Sales of U.S. Hotel Assets Sagged in First Half 2023

Here are the top stories from Daily Lodging Report in the past week. Get news on hotel deals, development, stocks, and career moves. Sign up here, now.

Fewer Hotel Sales in the First Half of 2023

LW Hospitality Advisors’ major U.S. hotel sales surveys for the first half of the year showed year-over-year decreases in hotel sales and dollar volume as well as prices per key. The surveys found a 36% drop in transactions priced at $10 million or more. Total dollar volume declined by half, and the price per key dropped 4% to an average price per key of $257,000.

Interest-rate uncertainty has been a key driver of the slowdown in hotel asset sales. Some owners have been reluctant to sell properties at today’s terms in case better terms may be available months from now. Get all the numbers from the LW Hospitality Advisors report, here.

That said, some hotel properties are still changing hands. For example, this week, Noble Investment Group announced the acquisition of 10 WoodSpring Suites hotels in the southeastern United States. The portfolio is throughout Florida, Georgia, South Carolina, Tennessee, and Kentucky.

Marriott and MGM Tie-Up

Marriott International revealed this week it had signed a licensing deal with MGM Resorts to let Marriott Bonvoy loyalty members earn points when staying at 17 MGM resorts, starting in October. Bookings at 40,000 of MGM’s rooms mainly in Las Vegas will be available through Marriott’s site and app by year-end.

Marriott also entered into a loyalty marketing agreement with BetMGM, MGM Resorts International’s online gaming and sports betting joint venture, for Marriott Bonvoy to become Bet MGM’s exclusive hospitality loyalty program partner in the U.S. and Canada. 

“The announcement confirms a long-time view of mine that the casino resort and traditional hotel industries would eventually become an item, so to speak,” said Alan Woinski, editor of Daily Lodging Report.

For context, see Skift’s story: Marriott to Bet on Gaming With MGM Resorts Loyalty Program Tie-Up.

Hotel Boom in London’s Financial District?

The City of London Corporation, which governs the financial district of the British capital, wants to transform under-used offices into hotels. Officials believe as much as 20% of old office blocks could be turned into hotels. While this sounds good, many office buildings aren’t outfitted in a way that makes conversion to hotels cost-effective. However, sitting empty is worse.

Across London as a whole, officials believe that if tourism demand trends continue at their current pace, it will need 58,000 extra bedrooms of serviced accommodation by around 2040. So more travel lodging in the financial district could help.

Restaurant Licensing

Well-regarded restaurants can cash in on their name recognition by licensing their names to restaurants run by hotels. Il Mulino New York, for one, said this week it would like to grow the restaurant license division of its three Italian-themed restaurant concepts. It already has three licensing partners at hotels: Swan & Dolphin Hotel in Orlando, Florida; Hilton in Nashville, Tennessee; and Mt. Airy Lodge in Mt. Airy, Pennsylvania.

Japan’s Big Hotel Asset Sale

Singapore-based SC Capital Partners Pte Ltd has formed a consortium with a wholly-owned subsidiary of the Abu Dhabi Investment Authority and Goldman Sachs Asset Management, and this consortium has bought a portfolio of 27 resort hotels in Japan from Daiwa House Industry for $900 million.

The hotels — with 7,124 rooms total — are located in major tourist destinations across Japan. The investment strategy will focus on increasing top-line revenue, rebranding initiatives, improving distribution channels, and refurbishment works, led by SCCP Group unit Japan Hotel REIT Advisors Co.

Oyo’s New Premium Brand

Oyo got its start by offering branded budget hotels. But this week, ahead of a promised initial public offering, the India-based company said it had entered India’s premium resorts and hotels category with a new brand, Palette. Oyo has started 10 Palette resorts on a pilot basis in cities like Jaipur, Hyderabad, Digha, Mumbai, Chennai, Manesar, and Bangalore.

Oyo will add 40 more Palette resorts to its portfolio by the second quarter of India’s current fiscal year in destinations like Delhi-NCR, Kolkata, Amritsar, Shimla, Goa, Udaipur, Pune, Mussoorie, Srinagar, and Kochi.

The news comes the same week that ICRA, a rating agency, said premium hotel occupancy in India would reach a decade high of 70% to 72%. Upcoming premium hotel supply has ben concentrated in select markets, with Mumbai and Bengaluru accounting for most of the new inventory.

Accor to Debut 400 Hotels in China

Accor has allied with Sunmei Group in China to open more than 400 Movenpick by Accor smart technology hotels, resorts, and extended stay properties across China, representing more than 60,000 guestrooms. So far, 10 new hotel projects have been signed, and more than 100 project negotiations are underway, with multiple openings in 2023. Hotels have been signed for Nanjing, Qingdao, Huangdao, Kashgar, Ganzhou, Shenzhen, Changsha, Shijiazhuang, Suqian, Xuzhou, Zhangjiagang, and Raoping.