Florida’s Diplomat Beach Resort Sells for $835 Million in Post-Pandemic Record

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

Truist Securities said with earnings season about to kick into gear for the lodging sector, they continue to see macro over micro. They see the main driver/wildcard coming from the economic impact of interest rates and inflation with investor sentiment around these being the most important. They do expect most companies to have at least modest 4Q earnings beats and talk positively about expectations for the year with management teams having more conviction for the first half of the year than the back half due to limited visibility. Specifically for hotel REITs, Truist said 4Q results should not be much of a surprise as many gave earnings updates in late December and early January. For C-Corps, they expect most to come out with optimistic tones with the greatest degree of optimism derived from international strength in 4Q, mostly from Europe, Caribbean, and Canada, the resiliency of leisure travel, group/convention strength, the relative stability of new unit pipelines and their ability to return capital to shareholders.

Trinity Investments and Credit Suisse Asset Management, have agreed to purchase the Diplomat Beach Resort, in Hollywood, Florida, for $835 million. The 1,000-room oceanfront property has approximately 200,000 square feet of meeting space. The new owners plan to make renovations, and the hotel will be managed by Hilton Worldwide Holdings, Inc. under its Curio brand. JLL brokered the sale.

Skift Take: The Diplomat Beach Resort deal is the biggest hotel deal in the country since the pandemic began, The Miami Herald reported. The last resort sale that large was in 2019, when the Boca Raton Resort & Club sold for $875 million. The transaction validates a sense that deal-making for larger assets is beginning to thaw after an eight-month freeze because of interest-rate disruptions.

Monday

Tour groups from mainland China to 20 countries have restarted, 11 of which are in Asia Pacific. This includes Singapore, Philippines, Cambodia, South Korea, Australia, New Zealand, Sri Lanka and Macau and Hong Kong. Countries that are not on the list include Japan, South Korea and the US. The battle already is fierce for these low-margin groups as some countries remain starved for tourism business and others want to further their progress with all types of business. Analysts at COTRI (China Outbound Tourism Research Institute) questioned this logic saying for most destinations and service providers, first-time travelers from lower-tier Chinese cities will create more problems than profit. That being said, there is a target of 200 million outbound Chinese tourists expected to be reached by 2028. That is a rather powerful number.

Skift Take: A lot of destinations will be competing for Chinese outbound tourists of any kind, including destinations such as Thailand, Vietnam, Indonesia, and the Philippines.

Tuesday

IHG’s luxury brand Six Senses is planning to open its first hotel in Australia on an estate, Burnham Beeches, 25 miles from Melbourne. After renovations of guest rooms, Six Senses plans to add a glamping option. Six Senses Burnham Beeches is expected to open in mid-2025.

Two hotels, Hampton Inn and Element by Westin, are proposed southwest of the Roseville Junction project in Placer County, California. Insignia Hospitality Group is the project proponent. According to the plans the Element by Westin will have four stories with 124 guestrooms, a lounge with outdoor patio, dining area and outdoor corn hole and pickle ball courts.

Skift Take: Pickle ball courts are the latest amenity operators have been rushing to install. We would wager you can expect to see one appear at the upcoming Six Senses resort, too.

Wednesday

Morgan Stanley changed price targets on its covered hotel companies. Hilton’s PT was lowered to $167 from $171, while Wyndham’s PT was upped to $90 from $87. Both were maintained at Overweight. Equal-Weight rated Choice Hotels’ target price was lowered to $129 from $137, Park Hotels was lowered to $15 from $14 and DiamondRock’s PT was upped to $9.50 from $9. MS has Underweight ratings on Sunstone Hotels and Pebblebrook Hotel Trust. MS lowered its PT on SHO to $9 from $10 and PEB to $12 from $13.

Following in the footsteps of Hong Kong, Macau said they may start paying people to come to visit. Macau’s latest ploy to attract new visitors is an incentive scheme for foreigners that would mimic the promotional arrangement afforded to mainlanders. The Macau Government Tourism Office is considering subsidizing group tours for foreigners, considering giving each overnight traveler arriving in Macau from Hong Kong, Taiwan or anywhere else other than mainland China a daily allowance. The proposal is to provide international group travelers MOP350 (US$43.33) per person for a one-night stay and MOP500 (US$61.90) for a two night visit. The promo would be capped at two nights but a couple could receive about US$124 for a two night stay. The MGTO program that is already in place for mainlanders has them getting MOP250 per night stayed in Macau.

Marriott International’s Ritz-Carlton is presenting a newly elevated experience at The Ritz-Carlton Club across its Asia Pacific hotels, joining a successful launch in Mainland China last summer. The Ritz-Carlton Club provides a private respite where guests will find unique indulgences, curated culinary journeys and personalized encounters that create meaningful and memorable moments for both business and leisure travelers.

Gold Key|PHR and the Cavalier Resort Virginia Beach announced the February 16 opening of The Embassy Suites Virginia Beach Oceanfront Hotel, the final phase of the Cavalier Resort’s $350 million master plan. The hotel’s opening adds an additional 157 suites plus event space, pools, a gym, and new eateries. 

Nobu Residences Los Cabos will celebrate its official opening in March 2023, as an extension of the Nobu Hotel Los Cabos. Located in Baja California Sur, Nobu Residences Los Cabos is home to 60 exclusive residences and offers guests exclusive restaurants and special amenities.

Skift Take: Paying for visitors is a policy that a handful of destinations worldwide have tried in the past few years. Will it endure post-pandemic, as a recession-fighting tool?

Thursday

InterContinental Hotels Group announced the recent signings of Crowne Plaza Shanghai Snow World and Shanghai Snow World Hotel, Vignette Collection. This is the first Vignette Collection hotel in Greater China. The hotels are part of the Shanghai Yaoxue Snow World Complex, an integrated sports-entertainment-tourism resort with the world’s biggest alpine-themed indoor ski park, which is expected to become a major tourist destination in Shanghai after opening. IHG said the signings demonstrate their long-term commitment to the China market.

Hilton named Katherine Lugar as executive vice president of corporate affairs, effective April 2023. Lugar most recently served as CEO of the American Beverage Association.

InterContinental Hotels Group PLC is seeking to fend off claims from franchisees five months after a cyber attack that hotel owners say cost them money and disrupted business. Lawyers for IHG have asked a judge to dismiss the lawsuit filed by owners of franchised hotels, arguing their contracts prevent them from seeking damages. According to IHG’s lawyers, the cyber attack didn’t result in personal data being exposed and claims based on alleged failure to protect information shouldn’t apply. Hotel owners sued IHG in September in U.S. District Court in Atlanta, accusing the company of failing to “adequately invest in data security, despite the growing number of well-publicized data breaches affecting the hospitality and similar industries.” The owners say they haven’t received sufficient information from IHG about the cyber attack, such as how it happened and whether they will be reimbursed for lost business. The lawsuit highlights the potential ripple effects of a hack, including technology outages and lost business for franchisees and other business partners.

Skift Take: IHG is more exposed to the domestic Chinese market than its peer group companies, and it stands to benefit once China recovers from its pandemic disruption.