It's great to see a strong pipeline of hotel development throughout many Latin American countries. Mexico leads the construction pipeline. Plus, find more hotel deals and development news from this week.
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.
Sunday, August 14
STR and Tourism Economics adjusted occupancy downward but lifted projections once again for average daily rate (ADR) in the revised U.S. hotel forecast just presented at the 14thAnnual Hotel Data Conference. RevPAR remains on track for full recovery this year on a nominal basis but not until 2025 when adjusted for inflation. The updated forecast adds a little more than $2 to the ADR projection for both 2022 and 2023. They project an average daily rate of $152, compared with $150 in the prior forecast. Occupancy was lowered by less than a percentage point for each year. The RevPAR forecast of $98, unchanged since June, represents a 14 percent increase from 2019 levels.
Park Hotels & Resorts Inc. is exploring a sale of the 652-key Caribe Hilton in San Juan, Puerto Rico. The real estate investment trust is seeking more than $200 million for the property.
The Hyatt Regency La Jolla at Aventine has been sold for more than $216 million following a $10 million renovation last year. Purchasing the 416-room hotel, located in San Diego, CA, is IQHQ, a biotech developer.
Skift Note: It’s worth noting the difference between real (inflation-adjusted) revenue-per-available-room growth and nominal revenue-per-available-room growth. Inflation is real.
Monday, August 15
China reported 2,312 new Covid infections nationwide today, the first time in more than three months that cases topped 2,000 for three consecutive days. That was the highest since May. Protests and anger are exploding in places like hotel resorts in Hainan. Either China has to start relaxing rules and admit they can’t have Zero Covid, or the virus spread has to run its course there. The problem is the protests are not just about being unable to leave. They’re also about how tourists don’t want to pay for rooms and food since they are being forced to stay there. Videos being leaked show small but growing protests and police being summoned to some hotels to restore order.
Hyatt’s newest all-inclusive resort is opening on the Caribbean island of Cozumel, off the coast of Cancun, on September 16. The new Dreams Cozumel Cape Resort and Spa, an AMR Collection resort, will feature 154 Preferred Club Suites, five eateries, and four bars. Adult guests at the Dreams will also have access to the adjacent Secrets Aura Cozumel resort, and all guests, including adults and families, will be able to access the nearby Sunscape Sabor Cozumel resort as well.
Skift Note: Social protest at China’s covid policy might be the start of more disruption for some hotels. But authorities are preparing for a major national political gathering this fall, and many experts don’t expect a policy change beforehand.
Tuesday, August 16
Saudi Arabia’s Public Investment Fund and Cain International have invested $900 million in Aman Group to help accelerate the global expansion of the company. The investment will be used to enhance the existing portfolio, drive the construction of the pipeline of Aman and Janu destinations, as well as support the acquisition and development of additional sites. Following the new funding, the company is now valued at over $3 billion. Aman Group has 34 hotels worldwide, including its first hotel in New York. The company has several properties in the pipeline, including hotels in Miami Beach, Beverly Hills, Mexico’s Baja California, Bangkok, Tokyo, and the island of Hokkaido in Japan. Twelve of Aman’s 34 hotels have branded residences, including the recently opened New York property. The Miami Beach and Beverly Hills hotels will also have private residences.
Driftwood Capital announced the opening of a new $31 million Staybridge Suites hotel in Wilmington, DE. The hotel is located in a former office building, which was transformed into an 11-story property featuring 134 suites, a lounge, fitness center, shops, and a business center. The new hotel was financed with $16.7 million from private investors, a $14.95 million construction loan from First International Bank & Trust, and an additional $1.02 million grant from the Delaware Housing Authority’s Downtown Development Districts Rebate Program.
Skift Note: The fresh investment in Aman raises several questions, such as whether investors will ever make money, what the market proposition is for the new brand Janu, and why the investors chose to invest now.
Wednesday, August 17
Baird issued a bullish report on Apple Hospitality REIT but removed the Bullish Fresh Pick designation as shares have increased 18% since their positive call in late June. APLE announced an increase in their monthly dividend today. Their regular monthly cash distribution was raised to $0.07 per common share from $0.05.
According to the recent Latin America Construction Pipeline Trend Report from Lodging Econometrics, the region’s total construction pipeline has 555 projects/90,496 rooms at Q2 2022. In the first half of 2022, 40 projects/8,481 rooms began construction in the region. New project announcements in the second quarter of 2022 are at 36 projects/6,208 rooms. In Latin America, there are 254 projects/46,670 rooms presently under construction, projects scheduled to start construction in the next 12 months are at 158 projects/23,371 rooms, and projects in the early planning stage are at 143 projects/20,455 rooms. Mexico leads Latin America’s construction pipeline at Q2 with 211 projects/34,509 rooms. Next is Brazil with 89 projects/14,471 rooms; Peru with 29 projects/3,669 rooms; the Dominican Republic with 24 projects/5,563 rooms; and Columbia with 19 projects/2,936 rooms.
Skift Note: Mexico has increasingly been able to tap financing from sources outside the U.S. for funding hotel development. Meanwhile, it’s unclear if the predicted upcoming political uncertainty in Brazil, Peru, and Argentina, if disruption happens, will dampen hotel development in those countries.
Thursday, August 18
Trip.com said that off-season travel between July to September for both Australia and Southeast Asian countries showed an increase as borders reopen. Southeast Asian consumers based in tropical countries have been making trips to Australia, which is a physically cooler destination right now. Australian travelers are making short-haul trips to Southeast Asia. Trips to Australia are the most popular on Trip.com among travelers from New Zealand, but flight bookings from Southeast Asia to Australia increased 35 percent between June and July from their booking data between April and May. Australia and New Zealand removed many of the travel restrictions that have been in place during the pandemic. In the top 5 countries traveling to Australia this summer, Indonesia was behind New Zealand, with Singapore taking third place, UK in fourth, and Thailand in fifth.
Polaris Holdings Co. Ltd. acquired a holding company operating 13 hotels under the Red Planet brand and its subsidiary Red Planet Holdings (Philippines) Ltd. Red Planet had been one of the largest limited-service hotel chains in the Philippines, but its rapid expansion, followed by Covid, made things tough for them. Polaris agreed to acquire 13 hotels with 2,208 rooms operating under the Red Planet Hotels brands, as well as two land sites for potential hotel development. After the completion of the two acquisitions, Polaris and its subsidiaries will operate 45 hotels with 8,135 rooms.
Skift Note: Growth in the hotel market in the Philippines is an area often underappreciated by Western observers.
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