactic Starcruiser at Disney’s Hollywood Studios in Florida is a model for the immersive hotel experience planned for Revelers Resort. The company does not have the Star Wars brand, but will be creating its own brand. The immersive hotel playgrounds are expected to take a year to build once construction starts. Opening dates have not yet been set for the Revelers Resorts in Denver and Stamford, CT, outside New York City.

Skift Note: On the Star Wars hotel concept, it’s unclear whether they can actually get the licensing to do this, and if not, what exactly it is they would create instead.

Thursday, July 28

The American Hotel & Lodging Association’s 2022 Midyear State of the Hotel Industry Report forecasts that 2022 nominal room revenue and state & local taxes will exceed 2019 levels. Hotel room revenue is projected to surpass $188 billion by the end of 2022, eclipsing 2019 figures on a nominal basis. Hotels are projected to generate nearly $43.9 billion in state and local tax revenues this year, up almost 7% from 2019 levels. Additional key findings of AHLA’s 2022 Midyear State of the Industry Report are: hotel occupancy is expected to average 63.4% in 2022, approaching pre-pandemic levels. By the end of 2022, hotels are expected to employ 1.97 billion people, 84% of the pre-pandemic workforce.

Arriba Capital has closed a $63.9 million syndicated construction loan for the development of an AC Hotel by Marriott in downtown Seattle, WA. The 200-key hotel is being developed by RevPAR Companies. 

Skift Note: Being a hotel owner has been miserable for two years. But 2022 is shaping up to be a profitable one, despite some ongoing headaches.