Skift Take

Analysts for investment bank Morgan Stanley modestly sliced their price targets on several lodging companies largely out of concern about demand trends. Plus, more 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 the top stories from the 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.

Caution on Hotel Companies

Pebblebrook Hotel Trust, a real estate investment trust, released its monthly update and it was something of a warning. The company, which operates many hotels in North America, said weekend leisure travel has been weaker than expected, partly because of cooler weather in Southern California and the Pacific Northwest along with some tightening of the belts on demand for suites/premium rooms. The company expected its second-quarter revenue to fall slightly below its outlook. As for what to think, CEO Jon Bortz has bought 43,000 more shares on the open market since June 20.

Analysts for investment bank Morgan Stanley chopped their price targets on several lodging companies. They cut Pebblebrook Hotel Trust’s from $13 to $12 and their advice on larger peer Host Hotels from “equal weight” to “underweight.”

For the large hotel groups, the investment bank believes most of the companies’ results are trending below 2Q consensus but that international trends should act as an offset for several of them. It lowered its target on Hilton to $163, from $166, cut Hyatt’s from $142 to $136, cut Choice Hotels from $134 to $127, and cut Wyndham from $92 to $80.

A Fight Over Iconic New York Hotels

The Wall Street Journal said Ty Warner and Four Seasons are getting closer to resolving their differences and the Four Seasons in Midtown Manhattan may actually reopen soon. Due to the pandemic and contract dispute, the hotel has been closed for three years.

Four Seasons and Ty Warner’s negotiations could also affect what happens at the Plaza Hotel, a few blocks away. Four Seasons and Raffles Hotels & Resorts brands are said to be the finalists to take over management of the Plaza. If the Four Seasons Midtown reopens, then Raffles is expected to get the win at the Plaza. For more, read “Two of New York’s Most Famous Hotels Plan Their Postpandemic Comebacks.”

Meanwhile, in New York City’s Times Square, Tempo by Hilton will debut with the opening of the 661-room Tempo by Hilton Times Square New York City. The property will occupy 36 floors of the soon-to-be-opened 46-story, mixed-use TSX Broadway building. There will be 31 Ball Drop rooms, guest rooms that offer up-close-and-personal views of the Times Square Ball. Relatedly, The 45 Times Square Hotel announced its June 2023 opening in the heart of Manhattan, New York. Ferrado Hotels own the property. The 139-room hotel will be converted into Palladium’s Only YOU Hotels.

Accor Is Bullish in the Medium-Term

Accor, the giant operator of 46 hotel brands including Novotel and ibis, plans to open more than 1,200 hotels in the next five years, increasing the number of its resorts by more than one-fifth. The company also raised its outlook, forecasting its 2023 revenue per available room to grow by 15% to 20% amid reorganization plans implemented in January.

Accor now expected its full-year earnings before EBITDA to come in the range of $1.01-$1.05 billion (920-960 million euros). For more, read: “Accor’s Investor Day: 7 Top Slides From the Hotel Group’s Presentation.”

As part of the implementation of its asset-light strategy, Accor has reached an agreement with Mutris under which Accor, will sell its 33% stake in Risma, a Morrocan hotel operator, to Mutris at a price of 130 dirhams per share, and secondly, sell its Risma bonds in the market. Completion, subject to regulatory approvals, is likely to close in the third quarter of 2023.  

Choice and Radisson Americas Merger on Track

Choice Hotels International, Inc. is on pace to integrate the nearly 600 Radisson Americas hotels onto its reservation delivery engine and its Choice Privileges loyalty program by the end of the summer. Full integration is expected by year-end.

Personnel Moves

Red Roof President George Limbert is stepping down from his role, effective July 12, to pursue interests outside of the hospitality industry. Mohamed Thowfeek, a board member of Red Roof, will oversee the day-to-day operations as the company begins its executive search.

EOS Hospitality announced the appointment of Simon Mais as Chief Executive Officer and Mark Keiser as President & Chief Development Officer.

Many Vietnamese Hotel Assets on Sale

Vietnam is seeing an avalanche of hotels listed for sale at reported deep discounts amid the ongoing recession and sluggish tourism market. The Vietnam Real Estate Association said many hotel owners, particularly small and medium-sized ones, are selling at significantly lower rates to maintain their cash flow while others are liquidating assets, trying to survive.

Many hotels have closed or suspended operations while some are unable to keep up with operational and maintenance costs. There was more but this is the second time we have covered this so no need to keep hammering what is really happening in Vietnam. For more, read the article.

Australia’s Boutique Hotels Have Been Booming

CBRE Viewpoint covered the outperformance of Australia’s boutique hotel market, amid heightened demand for unique and hyper-personalized hotel stays. CBRE’s analysis showed boutique properties outperformed ‘big box’ international hotels in Australia since the 2020 onset of the pandemic in occupancy and other key metrics. CBRE said the big reason is the recovery of Australia’s visitor economy has been driven by domestic, leisure-based tourism with the growth of the local traveler resulting in demand for a curated hotel offering. “Bedding on Boutique Growth.” Yes, they’re punny guys at CBRE.


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