Hotel Growth in the Philippines Set for a Luminous Future

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, December 18

Deutsche Bank Research said the lodging sector still had green shoots lingering as it relates to group and business transient travel. But they are taking a cautious approach to 2023 as they believe current consensus forecasts embed a continued recovery in both group and business transient demand to and through 2019 levels while valuation multiples resemble earlier cycle multiples, relative to DB’s view the sector is actually late in an abbreviated cycle. Further, DB does not believe macro factors are present in either 2023 forecasts or valuations. That includes corporate cost scrutiny in a recessionary environment or shrinking household savings. DB believes HLT and CHH represent better, relative risk rewards in 2023 even as investors have prioritized operating leverage among H and MAR. DB also questioned the aggressive share repurchase capital return moves by companies like HLT and MAR in this current environment. DB is forecasting 2023 US industry RevPAR growth of 1.6% with demand growth of 3.9% and supply growth of 0.8%.

The Wall Street Journal published a very positive article on Hilton, including an interview with CEO Chris Nassetta. The summary is that Nassetta said their hotels are busy worldwide as travel restrictions ease. He also feels Covid-19 likely caused people to renew a priority for in-person connections.

Marcus Hotels & Resorts sold the Skirvin Hilton in Oklahoma City for $36.75 million to Ortus Hotel Investments, LLC, the Chickasaw Nation, Paul Self, and other local investors.

Skift Note: About 70 percent of U.S. economists now predict a U.S. recession in 2023, according to a survey Bloomberg News published this week. Deutsche Bank joins other research firms in guessing how well hotel companies will withstand any potential downturn in the U.S. and worldwide.

Monday, December 19

Colliers is recommending developers in the Philippines line up various hotel projects to capture the surge in local and foreign tourists, reported the Manila Times. From 2022 to 2024, Colliers expects an annual average completion of 2,650 hotel rooms in the capital region, up from the average of 930 rooms delivered annually from 2019 to 2021. About 40% of the new rooms to be completed will carry a foreign brand.

Alliance Global Group, Inc. will speed up its growth in the Philippines, opening hotels in new tourism areas and additional townships which have large-scale integrated real estate developments.

Philippines‘ homegrown hotel brand Seda is bouncing back in the post-pandemic era and will soon add another 550 rooms to its portfolio by mid-2023, according to SunStar. Growth locations include Nuvali, Manila Bay, and the Edsa gateway to the Makati financial district.

Skift Note: Hotel growth in the Philippines has long-term tailwinds supporting it thanks to the return and expansion of China’s international outbound tourism market, plus growing tourism awareness of the country in the U.S. and Australia.

Tuesday, December 20

Destination Analysts conducted a poll to find out how interested American travelers are in visiting Japan in the next year. It found that just over one-third of U.S. travelers find Japan appealing or extremely appealing, with Asian-Americans at 63.1 percent. Just over 25 percent of American travelers are interested or extremely interested in visiting Japan in the next year.

Aloft Hotels announced it has arrived in Playa del Carmen, Mexico, marking the third Aloft hotel in the Mexican / Caribbean region. 

Performance Capital Partners LLC plans in Surprise, Arizona, a new dual-brand Marriott TownePlace Suites and Marriott Fairfield Inn & Suites hotel as part of the new Village at Prasada retail, entertainment, and dining center being developed by SimonCRE. The hotel will comprise four stories and 109 rooms.

MCR acquired the Hyatt Place Miami Airport East in Miami, marking the company’s first Hyatt hotel. The six-story hotel features 135 rooms, a full-service restaurant, and bar. MCR bought it from Mia LeJeune LLC for $16.58 million. 

Concord Hospitality assumed management of the 179-room Courtyard by Marriott San Antonio SeaWorld/Westover Hills and the adjacent 98-room Fairfield Inn & Suites by Marriott San Antonio SeaWorld/Westover Hills, both located in San Antonio, Texas.

Skift Note: Visitor arrivals to Japan jumped to nearly 1 million in November, the first full month after the country scrapped its border curbs because of the pandemic. It was still down close to two-thirds of what it was in November 2019, but demand will soar in 2023 and likely crest in 2024.

Wednesday, December 21

The U.S. hotel industry reported weakened comparisons in November compared with November 2019, according to data from the gold standard in hotel benchmarking, STR. Occupancy was down 3.2%, while the average daily rate was up 15.2%. New York City had the fullest hotels, while Minneapolis and St. Louis hotels were only half full and San Francisco had the steepest decline in occupancy compared to 2019 (down 21.8%). 

Pebblebrook Hotel Trust cut its guidance for the fourth quarter, citing a demand impact from Hurricane Nicole in November and weaker business/leisure demand at the end of that month. While it said demand picked up in early December, it later softened. Pebblebrok also cited heavier-than-expected expenses. Everyone seemed a bit surprised, including analysts and investors but isn’t this why the hotel REITs and C-corps have been climbing a wall of worry for the past six months? 

U.S. hotel occupancy for Christmas and New Year’s mirrors 2019 trends, according to Amadeus and its Demand360 business intelligence data. As of December 8. U.S. occupancy for the last two weeks of the year was pacing only 1 percent behind the same time in 2019. Currently, nearly 56% of transient bookings are made within seven days of travel, meaning there is still plenty of opportunity for holiday occupancies to rise as peak travel dates approach. 

Skift Note: Up, down, or sideways? Any forecast for the direction of U.S. hotel trends depends on where you sit and what you’re comparing against.

Thursday, December 22

Central Pattana is set to launch Marche Thonglor, the biggest fully-integrated mixed-use lifestyle destination in the heart of Thonglor in Bangkok. The project, worth over 2 billion baht, is expected to be fully ready for service in March 2023. The project will span 60,000 square meters and will include 10 five-star hotels with more than 2,700 keys and luxury condominiums priced at 290,000 baht/m2.

Marriott International previously announced Delta Hotels by Marriott opened its 100th property – Delta Hotels by Marriott, Dubai Investment Park, with 248 rooms and suites. Delta Hotels by Marriott now has two properties in Dubai and three overall in the Middle East.

Hilton is expecting to grow its portfolio to more than 75 hotels in Saudi Arabia “in the coming years.” It signed a partnership with the Saudi Tourism Development Fund and other private and public developers to support its expansion in the KSA. Hilton currently operates 16 hotels in Saudi with another 46 under development.

Skift Note: The GCC region is set to be a hotbed of hotel development through the rest of this decade as governments seek to meet their tourism development ambitions.