Skift Travel News Blog

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.

In full-year 2022, the Loews Hotels chain of 25 luxury properties generated $345 million in adjusted earnings before interest, taxes, depreciation, and amortization — a measure of profit — on revenue of $721 million, its parent company reported on Monday.

The hotel unit’s adjusted earnings were roughly 51 percent higher than the pre-pandemic 2019 adjusted earnings before interest, taxes, depreciation, and amortization of $227 million.

CORRECTION: This post originally misstated Loews Hotels’ adjusted earnings before interest, taxes, depreciation, and amortization for 2022 and its relationship to the 2019 figure.

Using a different metric, Loews Hotels’ performance was even more impressive. In full-year 2022, the chain generated $161 million in net income compared to a loss of $28 million in 2019.

For the year, Loews Corp., a New York City-based conglomerate that runs insurance, energy, and hotel business units, generated $1 billion in net income from $14 billion in revenue.

Loews Hotels’ results significantly improved due to higher occupancy of 79 percent and average daily room rates of $257, as travel rebounded from the impacts of the pandemic, the company said.

Here are the 2022 figures:

In 2019, the brand was getting an average nightly rate of $288 and had 84.6 percent occupancy across its system.

In recent months, higher hotel revenues were partially offset by increased operating expenses due to the higher demand levels and resumption of additional pre-pandemic services.

On January 1 Alex Tisch became the president and CEO of Loews Hotels — succeeding his cousin once removed Jon Tisch, who became executive chairman and remains co-chairman of the board. Alex, a fourth-generation family member, joined Loews Hotels in 2017 and was named its president in September 2020.

Jumeirah Group said on Monday it had bought the Le Richemond, a five-star hotel on Lake Geneva. The move signaled that the luxury hospitality company based in the United Arab Emirates is focused on growing worldwide in key gateway cities.

Le Richemond is the fifth European property to be acquired by Jumeirah, which operates a 6,500-key portfolio of about 25 luxury properties across the globe.

“As the gateway to the mountains of Europe, Geneva is strategically significant for us as we look to diversify our portfolio in major cities with both summer and winter resort destinations,” said Katerina Giannouka, the recently appointed CEO of Jumeirah Group.

Giannouka said she plans to hire architects and designers to renovate Le Richemond — pushing it further upscale and turning it into an “ultra-luxury” hotel by 2025.

The U.S. leisure and hospitality sector in January continued to make strides in recovering from the pandemic disruption, according to a robust U.S. labor market report on Friday.

U.S. employers added 517,000 workers to payrolls in January, the Labor Department said. About 15,000 of those jobs were in travel accommodation, while 99,000 were at restaurants and bars.

Despite hikes in inflation and interest rates and a spate of tech-sector layoffs, job growth in the travel lodging sector remained strong. The month’s performance of 15,000 jobs was better than the 10,000 hotel jobs added in December, as Skift reported.

Yet the travel accommodation sector still has a hill to climb to regain its pre-pandemic employment levels. In January 2023, about 1,618,000 workers were employed in travel accommodations (hotels, motels, casino resorts, and bed and breakfasts). The comparable figure for travel accommodation in January 2019 was 1,945,500, or about 17 percent higher.

“Today’s jobs report—in which 25 percent of all new jobs were added in the leisure and hospitality sector—is further evidence that travel is essential to the U.S. economy,” said U.S. Travel Association President and CEO Geoff Freeman.

The leisure and hospitality sector has nearly 2 million open jobs, the association estimated. Tighter rules on immigration and temporary work visas in recent years have helped to constrain the labor supply.

Indian Hotels Company (IHCL) plans to reach a portfolio of 300 hotels by 2025, it said on Tuesday when reporting its earnings.

“We are looking to open 18 hotels a year,” said CEO and managing director Puneet Chhatwal. He cited plans to grow through conversions and new construction across India and in West Asia and Europe. The company plans to invest about $60 million a year for the next few years specifically for hotel development.

India’s largest hotel operator — with brands such as Taj and Ginger — had its highest-ever net profit in the quarter that ended on December 31. The Tata Group-backed company reported consolidated net profit of $46.8 million (3.83 billion rupees) on revenue of about $206 million (16.86 billion rupees).

“We are very pleased to report our Q3 [third quarter] results with a record level on all key parameters, revenue, EBITDA, EBITDA margin, PAT, strong free cash flows and being net cash positive,” Chhatwal said.

The strong performance followed hard on a previous quarter that was also a company record thanks to a surge in post-pandemic travel. Hotel occupancy was up 27 percent on average from pre-crisis levels, while average room rates were up by 27 percent compared with 2019 levels.

“With the month of January gone by almost tonight, we see the momentum continuing,” Chhatwal said. “We have a fair idea and depth of the business on the books and the pick up the way it is coming. The outlook is very strong.”

For more context on CEO Puneet Chhatwal, read Taj Hotels CEO on the Sweeping Strategy Behind Delivering Best-Ever Financials.

The U.S. hotel sector will this year finally surpass 2019 levels on a few performance metrics, according to research commissioned by the country’s largest hotel lobby.

U.S. hotels will see gains in occupancy, inflation-adjusted revenue figures, and staffing levels in 2023, according to a report published on Monday by the American Hotel & Lodging Association (AHLA) and based on forecasts by the consultancy Oxford Economics with data from CoStar’s STR.

Here are some key quotes:

• 2023 nominal room revenue is projected to be $197.48 billion, versus $170.35 billion in 2019. But these numbers are not adjusted for inflation, and real revenue recovery will likely take several more years.

• Average hotel occupancy is expected to reach 63.8 percent in 2023 — just shy of 2019’s 65.9 percent.

• 2023 room-night demand is forecast to be 1.3 billion occupied room nights versus 1.29 billion in 2019.

• U.S. hotels are projected to employ 2.09 million people in 2023, down from 2.35 million in 2019.

While 2022 was a post-pandemic boom year for hotel demand in much of the world, total global hotel investment volume decelerated slightly to $71.9 billion, a decline of 2 percent relative to 2021. The relative lack of outbound Chinese hotel investment, the Russian war in Ukraine, and recessionary pressures in several markets tamped down the pace of growth.

That’s according to a Global Hotel Investment Outlook report released on Monday by JLL Hotels & Hospitality — an investment advisory firm that helps manage more than $6.8 billion in hotel assets.

A few charts from JLL’s report stand out.

In 2022, global portfolio transactions dropped 27 percent year-over-year, but small trades spiked. The total number of trades reached an all-time high, meaning that the market had a lot of smaller players and a lot of smaller assets being traded, compared with years with large assets and large portfolios shifted hands. CLICK TO ENLARGE.

There’s been much less ross-border investment in hotels than one might expect for quite some time. The five years before the pandemic, 2015 to 2019), saw cross-border hotel investments account for an average of 17 percent of total global hotel investment volume. Yet in that period, the investment declined as a global total year after year. CLICK TO ENLARGE.

Two of the most eye-catching data points from the report are the growing demand for hotel investment from high-net-worth individuals and the growing presence of these individuals in Singapore.

In fact, 16 percent of the year’s global investment volume was generated by first-time hotel buyers, predominantly comprised of family offices and high net-worth individuals. In Singapore, there are now an estimated 700 family offices, more than double the amount pre-pandemic. Expect this trend to continue in 2023 and beyond as lodging demand accelerates.

—Global Hotel Investment Outlook report released on Monday by JLL Hotels & Hospitality 

UPDATE: JLL released the report on Tuesday in sync with the Americas Lodging Investment Summit (ALIS) in Los Angeles.

Marriott International revealed on Monday its full-year totals for hotel development in 2022. The most notable figures highlighted a further push by the world’s largest hotelier into the luxury and extended-stay segments.

The operator of brands such as Ritz Carlton, Bvlgari Hotels, W, and Edition last year signed deals to develop 42 luxury hotels — a company record — adding to its nearly 500 open luxury properties. These luxury hotels represent nearly 8,000 rooms.

Growth in Extended Stay

Marriott also had continued momentum at the lower end of the spectrum in 2022, which represents most of the nearly 8,300 properties it had open worldwide as of late December.

In 2022, the company’s extended stay brands — Residence Inn by Marriott, Element by Westin, and TownePlace Suites by Marriott brands — made up a record 30 percent of the company’s signings.

Interest in extended stay from developers is partly driven by consumers seeking more space, “driven by the blending of work and leisure trips,” Marriott executives said.

“The select service and extended stay segments continue to generate significant growth for the company, particularly in the U.S. and Canada,” said Noah Silverman, global development officer, U.S. & Canada, at the Americas Lodging Investment Summit (ALIS) in Los Angeles.

In 2023, the company will particularly look at “underserved secondary and tertiary markets” for additional extended-stay growth, Silverman said.

Overall, last year was a robust year for Marriott’s pipeline expansion. It signed 726 management and franchise agreements, representing nearly 108,000 rooms. About 20 percent of these deals were conversions rather than new development.

Marriott joins other hotel companies in having a backlog of getting signed hotels built open. Last year, the company only added 394 properties, representing roughly 65,000 rooms, growing its worldwide network by 4.4 percent. But given the enormous size of its pipeline, that rollout could’ve been faster if key inputs for construction and financing hadn’t been disrupted by labor dislocations and rising interest rates.

For more context, see how the great merging between people’s work and personal lives has led Blended Travel to Come of Age, one of Skift’s Megatrends for 2023.

For context on the consumer dynamic driving the boom in luxury, see Skift’s 2023 Megatrend “A New Super Luxury Goes a Step Further.”

Entrepreneur Richard Branson and Virgin Group announced a reorganization of their hotel brands on Thursday. Virgin Group, which owns a half-dozen luxury Virgin Hotels, will take control of Branson’s private collection of hotels, retreats, and islands (including Branson’s own much-hyped Necker Island), marketed as Virgin Limited Edition.

Both brands will now fall under Virgin Group’s new parent brand, Virgin Hotels Collection. James Bermingham, current CEO of Virgin Hotels will become CEO of Virgin Hotels Collection on April 1, leading all the brands. Jon Brown, CEO of Virgin Limited Edition, will step down in March.

This year Virgin Group plans to open a Virgin Hotels property in New York, followed by one in Glasgow, bringing the number of Virgin Hotels to eight. It will also open an ultra-luxury property, Son Bunyola Hotel, in Mallorca, under the Virgin Limited Edition brand.

The company’s pipeline for future years includes Virgin Residences Miami and Virgin Hotels Denver, both in 2025.

Top Hyatt executives said on Tuesday they planned to create hotels and resorts in two destinations on Mexico’s Caribbean coast — Tulum and Isla Mujeres — with about 5,000 rooms together.

Mark Hoplamazian, president and CEO of Hyatt Hotel Corporation, met with officials from the Quintana Roo state of Mexico the day before the start of the International Tourism Fair of Spain (Fitur) in Madrid. Some of the properties will be part of Hyatt’s Inclusive Collection of all-inclusive resorts. Hyatt also pledged to participate in social projects for its workers and employees.

The Mexican Government has been investing in infrastructure works at Tulum airport and Tulum’s main and historic boulevards and bridges. It has also been supporting the creation of the Mayan Train, a 948-mile intercity railway that will traverse the Yucatán Peninsula.

Officials and destination marketers have also created Master Plan for Sustainable Tourism Quintana Roo 2030 to form a strategy with an appropriate balance of growth without overtourism or environmental destruction. One part of the plan includes the opening of new archeological zones.

Quintana Roo currently has 127,399 rooms across 1,331 hotels open.