Skift Take

Talk of inflation has soured some people on the prospects for hotels for the rest of the year. But some analysts, such as CBRE and Truist, have upgraded their views. Plus, Asia's recovery and other news items.

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 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, Sept. 4

After a record-breaking 2021 for hotel sales in California, hotel transactions have cooled off in the state in the first six months of this year, reported the San Diego Business Journal, citing data from Atlas Hospitality Group. The number of individual hotel sales declined by 9.9 percent and total dollar volume is down 33.6 percent thus far in 2022, according to Atlas. The median price per room has increased by 12.7 percent statewide, year-over-year, to a new California record of $143,443. 

Skift Note: The Atlas Hospitality Group data dovetails with reports from Lodging Econometrics and others showing an overall U.S. slowdown in hotel construction and development in 2022 from the momentum of January.

Monday, Sept. 5

Bloomberg reported that hotel rooms in Singapore are now the most expensive in almost a decade as the city-state seeks to position itself as the tourism and business destination in Asia. The average hotel room rate in Singapore rose nearly 70 percent year on year in July to S$259, the highest since September 2021. The next big event will be the Formula One Grand Prix on September 30 to October 2 after a two-year hiatus. The Singapore Tourism Board expects 4 million to 6 million visitors in 2022.

Radisson Hotel Group said they are aiming to accelerate growth across Thailand. Driven by a dedicated business unit in Bangkok, RHG will place a focus on three brands: Park Inn by Radisson, Radisson, and Radisson Individuals. Thailand has been identified as one of the company’s five key growth markets in Asia Pacific, along with India, Vietnam, Australia, and New Zealand.

Skift Note: Great news for Singapore, though it’s important to note the pandemic recovery is uneven across Southeast Asia. Meanwhile, for more context, see Skift’s profile of Radisson Hotel Group’s strategy from earlier this week.

Tuesday, Sept. 6

CBRE Hotels said it is raising its forecast for hotel performance on the heels of industry gains in Q2 2022. CBRE revised its forecast for the second half of 2022 to a gain in RevPAR of 14.7% year on year, up from their previous projection of 13.1% year-on-year growth. A pervasive recession or a more acute Covid variant would be factors that could scramble any such forecast. Longer term, CBRE believes muted supply growth will bolster top-line growth. High construction material prices, including lumber, steel, and labor, will make the development of new projects too expensive in some cases. CBRE is forecasting hotel supply will increase at a 1.1% compound annual growth rate over the next five years, below the industry’s long-term 1.8% historical average.

Wolfgramm Capital has acquired the Waldorf Astoria Park City hotel in Park City, UT. The property was acquired off-market and as part of an all-cash deal. The luxury resort continues to be managed by Hilton.

Skift Note: CBRE has some of the smartest economists in the industry and access to real-time data. Many industry watchers will hope its bullishness proves accurate.

Wednesday, Sept. 7

Hotels in the top 25 markets across the U.S. were the hardest hit by the pandemic-induced demand downturn but have come back with a vengeance, fueled by outsized rate growth. According to STRRevPAR growth is quickly rebounding in the top 25 markets, particularly those that play host to both business and leisure demand. Hotel performance has been improving at a significantly faster pace in leisure-driven markets outside of the top 25, but performance in the larger cities is starting to look more typical.

Hyatt Hotels Corp announced plans for its continued growth in the Asia Pacific market. They unveiled a robust pipeline of landmark luxury and lifestyle hotels and resorts, expected to open in late 2022 and 2023. This includes the strategic entry of several brands into new markets, including the arrival of The Unbound Collection by Hyatt brand in Japan, the Andaz brand in Thailand, and the Hyatt Centric brand in Southeast Asia with a new hotel in Malaysia. In October this year, the Fuji Speedway Hotel will be the first hotel under The Unbound Collection by Hyatt in Japan. Also in October, the Hyatt Centric Kota Kinabalu will be the first of the brand in Southeast Asia. The debut of the Andaz brand in Thailand will take place in the fourth quarter of this year with the Andaz Pattaya Jomtien Beach.

Skift Note: For more data from STR, the gold standard for hotel performance intelligence, see the presentation by its president, Amanda Hite, at Skift Global Forum in New York City this month.

Thursday, Sept. 8

Research analysts at the investment bank Truist Securities have yet to observe any “recession-driven” pullbacks and see the greatest degree of booking and pricing momentum coming from the corporate group segment. Truist sees RevPAR growth as the greatest opportunity for earnings upside over the net year led by the higher chain scales, most notably the group-centric, upper-upscale segment. Regarding individual corporate travelers, Truist reiterated their previous view that the demand recovery has stalled at down approximately -25% from pre-Covid levels. ADR is up 5% from pre-Covid. Truist said they believe the lodging bear case is too bearish. That bear case is for a slowdown in demand in 2023 with RevPAR down mid-single digits year over year driven by ADR down -10% and occupancy increasing by mid-single digits. They find the bear case too bearish given how corporate group demand is looking strong into 2023 and group room nights usually bring high spending.

ITC Hotels in India could soon be spun out of conglomerate ITC. The chairman of the parent company told reporters they are exploring alternate structures for ITC Hotels, in line with industry recovery dynamics. They recently launched Mementos and Storii to go along with existing brands Welcomhotel and Fortune. ITC Hotels is opening a new hotel almost every month, aggressively pursuing its growth through the asset right strategy. The company is also exploring overseas expansion.

Skift Note: Daily Lodging Report’s editors remind you that historically, Truist is usually one of the most skeptical/pessimistic firms out there with lodging. So its view that the market bear case is too bearish is notable.


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