Instead of a sudden stampede of Chinese tourists, expect a fast walk of travelers in a set of phases. Plus, more highlights from this week's news in hotel deals and development worldwide.
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.
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, March 12
In downtown St. Louis, Missouri, the dual-brand Home2 Suites/Tru by Hilton was placed under receivership last week, while the lender behind Hotel Indigo filed for receivership this week, reported the St. Louis Post Dispatch. The owner and developer of the 88-room Hotel Indigo, Olive Street Saint Louis LLC, failed to make payments and owes more than $10.4 million. Saint Louis Bank is asking the court to approve Midas Hospitality as the receiver. The 201-room Home2 Suites/Tru by Hilton is owned by Blueprint Hospitality and had failed to make payments on a $23 million loan. Last week a St. Louis Circuit Court Judge approved a request by lender HDDA, affiliated with Access Point Financial, to appoint Equis Hotels as a receiver to manage the property.
The Hilton Minneapolis, in Minnesota, sold for $225 million to its creditors in a foreclosure auction, The Minneapolis Star Tribune reported. The bid was on behalf of JPMorgan Chase, which provided a $180 million loan to the Hilton’s owners in 2018. Haberhill LLC and Walton Street Capital, the owners of the 826-room hotel, still have a six-month redemption period from when the sale enters into the court system to match the bid and pay interest as well as other costs to retain ownership.
Hyatt Hotels Corporation and Jesta Group announced the first Hyatt Centric hotel in Canada, Hyatt Centric Ville-Marie Montreal, Hotel Management reported. The property features 177 guestrooms, including five suites, a restaurant, a rooftop pool, and four meeting and events facilities sprawling nearly 5,000 square feet.
IHG Hotels & Resorts announced the opening of the Hotel Indigo Guadalajara Expo in the capital of Mexico’s Jalisco state. The property features 162 rooms, an enclosed courtyard, on-site fitness center and a rooftop bar. The Hotel Indigo Guadalajara Expo is owned by Immobiliaria JAVIPA S.A. de C.V. and managed by Grupo Hotelero Mexicano.
Skift Note: The shifting interest rate environment and mood about banks may wrongfoot some hotel owners as they manage their debts.
Monday, March 13
Hilton’s Asia Pacific president, Alan Watts, told Nikkei Asia that they expect hotel guest numbers in China to return to their pre-pandemic levels by year-end. By the fourth quarter, they expect regular 80% occupancies. Of the 7,000 hotels Hilton runs worldwide, Asia Pacific accounts for about 9% with 672 properties representing 12 brands. They have more than 500 hotels in China. By 2025, Hilton hopes to have 1,000 hotels operating in Asia Pacific. Outside of China, Hilton is focusing on emerging markets such as India, Vietnam, Thailand, and Malaysia. They see opportunity at all tiers but particularly in luxury brands and entry-level hotels. Watts does not expect Asia to recover until 2024 fully, saying airline flight inventory is the biggest issue in the region.
The Macau Daily Times said they are being told the recent spike in hotel room prices in Macau is driving international visitors away, or at least motivating them to stay for a shorter period. The couples they interviewed that felt prices were too high said they had no interest in gambling and were coming to sightsee. They also complained about the ferry schedules from Hong Kong to Macau.
Skift Note: Instead of a stampede of Chinese tourists, maybe expect a fast walk. See more on this topic below.
Tuesday, March 14
Reuters published an article on how the hoped for, fast out of the gate, revenge travel by the Chinese following the demise of Zero-Covid has not occurred. Reuters described Chinese consumers as returning to hotels, restaurants and some shops, but they are choosy about what they buy. Beijing had expected domestic demand to stimulate the economy. Once they overcame the fear of Covid, other countries laid out the red carpet. Many are still waiting. Nomura said the V-shaped spending recovery that the U.S. and other countries saw immediately after Covid restrictions were lifted would not happen with the Chinese and markets should curb their enthusiasm.Oxford Economics said tourist arrivals into the Asia Pacific region are tipped to reach around 50% of pre-Covid levels in 2023, only fully recovering in 2025 or 2026. Oxford also said Asia Pacific economies still rely too heavily on Chinese tourists who have been slow to return since China reopened on January 8. The tourism outlook was presented as part of a roundtable hosted by the online travel agency booking.com.
South Korea and Australia were left off the next list of 40 countries to which China will resume outbound group tours as of tomorrow. Vietnam and Nepal were included. That will make a total of 60 countries that can take part in the resumption of outbound group tours and ‘air ticket + hotel’ business for Chinese citizens.
Raines announced they acquired HP Hotels, a full-service, third-party hotel management company. Raines said this would result in operational expansion throughout the Southeast and Southwestern US. Raines is a fully integrated hotel development management and investment company and felt that assets alone would not get them to where they need to be as a company. The firm will add not only its first IHG properties but also its first independent assets. Operating as Raines, the combined company maintains offices in Florence and Charleston, SC.
Skift Note: Bureaucratic hurdles, a lack of flight capacity, and rising prices may make the Chinese travel outbound recovery more of a phased phenomenon. For details on what to expect, read: The Emergence of a New Chinese Traveler: A Skift Deep Dive.
Wednesday, March 15
Hilton predicts 2023 will be its strongest year of growth in France, with seven planned hotel openings. As well as continued expansion in Paris, Hilton is focusing on major resort destinations and provincial towns and cities, working with several local owners in France on a development pipeline that will more than double the hotel group’s presence nationwide. In France, Hilton’s development plans will see 24 properties added to the current portfolio of 23 hotels in coming years.
The Courtyard by Marriott Long Beach Downtown announced the addition of two Topgolf Swing Suites at their 216-room hotel. Powered by Full Swing Technology, the suites feature two simulator bays and a variety of virtual games, including Topgolf target games, Zombie Dodgeball, Hockey, Baseball, Football, Carnival games and more, according to the Long Beach Business Journal.
Vault Home Collection hopes to develop a Six Senses hotel and residences in Telluride, Colorado. The current design of the Six Senses Telluride calls for 82 hotel rooms, 18 residences and employee housing for 56 people, Hotels magazine reported. There will also be 25,000 square feet of retail and market space, a spa and health center, two restaurants and a rooftop pool. The project will also include an Earth Lab, Alchemy Bar, and Gear Garage. Dependent on final approval, the project could be completed by winter 2025.
Fort Partners reached a deal this month for a 30-year lease on land, from the Order of the Holy Sepulchre of Jerusalem, to transform a 15thcentury Italian palace into a Vatican City boutique hotel, the Wall Street Journal reported. The developer has tapped Four Seasons Hotels & Resorts to manage a hotel at the site which will feature 55 to 60 rooms and a courtyard restaurant. As part of the arrangement, Fort Partners has agreed to invest 54 million euros in the restoration of the property. The developer aims to have the hotel open in 2025.
Colliers has facilitated the $10.2 million sale of the Holiday Inn Express & Suites in Hardeeville, Georgia. The property is a three-story, select-service hotel comprised of 77 guest rooms.
Braemar Hotels & Resorts and Ashford Hospitality Trust both issued press releases, clarifying that their cash holdings are safe. BHR said 60% of their cash is in short term US Treasury Securities while AHT has 42% of their cash in Treasuries. AHT has 27% held at FDIC Insured Cash Sweep accounts at commercial banks and 30% relates to property-level operating cash deposited with commercial banks designated as G-SIB by the Financial Stability Board. BHR has 18% at commercial banks in Insured Cash Sweep accounts and 16% related to property-level operated cash deposited with commercial banks designated as G-SIB.
Borgata Hotel Casino & Spa, in Atlantic City, New Jersey, is embarking on a $55 million redesign and rebranding of The Water Club, in time for the resort’s 20th anniversary. Renamed the MGM Tower, the new offerings will feature more than 700 completely re-imagined guestrooms.
Skift Note: This Borgata’s renovation is critical to it maintaining its position in Atlantic City’s market.
Thursday, March 16
The Star is pulling out all stops in trying to raise capital to pay for their defense and fines, now listing the 295-room Sheraton Grand Mirage resort on Australia’s Gold Coast for $200 million. The beachfront property is 50% controlled by The Star, alongside Far East Consortium and Chow Tai Fook, each controlling 25%. The joint venture acquired the Sheraton property in early 2017 for $140 million.
202 Elizabeth is a new entry into Sydney’s boutique hotel scene, reported Australia’s Traveller magazine. Luxeland developer Diana Ren bought the property for a reported A$30 million last July before launching the restored Porter House Hotel in the CBD. The hotel is a 38-room, six-level property with a rooftop space. The ground floor lobby includes a sun-drenched rear courtyard and soon-to-open retail and wine-tasting space. The hotel includes a variety of room categories with the most luxurious being The Lizzy with plush armchairs, double walk-in rain shower and a soaking tub.
STR said Sydney WorldPride 2023 drove the market’s hotel average daily rate (ADR) and RevPAR (revenue per available room) above pre-pandemic levels while occupancy remained slightly below 2019. CoStar’s STR said that, during the 17-day event, daily occupancy averaged above 80% all but three days. When compared to the matching 17-day period in 2019, Sydney hotel occupancy was -2.3% lower while ADR was up +25.7%, resulting in a RevPAR surge of +22.1%
Club Med Borneo Kota Kinabalu in Sabah will open by the end of next year, the New Straits Times reported. The 17ha eco-friendly beachfront resort in Kuala Penyu will have 400 rooms, including 40 suites and is about 90 minutes by road from the Kota Kinabalu International Airport. This resort in Sabah, Malaysia, is owned by Golden Sands Beach Resort City.
The Borneo Post noticed Marriott’s Sheraton sign installed on a building near the Kuching Waterfront. The hotel is expected to open in June or July this year. Sheraton Hotel Kutching is the name that was found on the architect of the property’s website, Aki Media. The 20-story building will have over 300 rooms and have an infinity pool on its rooftop. Good sleuthing by a reporter at the Borneo Post.
Skift Note: Australia’s hotel market is forecast to see a lot of activity this year.
Tags: daily lodging report, future of lodging, hotel development