Choice Q3 earnings: Choice Hotels International reported Q3 earnings on Monday highlighted by domestic RevPAR exceeding 2019 levels by 15.2% and a 38% increase in domestic franchise agreements versus Q3 2021. The company’s total domestic pipeline as of September 30, 2022, increased 16% year-over-year to 1,017 hotels, representing over 98,000 rooms. Choice’s 3Q Adjusted EBITDA of US$139.4 million was below The Street’s consensus of US$144.2 million. Adjusted earnings per share of US$1.56 was below the consensus of US$1.69. R.W. Baird analyst Michael Bellisario wrote that earnings were held back due to higher SG&A expense (-US$9.4 million), lower procurement revenues (-US$3.8 million), and lower Radisson earnings (-US$3.7 million). CEO Pat Pacious added that the addition of Radisson Hotels Americas is expected to provide significant increases in incremental recurring adjusted EBITDA upon its full integration in early 2024. Also, domestic RevPAR growth in Q3 surpassed 2019 levels for 16 consecutive months through September 30, 2022, a trend that has continued in the fourth quarter of 2022 with October RevPAR increasing approximately 20%, compared to October of 2019. Finally, during the nine months that ended September 30, 2022, the company repurchased approximately 2 million shares of common stock for US$247 million.
Hilton grows footprint in Africa: Hilton has announced the signing of its first Hilton Garden Inn property in Mauritius with the 135-room Hilton Garden Inn Phoenix Mauritius in partnership with Ebène Square Ltd. The hotel is scheduled to open in 2026 and becomes Hilton’s second one in the country, joining the Hilton Mauritius Resort & Spa. The new property will join Hilton’s over 40 properties operating and 66 under development across Africa and the Indian Ocean. Currently, Hilton Garden Inn has eight operating hotels in the region with more than 1,300 keys and 10 more in the pipeline in the next five years. Meanwhile, in Morocco, Hilton has signed DoubleTree by Hilton Ben Guerir, Morocco. Slated to open in 2023, the signing of the 213-room hotels marks the debut of the DoubleTree by Hilton brand in Ben Guerir. It is owned by Sociéte Hôtelière de Ben Guerir, an affiliate of Mohammed VI Polytechnic University. Currently, Hilton operates five hotels in Morocco and has six additional properties under development.
International spending in US soars: International visitors spent around US$14.7 billion in September on travel to, and tourism-related activities in the U.S., increasing over 110% compared to September 2021, according to data released by the National Travel and Tourism Office. Americans spent US$15.5 billion traveling abroad, yielding a balance of trade deficit of US$802 million for the month, the third monthly balance of trade deficit for U.S. travel and tourism year to date this year. Between January and September, international visitors spent over US$112.1 billion on U.S. travel and tourism-related goods and services, up more than 106%, infusing around US$411 million per day into the U.S. economy. Purchases of travel and tourism-related goods and services by international visitors traveling in the U.S. surged 249% to US$7.8 billion, compared to US$2.2 billion in September 2021. Fares received by U.S. carriers from international visitors increased 144% to US$2.6 billion. Expenditures for educational and health-related tourism and all other expenses by border, seasonal and other short-term workers in the U.S. stood at US$4.2 billion in August 2022, increasing 17% compared to last year.
Hilton signs in India: Hilton has signed an agreement with India-based Wondergrain Exports Pvt. Ltd. to launch DoubleTree by Hilton Amritsar in the northern state of Punjab, India. Expected to open in early 2026, the 116-room hotel will mark the brand’s debut in Punjab. Hilton plans to double its footprint in India in the next five years. The company is looking for partners for its Conrad and Waldorf Astoria brands in the country.
W Rome sells: King Street Capital Management, New York, and London-based Omnam Investment Group have completed the sale of W Rome in Rome, Italy to a joint venture between CPP Investments and Hamilton Pyramid Europe. King Street partnered with Omnam and Kryalos SGR to acquire two office buildings in 2017 and convert them into a luxury hotel. The 162-room hotel opened in April after a full renovation. Omnam and King Street were advised by DLA Piper.
Aareal Bank refinances UK portfolio for Tristan: Aareal Bank, Wiesbaden, Germany, has completed a £239.9 million (US$272.71 million) senior loan to refinance the acquisition of a hotel portfolio for an opportunity fund advised by London-based Tristan Capital Partners. Aareal served as the only arranger, facility and security agent for the financing. Earlier this year, Tristan’s opportunistic fund, European Property Investors Special Opportunities 6, acquired a majority shareholding in Raag Hotels Ltd., which owns the brand Point A. With a portfolio of nine hotels totaling 1,387 rooms in London, Edinburgh and Glasgow, the properties are co-owned and managed by Queensway. The borrowers were advised by BCLP, while DLA and Ogiers advised Aareal. The valuation was conducted by JLL Hospitality.
Atour plans US IPO orders: Chinese hotel chain Atour Lifestyle Holdings Ltd. is reportedly considering taking investor orders for its initial public offering in the U.S. this week. The company is expecting to raise under US$100 million in its first-time share sale. Deliberations are still underway and the fundraising amount and its timing can still change.
Roseate acquires The Dunstane Houses: New Delhi, India-based Roseate Hotels and Resorts has acquired The Dunstane Houses in Edinburgh, Scotland, at an undisclosed price. The boutique hotel was marketed at a guide price of £7.5 million (US$8.52 million). The property offers 35 rooms and suites across two villas, a bar and restaurant, a lounge, a garden conservatory and private gardens. The sale was carried out by Savills Scotland. Roseate Hotels operates three hotels in New Delhi and Rishikesh in India and Roseate-branded properties in London, Bath and Reading in the U.K.
Developer Tarwater dies: Developer L. “Scott” Tarwater died on October 24. He was 74. In a career spanning over 50 years, Tarwater served in every capacity in the sector and finished his career focusing on hotel development as president of Newstream Hotels & Resorts. Previously, he served as an executive of John Q. Hammons Hotels & Resorts and Windsor Hospitality Group. He was engaged in several area developments, including Brown on the Square in Denton, Texas. Tarwater is survived by his wife, Donna, and two children, Renee Hildebrand and Reece Tarwater.
LuxUrban, Rebel Hotel Co. align: LuxUrban Hotels Inc., Miami, Florida, has announced a strategic partnership with New York-based Rebel Hotel Co. Under the agreement, Rebel will assume operational responsibilities associated with LuxUrban’s existing and future New York City portfolio of hotel units marketed under the LuxUrban brand.
Holiday hotel stay survey: The number of holiday travelers planning to stay in hotels has increased and hotels have emerged as the top lodging choice among those positively traveling for leisure in the next three months, revealed a new national Hotel Booking Index Survey commissioned by the American Hotel & Lodging Association and conducted by Morning Consult. About 31% of holiday travelers plan on staying in hotels, compared to last year’s 22%. About 28% of Christmas travelers plan to stay in a hotel, compared to 23% last year. Among those certain to travel for leisure in the next three months, 54% plan to stay in a hotel. However, overall holiday travel levels are expected to remain flat with 28% of Americans likely to travel for Thanksgiving and 31% likely to travel for Christmas, compared to 29% and 33% respectively in 2021. Although concerns about COVID-19 are on the wane, they are being replaced by economic challenges like soaring gas prices and inflation. Around 85% reported that gas prices and inflation were a consideration when deciding whether to travel in the next three months compared to 70% who said the same about COVID cases. Around 59% of adults whose jobs involve travel said they were likely to travel for business in the next three months and 49% among them were planning to stay in a hotel during the trip. About 64% of Americans would be concerned about cancellations or delays if they traveled by plane, with 66% of these reporting a lower chance of flying this holiday season as a result. Nearly 61% said they were likely to take more leisure/vacation trips in 2023, while 58% said they were likely to attend more outdoor gatherings and events in 2023.
Airbnb redesigns pricing, checkout experience: Airbnb has announced the redesign of its pricing and checkout experience. These updates include a total price display, which will see the introduction of an option to display the total price in countries without existing display requirements. The total price will include all fees before taxes and be shown in search results, map, filter and listing page. Guests can view a full price breakdown (which shows Airbnb’s service fee, taxes, and discounts) before confirming their booking. Search ranking will prioritize total price, instead of nightly price in the search ranking algorithm. From early 2023, hosts will be provided with new pricing and discounting tools to help them understand the final price and how to set competitive prices. Hosts will also be provided with guidance so that in case of checkout requests, they should be reasonable and displayed to guests before they book.
China months away from reopening: China may still be months away from reopening, said economists at Goldman Sachs, as Chinese health officials reiterated the government’s policy of zero-tolerance against COVID even as almost the entire world has eased controls. China’s actual opening is months away as elderly vaccination rates remain low and fatality rates stay high among the unvaccinated population, said Goldman Sachs, maintaining that the country is likely to reopen in Q2 2023. A full reopening is expected to drive a “20% upside for Chinese stocks based on empirical, top-down and historical sensitivity analyses.” As per recent data by the Hong Kong government, only 60.81% of people aged 80 and above have received all three doses of the vaccine. Separate data from Hong Kong government has shown that the fatality rate among unvaccinated people over 80 years was 14.79%, while the fatality rate of those in the same group who received all three doses was 1.48%.
Emerging travel trends: Travel will see significant changes in 2023, with a FinTech revolution and luggage-lite trips likely to top the agenda, revealed the latest report by Amadeus. Exploring the metaverse will enable travelers to explore a destination before they reach or relive their memories after they leave. Biometrics will create a smooth travel experience, while hotels will offer travelers more amenities to allow them to travel light. Remote workers will adopt a nomadic lifestyle, migrating to different locations as ‘work from anywhere’ policies will become increasingly normalized. A new category of business travel focused on connecting teams, building relationships and unlocking creativity away from the office, will be created.
Prioritizing sustainability in business travel: Nearly two-thirds (65%) of business travel leaders prioritize hotels that have earned a valid sustainability certification, highlighting the increasing frequency of sustainability as a deciding factor in influencing business travelers, according to the latest survey by GBTA and global corporate travel and payment technology platform, HRS. About 59% of the respondents said they would elevate these hotels in the displays in their corporate online booking solutions provided to employees as they look for hotels. About 48% said senior executives and leaders have the strongest influence on their company’s sustainability efforts, followed by the Corporate Social Responsibility department (33%). There is a gap from Europe to North America as respondents consider taking action to drive more business travelers to sustainable hotels. Europeans (78%) are more likely to feature properties with valid green credentials than those in North America (61%). About 36% said sustainability considerations will have a moderate to major impact on their hotel choices in 2023. Another 36% said sustainability elements will have a minor impact, with 28% stating that it would have no impact at all.
F&B trend study: Despite concerns of a recession, consumers still have about 20% more cash than before the pandemic struck and are spending, regardless of soaring food prices, according to the latest trend study on food and beverage trends for 2023 by Baum + Whitman. There has been an increasing popularity of private clubs, post-COVID, with ultra-luxurious members club and restaurants. There will be a rise in ethnically specific food halls and food halls will turn into social hubs, which could provide points of differentiation. Pistachio has risen in popularity and mortadella has made a comeback. Chefs have been changing their perspective in terms of “fresh fish,” with experiments with brining fish. Consumers have been cooling to plant-based food options, with supermarket sales of faux meat declining about 10% by volume in the last 12 months, while sales of real meat keep rising. Besides the price, complicated ingredient labels have shown that these plant-based food are mostly highly processed food compared to regular meats. AI is set to replace many functions of restaurant managers, with employees likely to get displaced by machine learning AI.