Skift Travel News Blog

Short stories and posts about the daily news happenings around the travel industry.


Generator Hostels’ Forecasts 50% Jump in Earnings as Budget Travelers Seek Deals

5 months ago

Generator Group, which owns or runs 21 hotels, gave a financial update on Monday that underscored the post-pandemic boom in travel.

London-based Generator Group forecasted that it’s on track to produce revenues of about $238 million (€225 million) this year — which would represent a 25% jump over the company’s revenue in the pre-pandemic year of 2019.

The privately held company anticipates this year it will produce earnings before interest, tax, depreciation, and amortization of about $80 million (€75 million). That would represent a 50% jump in earnings compared with 2019 — highlighting strong pricing power in so-called “compression,” or high-demand, markets.

PE-Backed Hostels

Private equity firm Queensgate Investments bought Generator for $480 million (€450 million) in 2017, and the group’s flagship brand is Generator, a set of premium economy hostels. Queensgate spent about $400 million in 2019 to acquire Freehand Hotels, which operates properties in New York, Chicago, Los Angeles, and Miami, and folded that into the group.

Generator said it has nearly 12,000 beds in ten countries. It told the Financial Times, “in the next year, it is planning to launch 10 more sites worldwide under an asset-light model where it does not own the long-term lease, including a new hostel in Bangkok.”

Queensgate is a part or whole owner of nine Generator-run properties. Generator also acts as a management company for other hostels.

For more context on Generator’s strategy, watch the interview with its CEO from last year’s Skift Global Forum East (below) or read Skift’s piece Generator’s Takeover of Paramount Hotel in Times Square Is Part of Broader Hostel Reboot.


Hotel Brand Selina Sees Upswing in Financial Performance

6 months ago

Selina, a hotel and experiences brand focused on youth travelers, said on Wednesday that its financial metrics were trending in the right direction as it reported earnings results.

In the second quarter, the company generated $52.5 million in revenue, a bump of 15.9% year-over-year. Factors included higher occupancy rates, reductions in corporate overhead, and essentially higher revenue per customer.

The company also narrowed its losses. It reported $700,000 in adjusted earnings before interest, taxes, depreciation, and amortization, compared to a $5.8 million loss in the same period a year ago.

Selina said it was “aggressively executing a comprehensive real estate portfolio optimization plan” that “includes renegotiating all leases through abatements, deferrals, and terminations.”

In the quarter, the company also collected $10 million as the first phase of a planned strategic investment of up to $50 million led by Global University Systems (GUS), which runs for-profit universities. It also drew $10 million under its $50 million credit facility with Latin America’s Inter-American Development Bank (IDB).

Selina’s stock price dipped below $1 last month, where it has remained. If Selina’s stock remains below $1 for about a month, the Nasdaq exchange will issue a notice of a plan to delist the shares from trading. Selina will then have 180 days to push the value of shares higher.

The company aims to report a continued upward trend, which could appeal to investors.

“Selina continues to focus on three key strategic areas: improving cash flow, advancing toward profitability, and building our brand,” said Rafael Museri, co-founder and CEO, in a statement.

Selina's earnings report


IHG to Launch Midmarket Hotel Brand Designed to Grow Quickly

7 months ago

IHG Hotels & Resorts revealed on Tuesday that it has been pitching hotel owners on a new brand addressing an opportunity in the middle of the market it said is underserved.

“Our aim is that this new conversion brand will become the first choice for guests and owners in the midscale segment, accelerating our growth in a space that is already worth $14 billion in the U.S. market alone,” said CEO Elie Maalouf during remarks tied to the company’s quarterly earnings.

The Windsor, UK-based hotel group — whose brands include Holiday Inn, Crowne Plaza, and Six Senses — didn’t reveal the name of the new brand, which has become IHG’s 19th brand, or other details.

“We’re delighted that more than 100 hotels have already expressed definitive interest in the new brand,” Maalouf said.

Designed for Fast Growth

Maalouf likely wanted to prioritize a conversion brand over a new construction brand to help address IHG’s need to maintain steady growth in its hotel pipeline.

Unlike new-build brands that take time to grow because of construction delays, conversion brands can expand quickly, especially as many independent hotel operators or owners of properties flagged with older brands seek a refresh.

“Conversions represent a major growth opportunity for us, generating around 40% of first-half openings and signings globally,” Maalouf said.

Addressing the Mid-Market

The new brand is Maalouf’s first big move as CEO, having taken the top job last month.

Maalouf had previously led the group’s North American business for 8 years. During that time, he showed an interest in mid-market growth.

Maalouf led his team in debuting the new brand Avid, in 2017, which he said at the time targeted “a vastly underserved $20 billion segment of the U.S. midscale market.” Avid charges roughly $10 to $15 a night less than Holiday Inn Express, IHG’s midscale leader, and less than Candlewood Suites, IHG’s other mid-scale brand. (The difference in market size figures Maalouf has quoted refers to different segments of the overall mid-market.)

Given Maalouf’s sense that the mid-market is underserved, he has prioritized putting another IHG brand on the grid. That said, IHG’s board (on which he’s been a member for years) approved of this initiative before Maalouf became group CEO.

The hotel franchisor already has upper midscale with Holiday Inn and Holiday Inn Express, so the new brand is likely more affordable.

IHG expects to target around a 25% lower cost per room to convert to the new brand than that for Holiday Inn Express.

Facing Rivals

IHG’s rivals have also been looking at the middle of the market.

  • In June, Marriott International said it would expand into the “affordable midscale” hotel category in North America with a new hotel brand — which it hasn’t yet named. The move came after earlier this year, when it completed its acquisition of City Express, a midscale brand focused on Latin America.
  • Hilton CEO Christopher Nassetta said in his second-quarter earnings call that the “mid-market” was what he coveted long-term. “We’re not ashamed of saying we have every intention to have the best brands in every market to serve the mid-market because we think that’s where the most money will be made over the next ten or 20 or 30 years,” Nassetta said.
  • In May, Hyatt unveiled a new brand, Hyatt Studios, in the upper-midscale segment.


Scandic Hotels Expects Strong Third Quarter With Steady Travel Demand

8 months ago

Scandic Hotels Group began the hotel earnings season with a financial update on Friday, voicing optimism about travel demand despite recent inflationary pressures.

“We expect a strong third quarter with high demand and increasing prices,” said president and CEO Jens Mathiesen on an investor call.

Scandic runs 55,930 hotels in Scandinavia and other European countries under the Scandic, Hilton, Holiday Inn, and Crowne Plaza brands — mostly under long-term leases. Friday was the 60th anniversary of the Stockholm-based company, one of Sweden’s most well-known brands.

“We expect a strong third quarter, driven by continued high levels of leisure travel during the summer as well as business travel and meeting gaining momentum in the latter part of the quarter,” Mathiesen said. “So based on the current booking situation, we expect occupancy to be on par with the same period last year, but also continuing at higher average prices per room.”

In the second quarter, the company enjoyed record high revenue per available room, or RevPAR — a key industry metric.

scandic hotels financial presentation july 2023 screenshot

In the second quarter, Scandic generated a profit of about $26 million (271 million Swedish krona) on net sales of about $556 million (5.69 million Swedish krona).

The hotel group has one of the lowest levels of indebtedness of any publicly held competitor. As of the end of June, it had net debt of 2.8 billion Swedish krona, which was only 1.1 times its adjusted earnings before interest, taxes, depreciation, and amortization on a rolling one year basis.

The company recently entered the economy segment with Scandic Go, a brand with 221 compact hotel rooms. The brand’s design aims to drive more room revenue per square meter at a lower capital expenditure and labor cost on average than its other brands. The new brand’s first property will open next summer.


Choice Hotels Opens Properties at Faster Pace and Reaffirms Profit Outlook

8 months ago

Choice Hotels, a U.S.-based franchisor, said on Tuesday it had opened an average of more than four hotels a week in the first half of 2023 — a 39% jump year-over-year. The steady onboarding of properties was one reason it reaffirmed its profit forecast for the year despite some industry concerns about leisure demand patterns in the U.S. going into reverse.

Choice Hotels opened 107 hotels in the first half of the year, with an increase in conversion hotel openings of 45% and a rise in new construction hotel openings of 24%. The gains were impressive in a hotel sector where interest rate uncertainty had raised concerns about the willingness of banks to endorse hotel development.

The first-half openings growth was across all segments. Openings in the upscale segment were by 83%, the midscale segment by 42%, the extended stay segment by 50%, and the economy segment by 11%.

“The company remains optimistic about extended stay franchise business growth and expects the number of its extended stay units to increase at an average annual growth rate of more than 15% over the next five years,” it said in a statement.

The positive news helped the company re-commit to its previously provided financial guidance for full-year 2023, where it forecasts net income — a measure of profit — of between $255 and $265 million.

The news is positive at a time when analysts have become more cautious about the hotel sector. For more context, see “Analysts Pare Back Enthusiasm for Hotel Companies.”

Investors closely watch trends in another metric, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). The news on that front was also positive relative to its peers.

“In 2024, Choice Hotels expects to generate more than 10% adjusted EBITDA growth at the midpoint, year-over-year, driven by approximately $20 million in incremental contribution from [the merger with] Radisson Hotels Americas as well as organic growth in more revenue intense segments and markets, strong effective royalty rate growth, and other factors.”

For more, see “Choice Hotels’ Brands, Explained.”

What is Choice Hotels?
Choice Hotels International, Inc. is a hotel operator based in Rockville, Maryland. The company operates nearly 7,500 hotels spanning 22 brands, including its flagship upper-midscale brand Comfort and roadside midscale brand Quality Inn. The company’s strategy consists of expanding its portfolio with hotels that generate higher royalties per unit, meaning higher-end properties. In addition to this, Choice Hotels also has a loyalty program known as Choice Privileges.

These are the most relevant articles I found:

Morgan Stanley Flags Headwinds for Hotel Companies – 06/30/2023

Choice Hotels Explores Buying Wyndham: Report – 05/23/2023

The Wyndham-Choice Merger Skeptics – 05/25/2023


MGM Resorts CEO Thinks Dubai or Abu Dhabi Might OK Gaming This Year

10 months ago

Executives at MGM Resorts International are hopeful that gaming may be approved by the United Arab Emirates, possibly as soon as this year.

The Las Vegas-based casino and hotel operator announced back in 2017 its plans for an MGM Resort in Dubai that wouldn’t have gaming but would instead have 1,000 rooms and 10 villas. Yet executives sounded more hopeful about running a casino in a Gulf State someday when talking with analysts during the company’s first-quarter earnings on Monday.

“As it relates to Dubai, that property continues to evolve,” said Bill Hornbuckle, president and CEO. “We’re the managers, but the owners want to upgrade the property, I think, with gaming in mind. But it’s up to Abu Dhabi and the national government to ultimately decide. … We’re hoping ‘any day.’ But I got to believe as the summer fulfills itself, we’ll hear more news on that.”

“We have had people on the ground there basically nonstop since the first of the year, trying to understand the opportunity in Abu Dhabi and then ultimately, if it will open up,” Hornbuckle said. “If they pass on it, [the opportunity] will open up to the other Emirates. Whether the rulers of each Emirate then take it upon themselves to approve it is up to them.”

“Obviously, we’re focused on Dubai, and we think it would be ideal,” Hornbuckle said. “There happens to be 150,000 to 200,000 square feet of space that could be converted into such a thing. But time to tell there, and we’re not saying no to Abu Dhabi either.”

MGM already has competition on the non-gaming front. Wynn is spending $3.9 billion in the region, as Bloomberg reported this week, noted Alan Woinski, editor of The Gaming Industry Daily Report and Skift’s Daily Lodging Report. The Wynn property is on an island and is said to have a “gaming area” though this doesn’t seem to have been approved yet.

Here are other key points about the operator of 32 hotels and casinos in the U.S. and Macau.

Expansion Continues

In April, the company received approval of its development plan in Osaka, Japan. MGM and its partners Orix hope to start building the nearly $10 billion integrated casino resort, with an opening now expected in 2030.

MGM’s application process in New York is “progressing,” the company said.

Hotel Boom:

In the first three months of the year, the overall MGM Resorts company generated $467 million of net income on revenue of $3.9 billion.

Its Las Vegas Strip resort hotels, in particular, generated $752 million in revenue. That was thanks to a mix of strong pricing — with rates 31 percent higher than a year earlier — and an average occupancy of 92 percent.

There’s further room to grow, executives said, if Chinese and other Asian travelers come back to Las Vegas in large numbers. In the first quarter of 2019, Asian Pacific customer made up about 45 percent of its business, while now they’re currently only about 25 percent.

“So if that comes back, from that perspective, it would be pretty meaningful,” said Corey Sanders, chief operating officer.


Soho House Parent Changes Name to, Surprise, Soho House & Co.

12 months ago

Membership Collective Group is best known for its Soho House upscale member’s clubs and hotels and for being unprofitable for decades. The London-based company wants to change both of those things, it said during a Wednesday earnings call.

In a few weeks, it will change its name to Soho House & Co., and its executives said they have a path to profitability.

On Wednesday, Membership Collective Group reported that it had narrowed its losses in the fourth quarter, year-over-year. It had a loss of $13 million on revenue of $270 million.

“We’ve raised prices by a double-digit percentage this year,” Carnie said on Wednesday. “Since we’ve increased our new member pricing, we continue to see super high applications, which shows the strength of our business.”

Total members grew to 226,830, up 7 percent on the previous quarter.

The company forecasts that its 2023 revenue will come in between $1.1 billion and $1.2 billion. That partly reflects a moderation in the pace of its network expansion. The company is returning to a 5 to 7 openings a year pace — which is a pace that’s easier to streamline and keep profitable.

The company’s streamlining push has a few key areas, including analyzing data to find operational efficiencies.

Data analysis has, for instance, shown that its members are using their facilities just as much post-pandemic as before Covid, but they’re doing so at different times. So the company has adjusted how it schedules its staffing to reduce its in-house operating expenses.

“Wages as a percentage of revenues dropped approximately 1,000 basis points in December versus August last year,” Carnie said of this initiative’s impact.

The company has been trimming the production of content, digital, and other corporate expenses. In one example, it will cut its “editorial content” expenditure by about 40 percent “going forward.”

In recent months, the company said it has found “sizable opportunities” to be more cost-efficient in how it procures supplies for its food-and-beverage offerings.

“The changes we’ve made in our F&B program continue to drive growth margin expansion with like-for-like F&B margins 230 basis points above the final quarter of 2019,” Carnie said.

“It’s still early days in terms of driving the benefits of these profit initiatives, and we have much more to go,” Carnie said. “But we’re on track, and we feel confident that this will help us generate stronger, more [consistent] earnings going forward.”


Nigeria’s Transcorp Hotels Returns to Profit and Plans Expansion

12 months ago

Nigeria’s Transcorp Hotels, one of Nigeria’s biggest hotel players, reported that it had returned to profit in 2022 after a rough pandemic.

The company reported a full-year 2022 profit before tax of $9.8 million (4.5 billion Nigerian naira) on $68.2 million (31.4 billion naira) in revenue.

“This impressive achievement is the highest revenue generated since the inception of the company,” said Dupe Olusola, CEO and managing director. “The full-fledged return of the international business travel segment and the bolstering leisure segment contributed immensely to this performance.”   

The company doubled its net profit margin year over year from 7 percent in 2021 to 14 percent in the year 2022. It reported a $5.6 million (2.6 billion naira) profit after tax.  

But the operator and the owner of landmark properties Transcorp Hilton Abuja and Transcorp Hotels Calabar still has potential room to grow for profitability. Its profit after tax in 2022 was the same as it was in 2015, a year when the country endured a six-week closure of its major airport.

Dupe Olusola, CEO and managing director. Source: Transcorp Hotels.

Transcorp Hotels is a hotel operator that’s a three-decade-old subsidiary of the conglomerate Transnational Corporation of Nigeria, with interests in energy and agriculture.

The Transcorp Hilton Abuja will add a state-of-the-art convention center this year, after having just added a premium spa. A luxury hotel in central Lagos is also in development. 

Since 2021, the company has been attempting an expansion into Airbnb-like travel categories by running a listing marketplace for vacation rentals and experiences. Transcorp Hotels, runs Aura, a mobile booking app and website that lets entrepreneurs list short-term rentals, tours, activities, and restaurants, as Skift has profiled before.

For a profile earlier this month on CEO Olussola, read Nigeria’s Independent.


Marriott Vacations Sees Timeshare Strength on Torrid Leisure Travel Demand

1 year ago

Marriott Vacations Worldwide Corp‘s new CEO John Geller said on Thursday that the company’s fourth-quarter earnings underscored continued strength in leisure demand for its timeshare properties, package tours, and other offerings for travelers, despite talk of economic uncertainty.

In the fourth quarter, the company generated a net income of $88 million off of $1.19 billion in revenue. Revenue rose 8 percent year-over-year, thanks partly to the company’s lodging averaging nearly 90 percent occupancy.

The company said consolidated vacation ownership contract sales — a key metric in the sector — was $454 million in the quarter, up from $406 million a year earlier. Executives forecasted that the company would end 2023 with contract sales up between 5 percent and 9 percent.

Thursday was the first earnings call for John Geller as the company’s CEO, president and director.

“The past two months have felt a lot like when I joined the company just over 13 years ago, full of potential and possibility. Long term, I expect our timeshare and exchange business to remain the core of our business model while we look to add to our growth by diversifying into adjacent leisure-focused businesses where we can leverage our core capabilities. And finally, I want us to find new ways to unlock the power of data through advanced analytics to improve efficiency and drive top-line growth.”

—John Geller, CEO of Marriott Vacations

Marriott Vacations Worldwide’s international active members rose 21 percent year-over-year to 1.6 million.

But average revenue per member — another key performance metric — fell by 17 percent year-over-year.

In January, the company said that beginning this summer, it would rebrand all of its recently acquired Hyatt legacy Welk resorts as Hyatt Vacation Club.

Later this year, it plans to expand the vacation experiences available to Hyatt owners with a new exchange option called Beyond, allowing them to use their ownership for cruises, tours and hotel stays.

Earlier this month, the company acquired a parcel of land in Charleston, South Carolina, where it plans to develop a 50-unit Marriott branded resort, including a new on-site sales gallery by 2025.


MGM Resorts Forecasts March to Be the Best Month for Its Las Vegas Hotels Ever

1 year ago

MGM Resorts International reported earnings for the fourth quarter of 2022 on Wednesday. Here are key points about the operator of 32 hotels and casinos in the U.S. and Macau.

Revenue and losses:

The Las Vegas-based company reported a net income of $284 million on revenue of $3.6 billion for the last quarter of 2022. That compared favorably to half as much net income and 18 percent less revenue for the same period a year earlier.

Hotel segment:

“The calendar in March is positioned to have us have the best hotel revenue month, we believe, in our history,” said Bill Hornbuckle, president and CEO, during a call with analysts. Hornbuckle said demand for upcoming events in Las Vegas is driving demand for its hotels.

Worldwide, the company’s forecasts for the business volume in travel in its key markets were quite positive, though Macau is a developing situation.

MGM’s hotel revenues in full-year 2022 were up 95 percent from the previous year.
Occupancy was 89 percent, compared to 74 percent in 2021.

Average daily rate was up by a third compared to a year earlier. In the full-year 2022, MGM’s properties on the Las Vegas Strip specifically had an average daily rate of $229, up by a third over 2021. Occupancy improved 15 percentage points, year-over-year.