Skift Take

CBRE surveys recent performance metrics for U.S. hotels and finds the national figures are better than average on most counts. Plus, other highlights from this week's news in hotel deals and development worldwide.

Series: Daily Lodging Report

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.

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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, April 16

CBRE released its US Hotels State of the Union: March 2023 Edition. Key takeaways include February marked nine consecutive months of easing inflation. Job openings per hotel decreased to 26 in January, down slightly from 29 in December. CBRE revised its 2023 GDP forecast from 0.2% to 0.8%, but lowered 2024 based on more difficult comparisons. GOP [gross operating profit] margins expanded in January, reaching 26% up from last year’s 21%. Large branded hotel search trends reached a post-pandemic high. High-end travel indicators also reached an all-time high. February RevPAR increased 13% Y-o-Y. CMBS spreads are below pre-pandemic levels, and interest rates are close. Contrary to popular narrative, real consumer credit levels remain below pre-pandemic highs, representing 6.5% of real personal disposable income.

Baird said that with industry-wide March RevPAR being better than expected, it de-risked 1Q23 earnings a bit, and the trade is likely higher into the earnings prints as investors continue to price in less bad near-term outlooks. Growth rates are normalizing and Baird expects expense pressures to persist which keeps them selective. Baird said HST and SHO are the two that they believe risk/reward and the 1Q23 setup have become more attractive for.

The $25-an-hour minimum wage proposed by Los Angeles City Council Member Curren Price is a short-sighted, industry-specific mandate for political gain that ignores accepted living wage policies and far less pay for teachers and city workers, according to these industry lobbies: the California Hotel & Lodging Association, the Asian American Hotel Owners Association, and the Hotel Association of Los AngelesPrice plans for the rise to continue to $30 per hour minimum wage by 2028.

Skift Note: For more context, read CBRE’s state of the union report for U.S. hotels. One note: The report talks about averages. But in some markets, like Midwestern cities such as Minneapolis, weakness persists.

Monday, April 17

There was no Daily Lodging Report on this day.

Tuesday, April 18

Hyatt Hotels Corporation announced plans for Hyatt Studios, the newest addition to Hyatt’s portfolio of brands. The brand, which marks Hyatt’s entry into upper-midscale lodging in the Americas, is an extended-stay brand and is supported by signed letters of interest for more than 100 Hyatt Studios hotels, with construction expected to begin in 2023 and the first hotel expected to open in 2024.

B of A Securities initiated coverage of Hilton Grand Vacations with a Neutral rating and $50 price target. BofA also initiated coverage of Travel + Leisure with an Underperform rating and $42 price target.

Morgan Stanley raised their target price on Marriott International to $197 from $195 and maintained their Overweight rating on the stock.

OYO plans to expand its market presence in the U.S. with an addition of over 100 hotels in CY2023. The planned expansion comes shortly after the company revived its potential IPO plans in India. 

Skift Note: For more context on Hyatt’s move into extended stay, see Skift’s story.

Wednesday, April 19

Upper upscale hotels, the property types most associated with business travel, are well represented in the U.S. development pipeline. The volume of projects in the segment points to confidence in the future of business travel, according to STR. Upper upscale saw the slowest recovery, but a steady climb in performance and the business travel indicators have supported developer confidence in the segment. For the March 2023 U.S. Hotel Pipeline, luxury shows the highest number of rooms as a percentage of existing supply. Luxury (5.2%, 7, 136 rooms); Upscale (4.1%, 36,089 rooms); Upper Midscale (3.7%, 43,470 rooms); Upper Upscale (3.4%, 23,564 rooms); Midscale (2.1%, 10,363 rooms); and Economy (1.0%, 6,302 rooms). 

The total number of esports hotels in China exceeded 20,000 by the end of February this year, with the occupancy rate reaching an average of 60%. Shunwang Big Data Centre, Chinese property management system provider Xuanzhu, and esport hotel management system provider Xingyun prepared the report. The study shows 20,000 esports theme hotels are equipped with 62,000 computer terminals, which had more than 18 million consumers. The number of esports hotels rose 3.12% and the computer numbers increased by 5.26% compared to January. These hotels in second-tier cities have been more successful than in big cities in China. Xi’an has more than 600 of the hotels in the city, leading the group. Zhengzhou, Chengdu and Wuhan are said to have more than 500 in each city.

Skift Note: Western companies are far behind on the potential for e-sports hotels. See Asia Gaming Brief on the opportunity.

Thursday, April 20

Chartwell Hospitality announced the sale of their Home2 Suites by Hilton property in Colorado Springs, Colorado, to ARA US Hospitality Trust for $29 million. The 119-room hotel features a business center, meeting space, indoor heated pool and a combined fitness and laundry center. 

Hyatt Hotels Corporation and GRJ announced the official opening of The Pell, the first JdV by Hyatt Hotel in Rhode Island. The property, managed by Highgate, is located on Rhode Island’s Aquidneck Island. Following a $9 million renovation, the property features 127 guestrooms and suites, a signature restaurant, and 1,250 square feet of customizable meeting and event space.

Adventurous Journeys Capital Partners announced an acquisition in downtown Austin, Texas, which will be home to the forthcoming Graduate Austin. Upon completion, the 18-story hotel is expected to open in 2025. The hotel will offer meeting and event space, a fitness center, ground floor café and lobby bar, rooftop restaurant and bar, a rooftop pool, and on-site parking. The Burt Group will serve as co-developer of the project alongside the AJ team.

Marriott International announced it signed agreements with Vinpearl for an additional seven hotels and resorts in Vietnam, comprising more than 2,500 rooms. The seven add to the eight hotels announced in 2022 when Marriott first entered into agreements with Vietnam’s largest hospitality and leisure chain. Vinpearl is expected to be Marriott’s largest owner in Vietnam, with 15 hotels and resorts. Three of the seven newly signed hotels and resorts are conversions, expected to join the Marriott system later this year. They include the 829 room/suite/villa Nha Trang Marriott Resort & Spa, Hon Tre Island; 193 room/25 villa Renaissance Hoi An Resort & Spa; and two, three and four bedroom villas Danang Marriott Resort & Spa, Non Nuoc Beach Villas. Four new builds comprising more than 1,200 rooms are expected to open by 2028.

Archipelago announced its expansion in Vietnam with three new signings, including Cicilia Danang Hotel & Spa Powered by ASTON, Can Tho Eco Resort Powered by ASTON, and Perolas Villas Resort Powered by Aston. Archipelago offers more than 40,000 rooms and residences in over 200 locations across Southeast Asia, the Caribbean, the Middle East and Oceania. They have signed six properties in Vietnam under Powered by Archipelago and recently open the ASTON Nha Trang City Hotel.

The Ascott Limited, a unit of CapitalLand Investment Limited, has achieved its target to secure 160,000 units by 2023 with the signing of over 4,000 units in 1Q this year. Ascott said they are renewing their target to double its fee revenue to more than S$500 million in the next five years. The FY2022 base was S$258 million which was the highest they earned on record. Acquiring Oakwood helped Ascott achieve record net room growth in 2022 of 20%. Oakwood added about 15,000 units to its portfolio. This year they expect to open more than 13,500 units in over 70 properties. Fee revenue growth will be driven by new property openings as well as new signings at an expected annual net room growth rate of 8%-10% in the next five years.

Skift Note: Asia will likely witness phenomenal hotel development rates in the next couple of years-


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