With the backdrop of the year’s first investment conference in Los Angeles, STR upgraded its 2022 forecast, while multiple operators put their best feet forward and presented news about the status of their pipelines. Here is our roundup based on Monday reports from ALIS. We also have a report about the local Los Angeles construction pipeline.
STR upgrades forecast: Underpinned by continued strengthening in average daily rate (ADR), STR and Tourism Economics have slightly upgraded the U.S. hotel forecast, just released at the Americas Lodging Investment Summit (ALIS). The timeline for recovery remains mostly the same from the previous version of the forecast released in November. On a nominal basis, ADR is expected to surpass the pre-pandemic comparable this year, while revenue per available room (RevPAR) is anticipated to exceed 2019 levels in 2023. When adjusted for inflation, however, full recovery of ADR and RevPAR are not projected until after 2025. Occupancy is projected to surpass 2019 levels in 2023. “The industry recaptured 83% of pre-pandemic RevPAR levels in 2021, and momentum is expected to pick up after a slow start to this year,” said Carter Wilson, STR’s SVP of consulting. “With so much of that RevPAR recovery being led by leisure-driven ADR, however, it is important to keep an eye on the real versus the nominal. Terms of recovery are not playing out evenly across the board, and many hoteliers have had to raise rates to minimize the bottom-line hit from labor and supply shortages. We are anticipating inflation to remain higher throughout the first half of the year with a gradual leveling off during Q3 and Q4. If that happens, and we avoid major setbacks with the pandemic, this year will certainly be one to watch with demand and occupancy also shaping up to hit significant levels during the second half.”
Hilton development data: Hilton made an announcement about its 2021 development achievements. It reported opening 414 properties in 2021, adding more than 67,100 rooms to its system. Hilton ended 2021 with more than 6,800 hotels across 18 brands in six continents, with net unit growth of 5.6%. The company’s development pipeline includes nearly 2,670 hotels representing approximately 408,000 rooms, nearly half of which are under construction.
Hyatt expansion emphasizes leisure: With a growing focus on leisure business, Hyatt Hotels Corp. said on Monday that it plans to accelerate its brand growth in the Americas region with 45 hotels expected to join its portfolio of brands, including Apple Leisure Group’s (ALG) AMR Collection brands, in 2022 and 2023. In addition, Hyatt has signed management and franchise agreements for hotels in 11 new markets and 19 existing markets across the Americas. Hyatt Executive Vice President, global franchising and development, Jim Chu, said new properties signals that Hyatt wants more leisure destinations like Cozumel, Panama City, Punta Cana and South Beach. He added that Memphis will welcome the first Caption by Hyatt hotel.
Cambria’s pipeline: Choice Hotels International’s upscale Cambria Hotels brand debuted eight hotels in the United States in 2021 and broke ground on six more new construction properties, it reported on Monday. The six hotels under construction include Downtown Austin, Texas; Columbia, South Carolina; Nashville West End, Tennessee; New York City Times Square and Niagara Falls, New York; as well as Orlando, Florida. It said more properties are coming soon to locations like Austin Airport, Texas; Sommerville, Massachusetts; Historic Downtown Savannah, Georgia. There are currently almost 60 Cambria hotels open across the U.S. with over 70 hotels in the pipeline.
LA market leads construction pipeline: At the end of Q4 2021, the Los Angeles market led the construction pipeline by rooms with a total of 120 projects/19,815 rooms, according to a report by the Lodging Econometrics. This is followed by the Atlanta market with a construction pipeline with 133 projects/17,593 rooms, followed by New York with 121 projects/19,303 rooms. In Los Angeles, there are 22 projects/3,630 rooms in the under construction stage, with 41 projects/6,278 rooms scheduled to start construction in the next 12 months. Projects in the early planning phase stand at 57 projects/9,907 rooms. At the end of Q4, the Los Angeles market ranked second of all new hotel openings, with eight projects/1,323 rooms, behind the New York market which stands at eight new projects and 1,958 rooms. Lodging Econometrics anticipates that the Los Angeles market will rank fourth in the U.S. in 2022 for new hotel openings with 19 projects/3,081 rooms. In 2023, it is predicted to get 11 new projects and 1,367 rooms.