After wildfires devastated Maui's western region, the island as a whole appeared to show resilience in hotel demand. Plus, optimism at Hyatt, North America's top hotel managers, and more news highlights.
Daily Lodging Report
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Optimism About Hyatt
JP Morgan analysts reported on investor meetings they held with Hyatt, saying they came away incrementally enthused about Hyatt and its multi-year opportunities and transformation to an increasingly asset-light business model.
Hyatt said the seasonally driven transition to group and individual business transient travel mix is starting in the U.S. and should replace leisure for the balance of 3Q23 and 4Q23, accelerating RevPAR growth relative to the summer.
In the near to medium term, Hyatt conveyed confidence in sustaining above-peer net rooms growth and growing fees per room in excess of net rooms growth.
In a report, Truist continues to have Hyatt as its favorite name among hotel groups for potential stock performance. Truist gave forward-looking booking and pricing trends for U.S. hotels, and see no signs of demand slowdown. In fact, Truist sees U.S. RevPAR growing stronger in the fourth quarter than in the third quarter.
Hyatt CEO Mark Hoplamazian spoke at the Bank of America Conference a week ago. He said they are picking up on signs that more people in big cities are returning to offices, which he feels will lead to more business transient travel. Hyatt’s hotels in New York City are seeing increased levels of local traffic, which means people are back in the office, a clear difference between now and the beginning of the year.
Skift Take: We summarized highlights from Hoplamazian’s comments in Hyatt Sees Signs of a U.S. City Rebound That Could Boost Business Travel. See Hyatt CEO Mark Hoplamazian speak on-stage at the Skift Global Forum in New York City on September 27, 2023.
Maui’s Muted Impact on Regional Hotels
The wildfires that recently devastated Maui’s western region were a major tragedy, and Skift has reported that tourism there faces a “long recovery.”
That said, if you zoom out to the perspective of hotel companies across the Hawaiian island, you may see less of a business and operational impact than many feared.
Sunstone Hotel Investors, an investor in roughly a dozen prestige hotels, gave a business update this week. As Daily Lodging Report summed up: “It looks like the Maui wildfires’ impact was less bad than feared, or less of an impact than expected. August company revenue per available room (RevPAR) growth was 1.4%, better than analysts expected.”
Host Hotels & Resorts, America’s largest hotel owner by property count, said it had avoided any reported property damage to the company’s hotels or golf courses on Maui. All its hotels remained open and operational through the wildfires.
The company’s hotels provide food and shelter for employees, their families, and emergency response teams while remaining open to guests. The Hyatt Regency Maui Resort and Spa, for instance, remains open to first responders and expects to begin welcoming guests back in mid-October.
The company estimates that net income and hotel earnings before interest, taxes, depreciation, and amortization from its three Maui hotels were impacted by approximately $5 million in August. But it’s still too early to estimate the full-year impact because of evolving tourism trends on the island.
The company does not expect a delay in completing the comprehensive renovation at the Fairmont Kea Lani, which remains on track to be completed in the fourth quarter of 2023.
Skift Take: “Hawaii public officials want tourists back after the horrible wildfire as soon as possible, but airlines and tour operators know that it takes time for local communities to heal. For more, read: Hawaii’s Maui Tourism Faces ‘Long Recovery’ After Wildfires.
Top Hotel Managers
J.D. Power released its 2023 rankings of third-party hotel management companies in North America Davidson Hospitality Group and Dimension Hospitality tied for overall guest satisfaction with branded hotels in the survey. HEI Hotels and Resorts ranked third. The benchmark asks guests about factors such as “communications and connectivity, food and beverage, guest room, hotel facilities, staff service, and value for price.”
Skift Take: J.D. Power typically sells some of its findings to corporate clients, which has caused some critics to doubt its impartiality. Yet others consider the rankings to be one of the best available signalers of relative provider performance.
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