Here are some excerpts from Daily Lodging Report from the past week highlighting stories in hotel deals and development. Hotels, especially with apartment-style brands, had a better week than Airbnb did.
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, Dec. 4
MCR has acquired the Staybridge Suites Chattanooga Downtown, a five-story, 124-room, extended-stay hotel in Chattanooga, Tennessee. The company has the option to convert 13,000 square feet of underutilized ground-floor space into additional guest rooms, retail, or meeting space. The hotel boom in extended stay has helped the segment compete against the rise of vacation rentals and short-term accommodations.
Braemar Hotels & Resorts Inc. completed the acquisition of the luxury 210-room Four Seasons Resort Scottsdale at Troon North in North Scottsdale, Arizona. The $267.7 million acquisition was funded with cash on hand and no common equity was issued. The property features 5.7 acres of excess developable land which is zoned for commercial use. The potential uses include new hotel keys, as well as fitness and health studios, restaurants, and accessory buildings.
Hyatt Hotels Corporation and Playa Hotels Resorts N.V. announced the opening of Hyatt Zilara Riviera Maya in Riviera Maya, Mexico. The all-inclusive resort includes 291 suites, an ocean-view pool with an adjacent hot tub, nine restaurants, bas and lounges, Zen Spa, and more than 6,000 square feet of modern facilities for conferences and meetings.
Skift Note: Some analysts wonder if Hyatt is considering acquiring Playa Hotels to expand further into all-inclusive resorts.
Monday, Dec. 5
Morgan Stanley re-launched coverage on the lodging sector, saying they prefer C-Corps over REITs [real estate investment trusts]. MS said they believe C-Corps have undergone structural changes over the past 10 years that have yielded a more resilient, higher margin-free cash flow. While they believe U.S. hotel REITs have cut costs, the cyclical environment and high capex remain. MS said they believe the macro risk everyone talks about is more muted than a typical cycle, especially as the recovery in travel is still underway. As for stock selection, MS launched with Overweight ratings on Hyatt (Top Pick), Hilton, Marriott, and Wyndham. Underweight ratings were given to Xenia Hotels, Pebblebrook Hotel, and Sunstone Hotels.
According to the NY Daily News, more than 10,000 Airbnb listings for short-term rentals in New York City are likely to disappear when tight new housing rules take effect next year. The rules, set to be implemented on January 9, will require all Airbnb hosts in the city to register their units with the Mayor’s office of Special Enforcement. Airbnb will be barred from processing payments for any hosts who fail to register. The company said the rules will result in a “draconian and unworkable registration system that will prevent lawful and responsible hosts from listing their homes.” The news came after The Washington Post profiled growing consumer gripes against Airbnb.
Skift Note: Swings in fortune. Hotel real-estate investment trusts had many hot years as equity investments. Maybe the brand parent companies will get their day in the sun once markets rebound. As for Airbnb, where a city shuts a door, it finds a window.
Tuesday, Dec. 6
According to the South China Morning Post, even without the Chinese, hotels on the Indonesian holiday island of Bali are booked solid for the Christmas and New Year period. The article said Airbnb named Bali as the world’s most popular holiday destination between July and October. The spot was Kuta, a beachside district just 10 minutes from Bali’s airport. Kuala Lumpur in Malaysia was second. As for the hotels, not only are they filling up with bookings, they are getting good prices with the Four Seasons at Jimbaran Bay said to be charging $3,300 per night for a villa during the festive season and most are said to be booked. Based on this article, the vast majority of the hotels are reporting expected occupancy over 90 percent for the period. What will happen to places like Singapore and Bali when the Chinese can travel again?
Sharbell Nexton, LLC announced the addition of an A.C. Hotel by Marriott in the Downtown Nexton area of Summerville, South Carolina, in 2024. The four-story hotel will include 117 rooms, an outdoor pool and courtyard, indoor kitchen and open lounge area, fitness room and meeting space. The Nexton venture will be the second A.C.-flagged property in South Carolina. The project involves Baywood Hotels.
Continental Hospitality Group has acquired the 108-room Springhill Suites in the South Side neighborhood of Pittsburgh. Property renovations will commence in Q1 2023, focusing on technology upgrades, rooms product, and the fitness experience. Continental’s current portfolio encompasses 15 hotels, including 13 open/operating assets and two under construction.
Skift Note: It’s interesting how some destinations have found ways to thrive without international outbound Chinese travelers. But those travelers will return someday, causing further surges in demand.
Wednesday, Dec. 7
Morgan Stanley cut their rating on Airbnb to Underweight from Equal Weight, slashing its target price to $80 from $100. Their bear case scenario has the stock plunging to $60. MS believes ABNB’s supply of properties will growth slowing to 7% annually through 2025, down from the 12% pace from 2018 to 2022. MS is not very confident in the 7% growth number. They also cut their estimates for room nights booked for 2023 and 2024. With slowing listings growth and occupancy not exactly surging, MS is not very confident, hence the downgraded and price target cut.
ONYX Hospitality Group unveiled plans to strengthen its serviced apartment brand, Shama. They plan to open nine new properties in Thailand and one in Malaysia by the end of 2025, boosting their portfolio. The group currently operates six Shama properties in Thailand and 10 in Hong Kong and China. Onyx took over the Hong Kong-based Shama brand in 2010. Onyx launched Shama Social Club, a new lifestyle concept that looks to connect Shama guests with the fabric of the local community where the property is located with locally-tailored programs of activities, events, games, social occasions, food and drink, and music.
Skift Note: Airbnb continues to face regulatory headwinds, like from the New York City ruling mentioned in an earlier item above. Its growth has been remarkable but gravity may eventually affect it. Onyx’s move into serviced apartments highlights the broader competitive resilience against alternative accommodations by hotel companies.
Thursday, Dec. 8
The latest STR report, commissioned by Arabian Travel Market, conducted at the end of September 2022, suggests the GCC region now has over 170,000 hotel rooms under active development (planning, final planning & under construction). This is equivalent to 40 percent of the GCC’s existing hotel room inventory. The STR report estimates 135,560 existing rooms in Saudi Arabia with an active pipeline of 82,639 rooms, with total room inventory projected for 2030 at over 218,000 rooms. For the UAE, Ras Al Khaimah is second only to Dubai with 5,076 rooms in its pipeline, almost the same amount as Sharjah, Abu Dhabi, and Fujairah combined. In the past, the UAE’s growth in hotel rooms has spurred demand as room supply increased by more than 70,000 rooms between 2010 and 2019.
Hilton announced its luxury brands would continue a year of growth across their global portfolios with 10 openings and a rollout of new signings across their Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts and LXR Hotels & Resorts. The Conrad brand’s largest growth region is Asia Pacific. Other new entry markets across the Hilton Luxury Brands portfolio this year included Shanghai.
Accor plans to add several more properties in Australia and New Zealand in 2023, including new furnished apartments. Accor said they would add more than 520 hotel rooms to its portfolio in Australia with the January opening of Hotel Morris and Manly Pacific MGallery in Sydney and Mercure Hotel Cairns in Queensland, with the Pullman Sydney Penrith slated to open in the fourth quarter. In New Zealand, Accor will add more than 60 apartment-style units in the second quarter with The Sebel Wellington Lower Hutt and add 313 rooms to its Auckland portfolio with the opening of Pullman Auckland Airport in the fourth quarter. Also opening in 2023 will be three new lifestyle hotels from the Ennismore joint venture where Accor is the majority shareholder, including a Jo&Joe and Tribe hotel in Auckland and a Hyde property in Queenstown. The properties will add more than 180 lifestyle units for the company in New Zealand.
Skift Note: Travel leaders are gathering in Dubai next week for Skift Global Forum East, a two-day event featuring conversations with the CEOs of Hilton, Jumeirah, Kerzner, Global Hotel Alliance, Freehand Hotels, and more. Details, here.