Dual Hyatt in Scottsdale sells for US$54.5M: A joint venture between Gardner Batt and private investors have sold the 229-room Hyatt Place/Hyatt House in Scottsdale, Arizona, to a joint venture between KKR and Riller Capital for US$54.5 million. The sale was brokered by Avison Young. Jay Maddox, Keith Thompson, Andrew Broad and David Genovese of Avison Young represented the seller in the transaction. The nine-story hotel, which opened in March 2021, features an on-site restaurant, breakfast area, business center, meeting space, heated outdoor pool and fitness center.
Taconic, HEI acquire Westchester Marriott: Taconic Capital Advisors and HEI Hotels & Resorts have partnered to acquire for US$40 million the 444-room Westchester Marriott in Tarrytown, New York, from Ares Commercial Real Estate Corp. (ACRE). As part of the deal, ACRE will provide a financing facility in support of the property’s business plan. Spread over 15 acres, the hotel consists of 21 event rooms or 26,700 square feet of meeting space, including a 9,000 square foot ballroom which can accommodate up to 1,100 people. The hotel will continue to operate as a Marriott-branded property and will be managed by HEI. Taconic and HEI have planned a US$30 million renovation project focused on all areas of the hotel. This is Taconic’s first acquisition with HEI and the company’s 12th overall transaction, totaling to 17 properties and 3,700 keys, in the past year.
Aareal Bank refinances London Nobu hotel: Aareal Bank has closed the financing agreement with London + Regional Hotels (L + R). The London-based private real estate and leisure investment firm received a senior loan to refinance the rebranding and remodeling of the 249-key Nobu Hotel London Portman Square, which opened in May 2021. The hotel marks Nobu’s third collaboration with L + R, after existing properties in Monte Carlo and Ibiza.
Sightline adds 3 to portfolio: Sightline Hospitality, San Francisco, California, has added three independent hotels — evo Hotel, The English hotel and Radio Tower and Hotel — to its third-party management portfolio. The evo Hotel, which opened on February 1 in Salt Lake City, Utah’s Granary District, is a result of a transformation of a 100-year-old warehouse space. Celebrity chef Todd English-curated The English Hotel opened on February 22 in the art district of Las Vegas, Nevada, and is a Marriott’s Tribute Portfolio-branded property. The Radio Tower and Hotel is slated to open on June 16 in New York City.
Corona beer creating island experience: Set to open later this year, the operator outside of the United States under Anheuser-Busch InBev for global beer brand Corona is developing Corona Island off the coast of Colombia, centered around sustainability and aimed at helping consumers disconnect from the everyday and reconnect with nature. While there will not be a traditional hotel on the island, Corona is creating bioclimatic and sustainable building structures and 10 guest bungalows that can accommodate two guests. The structures were built with nature in mind and will be anchored by locally sourced materials, so as not to disturb the natural environment of the island. Corona is working with local developers and designers Jaime Gaztelu and Mauricio Galeano Escobar of Hames & Mau to create a unique experience for those staying on the island. Corona Island has a goal of becoming “Blue Verified,” as part of the international NGO’s Blue Standard program. In addition to design and cuisine, Corona Island’s guest experience will focus on workshops and excursions that immerse guests in sustainable living.
Limited impact of gas prices on demand: Performance has been reviving among U.S. hotels. However, this recovery is meeting potential headwinds from Russia’s war against Ukraine and the resultant increases in gas prices. STR’s historical data suggests that the rising gas prices is not expected to weigh down hotel demand in the U.S., even as the cost for leisure and business travel surges. Gas prices have hit an all-time high but are lower than the July 2008 peak on an inflation-adjusted basis (real). STR’s data from 1990 shows the correlation between real gas prices and room demand (adjusted seasonally) to be a moderate 0.54, indicating that very little of the demand change can be attributed to changing gas prices. A strong correlation would be considered 0.7 and above. The correlation between gas prices and real revenue per available room is only 0.16. Historically, gas prices have peaked when lodging demand was the strongest (i.e., during summer). While generally, travel is skewed towards higher-income families who are able to afford the high costs, pent up travel demand from the pandemic is also expected to offset the negative impact of gas prices. Airlines are likely to increase fares, with business travelers attributing it to “the cost of doing business” and is not expected to affect corporate transient and group demand.
Passage of omnibus spending bill “major win”: The passage of the US$1.5 trillion Omnibus Spending Bill, which includes the Restoring Brand USA Act to provide US$250 million in relief funding to the country’s destination marketing organization, is a “major win for the U.S. travel industry,” said U.S. Travel Association President and CEO Roger Dow in a statement. “As international travel spending remains 78% below pre-pandemic levels, the relief provided by the bill—which utilizes existing funds at no cost to American taxpayers—will help the international travel segment rebound more quickly and restore U.S. jobs,” Dow said. “Brand USA has historically garnered strong bipartisan support due to its focus on promoting both urban and rural destinations, as well as its strong ROI, which yields an average of US$26 for each US$1 spent on marketing activities.”