Hotel groups have been eager to introduce branded residential offerings. Plus, Marriott tests "magic" beds, Macau may cap room occupancy, and other recent hotel news.
Daily Lodging Report
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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, January 15
Maverick Real Estate Partners filed a suit against Chetrit Group and its president, Meyer Chetrit, over an unfinished hotel near Penn Station. The Commercial Observer reported that Chetrit has been working on a 33-story, 323-key hotel at 255 West 34th Street in Manhattan. In May, Maverick bought $110 million of debt, The Real Deal reported. Maverick alleged that payments were never made. Arbor Commercial Mortgage provided construction financing. The lender also said Chetrit didn’t pay property taxes on the site, a breach of the loan agreement, The Commercial Observer reported. Maverick is seeking $19 million to cover the principal of the loans, as well as interest. The lender is also demanding Chetrit either complete the hotel or pay the $106.4 million Maverick claims necessary to finish the project. Chetrit denies wrongdoing.
G6 Hospitality LLC said Julie Arrowsmith, President and Chief Financial officer of G6, has been appointed President and Interim Chief Executive Officer. Rob Palleschi stepped down as the Company’s CEO, as he transitions to the position of CEO of American Campus Communities, the nation’s premier student housing manager, owner and developer. Blackstone owns both businesses.
Marcus & Millichap announced the sale and financing of Courtyard by Marriott Dallas Grand Prairie, a four-story, 120-room hotel in Grand Prairie, Texas. Marcus & Millichap’s Austin office represented the seller, Anderson Companies and procured the buyer, MCR Hotels.
A hotel is being proposed for the Speer neighborhood in Denver, Colorado. Plans were submitted to the city for a nine-story, 123-key hotel under the Residence Inn brand, reported Denver Business Journal. Plans for the hotel include 59 parking spaces. On the second level, plans show a larger lobby area, meeting room, courtyard, work areas and employee rooms, in addition to nine guest rooms. The owner and manager are the Guddanti Partnership.
Skift Note: If a recession materializes, expect to see more lawsuits.
Tuesday, January 17
Accor announced the creation of Accor One Living, focused on mixed-use developments with branded residences, anchored by managed and franchised Accor hotels and resorts, and other products, such as co-working offerings, extended-stay hotels, and private clubs. Accor has over 135 branded residences projects operating or in development, up from 35 in operation in late 2021. Looking ahead, Accor One Living expects to open more than 125 new branded residence communities over the next several years.
Accor said about its residential offerings across brands like Raffles, Fairmont, Sofitel, SLS: “One of the key differentiators for Accor One Living is its delivery of end-to-end solutions for its hospitality and real estate investment partners. Beginning with the planning phase, Accor One Living works with its partners to ensure design, services and benefits are customized to meet the needs of targeted homebuyers, to the operating phase where Accor One Living will continue to provide essential support, promising to make hotels more profitable for investment partners…. It’s not just classic luxury that’s driving growth — the lifestyle category is taking off as well…. Properties such as the Mondrian Residences on Australia’s Gold Coast saw all residences sell out in less than six months.”
Marriott is testing a mechanical device where with the press of a button, a hotel bed would rise into the sky and in its place, transform into a sofa, described as a new “magic“ bed. The move would allow Marriott to add rooms to preexisting properties, thanks to the reduced need for floor space, said Scott Mayerowitz via Instagram. This would allow the company to impress the hotel owners with increased revenue potential for each square foot.
Huff, Niehaus & Associates, Inc announced the sale of the Best Western Plus Brandywine Inn & Suites in Monticello, Indiana. The complex contains the 59-room hotel, the Brandywine Reception & Meeting Center and the Sculptures Sports & Fitness Center. Amenities include a fitness center, tennis/pickle ball courts, indoor basketball/volleyball court, ballroom and large meeting and reception center. Huff, Niehaus & Associates, Inc. represented the Seller, Brandywine Complex, Inc., and assisted with the Purchaser in the transaction. The property sold for $5,750,000 with an automatic transfer of the Best Western Plus brand to an investment group.
Travel data for the U.S. released by the National Travel and Tourism Office showed that in November 2022: International visitors spent more than $15.9 billion on travel to, and tourism-related activities within, the United States, an increase of nearly 57% compared to November 2021. Americans spent more than $15.2 billion traveling abroad, yielding a balance of trade surplus of $703 million for the month.
Skift Note: Branded residences are hot, hot, hot among hotel brands and developers right now as analysts at Bernstein have pointed out. According to Savills International Development Consultancy, the branded residential sector has grown 150% over the past decade, creating more than 100,000 units across 640 projects around the world.
Wednesday, January 18
The 140-room InterContinental Double Bay in Sydney, Australia, has been listed for sale with a price tag of $240 million Australian dollars. The hotel is the first major hotel offering of the year in Australia, the Australian Financial Review noted.
The scheduled auction of the downtown Hilton Hotel Minneapolis, previously slated for Friday, has been postponed. Haberhill LLC and Walton Street Capital acquired the Hilton for $143 million in 2016, reported the Star-Tribune. In April 2020 the owners stopped making their scheduled monthly payments on a $180 million loan from JPMorgan Chase Bank on the 826-room Hilton.
Pineapple Hospitality announced the launch of Staypineapple Hotels Inc. which will take over the management of all 10 Staypineapple hotels across the United States, as well as open the doors for third-party licensing and property management. Staypineapple Hotels will provide access to its staypineapple.com website, complete with an online booking engine. Access is also offered to an operations system, a central reservations department, a corporate sales and marketing team, and other components of a company’s operating business.
Skift Note: Other hotel companies, such as Accor, Choice, and Red Lion, have attempted to monetize their tech stacks, with mixed results. But companies such as Life House claim traction, and Pineapple may enjoy gains, too.
Thursday, January 19
The Macau Hotel Association warned that local hotels may need to cap their maximum guest capacity at 70% to 89% during the Lunar New Year holiday period due to a shortage of staff in operations. They cite the abrupt reopening of Macau’s borders on January 8, catching hoteliers off guard and not allowing them time to add staff in several areas of the hotel operations. The need for restricted capacity stems from a need to ensure the quality of service provided by hotel units, which must comply with the standards of their respective class. Some hotels have said they were able to rehire former staff members who were laid off or did not have their contracts renewed during the pandemic. Other hotels are looking to recruit local part-time workers to fill positions that require less experience and are calling on current staff members to extend their working times and temporarily reduce their rest days.
Forbes published an article on Banyan Tree Holdings and how they are busy planning for 50 new hotels. Founder and chairman Ho Kwon Ping told the reporter that hotels across Asia will see the return of Chinese tourists beginning in the second quarter with a real surge expected during the Labor Day holiday in early May. Right now, airfares are still very high and the availability of flights is still limited. Ho said his Banyan Tree is on track to grow its portfolio to 100 hotels and resorts by 2025, almost doubling what it owned and managed just a year ago. In 2022 the company added 8 hotels across China, Indonesia, Japan, Saudi Arabia, and Thailand, bringing its portfolio of properties to 65 across 17 countries. He believes his existing hotels in Asia are already performing close to pre-pandemic levels as of the end of 2022 as visitors from Russia, India, and Arab countries filled the rooms. RevPAR at their properties in Thailand jumped 277% year over year in the first quarter’s advance reservations with occupancy in forward bookings jumping 28%.
Truist held a conference call with corporate travel data company TRIPBAM. Takeaways included that volume in early January is down 30% in the US for the trailing 30 days compared to the same period of early 2020. The gap is anticipated to close to 20% in 1Q 2023. Truist believes the strength of volume recovery in early 2023 may provide a read-through on permanent versus temporary Covid-related corporate travel demand loss. Corporate room rates are said to be down 2% lower than in January 2020. Corporate buyers expect hoteliers to raise room rates due to rising operating costs. Large markets that have seen a slower recovery like NYC, Chicago and LA, have rebounded of late but San Francisco’s recovery is still relatively weaker.
After 25 consecutive months of year-over-year declines, U.S. hotel construction increased slightly in December, according to pipeline data from hotel benchmarking gold standard STR. December 2022 (percentage change in comparison with December 2021): in construction: 159,344 rooms (+0.3%); final planning: 213,066 rooms (+15%); and planning: 240,092 rooms (-15.6%). When looking at the in-construction phase of the pipeline, luxury chains show the highest number of rooms as a percentage of existing supply: Luxury (5.3%, 7,241 rooms); Upscale (4.6%, 41,111); Upper Midscale (3.7%, 43,946); Upper Upscale (3.0% 20,140); Midscale (2.5%, 10,766); and Economy (0.9%, 6,482 rooms). NYC leads the major markets in rooms in construction as a percentage of existing supply: New York City (8.5%, 10,944 rooms); Phoenix (7.1%, 4,968); Phoenix (7.1%, 4,968); Dallas (5.0%, 4,877); Nashville (4.8%, 2,746); and Detroit (4.7%, 2,192 rooms).
IHG Hotels & Resorts is celebrating recent successes and upward momentum for voco hotels. With 10 new openings in 2022, bringing its global total to 41 hotels, and an additional 34 in the pipeline, voco hotels continues to extend its presence with more growth planned in 2023. New properties in development across the U.S. include: Destin, FL; Laguna Hills, CA; College Station, TX; and Flushing, NY and in Mexico in Queretaro and Saltillo.
Skift Note: It looks like Chinese outbound tourism is snapping back faster in much of Asia than expected. Thailand is already crowded with Chinese visitors for the Lunar New Year. But as China’s economy revs back up, demand for oil will also increase, which will boost jet fuel costs worldwide, making travel costlier on average.
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