Skift Take

Even as the Bank of Canada recently hiked interest rates, developers keep pressing ahead with hotel development at pre-pandemic levels. Plus, news other news in hotel deals and development worldwide.

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.

Sunday, November 6

DiamondRock Hospitality reported 3Q results, beating the preliminary results they announced two weeks ago. DRH said they bought back $12.3 million worth of stock in October, post-3Q. Service Properties Trust followed up their resumption of a $0.20 per share quarterly dividend with a 100% increase in normalized FFO in 3Q. SVC said business continues to recover with increased bookings at their urban and suburban select service hotels. They expect to benefit further in the coming quarters from the continued business travel recovery. Playa Hotels beat estimates and is trying to do its part in propping up its stock price, buying back 973,000 shares in 3Q and another 2.67 million shares so far in 4Q. The 3Q result is impressive given the impact of Hurricane Fiona.

Jefferies cut its rating on Xenia Hotels & Resorts from Buy to Hold. Jefferies has a $17 price target on XHR.

Loews Hotels & Co announced the opening of the Loews Coral Gables Hotel in Coral Gables, FL. The property includes 242 guestrooms, including 21 suites; a spa; fitness center; pool; and four restaurants and lounges. Additionally, 30,000 square feet of indoor/outdoor meeting space.

The RADCO Cos. purchased the Courtyard by Marriott St. Petersburg Downtown, in Florida, from The Blackstone Group for $29.1 million. The 128-room hotel features a restaurant and bar, fitness and business centers, indoor pool, and meeting space. CBRE Hotels represented Blackstone in the sale.

IHG Hotels & Resorts announced the opening of its first dual-branded avid hotels and Holiday Inn & Suites property in Mt. Juliet, TN. The five-story hotel is owned by Image Hotel Management.

Skift Note: Economic turbulence hasn’t stopped hotel dealmaking.

Monday, November 7

Choice Hotels received a mixed response to its third-quarter earnings report from analysts and a big thumbs down from investors. They missed estimates but whether it justified the pummeling their stock took depends on whether you think the stock already being down nearly 20% from its highs was enough to foreshadow the miss. CHH did buy back $230 million in shares during 3Q and said October RevPAR was up 20 percent versus October 2019. Investors seemed to have stopped reading/listening after the earnings miss part.

Hong Kong has continued to loosen Covid restrictions, now targeting eventgoers. The NY Times gave them publicity on this, as the city tells people no sweat if they test positive for Covid in Hong Kong. Stories of bankers being allowed to leave on a private jet if they test positive, tech executives dining in private rooms, and rugby watchers allowed to eat in the stands are a bit different than what ordinary Chinese or Hong Kong residents go through. If you believe the stock markets, China’s government is loosening up restrictions while still having their officials toe the line on Zero-Covid. We’ll see who is correct in another month or so.

Marriott International will be adding about 13-14 hotels in India under different brands in the next 12 months. Marriott currently manages about 134 properties under different brands in the country. They have about 60 agreements for hotels to open in the future. The VP of South & East India, Bangladesh and Sri Lanka said in his area, Marriott will be opening new hotels under brands like Courtyard, Sheraton, and Tribute in Meghalaya, Kerala, Karnataka, Telangana and other places. While Marriott continues with conversions, the new properties are supposed to be mostly new construction.

The new Courtyard by Marriott Tiruchirappalli in India’s southern Tamil Nadustate is a conversion, The Hindu reported. A hotel called Sangam in Trichy morphed into a 108-room Courtyard. Marriott’s the first international hospitality global giant to launch in Tamil Nadu’s fourth-largest city.

Indian Hotels Company announced the signing of a SeleQtions hotel in Munnar, Kerala. The brownfield project is a management contract between IHCL and CRB Hotels & Resorts, The Economic Times reported. The hotel will feature a combination of 55 rooms and suites, located at an easy driving distance from Kochi airport. The hotel will house an all-day restaurant and bar, a fitness center, swimming pool and spa and more. “With the addition of this hotel, IHCL has 14 hotels in Kerala, including three under development,” ET reported.

Skift Note: Marriott and Taj-parent IHCL are seeing vast opportunities ahead in India.

Tuesday, November 8

According to a new national Hotel Booking Index Survey commissioned by the American Hotel & Lodging Association and conducted by Morning Consult, the share of holiday travelers who plan to stay in hotels is up this year, and hotels are the top lodging choice among those certain to travel for leisure in the next three months. AHLA’s Hotel Booking Index is a new composite score gauging the near-term outlook for the hotel industry. The 1-through-10 score is based on a weighted average of survey respondents’ travel likelihood in the next three months (50 percent), household financial security (30 percent), and a preference to stay in hotels for travel (20 percent). Based on the survey results, the AHLA Hotel Booking Index for the next three months is 7.1, or very good. Moving forward, AHLA plans to release Hotel Booking Index results three times a year. 2022 survey results, here.

Barclays called Chatham Lodging Trust’s third-quarter results one of the strong points within the lodging subsector. CLDT has not been giving guidance and they reported EBITDA more than 10 percent above consensus and adjusted FFO per share of $0.50 versus consensus of $0.41. While CLDT commented that midweek business travel demand is recovering, they once again declined to give guidance, citing an uncertain business climate.

Wyndham Hotels & Resorts said they expect Hua Hin’s tourism market to rebound back to normal levels in 2024. “Wyndham has a positive outlook for Thailand both this year and next year,” the Bangkok Post reported. Wyndham operates hotels in Thailand across different brands such as Ramada and Wyndham Grand in Bangkok, Phuket, Krabi, and Phangnga. Their new property is the Wyndham Hua Hin Pranburi Resort & Villas, a 5-star resort with 154 rooms and 40 pool villas spanning a 50-rai plot that was rebranded from the Evason Hua Hin. Hua Hin is plagued by oversupply that is expected to continue with more than 800 rooms to be added next year, the Post reported.

Life House has been tapped to operate Hotel Ella, a storied property with 46-keys, front veranda, and courtyard pool, located in the heart of Austin, adjacent to the University of Texas. The owner, Peter Rex, has filed initial plans for a $100 million expansion of the property that would encompass 213 rooms with 172 parking spaces. 

Skift Note: The leading hotel lobby in the U.S. is to be commended for creating a useful tool for hotel leaders with its new Hotel Booking Index Survey. It helps show how competitive hotels are with alternative accommodations such as short-term rental apartments.

Wednesday, November 9

According to the recent Hotel Construction Pipeline Report for Canada by Lodging Econometrics, LE analysts report that at the end of the third quarter of 2022, projects presently under construction in Canada stand at 54. Projects scheduled to start construction in the next year are at 105 projects, or 14,270 rooms. In the third quarter, Canada had 20 new project announcements with 1,463 rooms. Full results here.

Ontario is the most active province for pipeline projects in Canada in Q3 2022, with 148 projects/20,396 rooms. Next is British Columbia with 47 projects/7,239 rooms and Quebec with 20 projects/2,633 rooms. The top city in Canada’s hotel construction pipeline, at the Q3 close, was Toronto with 62 projects/9,147 rooms. Marriott International led the top hotel companies in Canada’s construction pipeline. The 2023 forecast for Canada is for 37 new hotel/4,036 rooms expected to open. 

JLL’s Hotels & Hospitality Group released its second annual Hotels Global Asset Management Report outlining tips for profitability and minimizing operational risks. The recommendations for hotel owners when planning their 2023 budgets include: Transform labor strategy to attract and retain top talent. Push rate judiciously and keep disciplined cost management solutions employed during the pandemic. Understand the evolving nature of lodging demand and intentionally drive ancillary revenue to optimize profit, and capital expenditures should aim to protect market share and enhance property value. Find the report here.

Hilton Grand Vacations clearly had the best report of the timeshare group with their 3Q results, with a solid beat of estimates. HGV also significantly raised FY22 guidance. Since their guidance was more than the beat, they’re seeing 4Q results coming in better than they had expected.

Skift Note: Parts of Canada should see a lot of new hotel properties in the next two years.

Thursday, November 10

Ratings agency ICRA, backed by Moody’s, said it expects premium hotel inventory in India to increase 3.5 percent to 4 percent in the current fiscal year with an addition of around 15,500 rooms amid a recovery in demand, Press Trust of India reported.

Icra believes India’s hotel supply pipeline will grow only at a 5-year compound annual growth rate of 3.5 percent to 4 percent, Mint reported. The report suggests that pan-Indian premium hotel occupancy is expected to be 68-70 percent. Find the ICRA report here.

Skift Note: Expect India’s hotel supply to stay less than demand over the next few years.


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