Skift Take

Analysts did an uneven job of predicting hotel company performance. Vietnam's hotel market is slumping. Plus, other highlights from this week's news in deals and development.

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

A Rough Earnings Season

Quarterly earnings reporting wound down this week. Several hotel companies, mainly real estate investment trusts, reported results that missed analysts’ estimates. Here’s a snapshot:

  • The big surprise was Host Hotels missing estimates by -4%, as well as reducing their guidance for future earnings. This is the company’s first earnings miss since 2020. Slower transient business in San Francisco and Seattle and softer resort portfolio results were the culprits.
  • In positive news, Apple Hospitality, RLJ, and Sunstone Hotel Investors beat analyst expectations. Apple benefited from its portfolio being in select service and upscale/upper midscale, with diversified business and leisure exposure. Even with that, it lowered its guidance for future earnings slightly.
  • DiamondRock Hospitality missed estimates, most likely due to their resort/leisure overweighting of their portfolio. DRH said they are considering selling some smaller urban assets for which buyers can more easily get financing. 
  • Ryman Hospitality Properties also missed but said second-quarter bookings for future stays were very strong, with average daily rates for those bookings at a new record. 
  • Playa Hotels, with heavy exposure to San Francisco’s troubled market, missed estimates. They missed even though they have so many leisure properties outside the U.S., where everyone is now saying travelers are heading.
  • Choice Hotels and IHG reported earnings, and both immediately hit new 52-week highs. Both have the franchise model, which probably has a lot to do with the reaction.
  • Marriott and Hilton gave sterling reports.
  • Hyatt missed Wall Street estimates by -6%, mostly due to owned/leased earnings. The miss was surprising until you realize the company is more tied into leisure and resorts now with ALG, a set of all-inclusive resorts that it bought two years ago.

Vietnam’s Troubled Hotel Scene

Is anyone out there willing to say that all the news in the past few weeks shows Vietnam as a market in trouble for any type of travel accommodations? Vietnam is lagging behind its regional peers regarding international tourism recovery.

  • Vietnam welcomed 1.04 million international visitor arrivals in July, a post-pandemic high. But that figure represents 79% of the foreign tourists in the country in July 2019.
  • The return of Chinese tourists will be a bright spot for the city’s hotel market if it occurs.
  • Viet Nam News said the condotel market remains in a slump. DKRA Group said the inventory of unsold units topped 42,300 in June, far exceeding the combined inventory of beach shophouses and resort villas.
  • VN Express said the hospitality market in Ho Chi Minh City remained gloomy in the first half of the year due to a slow recovery rate of international tourist arrivals.
  • According to real-estate agency Savills Vietnam, the hotel occupancy rates in the second quarter were 60%, down 8 percentage points from the first quarter, while room rates of VND1.9 million a night were down by -2% from the previous quarter. 
  • Construction on the first phase of a new international airport to serve Vietnam’s second metropolis, Ho Chi Minh City, is to start in August. The Airports Corporation of Vietnam said the facility, at Long Thanh in Dong Nai province, is the next hope for what has been a massive failure for the Grand Ho Tram Strip casino resort southeast of Ho Chi Minh City. The airport is supposed to halve the current airport transfer time for international visitors to the resort. 
  • The Grand Ho Tram Strip casino resort in Vietnam, which has had so many changes of ownership and partnerships as it continues to lose money, announced the launch of Ixora Ho Tram by Fusion, a collection of luxury residences that complements the existing accommodation offer at the entertainment complex.

The Birth of Another Hotel Brand

The big news from IHG was that they are pitching hotel owners on a new brand in the mid-market. IHG wants something that prioritizes a conversion brand rather than a new construction brand. That can keep them growing at a time when new construction may hit some financing and supply-side bottlenecks. This is the first big thing Elie Maalouf has done since taking the CEO job. Skift covered the story.

China’s Rebound Unfolds

China has lifted a ban on group tours to more than 70 locations worldwide. In Asia Pacific, tours will resume to Japan, South Korea, and Australia, while Middle East nations getting the approval include Qatar, Oman, Lebanon, and Israel. This will be the first time in six years that China will allow group tours to South Korea, as they banned such tours in 2017 in response to the deployment of the Terminal High Altitude Area Defense Systems in South Korea.

Kyoto Is a Hotspot for Development

Japan’s Kyoto draws many tourists for its Buddhist temples, Shinto shrines, and traditional kaiseki dining. Hotels are being built to meet demand.

  • Hilton announced the opening of DoubleTree by Hilton Kyoto Higashiyama, marking Hilton’s third brand in Kyoto. The company plans to open two more hotels in Kyoto next year, another DoubleTree in Kyoto Station and the Hilton Kyoto.
  • Dusit International announced it will continue its expansion in Japan this September with the opening of Dusit Thani Kyoto, a new luxury hotel in the city’s Hanganji Monzen-machi district. This will be their second hotel after ASAI Kyoto Shijo, which opened in June.
  • In June, BWH Hotels opened the KAYA Kyoto Nijo Castle, BW Signature Collection by Best Western.
  • Travelodge Hotels Asia Co., Ltd. recently unveiled its newest addition to its portfolio, Travelodge Kyoto Shijo Kawaramachi, located in Nakagyo-ku, Kyoto City, Kyoto Prefecture, in Japan. The hotel officially opened on March 15. 

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