The U.S. and Canada's hotel industries each made significant progress in their recoveries from the pandemic. We also feature other major news in hotel deals and development across the world.
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U.S. Hotel Industry’s Improved Performance
According to May 2023 data from STR, the U.S. hotel industry reported higher performance from the previous year. Both the average daily rates and revenue per available room recorded close to 4 percentage point increases from May 2022.
Among the Top 25 Markets, New York City experienced the highest occupancy level (84.0%), up 3.6% year over year. Markets with the lowest occupancy for the month included Minneapolis (59.1) and Houston (60.2%). Reflecting continued improvement in business travel and groups, the Top 25 Markets showed higher occupancy and ADR than all other markets.
Canada’s hotel industry reported its highest performance since September 2022. These were the year-over-year percentage increases for May 2023: Occupancy: 69.2% (+9.3%); ADR: CAD197.10 (+15.0%); and RevPAR: CAD136.32 (+25.7%).
Among the provinces and territories, Newfoundland and Labrador recorded the highest May occupancy level (79.9%), which was up 46%. Among the major markets, Vancouver reported the highest occupancy level (83%, up 8.5%). Prince Edward Island (59.1%, up 15.1%) and New Brunswick (59.1%, up 7.9%) matched for the lowest occupancy among provinces. At the market level, the lowest occupancy was reported in Edmonton (60.9%, up 10.2%).
Japan’s Massive Surge in Overseas Investment
The South China Morning Post said Japan’s hotel sector drew a fivefold increase in overseas investment, with $691 million this year to date.
A 3.4 billion yen deal by Hong Kong-listed Golden Resources Corporation for Japan’s Ni Corporation is likely to close as soon as the end of this month. Ni Corp owns 133 parcels of land with a total area of more than 326,000 square meters in the ski resort town of Niseko and surrounding districts. The deal will also see Golden Resources gain 11 properties such as restaurants, sports facilities and car parks in Niseko and surrounding areas.
The biggest hotel deal so far this year in Japan has been the acquisition of the 746 room Hyatt Regency Tokyo for US$419 million by KKR and Gaw Capital in March.
Since the third quarter of last year, foreign investment in Japan’s hotel sector consistently accounted for 40% of the total investment in the segment.
Vietnam’s Large Number of Hotel Closures and Sales
More reports are coming out of Vietnam about hotels closing or being put up for sale. A recent article said a Google search for “for sale hotels in Ho Chi Minh City” brought up hundreds of results.
The Ho Chi Minh City Department of Tourism said in District 1 there are 308 tourist establishments and about 20 have closed, suspended operations or changed owners.
If the first four months of 2023, Ho Chi Minh City attracted more than 1.3 million international tourists and nearly 10.6 million domestic tourists. But the department’s goal is to get 5 million international tourists, 35 million domestic tourists and a total tourism revenue of 160,000 billion VND this year. It would fall short of its targets if the current pace of both international and domestic tourists hold up.
Hotels not only are facing lower than expected visitors and revenue, many are in need of investment. That is causing the combination of closures and record number of hotels being listed for sale.
Australia’s Reduced Hotel Openings
The Australian Financial Review said rapidly rising construction and finance costs have cut almost 1,000 hotel rooms from Australia’s planned openings this year and a further 1,700 rooms over the next two years. Projects have been canceled or delayed until conditions improve even as luxury brands, such as Ritz-Carlton, W and Capella and new lifestyle hotels look to make their mark on the accommodation landscape, according to Colliers, a Canada-based investment management company with offices in more than 60 countries.
Soho House Announces Expansion to Charleston
Soho House & Co. is bringing one of its private social clubs to the nearly 150-year-old Wagener Building in downtown Charleston, South Carolina. Soho plans to open the venue in 2024, in the city’s French Quarter, with members-only space on the upper two floors and a public Soho-branded restaurant at ground level, a rooftop bar and a dining area. AJ Capital Investors bought the three story Wagener Building last year for $8.1 million and will continue to own the building with Soho House as a tenant.
Art’otel Announces European Expansion
The art’otel brand, owned by PPHE Hotel Group and part of Radisson Hotel group, is expanding across Europe with three new hotels in Zagreb, London Hoxton, and Rome. The art’otel Zagreb will open in Croatia in autumn 2023, offering 110 rooms, a restaurant and bar, meeting space, a spa, indoor pool, and rooftop bar.
In spring 2024, art’otel Rome will debut in Italy with a destination restaurant and bar, outdoor terrace, and art gallery. art’otel London Hoxton will open in early 2024, offering 357 guestrooms, a restaurant and bar, art gallery, event space, auditorium, and indoor pool. In addition to these developments, art’otel also plans to invest in its Berlin and Cologne properties this year.
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