Accor shares details on its growth plans in Australia and India, California sees a cooling in hotel deals, and other news worldwide in hotel development.
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, Sept. 11
The St. Joe Company and InterMountain Management, LLC announced the commencement of construction on a new hotel in Panama City Beach, FL. The current plan calls for the 121-suite Residence Inn by Marriott, located in the popular Pier Park shopping and entertainment district, to be managed by InterMountain. Amenities will include a conference room, pool, fitness center, and outdoor patio with grills. Sitework has already begun on the Residence Inn by Marriott, with an anticipated completion date in 2024.
Opwest Partners has partnered with Iridius Capital to open the first soft branded lifestyle hotel in Tucson, AZ, inside the iconic One South Church building in early 2023. The first nine floors of the building are currently being renovated into The Leo Kent, A Marriott Tribute Portfolio Hotel, while the upper floors of the tower have been upgraded and will continue to function as office space. In addition to 145 rooms, the property will feature a function hall, a casual dining restaurant, an elevated bar and lounge, and a fitness center.
Hyatt Hotels Corporation announced plans to expand Hyatt’s Inclusive Collection, a new global portfolio of distinct luxury all-inclusive resort brands, with five all-inclusive resorts in Bulgaria.
Skift Note: Many developers like placing hotels in entertainment or mixed-use complexes to ensure traffic, like setting a diamond in a tiara. Also, Bulgaria may be the new Croatia in terms of luxury development hotspots in Europe.
Monday, Sept. 12
Hersha Hospitality Trust has entered into definitive agreements to sell Hotel Milo Santa Barbara and Pan Pacific Seattle for gross proceeds of $125 million. Hersha intends to use the proceeds from the sale to pay down approximately $45 million of debt and expects to utilize the remainder for general corporate purposes.
Hilton Worldwide Holdings Inc. has tapped a major development project in Manhattan’s Times Square to debut a boutique hotel, which will be the first under the new Tempo by Hilton flag. The 36-floor hotel will feature 661 rooms when it opens next year. It is part of TSX Broadway, a $2.5 billion tower, located next to Times Square’s red bleachers.
It’s been three years since Mike Wampold and Lenny Lemoine acquired the 111-year-old Whitney National Bank building in New Orleans, LA with plans to redevelop it into a mixed-use space anchored by a high-end, boutique hotel. The hotel would likely cover the first several floors of the tower, with the remaining floors set aside for luxury multifamily residences or corporate apartments and with restaurants and retail on the ground floor. The developers need an equity partner as a co-developer.
Skift Note: Business travel is definitely back, at least when it comes to hotel dealmakers hitting the road.
Tuesday, Sept. 13
Salamander Resorts is expanding its resort portfolio to Southwest D.C. with the purchase of the Mandarin Oriental Hotel. To purchase the Mandarin, the company partnered with Henderson Park, of London, for a $140 million deal. Work on the 373-room Salamander DC is scheduled to take place over the next few months.
According to Atlas Hospitality Group, during the first half of 2022, the total dollar volume for hotels bought in the Bay Area market in California was $660.5 million, down 66.8% from the $1.99 billion in hotel purchases during the first six months of 2021. During the first six months of 2022, California hotel purchases generated $3.45 billion in transactions, a slide of 33.6% from the record $5.19 billion in hotel deals in the first half of 2021. The average price for hotel purchases in the Bay Area during the first half of 2022 was $16.9 million, down 39.6% compared with the first six months of 2021, when the average hotel purchase was $28 million. The number of hotels bought was down 42.3% during the first six months of 2022 compared with the same period in 2021 and the number of rooms involved was down 57.9%. Atlas Hospitality stated interest rates and inflation are increasing, making it harder to complete deals.
Skift Note: It’s odd that Mandarin Oriental agreed to give up a prime location in the U.S national capital, but the deal is a validation of the brand-building Salamander Resorts has been doing as an upstart hospitality player.
Wednesday, Sept. 14
Truist reported on a call it held with the CEO of hotelAVE, which offers hotel asset management services and consulting. The takeaways included that the hotel company saw leisure demand start to slow in May while group and corporate recovery is now benefiting from urban and convention hotels. For next year, hotelAVE is expecting group and corporate growth to exceed 2019 levels with corporate at 85% of 2019 levels. Group demand could grow 18% year over year and corporate at 15%. They are expecting a leisure decline of about -5% year over year. ADR will continue to grow with group up 5% and corporate up 10%, making up for an expected flat leisure ADR.
Accor said it’s experiencing a sustained recovery in their Western Australia hotel, apartment, and resorts network. Accor operates 25 hotels and resorts across the state. Their Perth hotels recovered to 66% occupancy by the end of June, just five percentage points behind June 2019. Average rate is higher than pre-pandemic. The forecasts indicate the arrivals will still only be 59% of pre-pandemic levels by the end of the year. Since 2019, Accor has opened four new hotels with 1,060 rooms in Western Australia.
Accor also said it’s bullish on India. It plans to open mid-level hotels across metros and budget brands in tier-2 and tier-3 cities but also will add to its luxury portfolio. Accor said its introduction of luxury brands such as Raffles in Udaipur and Fairmont helped it solidify their luxury position in the country. Accor has 26 hotels in the pipeline in India and it plans to add more than 1,300 keys to their Novotel and Ibis brands across the country over the next two years. It’s planning to launch Raffles Jaipur next year, followed by Fairmont Mumbai, among others. Accor’s plan is to have more than 100 hotels by 2027 in India.
Skift Note: Accor’s ambitious hotel pipeline in markets worldwide is worth watching.
Thursday, Sept. 15
Asset World Public Company Limited said it’s strengthening its long-term partnership with Marriott International with an agreement to launch a new Ritz-Carlton hotel in Bangkok’s heritage riverside district. The Ritz-Carlton Bangkok, The Riverside will be spread across three locations between the two banks of the Chao Phraya River, transforming the area into a world-class sanctuary and wellness destination under the River Journey concept. The Ritz-Carlton Bangkok, The Riverside will feature 166 rooms with 86 rooms at The Lhong 1919 Riverside Heritage Destination, 24 rooms at ‘The Shophouse-SongWad’ and 56 rooms at ‘The Mansion-SongWad’ located across the Chao Phraya River from The Lhong 1919. The sites will connect for guests by shuttle boat. Rolling openings are set for 2026 and 2027.
Skift Note: Thailand is a hot market right now, with Nobu, Marriott, Dusit Thani, and Radisson Hotel Group among the companies recently pledging significant growth.
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